“Unfair Advantage” by Robert Kiyosaki is the greatest book I have ever read. Blanket statement. However, I would still recommend reading “Rich Dad Poor Dad” first (here) because it is the beginner level to his thought processes. I prefer “Unfair Advantage” because it is straight to the point, and he is even more direct on how he feels the world is going. This book was released 14 years after “Rich Dad Poor Dad” and the 2008 financial crisis played a huge role the more direct tune of “Unfair Advantage”. Disclaimer, I am completely biased towards Robert Kiyosaki. He is far and away my favorite author. I have read 8 of his books and one by his wife Kim. While I was reading this book, I realized that I have become a little version of him. My thought process is extremely similar to his. I believe if more people adopted his way of thinking, the world would be a better place.
“Unfair Advantage” is a book on how having a strong financial education will give you the life you never knew existed. True financial education, however, is not taught in high school or college. Even business school does not teach financial education. The only place to get it is through self-education. You can read books, go to seminars, and seek out mentors. This book is a huge step in the right direction of getting a financial education. Financial education is what separates the rich from the poor and middle class. To build wealth, we need to obtain assets. Assets are anything that puts money in your pocket, outside of a job. An example of an asset is a house that you rent out for profit. Liabilities are anything that takes money from your pocket. What is happening inside the middle class is that we are buying liabilities and believing they are assets. These include fancy cars, boats, jet skis, houses, etc… We are working to pay off our liabilities and when we are finished paying them off, they are worth less than when we bought them. The rich do not work for money. They invest in ventures that give them a return on their investment. These simple principles are literally what is dividing the rich from the middle class and the poor. It is imperative that we not only learn these principles but pass this information, and assets, to our children. With that, let’s get into my 5 takeaways.
1) Unfair Advantage #1: Knowledge- People with financial education are in a better position to participate in investments that will make them richer. The more that they learn about financial education, the richer they become. When the 2008 financial education happened, those with financial education were buying distressed properties and businesses. Those without were losing them.
2) Unfair Advantage #2: Taxes- People who work for money as employees and self-employed are taxed at the highest rates. Those who own businesses and investments are taxed the least. The harder you work, the more you pay in taxes. I would consider that unfair. But the only way to free yourself from this cycle is to get educated.
3) Unfair Advantage #3– Debt- In 1971 the US Dollar went off the Gold Standard. This is when the US Dollar became debt. There is no point in saving your money if it is quickly becoming worthless. You need to use your money to buy assets that will retain value. You also should buy your assets using debt. In a nutshell, use debt to buy assets like a house, rent the home out to obtain US dollars, then use those US Dollars to buy something that will retain value, like gold and silver.
4) Unfair Advantage #4– Risk- Investing is very risky if you do not know what you are doing. There is very little risk if you know what you are doing. To learn how to invest in certain asset classes like a business and real estate, you need to take the time to learn. This is part of your financial education. If you do not take the time, you will lose a lot of money.
5) Unfair Advantage #5– Compensation- The rich get wealthy by solving problems and helping others. The more people that an entrepreneur can help, the more wealth they will accumulate. The poor and middle class mostly only help themselves. They do not create products, services, jobs, or housing. To become rich you have to help people.
Again, this is my favorite book of all time. I believe almost every single passage is highlighted. I have used his techniques to begin my journey to financial independence, along with my wife. We are accumulating assets everyday and learning how to build our financial education. We all know what compound interest is. He mentioned something that kind of stuck with me. He says that financial education also compounds. The more you learn the more you will be able to leverage your learnings. You will be able to become richer and richer with less and less work. I had never thought about it like this but I can see exactly what he means. I do not feel overworked right now, but we are making more money than we ever have. We also have so many ideas left to take advantage of. 12 years ago we were working very hard and barely scraping by. There is a huge difference between where we are today and where we were 12 years ago. This book is a must-read for anyone who wants to get ahead financially in life. The time to do it is now.
This link is to a physical product. The link above is to the digital book. Sorry. I get no credit for digital product links.
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Disclosure: I am not a financial advisor or money manager, and any knowledge is given as guidance and not direct actionable investment advice. I am an Amazon Affiliate. Please research any investment vehicles that are being considered. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.
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