Lesson 8: Getting Started
For people that like lists this would be your bread and butter. In this chapter Robert goes through his ten steps to awaken one’s financial genius:
- Have a reason greater than reality: the power of spirit. Basically a reason is a combination of wants and don’t wants. Many other books talk about having a very strong WHY, which I think is a strong motivator. Many people wouldn’t dream of doing something until something/someone else comes into the picture: a loved one, a kid, a higher purpose. This got me thinking of what my overarching drivers are, and I came up with a few: 1) I want control over my time 2) Pickleball/sports every morning 3) Time for my family
- Make daily choices: the power of choice. This talks of the importance of daily habits, spending habits most specifically. You dictate how you use your time, money, and energy. This made me think of the saying, “people overestimate how much they can do in a day, but underestimate how much they can accomplish in a year.” Stay focused and don’t be discouraged by short term setbacks.
- Choose friends carefully: the power of association. If you spend time with deadbeats you’ll probably get pulled down. Robert was not saying that you should cut friends off based on their income statements, but more so he wants people to be exposed to many types of people and find people that are doing what you want to be doing. Insider trading is not illegal in all spheres. For example if you start networking with property managers maybe they’ll start bringing you information on properties that are about to go up for sale but haven’t been listed yet. Wouldn’t it be nice to be in the inner circle?
- Master a formula and then learn a new one: the power of learning quickly. It might sound rudimentary, but do you know how to learn? Learn how to learn. The world is changing quickly and it will be imperative to be able to learn things quickly. This goes back to a generalist mindset over a specialist.
- Pay yourself first: the power of self-discipline. Sounds simple in theory but few do it. He’s not saying to not pay your bills and neglect the tax man. All he’s saying is prioritize yourself. It takes incredible discipline to stick to a plan over a long period of time and Robert says, “I would venture to say that personal self-discipline is the number one delineating factor between the rich, the poor, and the middle class.” He emphasizes that savings should only be used to create more money, not to pay bills.
- Pay your brokers well: the power of good advice. Surround yourself with people that are smarter than you. Information is priceless. Professionals can provide great information to make you more money. So instead of being deterred by a professional’s price tag maybe you should find out if they might be the one that could take you to the next level. Kiyosaki questions paid professionals in the following 1) how much in property or stocks they own and 2) what percentage they pay in taxes. This is basically to get a gist of if they’re not just big talk, but also walking the walk.
- Be an Indian giver: the power of getting something for nothing. Most people tend to look at return on investment (ROI) but Robert seems to imply, while not using this terminology, that one really should be looking at an internal rate of return (IRR) type of metric. A metric that is more long term, and somewhat answers the question of what one has once one gets their money back. For example if you could get into a cash flowing real estate property for five thousand dollars. Once you got your money back you have a future stream of cashflows that could pay things in your life. It’s kind of how I think of my book sales, like the latest book, once I recoup my design costs: (Tape Name Here)’s Journal for (Tape Year Here): Reflect Towards an Intentional Life: Allweil, Jack: 9781734895643: Amazon.com: Books
- Use assets to buy luxuries: the power of focus. Before you think of taking out a big loan to buy that nice new car, is there an asset you could buy or create that would pay for it? I tried to think of things I could do for a $10 subscription for one year, while a ways from a luxury product it does well to illustrate. I basically would need to produce $10 in interest payments each month for that year, or setup something from scratch that produces $10 per month in cash flow. For round numbers I came up with an idea to lend $5,000 to a buddy, maybe a young go getter who’s raising capital for a real estate deal, at a 6% monthly nominal interest rate. The payment each month to the lender would be $221.60 and the interest revenue, unless the taxes are very high for interest payments collected, would be above $10. And there you go, your buddy is now effectively paying for your subscription for the year.
9. Choose Heroes: the power of myth. When I was little I would pretend to be certain soccer players while I practiced and played. Robert is advocating for finding certain professionals to emulate. Is there a great negotiator you like? Try to be like them and practice things they do. Maybe you look up to Warren Buffet as an investor. Start reading the books Buffet read and try to analyze businesses in a similar manner.
10. Teach and you shall receive: the power of giving. Robert speaks on when he wants to learn he often seeks to teach. “The more I teach those who want to learn the more I learn.” I thought this is such a fabulous quote, and made me think of a book I read in the past, The Go-Giver. Like The Go-Giver’s message, don’t always be thinking about what you’re getting, think about what value you’re providing to others. Those who help the most people will be rewarded.
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- Make Better Bets: https://www.amazon.com/gp/product/B0893K72LZ?pf_rd_r=34RMC5D4WCM4606VD3PE&pf_rd_p=edaba0ee-c2fe-4124-9f5d-b31d6b1bfbee
- 15 Weeks to Pass an Actuarial Exam: https://www.amazon.com/15-Weeks-Pass-Actuarial-Exam/dp/1734895632/ref=sr_1_2?dchild=1&keywords=jack+allweil&qid=1601417120&sr=8-2