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Questions and Answers
What do rich people buy first?
The poor and middle class often buy luxury items because they want to look rich.
True
What happens when people impulsively buy luxuries on credit?
The author and his wife went into debt to buy a luxury car.
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Why do the poor and middle class tend to buy luxury items?
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The author and his wife went into debt to buy a luxury car.
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What is the secret that puts the rich way ahead of the pack?
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The author and his wife bought their luxuries immediately.
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What is the result of building an asset column?
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Why do people often buy luxury items on credit?
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The author and his wife went into debt to buy a luxury car.
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What is the significance of the author's wife's Mercedes?
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The author and his wife built their asset column before buying luxuries.
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What is the key to affording luxuries without going into debt?
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Study Notes
The Rich vs. Everyone Else
- The rich focus on their asset columns, while everyone else focuses on their income statements.
- Ray Kroc, the founder of McDonald's, understood that his business was not in the hamburger industry, but in real estate.
- McDonald's is now the largest single owner of real estate in the world, owning valuable intersections and street corners globally.
Minding Your Own Business
- Many people work all their lives for someone else, and at the end of their working days, they have nothing to show for it.
- There is a difference between your profession and your business.
- People often confuse their profession with their business, and as a result, they spend their lives making someone else rich.
The Asset Column
- To become financially secure, a person needs to mind their own business, focusing on their asset column, not their income column.
- The rich focus on building their asset column, which generates passive income, rather than relying on their income from a job.
- Assets can include businesses, stocks, bonds, income-generating real estate, notes, royalties, and intellectual property.
Starting Early
- Parents should teach their children the difference between an asset and a liability and encourage them to start building a solid asset column before leaving home.
Investment Strategies
- The author's investment strategy for real estate is to start small, trade up for bigger properties, and delay paying taxes on the gain.
- For stocks, the author likes small companies, especially startups, and aims to sell the stocks within a year.
Financial Literacy
- Financial literacy is key to analyzing investments and building a successful business.
- Rich Dad stressed the importance of understanding accounting and cash management to be successful in business.
Building Wealth
- Building wealth requires patience, discipline, and a long-term perspective.
- Rich people buy luxuries last, after they have built their asset column, whereas the poor and middle class tend to buy luxuries first and go into debt.
- A true luxury is a reward for investing in and developing a real asset.
The Rich vs. Everyone Else
- The rich focus on their asset columns, while everyone else focuses on their income statements.
- Ray Kroc, the founder of McDonald's, understood that his business was not in the hamburger industry, but in real estate.
- McDonald's is now the largest single owner of real estate in the world, owning valuable intersections and street corners globally.
Minding Your Own Business
- Many people work all their lives for someone else, and at the end of their working days, they have nothing to show for it.
- There is a difference between your profession and your business.
- People often confuse their profession with their business, and as a result, they spend their lives making someone else rich.
The Asset Column
- To become financially secure, a person needs to mind their own business, focusing on their asset column, not their income column.
- The rich focus on building their asset column, which generates passive income, rather than relying on their income from a job.
- Assets can include businesses, stocks, bonds, income-generating real estate, notes, royalties, and intellectual property.
Starting Early
- Parents should teach their children the difference between an asset and a liability and encourage them to start building a solid asset column before leaving home.
Investment Strategies
- The author's investment strategy for real estate is to start small, trade up for bigger properties, and delay paying taxes on the gain.
- For stocks, the author likes small companies, especially startups, and aims to sell the stocks within a year.
Financial Literacy
- Financial literacy is key to analyzing investments and building a successful business.
- Rich Dad stressed the importance of understanding accounting and cash management to be successful in business.
Building Wealth
- Building wealth requires patience, discipline, and a long-term perspective.
- Rich people buy luxuries last, after they have built their asset column, whereas the poor and middle class tend to buy luxuries first and go into debt.
- A true luxury is a reward for investing in and developing a real asset.
The Rich vs. Everyone Else
- The rich focus on their asset columns, while everyone else focuses on their income statements.
- Ray Kroc, the founder of McDonald's, understood that his business was not in the hamburger industry, but in real estate.
- McDonald's is now the largest single owner of real estate in the world, owning valuable intersections and street corners globally.
Minding Your Own Business
- Many people work all their lives for someone else, and at the end of their working days, they have nothing to show for it.
- There is a difference between your profession and your business.
- People often confuse their profession with their business, and as a result, they spend their lives making someone else rich.
The Asset Column
- To become financially secure, a person needs to mind their own business, focusing on their asset column, not their income column.
- The rich focus on building their asset column, which generates passive income, rather than relying on their income from a job.
- Assets can include businesses, stocks, bonds, income-generating real estate, notes, royalties, and intellectual property.
Starting Early
- Parents should teach their children the difference between an asset and a liability and encourage them to start building a solid asset column before leaving home.
Investment Strategies
- The author's investment strategy for real estate is to start small, trade up for bigger properties, and delay paying taxes on the gain.
- For stocks, the author likes small companies, especially startups, and aims to sell the stocks within a year.
Financial Literacy
- Financial literacy is key to analyzing investments and building a successful business.
- Rich Dad stressed the importance of understanding accounting and cash management to be successful in business.
Building Wealth
- Building wealth requires patience, discipline, and a long-term perspective.
- Rich people buy luxuries last, after they have built their asset column, whereas the poor and middle class tend to buy luxuries first and go into debt.
- A true luxury is a reward for investing in and developing a real asset.
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Description
Ray Kroc, the founder of McDonald's, shares his business strategy with an MBA class at the University of Texas at Austin. What business am I in, he asks?
