In this article we are going to discuss specific topics that the Rich Dad Poor Dad teaches as well as other theories to help you on your journey to understanding How to Get Filthy Rich Quick.
I have read many books on financial independence such as Rich Dad Poor Dad, The 4-hour Workweek and a ton of Awesome income-generating asset growing idea generating books.
My goal is to sum up all of them and condense them into this post. So make sure you read this article all the way through.
Hopefully all the ideas will click and you’ll be able to start working on your pleasant dream of creating a lifestyle that you want to live.
How to Get Filthy Rich Quick- Most People Have Never Received a Fiscal Education
First off we’re going to establish the facts of the case that most people don’t get formal fiscal education. If you’re like me, the only education you got was as a child was watching your Father or Mother try balance a checkbook, go to work and try to put food on the table.
Now most people are taught to look at the rich wide-eyed and frown upon them because they have a preconceived idea that they are doing something that is unlawful or involves a get rich quick scheme.
People as a whole, think that rich people usually do something immoral to get where they are. But that is not the whole story. Now that I am a man now. I don’t want to follow down the footsteps that so many people have previously traveled. Chances are you realize that path doesn’t work either.
After educating myself on financial literacy and investing concepts. I’m here to educate you on the methods that differ from the norm. Lets face it, the work till your old enough to retire, usually translates into you work until you are almost dead.
How to Get Filthy Rich Quick- Understanding Liability and Assets
The first point I want to go over was one that Robert Kiyosaki went over in his book Rich Dad Poor Dad. There are two ways to use your money. You can use it on building assets or waste it on things that will not make you money.
Most poor people usually have more liabilities then assets So let’s talk about liabilities.
Liabilities are anything that takes funds out of your pocket daily, monthly, or yearly. If you own a automobile and you drive it to work every day it’s costing you funds.
You’re paying for gas you’re paying for an insurance policy and now and again you must pay for upkeep on the car.
You’re not making any money directly from it, so we have to label it a liability. Likewise, if you own a house and you live in it, it’s also a liability.
If you pay for that expensive coffee before you head into your job that also falls into the liability category.
Now let’s move on to the other side.
The asset. An asset is anything that brings you direct profit. For example, if you own a condo and you are able to lease it for five hundred dollars a month, then this condo is going to be a profit source. If you own a small business and your profit is eight thousand dollars a month, this is also an asset because it’s bringing coin into your hand.
So now that we know the difference between assets and liabilities let’s get to the main point. To become rich, you must own a numerous amount of income producing as is practical.
If you want a two-hundred-thousand-dollar Lamborghini, then you are required to own the resources to pay for that Lamborghini. The goal is to have more funds coming in than going out.
How to Get Filthy Rich Quick- Invest in Long Term Assets
Along-term investment asset is what the rich and super wealthy put their coin in. For example, if you could spend a hundred dollars to upload a video but for the rest of your life you would make one dollar a month for that video, would you?
I certainly would. To become wealthy, you have to buy assets that work for you, even when you’re not. Real estate, interest producing investments, stock dividends and businesses are all examples of assets.
How to Get Filthy Rich Quick- Relative vs Absolute Income
So what is absolute income? Absolute income is the total amount of money each individual makes per year irrespective of their living conditions. This could be thirty thousand dollars, a hundred twenty thousand dollars or half a million.
Absolute income doesn’t take anything else into analysis, just the raw number of person is profiting per yeare. and this is where most people’s thinking is off when they think of rich.
The 4-hour Work Week by Timothy Ferriss introduced me to the idea of relative income. Relative income is the amount of money someone earns versus the amount of freedom they have to enjoy their life. For example, let’s say there were two people, the first one is John. John is working in New York City he works 80 hours per week but he makes a hundred sixty thousand dollars a year.
He can’t move, and he has to live in the polluted densely populated metropolis of New York. On the other side we have Jerome, he only participates in his business 10 hours per week, but he profits forty thousand dollars a year. Jerome is self-employed, and his income comes from advertisers.
He can live virtually anywhere in any countries around the world. So who is currently wealthier? Technically John receives more income, but Jerome has more freedom.
Jerome can move to Cuba where he was able to buy a luxurious house for thirty thousand dollars while John has to pay two thousand dollars a month for his apartment.
If we break it down John receives thirty-eight dollars an hour but Jerome receives a whopping $77 dollars an hour for his time. The person with more relative income is Jerome.
Rich people focus on relative income by calculating how much they earn per hour even if their salaried.
How to Get Filthy Rich Quick- Create a Business and Maximize Your Tax Deductions
This is for business owners who wish to build an empire and pay for their reveries without putting their money back into taxes.
In America there’s a way to do this. In the American taxation system and quite honestly some other countries taxation systems. If you own a business even if it’s not classified as a business. It could be you’re self-employed income.
If your business technically loses money, you don’t have to pay taxes. For example, if I spend five hundred dollars to generate a video and that video only returns to me four hundred dollars. That is a net loss of a hundred dollars and I don’t have to pay a dime in taxes.
The secret is using the tax code to your advantage by writing off those legal deductions. If you do it in an illegal way this is called tax fraud and is a serious felony. I recommend consulting with tax professionals to find out what items you can and cannot deduct. Even if you have a full time job and you have a side business.
The expenses you incur with your side business will be eligible to write off and can help you offset the taxes you have to pay on your regular income.
How to Get Filthy Rich Quick- Become a Producer Instead of a Performer
In the book The Self-Made Billionaire Affect the author states that all billionaires fall into the producer category. A producer is someone who develops raw content they form it into something new. They invent and create.
They give orders to what the book terms performers. Performers are people that use existing processes. A great example of this type of person is a factory employee. They are speedy and engineered to reduce mistakes.
They only do what they’re told. Before we get into a debate as to which is better, you need to understand the principle of supply and demand. It’s not that producers are better it’s just that there are fewer of them.
This is because they have to take risks which means that the demand for them is higher.
There is significant evidence that there will always be a fewer amount of producers.
The bottom line is that the producers make more because there are not a lot of people willing to stick their necks out to make the big bucks.
Want to be one of the producers? Start making YouTube videos, blogs or create content on Instagram. if you really want to take the entrepreneurial leap. You could combine the idea of a content producer with the methodology of the 4-hour workweek and outsource your efforts.
You could offer people five dollars to upload a relevant innovative image on a social media feed once a day. If you developed a large enough following, your five dollar investment could create way more than five dollars’ worth of value in their lives.
Eventually advertisers would start messaging you offers to advertise their goods and services on your feed. This is known as influencer marketing. Which by the way is becoming big business.
How to Get Filthy Rich Quick- Rich People Focus On Opportunities not on Obstacles
In fact, they see every problem to be solved as an opportunity to add value. Solving people’s problems equals more opportunities to make money. For Instance, what if you were having a hard time installing your TV.
Perhaps the directions you received from the manufacturer were crap. What if you created a video and charged a dollar to view it on a member’s only website. Instantly, you have created value and might earn thousands of dollars in the process.
How to Get Filthy Rich Quick- In Summary
Becoming filthy rich is just a mindset change. If involves changing your perspective and pointing your ship in a new direction. If you want to become filthy rich, you have to look for ways to create assets out of what other people see as obstacles.
To put it another way “when life gives you lemons, make lemonade”.
If you would like to learn a practical way to earn money online then please see this video series by clicking the image below.
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