In the book “ Rich Dad’s Guide to Investing: What the Rich Invest in, That the Poor and the Middle Class Do Not!” it talks a lot about adjusting your mindset from that of the poor and the middle class to that of the rich.
Basic rule of investing #1: Adjust your money mindset Here are seven basic rules of investing to master, as taught by rich dad. If you’re facing a windfall in new money, now is the perfect time to put into place the rich dad fundamental: invest in cash-flowing assets.īut in order to do that, you need to understand the investing fundamentals. We’ve talked a lot about all of these topics, and it should come as no surprise that none of them are considered “sound advice.” Such conventional advice could be to increase your contributions to your 401(k) or to save as much as possible and continue to live below your means. Whether it’s from an inheritance, a raise or bonus, or some other source, the temptation for those on the left side of the quadrant can be to, at best, follow conventional advice about money, or, at worse, to spend it on liabilities like cars or vacations. One of these behavior changes is understanding what to do when you have more money suddenly at your disposal. It takes time, and often requires a total transformation in mindset and behavior. The process of moving from being an employee or self-employed to a business owner or sophisticated investor is a bit like that of a caterpillar turning into a beautiful butterfly. One of the key signs of approaching financial freedom is the steady movement from the left side of the CASHFLOW® Quadrant to the right side of the quadrant.
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