Rich Dads Increase Your Financial
IQ: Get Smarter with Your Money by
Robert T. Kiyosaki
A Great Starting Point!
For years, Robert Kiyosaki has firmly believed that the best investment one
can ever make is in taking the time to truly understand how ones finances
work. Too many people are much more interested in the quick-hitting
scheme, or trying to find a short-cut to real wealth. As Kiyosaki has
preached over and over again, one has to truly under the process of how
money works before one can start out on trying to escape the daily
financial Rat Race.
Now, in this latest book in the popular Rich Dad Poor Dad series, Kiyosaki
lays out his 5 key principles of Financial Intelligence for all to understand.

In INCREASE YOUR FINANCIAL IQ, Kiyosaki provides real insights on
these key steps to wealth:
o How to increase your money -- how to assess what youre really worth
now, what your prospects are, and how to start mapping out your financial
future.
o How to protect your money -- for better or for worse, taxes are a way of
life. Kiyosaki shows you that its not what you make....its what you keep.
o How to budget your money -- everybody wants to live large, but you have
to learn how to live within your budget. Kiyosaki shows you how you can.
o How to leverage your money -- as you build your financial IQ, knowing
how to put your money to work for you is a crucial step.
o How to improve your financial information -- Kiyosaki shows you how to
accelerate your wealth as you learn more and more.
Personal Review: Rich Dads Increase Your Financial IQ: Get
Smarter with Your Money by Robert T. Kiyosaki
This book addresses the current (2009) financial crisis in the US and world
economy. Kiyosaki analyzes the historical actions and factors that led to
this situation, and provides specific suggestions for getting out of this.
Steve Forbes and Donald Trump have both written forewords for the book.
Equipping, not Directing
Kiyosaki points out that this is not a how-to book, with step-by-step
instructions. But the principles he presents indicate approaches that
should equip the reader with a new perspective. Kiyosaki's primary focus
is informing and enabling ordinary people to take charge of their financial
lives, rather than being victims of the system and those who already have
money.
Readers will come to understand the irresponsible decisions taken by past
and present government administrations that contributed to the crisis now
in process. Kiyosaki outlines events and decisions that have changed the
kind of money system we now have, which require a changed focus on
wealth and financial security.

Valuation
A critical turning point was Richard Nixon's decision in 1971 to remove the
US dollar from the gold standard. There was thereafter no real-world
standard of reference for the valuation of the dollar. The basis of value
became the "faith and credit of the United States." Thus money simply
saved away loses value steadily under the pressure of inflation.
In the current climate, the government has allowed the Federal Reserve
Bank to print extensive amounts of currency. This automatically makes all
money less valuable. Thus money in bank accounts is losing value daily.
The bank loan system whose legalized abuse led to the current crisis is
based on loaning more than the bank has available.
The current infusion of loans and new currency is further diminishing the
value of the numbers on the ledgers. The ones who suffer are those who
are solely dependent on a job for their financial security. A job makes
them a victim of the rich who hire them. Kiyosaki presents alternatives.
Kiyosaki explains that in the old system, based on gold, saving was an
investment. He notes in contrast that now money in a bank is not an
investment, but a liability, since it is losing value. But money being used
gains value as it is invested in real assets.
Financial Intelligence
Kiyosaki defines five types of intelligence needed to understand the new
financial system and take charge of wealth management. Underlying all
these is to stop thinking poor.
Here are his five points of financial intelligence:
1. Making More Money. This involves the problem of debt, living above
one's means. But Kiyosaki further says wage earning makes you a victim
and places a limit on money. Lack of money further puts the focus on
money, rather than on yoru planning. Rather, look for ways to increase
your income by making your money work for you, rather than the other way
around. Think in terms of increasing your income by understanding how
money and debt work.
2. Protecting Your Money. The highest percentage of tax is paid by wage
earners. Thus look for other types of income than earned income. He
presents very practical alternatives.
3. Budgeting Your Money. A budget is a plan for "the coordination of
resources and expenditures." This does, of course, entail the simple
logical recognition that you cannot spend what you do not have. He
refocuses us on matching income to needs or desires by managing money
and creating wealth. Kiyosaki urges us to be intentional, planning what we
will spend, and to create ways to get income for what we plan, not being a
slave to to either a paycheck or to our uncontrolled desire for things. His

focus is on managing debt and understanding liabilities. In this section he
focuses on controlling expenses. Some money must first be put aside for
investment in real value. If the money becomes too little, more effort has
to go into bringing in more money in whatever ways.
4. Leveraging Your Money. Here Kiyosaki outlines specific strategies for
increasing the value of your money, creatively making it do more, saving
taxes by understanding how money, debt and taxation work, using other
peoples' money on "good debt" in assets that will produce money (like
rental property). A critical insight here is the confusion that owning a
house with investing. An "investment" is something that brings you return.
Kiyosaki focuses on creating cashflow. House prices derive primarily from
market value (valuation based simply of estimates, and who wants it, and
how many are looking for homes). Real estate you invest in will produce
income for you (cash flow, creating money and paying the expenses or
loan, etc.).
5. Improving Your Financial Information. He caps it with useful insights
and suggestions. In this section he describes 4 approaches to wealth,
related to developmental stages in human society and economies. Hunter-
Gatherer, Agrarian, Industrial and Information. This is a helpful practical
section on ways people think about wealth and money in certain life
contexts. Knowing these contrasts can help you take understand where
you are and take charge of your situation.
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