I think many people, like me, have done the first thing, paying off debts. Debt here refers to anything we owe others, including rent, mortgage, credit card bills, consumer loans, or car insurance, parking fees, Internet access fees, property fees, heating fees and so on.
Then we will live until the end of the month. If there is any balance, we will deposit the saved money in the wealth management account, usually moonlight, or we have already owed a new credit card bill, so there is no balance.
But the book Rich Dad and Poor Dad tells us that this expenditure structure is the thinking of the poor. The rich pay their own debts first, and then they don't need to pay their debts in most cases, because the income generated by the investment account can far cover the credit card bills owed.
The rich are completely different. The only thing they need to consider is themselves and their careers. Invest enough money every month, that is, inject assets. What should I do with the remaining debt? Give yourself time and pressure to make money and pay back the money. How to make money? Give full play to your financial talent and find opportunities to make money that others can't see.
This kind of reverse financial thinking is a lesson that "rich dad" wants to teach his children most.
This principle can avoid getting into debt for life. Even if there is a shortage of funds, you should pay yourself first. Those who prefer to collect taxes, those who urge loans from banks, and those who collect heating fees from property companies have all started yelling. You should also make sure that you pay the money first.
What are the advantages of doing so? It allows us to focus on increasing assets all our lives, and then use the continuous cash flow generated by assets to buy a house and a car, thus improving our living standards, and at the same time, we should always be alert to debt and not take on too much debt.
The author of Rich Dad and Poor Dad thinks that the poor have a very bad habit. They always dip into their savings at will. The rich never use their accounts because they know that savings are used to create compound interest, not to pay bills.
Who will pay the bill? You won't believe it. It's your tenant If you want tenants to pay for you, all you have to do is buy a house that can generate rent for rent.
Many people around me, including myself, save money and spend less. We reduce expenses, then deposit the remaining money in the bank, and then buy a very safe and low-yield financial fund, but this is contrary to the idea of paying ourselves first.
Pay yourself first, there is no need to suppress your consumption demand, and you are not encouraged to sacrifice your comfortable life to pay the bill.
When the stock market rises sharply, most people's reaction is to buy more. The stock market plummeted and everyone ran away. However, this is completely inconsistent with the most basic and simple investment principle: buy low and sell high.
The same is true of real estate. Now that house prices are so high, most people's judgment is that house prices will rise. Now, we should buy it as soon as possible. Everyone thinks so, so everyone does it. If they have money, they will buy a house and borrow at least 50%. I don't know that the house has not become an asset, but a debt, because you still owe a lot of loans to the bank.
Moreover, in the eyes of most people, house prices are definitely not low. Then why do many people still want to buy a house, because they hope that house prices will continue to rise. This is exactly the same as the phenomenon in the stock market.
Reading the whole book in one day, the whole person is reconstructed. Almost every sentence of the author's opinion is surprising. It turns out that I have always been a poor man, so lacking in financial quotient, I will never get out of the endless cycle of studying, finding a good job, making money, upgrading consumption, paying off debts and making money.
To jump out of the strange circle, we must first recognize what assets are and what liabilities are. The next step is to practice the rich man's idea that sounds reasonable. I hope that one day, I can also be a "rich mother" of my child and give him correct financial guidance.