Hello friends, in today’s article, we see the Book summary of Why the rich are getting richer. This book helps you to understand the process of the rich and why poor people are getting poor and avoid this thing to become rich.
Let’s see one by one
The Science of Getting Rich Book Summary
Why the Rich Getting Richer:-
The book why the rich are getting rich by Robert Kiyosaki is written as the graduate school version of rich Dads and Poor Dads.
It’s mainly for people who have already read rich dad poor dad. So if you wanted to enjoy the book fully, it’s better to read Rich Dad Poor Dad first.
the book explains what real financial education is and why the rich are getting richer the author claims the difference between rich and poor and middle classes education.
Unfortunately not the education found in schools. The author points out the fact that the gap between the rich and all others is getting bigger and it’s not the American dream he finds that there are five main reasons causing this process.
1) Globalization:-Why the Rich are getting Richer
Jobs more to lower-wage countries the rich owned the factories and they get richer when they can hire lower-wage employees.
2) The Technology:-
If jobs is not moving overseas robots and Artificial intelligence are replacing workers even highly educated doctors, Lawers and accountants are in the crosshairs of robots.
Roberts doesn’t need paychecks or raises they work longer and don’t need vacations time medical benefits or a retirement plan.
3) Financialization:-
It’s a process by which financial institutions market etc. An increase in size and influence is commonly known as financial engineering. Derivatives are being created and sold to the world as assets.
4) Kleptocracy:-Why the Rich are getting Richer
It’s a society whose leaders make themselves rich and powerful by stealing from the rest of us. Financialization can’t take place without kleptocracy.
5) The Baby Boom Bust:-
Baby boomers ( 1946 to 1964 ) who are 75 million American will live longer act younger and shake and rattle the global.
Economy until 2050 many taking more out of the economy than they put in the Western world is old the new world is young.
The new world is the emerging markets such as India and Vietnam.
Middle East, South America and Eastern Europe.
The new World is the Millenial Generations ( 1981 to 1997 ) world.
They’re tech-savvy and born into a cyber world. Giving definitions to the class’s aristocracy Firs Hua Proletariat.
Kiyosaki claims that people who sell their labour for money are really proletariat
Because an employee doesn’t own the production even if they have high-paying jobs our self-employed specialists such as doctors and lawyers or small business entrepreneurs.
They don’t own the real estate or the production they work for money.
But money is making people poorer and savers or losers at the same. the rich get richer using death.
the author explains that there are three types of income
- Ordinary income occurs when you work for money
- Portfolio Income:- it’s also called capital gains and occurs anytime you buy low and sell high shares of stock or real estate your money works for you instead of you working hard for money.
- Passive Income:- Cash flowing from an asset your asset is producing money.
the rent you get from your tenants for example
the rich work for portfolio income in passive income.
One of the most interesting chapters in the book is the one about Phantom income according to the author.
It’s the income of the very rich, it’s income that very few people are aware of describing as the Ghost in the room.
Kiyosaki tries to explain why Phantom cash flow is not ordinary, portfolio or passive income.
The income you can see in Phantom cashflow is invisible to people without financial education. it’s invisible income a derivative of debt and taxes real financial education is about debt taxes and phantom cashflow.
the invisible income of the rich that phantom cashflow when people put money down a deposit on a house they generally use after-tax dollars.
They’ve already paid some amount of money to the government in form of taxes when the investor borrows money rather than uses his or her own after-tax paycheck money.
The investor saves this sum in Fanta money the investor didn’t have to work for didn’t pay taxes on and didn’t have to save while other people are saving after-tax dollars for a down payment.
The professional investor who knows how to use debt as money is ahead of the game.
The professional investor is on to the next investment before the amateur leaves the home revealing how much time and money you’d save if you didn’t have to work pay taxes and live frugally just to save for your down payments.
The rich get richer because they know how to borrow the money for larger down payments on properties of millions of dollars that is the key because it’s tax-free you save a lot of time and money.
renting money rather than working for it. the sophisticated investor works for the phantom income you can get richer faster if you know how to use debt as money.
the author explains Appreciation and Amortization:-
Robert Kiyosaki explains that Appreciation is when the price of a property goes up and you can use it as a home equity loan amortization.
Depreciation the taxman gives you a tax break for it is all phantom income as well churning zero into millions of dollars is known as the velocity of money how fast can I keep my money moving?
Acquiring more assets than pulling the money out of those assets without selling the assets and buying more assets.
Another reason why the rich get richer is that the poor and middle-class part their money and save or invest for the long term and a pension income.
which is parked in long-term investment and is taxed at capital gains rates.
When an investor keeps their money moving through debt and investing.
They cannot tax the movement because it’s a debt and can actually get additional phantom income from depreciation.
The masters of money don’t need money they create money out of nothing. kiyosaki explains. How the economy grows when people create money by borrowing money when people pay off their debt the economy gets.
Smaller they give you credit because they’ll make more money by interest when you use your credit card.
They’ll make even more when you make only minimum payments on credit card balances.
The banks make money from debtors not savers like credit card holders. Banks don’t want countries to pay off their debts when such countries face default.
the banks restructure their debt which means they lend them more money enabling them to continue to make interest payments.
your minimum monthly credit card payments make the rich richer in the same way monthly rental payments make real estate investors richer.
The book why the rich are getting richer by Robert Kiyosaki isn’t educating and engrossing read it gives a lot of information and practical tips on how to build wealth.
Inspiring the reader to start preparing for the new challenges of the future and to change, their life.
Read More Books summaries
- Money management ( how rich people manage their money )
- The psychology of money
- Rich Dad Poor Dad
- The secrets of the millionaire mind
- the total money makeover
- Stocks to riches
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