The book was written quite a few years ago, but it still has the reality at present. It clarified that how to get rich if you want. I think what it says is exactly right, but it is still hard to do for most ordinary people.
Generally the book can be divided to two parts: theory and action, and it empathizes on theory.
1) The rich do not work for money and let money work for them. It means the rich do not just take a job to make money while have money to be invested to make more money.
2) The rich buy asset instead of liability. Most people often buy some luxuries on credit, and they think they are asset. Actually, they are liabilities that cause the cash flow outs.
The rich buy luxuries only when they make enough money.
3) Mind your own business. Keep your daytime job, but start to build a base of solid asset like stocks, bonds, mutual funds, real estate, and notes
4) Financial knowledge you need to learn about, including accounting, investing, understanding market and the law.
Then take action:
Before take action, you need to overcome some obstacles:
1) The fear of losing money. Failure inspires winners and failure defeats losers. if failure inspires you to win, maybe you should go for it. If you hate risk and play it safe, you have to start early to accumulate “net egg” in your basket since it takes time.
2) Cynicism. All of us have doubt and not confidant. They don’t make money because they choose not lose money.
3) Laziness. “I can not afford it” is the excuse of most people to get started.
4) Habits——pay you first. Whatever pressure, pay yourself first, the pressure to pay taxes and other forms of income is motivation.
5) Arrogance. Many people use arrogance to try to their own ignorance. It often happens when discussing financial statements with accountants even other investors.
Getting started:
1) Need a reason greater than reality. If you do not have a strong reason, there is no sense reading further. It will sound too much work.
2) Choose friends carefully. It does not mean you make friends by their financial statements while you can learn a lot from rich people. And do not listen to the poor and frightened people about finance.
3) Master a formula and then learn a new one. Working hard for money is an old formula, you need to master a new one: master the skill to invest in the proper time, the sooner the better. It is priceless in finding faster formulas.
4) Pay yourself first. People who have low self-esteem and low tolerance for financial pressure can never be rich. And the three management skills necessary to start your own business: management of cash flow, people and personal time.
5) Pay your brokers well. If the people are professionals, their services should make you money. And the more money they make, the more money you make.
6) Be an “ Indian giver”. The Indians got upset when they realized the settlers did not want to give what they gave them back. That is where the term “Indian giver” came from. It means here when you invest money, you should choose the investment that gets money back quicker. On every one of investments, there must be an upside, sth for free, limited risk, or a low-risk idea.
7) Choose daily. One is time, the other is learning. Just because you have no money, it should not be an excuse to not learn. That is a choice we all make daily, the choice of what we do with our time, our money and what we put in our heads.
8) Assets buy luxuries.
9) The need for heroes. Heroes do more than simply inspire us. Heroes make things look easy. It is the making it look easy that convinces us to want to be just like them.
10) Teach and you shall receive. If you want sth, you first need to give and it will come back in buckets.
Take action:
1) Stop doing what you are doing. In other word, take a break and assess what is working and what is not working.
2) Look for new investing ideas. For example, buy how-to books on a formula.
3) Find someone who has done what you want to do.
4) Take classes and buy tapes.
5) Make lots of offers. Jog, what I look for is change; look in the right places; look for people who want to buy first, then look for someone who wants to sell.
Recommended reading
Beating the street (stock Picking), Peter Lynch
Creating wealth (Real estate), Robert Allen
E-Myth (business), Michael Gerber
The new positioning (Marketing), Jack Trout
The Wall Street Journal Guide to Understanding Money & Investing (stocks, Bonds, Mutual funds, Futures, Money), Kenneth M.Morris, Allan M.Seigel