I have never realized that reading a book 2nd time would give me such different perspective. It was years since I first read the book Rich Dad Poor Dad, when I first got the book, my reading objective was to find “get rich strategies” in the book, than my perspective was to save up some money and invest in stocks thinking as long as its investment it will make me rich. I totally forgot about RISK. This was during my polytechnic days. And because I was very much motivated by the book, In 2005. I also make use of my skills and experience in event management to set up my own event firm. It was a one man show, because of my contacts in the industry I was able to secured some nice deals, but without any proper cash management, my first business failed. “I will talk this on a later post”
Recently, I pick up the book again. And after reading it for a 2nd time. I have a brand new & fresh perspective on wealth management.
3 New things I learn from my 2nd read.
- always paid myself first
- in the past, when I earn some money from investment or getting my monthly pay I would buy something for myself, this kind of “thing” is a form of want and not need thus it became an expenses. The worst thing I did was to spent a 2nd hand Yahama R6, it a a sport bike which I got right after I got my class 2 lesson. It was an burden because the installment was as I did not make high downpayment. In the end, I sold it at a loss. So now if I have extra I would rather invest it in a stable stock or try to set up a business to gain passive income
- Asset is money into your pocket and Expenses is money out of your pocket
- Exactly the thing that happen tome when I brought my bike, money was out of my pocket. Why did I not understand this when I first read the book??? Only when I committed the mistake than I realized I read it before
- Use cashflow from passive income to buy your “wants”
- I still have interest in bike riding and I am interested in getting myself an BMW GS600 but this would have to wait till I have enough cashflow from my passive income to pay the bike.No longer will I make the same mistake again 🙂
The great thing about this book is its simplicity and I only have myself to blame for not getting the key points during my first read, but the good news is that I finally understand what cashflow management is all about and I learn from my experience. So from readers who are interested in getting your financial planning into place I would strongly suggest this book. 🙂