Mind Your Own Business

This is a summary of Rich Dad Poor Dad Chapter 4

In chapter 4, Kiyosaki reveals secret #3 of the rich. The secret is to "Mind Your Own Business." To explain this concept, Kiyosaki started off the chapter with a story about Ray Kroc, the founder of McDonalds. Knowing that McDonalds is a fast food restaurant, it is easy to make the assumption that its business is in the fast food industry. However, Ray Kroc would say that his business is real estate. If you think about the location of all the McDonalds restaurants that you have seen, you will notice that it owns land on some of the most busy intersections. Though the primary focus of the business is selling fast food franchises, the company is acquiring some of the most valuable real estate in the process. Ray Kroc never lost focus of this important distinction.

There is a difference between your profession and your business. Your profession is centered around your income statement. For most people, their only source of income is their job. They also make the mistake of focusing all of their attention on their job. Instead, you need to work your job for income while also focusing on your assets. Your business is centered around your assets. The poor and the middle class have fallen into the habit of working on someone else's business their entire life and ignoring their own. The rich are in the habit of focusing on their own business and assets more than anything else. While the poor often buy luxuries and acquire liabilities to appear rich, the truly rich only require luxuries when their assets are producing enough income to afford them. That is the type of mindset you need to have to become rich. Remember that the one and only rule is to know the difference between assets and liabilities, and buy assets.

In Rich Dad Poor Dad, Kiyosaki provided the following list for types of assets you should acquire:
1. Businesses that do not require your presence.
2. Stocks
3. Bonds
4. Mutual funds
5. Income-generating real estate
6. Notes (IOUs).
7. Royalties from intellectual property such as music, scripts, patents, etc...
8. And anything else that has value, produces income or appreciates and has a ready market

Kiyosaki also provided his personal strategy for investments and business. During the early parts of his career, he held jobs for Xerox and the Marine Corps. While working these jobs, he was building his business. As far as stocks are concerned, he likes to invest in start-ups and small caps. His strategy in real estate is to start small and trade up for larger investment properties. One thing Kiyosaki also mentioned is that you should invest in things that you like. If you do not have an interest in your investment, you are not likely to maintain it properly.

Note: Remember that this is only a summary of rich dad poor dad. In particular, chapter 4 is packed full of valuable information for investing in your business assets. I hope you got the main idea here, but you probably won't have a complete understanding until you read the book. You can find Rich Dad Poor Dad on Amazon.