Editor’s note: This article was first published in February 2011; its remarks on how much Facebook earns Mark Zuckerberg and on stock market volatility at the time reflect that year.
This is the second article to get to know Robert Kiyosaki and his message a little better. In the previous one we looked at how he got his first capital to set out on the road to financial freedom; in this one we’ll “translate” what he meant when he told us we should invest in assets.
If I remember correctly, in his books he defined the word asset in something like these terms:
- An asset is something that puts money in your pocket.
- A liability is something that takes money out of your pocket.
What he was getting at is that if you buy a house to live in, it’s a liability, and if you buy it to rent out or to sell for a higher price, it’s an asset, or simply a good deal.
Living off the shares you invest in
The only way to buy or invest in shares and have them give you an income without selling them is through dividends. Realistically, though, to live off share dividends you need a lot of money invested in those shares, and you certainly need to have picked a good bull market.
It’s true that when Robert talked about investing in the stock market, the market wasn’t as volatile as it is now. I had the chance to see some of his trades, and you have to admit the man was brilliant at getting in on the dips and selling on the rallies. All those years he kept collecting dividends.
Robert Kiyosaki’s biggest asset has been his books, living up to the old saying “make a name for yourself and then rest on your laurels.” Robert invested in publishing his book, and that book still sells. That’s an asset, and that’s an income that keeps paying, because years have passed since he wrote his first book and he still earns money from it.
See also: Now is not the time to be in the stock market: a crash is coming
Then he wrote another one, and another, and so on, and his books have earned him hundreds of millions of dollars.
Kiyosaki made a lot of money from property speculation and from investing in shares, but he has made much more explaining how he did it. That’s an asset.
I will never advise you to get into multi-level marketing businesses.
Back then the internet era hadn’t arrived yet, but today one of the biggest assets you can create can come through it. If you build a website or a blog and it brings you an income, that’s your asset. Facebook is an asset that generates billions of dollars a year for Mark Zuckerberg.
You are surrounded by business opportunities to create assets; you just have to look for them with an open mind, come up with ideas and make the most of them.
With the famous cashflow quadrant that Robert Kiyosaki designed, you’ll have to picture which part of that quadrant you want to be in.
But always keep in mind that before you get rich or reach financial freedom, you first have to work, and work very hard. You have to crawl before you can walk and run.
Featured image: "To let" signs, Belfast (2013) by Albert Bridge, CC BY-SA 2.0, via Wikimedia Commons.
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