This book Rich Dad’s Conspiracy of the Rich: The 8 New Rules of Money is from the author Robert Kiyosaki, it tells us how to utilize eight new money laws to improve financial capabilities in the new era.

Rich Dad's Conspiracy of the Rich: The 8 New Rules of Money

Knowledge is money

The understanding about the money tools is important, money tools are things that bring you money.

For example:

  • If you’re a staff, it’s your job.
  • If you’re investing in stocks, it’s the stock market.
  • If you’re starting a business, it’s your business.

The more you know about your tools, the more you will earn.

For example:

  • The knowledge about stock.
    • When to buy
    • When to sell
    • What to buy

Leverage other’s people money

In games of the rich, you often see the concept of using other’s people money, just some is legal, some is illegal. For people, the best way is to leverage from a bank.

For example:

  • You buy a house with loan $700,000, and you sell it after 2 years later
  • If price grows to $1000,000 after 2 years later
    • Net profit is $200,000 (Good Debt)
  • If price drops to $500,000 after 2 years later
    • Net profit is -$200,000 (Bad Debt)

But how to buy a good house, here we return to the first rule: knowledge is money. With knowledge, we know where to buy & how to buy.

Accelerating acceleration

There are many trends in modern society that cannot be seen, so many people are eliminated without knowing it.

For example: One of the important parameters is the spread speed of the network.

  • Today, an internet celebrity who is less than ten years old can earn millions of dollars a month by relying on advertising revenue alone.
  • When many fishmongers complained that the economy was getting worse and worse, and the fish couldn’t be sold, the 19-year-old guy next door sold someone else’s amount one night on the Internet.

In this era of rapid development, if you can’t keep up with the trend, you can’t catch the trend, you and I may be eliminated.

Keep learning and keep up with the trend, you will not be eliminated.

Focus on cash flow not capital gain

This is to get people used to doing what the rich would really do, and it’s easy for ordinary people to focus on capital gain.

For example:

  • How much did i make from buying this stock
  • How much did I earn from my real estate investment last year

Cash flow are the tools that can bring you income consistently.

Passive income:

  • Positive rental income
  • Stock dividend income
  • Business income

Because money is constantly flowing to you, and continuously investing money in cash flow is the way for the rich to play.

Prepare for the worst

If you prepare for the worst, you will be fine when the bad happens.

For example: 2008 Financial Crisis

Many people want to have a lot of money in their hands to buy assets when the market is so bad, but I believe that most people did not do so, and they may continue to sell their assets at that time, such as real estate or stocks, in exchange for cash to solve the immediate financial crisis.

But if you have good investment capabilities and a standby fund at that time, then it will be a time when your wealth can be expanded and doubled. Every financial event, large or small, will cause the redistribution of wealth. And those who do not plan for the worst, always distribute their wealth to others.

Learn the jargon in money too

If you want to cooperate with foreigners in a business, but you do not know the language of the other party, how to cooperate. In the same way, if you want to cooperate with money and let money do things for you, you need to understand the language of money.

Understanding the language of money is as important as understanding the knowledge of money tools, thinking in the right language. If you are used to speaking the language of the poor, you will be poor in the end, and if you are accustomed to speaking the language of the rich, you may end up being rich.

Learning the language of money is the beginning of your thoughts on getting rich.

Learn to make friends with masters

Life is a team sport, choose your teammates carefully. The team is very important, especially now, it’s not easy to start a business by one person and finally get rich. One person can hit ten, but what about 100 people?

No matter what you are investing now, having a team can bring you greater wealth. Whether in real estate investment, stock investment, or gold investment, you can cooperate with experts in related fields.

If you don’t have such a master partner, and you want to get in touch with some masters you know, the best way is to buy their products, discuss their preferences, and participate in activities or communities in their presence. This is the first step for you to connect with the master.

Learn to print money by yourself

A professional investor must learn to invest in the following four domains:

  • Businesses
    • Rich people usually have several businesses to provide themselves with a steady stream of cash flow
  • Real estate
    • Those assets that will bring you rental income every month
  • Paper assets
    • Stocks, bonds, deposits, annuities, insurance, etc.
    • It only requires minimal management effort, and it is easy to turn into cash
  • Commodities
    • Gold, silver, petroleum, raw materials, etc.
    • Most investors don’t know where or how to buy them

We must have investments in these four domains at the same time to be called risk diversification in the true sense.