Rich dad, Poor dad

Author: Robert T. Kiyosaki

My Rating: 4.6 / 5

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“Working hard for money is an old formula born in the day of cave man”

Go to school, get good grades, find a secured job, work hard, save money and retire – this has been the mantra of our life. But by following this mantra the middle class will remain as middle class only passing on the same cycle to the next generation. The reason for this (as the author puts it) is that we haven’t been thought financial intelligence in our schools i.e we haven’t been thought the art and science of making money. The author illustrates a few examples of how cash flow works and explains the differences between cash flows of poor, middle-class and rich people and thereby emphasizing why they are the way they are. It all comes down to how well we manage our asset columns. I would like to mention the highlights of this book.

Middle class/Poor vs Rich:

This difference comprises the core of the book. The author stresses on the fact how to make money work for you instead of working for money. He uses two terms viz. “Rat race” and “Fast track” predominantly throughout the book. The former refers to the mundane middle class habit of working hard at the job, paying bills and liabilities, saving in a conventional way not bothering to build on the asset column. In simplistic terms he defines asset as something which puts money in your pocket and liability as something which takes money out of your pocket. The latter refers to a smart habit which according to the author pushes people from middle class to the so called rich. It incorporates the idea of building our assets until our asset column alone is sufficient to meet our expenses with or without our day job. According to the author, assets are stocks, bonds, mutual funds, income generating real estate or anything that produces income, appreciates and has a ready market.

Playing safe vs Playing smart:

The author puts spotlight on the fact that many people never become rich because they show reluctance in taking risks and hence they make “safe investments“. But the problem with these investments is that they give very low returns. And of course the author acknowledges the fact that there is a higher risk involved when you make investments which have the potential to milk higher returns. But that is exactly where financial intelligence comes into picture. He further asserts that there is not a single rich person in this world who hasn’t lost money while experimenting. You lose, you learn from your mistakes, you learn new formulas and you invest again – this time more sophisticated. This is how smart people invest.

Controversial views:

The author contradicts the popular saying “Our home is our greatest asset“. Instead he views it as a liability unless you have generated an asset column which pays for the bank loan. A bigger house usually means higher expenses as we have to refurnish everything matching the requirements of it. What many people fail to consider is the property tax which will be incurred upon them. Also, we miss out on the opportunity to make other investments which would have grown faster in value simply because we have no money left to invest. Another controversial view is “Pay yourself first and others later“. Even at times when you realize that you will not have enough money left to pay bills, the author still asks you to pay yourself first. Our asset column should be far more important to us than anything else. He claims that it is a good money habit because when we pay ourselves first we get financially stronger and when we pay ourselves last, we let people like bosses, tax collectors, bill collectors and managers push us around all our lives. Though I wasn’t fully convinced with the author’s views personally, these insights gave me a different approach to look at the same topic.

Who can buy this book ?

Anyone who has a fire in their belly to become rich. But, doesn’t that mean everyone ?? No, it doesn’t. There is a fine line between people who have the desire to become rich and people who take steps towards it. The author illustrates by using an example that it is strange to see people who give 10 percent of bill as a tip but are hesitant to give 5 percent of fee to a broker. This book definitely serves as a great inspiration to take action but it alone isn’t sufficient. Personally, I would say it is a very good start for anyone who plans to invest.

The mindset of Indian women….has to change

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Before I start to write anything, let me tell you that I am a feminist. I advocate for the equality of sexes. But I don’t think even if millions of people like me support for the cause, there isn’t going to be any significant change in the role women are going to play in the society. The figures from World Bank which shows the labour force participation rate of women in India exemplifies it. To oversimplify things, millennial women in India can be classified into 3 broad categories of which only set is productive.

1. The Conservative set:

They make up a huge chunk of the population. Their dreams are limited. Cultural backgrounds have forced them to draw boundaries to their goals. Their parents don’t focus on what their aspirations are. They are told to study well and restricted from activities like late night partying, fashion dressing and sometimes even speaking out their opinion raises eyebrows. Fingers are pointed towards them when they mingle too much with men. But if they start to believe that it is the way they are supposed to live they are making a catastrophic mistake. Before anything else, they need to dig into themselves and find out their lost ambition. They need to stop worrying about their mounting age, pressure from their parents to marry early, pressure to quit their jobs. They have an advantage, they have studied well, they have good grades. It is up for them how they are going to use it. Are they going to print their qualifications on their marriage cards or are they going to make an impact with it? They can live independently and make money. One thing which they need to do is to start living their lives instead of others.

                 “I suppose I could have stayed home and baked cookies and had teas, but what I decided to do was to fulfill my profession which I entered”  – Hillary Clinton

2. The Vacuous Set:

Unlike the first set, they have the luxury of being born into liberal families. They don’t have any limitations or ceilings on what they want to achieve. But the problem is they never think of achieving something. They are tamed too much to act wild. They are content with what they have and never think of multiplying it. They need a guy who earns on one hand and unconditionally loves them on the other. You might probably have imagined a few people while reading through these lines. But this isn’t their fault completely. They have a sense of insecurity. The similarity between them and the conservative set is that they pay too much attention to the people around them. All their time is invested in materialistic things like glamour, beauty, crappy movie gossips, mocking the first set of people(the conservative set) etc. They never invest in themselves which makes them vacuous and in specific cases it earns them tags like bimbos. One thing which they need to do is to start  pivoting their time onto productive things and challenge men in all aspects of life.

“Any girl can be glamorous. All you have to do is stand still and look stupid.” – Hedy Lamarr

3. The Rational Set:

These women are great adapters. Irrespective of the type of families they are born into, they capitalise on their status quo. They are rational minded and set up at least short term goals. These are usually the type of women who contribute the fair share instead of adhering to the fallacies that men are supposed to pay every time or that only men are supposed to save money. They aim high to the ranks of starting their own business or growing up through the corporate ladder or becoming a professor or sometimes even dedicating their lives to research. They don’t blame that society is inherently gender biased and sit back. They sense the rise of feminism and make full use of it. They know how to persuade people. Just like a majority of men, they are hungry to make a mark and make their voice be heard. They don’t let stereotypes dent their progresses. But the problem is they are very few in number and sometimes even these set of people become complacent.

             “If you want something said, ask a man; if you want something done, ask a woman” – Margaret Tatcher

It all comes down to a simple choice for women in India today. Are they going to sit back and play they blame game or are they going to figure out a way around ? I am not telling that there aren’t any problems faced by women today. There is no moral encouragement. There are differences in wages paid, for example like the men and women cricket teams(although, I blame economics for that). They struggle to balance their lives between their conservative older generations and their liberal peers. But even all of these circumstances might make things a little difficult for them but never impossible. Things are changing for better. Look at how the United Nations is planning to elect their next leader or how Canadian PM Trudeau elected his cabinet. This expanding list also features female Indian entrepreneurs. To sum it up, if the mindset of women isn’t going to change, no government policy will ever help in bridging the gap between men and women in the labour force participation rate that I have mentioned in the intro.

Thanks for reading, feel free to comment.

Apsara

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She felt like crying. She understood that tears would come out of her eyes within the next few seconds, so she swiftly walked towards the restroom. Restrooms are like one of the best friends for girls. They just watch you and give you support till you calm down, they don’t judge you or give you those free advises. Tears burst out uncontrollably and thoughts were running through her mind. “Do you know that feeling when you have to pay for something without doing anything wrong ?” That’s exactly how she was feeling. “How do I deal with it ?” has been the chronic question of her life.

Apsara is 26 years old, kindhearted and soft spoken. Right from her childhood she always tried to be a good girl and keep everyone happy. She was disciplined at school, studied well and never vexed her parents or teachers. Every time she looked at the mirror, she understood that something was wrong and disturbing. She asked her mother about it who used to fend it off casually by saying that she shouldn’t be worried. Days went on, she reached that age where we come to know about new things. Something was wrong again, she observed boys paying attention to other girls in the class where she felt left out. Since she was studious, she never waited late after school for regular gossips. In fact she hardly had friends besides her bench mates. She didn’t think too much because the society around her made her believe that if you study well and get a good job, you are destined to get a good partner. Moreover mingling too much with boys was considered bad.

After reaching college she could clearly differentiate between herself and her friends. She never participated in extra curricular activities like dancing, singing or skits. Why didn’t she ? She kept thinking. No one ever encouraged her to even try such things. Who would want to even see a girl like her performing on the stage. She felt sick. She was like a remote and cornered girl who talks with only two to three girls. Even those conversations were just about normal stuff (mostly studies). She hardly had any intense conversations, those kind of ones which build strong and lasting friendship. This has been the repeating pattern of her life. Just when things looked bleak, a guy said Hi and started talking with her. Ankit was a very sociable person, above average in terms of looks and was also her lab mate. He gossiped a lot with her and they became friends very quickly. They used to text regularly and she took care of all of his lab assignments. She explained all the subjects to him during exams and thanks to him she made good friends with others as well and for the first time in her life she was really happy.

Was that feeling love? It is obviously but to what extent, Marriage? She felt very apprehensive. She can never tell him what she feels about him. Rejection is too big to swallow. He definitely doesn’t feel the same for her. How to change that? She decided to make it obvious without admitting it. She talked more than regular, started writing all his class assignments even without him asking it. Occasionally she used to buy him stuff like T-shirts, watches and accessories. Ankit knew this. He neither wanted to lose all that care shown by her nor feel the same way about her. Which boy would? Beauty is like a prerequisite factor when you have to love a girl. Did you ever see a guy chasing after a girl who isn’t good looking. There might be rare cases but just to give you an idea, Apsara’s looks were beyond repair. Facials and make up would only exacerbate it. One fine day during a casual talk he referred Apsara as his caring and lovable sister. That was a sting in her heart and calmly replied in a low voice “Well which boy doesn’t think of me as his sister“. Ankit didn’t want to acknowledge it and so hastily changed the topic. Her name sounded like an irony which meant beauty in Sanskrit.

She slowly faded out from Ankit, and he too never bothered much to talk with her expect during exams. All the other friends too distanced from her slowly and even she doesn’t know why. What was meant to be her heyday of elation turned out to be a temporary euphoria. She was badly hurt but not broken. She topped the college and landed in a prestigious MNC with a good starting salary. She worked hard, sometimes even did the work of others without complaint. Perhaps that was her innate quality or perhaps that was the only way she would get attention. Years passed, her parents created a matrimony profile for her and consulted their relatives. Nothing worked. Good education, thick salary, good family, her kind attitude, nothing mattered. All the requests she got on the matrimony website were of low education profiles and demanded hefty dowries. She felt upset because her parents were not that financially strong. What a burden she is being for them. One day she attended a wedding of one of her relatives. How much fun were they having, what wrong did her parents do for not deserving it? They asked everyone in the function hall to pair up with a partner from the crowd to dance beside the groom and bride. Naturally, no one chose her. So, she was strangled between the questions posed by the elders about when was she planning to get married. Did they ask out of formality or sarcasm? It was too much of an emotion to handle. She felt like crying. She understood that tears would come out of her eyes within the next few seconds, so she swiftly walked towards the restroom.

Beauty is a bitch !! It masks people from realizing that everyone deserves love. Do you know that feeling when you have to pay for something without doing anything wrong ?