How To Make Yourself Rich
The main solution that is needed to achieve financial success according to this chapter was once again the need for one to improve their financial IQ. This time, Kiyosaki first voiced how he felt a Defined Contribution Plan is bad and that people relying on it will face financial challenges as a result on basing their future around it. To advocate his point about these types of retirement plans, he used some quotes from the Time Magazine article titled â€œThe Great Retirement Ripoffâ€ which was published on October 31, 2005.
He then had an interested example about oneâ€™s financial IQ by using Americaâ€™s oil supply situation and how he was taught that Wealth = Energy.
He then used these arrow diagrams to describe about how when the price of energy goes down, wealth goes up:
Vice versa, when energy prices go up, wealth goes down:
A real example he used was how when he worked for Xerox, during the high oil prices in 1974 people were not renting and also canceling copier rental contracts which as a result caused him to lose a lot of money. That was a typical example on how you can be hurt as a result of rising energy prices.
On the flip side, he then demonstrated how you can capitalize on it instead with some knowledge. For him, he decided to work part-time for an oil company which also sold gas tax shelters. Back in his old days, an investor investing $100,000 could receive $400,000 worth of tax write-offs meaning that you would essentially be receiving a 4 to 1 tax break on oneâ€™s investment. With this new knowledge, he realized that you can make money during these bad times and began to sell tax shelters in his spare time. That inspired him to become rich. That basically shows that instead of being on the poor side in a bad situation, with some proper knowledge you can increase your financial IQ to make it a positive situation. With this example, basically you can make it so that when energy prices go up, so does your wealth.
Donald Trump then gave his opinion on the matter and his example of financial education is how he spends money wisely. He talks about how one of the restaurants at the golf course needed 150 chairs and that his manager was quoted that each chair would cost $1500. Instead of simply giving the go-ahead to make the purchase, as obviously he is not afraid to spend that much money, he decided to do some research himself and in the end he ended up buying chairs that were better at $90 for each chair. Basically, he was demonstrating how he likes to buy the best, but at the same time he doesnâ€™t like to waste money which also rubs off on his staff to be smart with money. His other advice revolved around how you need to have the mentality of a leader and treat problems as challenges that provide you an opportunity to achieve a great reward.
Once again, there were interesting stories to read in terms of how they did it along with their mindset in those types of situations. I fully agree with that fact that one must see problems as challenges. Doesnâ€™t matter if you are on a sports team, simply playing a game or starting a business, being able to see problems as challenges forces you to expand your thoughts and to create a solution. Is this really the answer as to how to make yourself rich like what the chapter title implies? While having that type of mentality is definitely a factor I would say, I think that is a little too general as the examples can be used across many different categories and subjects such as in a how to become successful book where you want to teach people on how to get out of a rut.