Rich Dad Poor Dad: A Small Business Perspective - Part One

Rich Dad Poor Dad: A Small Business Perspective - Part One

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Here is an insight into "Rich Dad, Poor Dad" that feels the pain and frustrations of the self-employed and small business owner for whom financial independence seems to be constantly just out of reach.

As a Poor Dad from Kiyosaki's S-quadrant - Self-employed/Small business group, I want to apply Step 10 of his process of developing our God-given powers: "Teach and you shall receive."

Rich Dad, Poor Dad is heavily skewed towards debunking the established mantra of "study hard so that you can get a good job or profession and achieve financial security." It highlights the advantages of following the alternative path of developing financial intelligence so as to effectively operate in the right-side quadrants of being an Investor or Big Business Owner.

A great deal of emphasis is placed on pointing to the inadequacies of being committed to striving for a good job or profession and working hard to accumulate savings. Kiyosaki actually makes a good case to show that "savers are losers".

Someone in my situation - 6th decade and small business owner for over 3 decades - might be tempted to believe that Rich Dad, Poor Dad might not be relevant. However, I want to share some valuable insights that I take from Kiyosaki.

New beginnings

New beginnings can start at any time. I was inspired by the reminder of the Colonel Saunders story of perseverance in working to sell an entrepreneurial idea. This came at the back end of a failed career at a time when others are retiring.

With the rising numbers who have been displaced from "secure" employment, the fact that there is hope and precedence for new beginnings is empowering.

I have a healthy respect for small business owners who while escaping the employment trap have still not attained financial independence.

What does Rich Dad, Poor Dad have to offer to us?

We have changed bosses not our status

A powerful realization is that for many small business owners, the term "self-employed" is really descriptive of our true status. We are still "employed". We have only changed bosses.

In fact, I bet that like me you have actually taken on a far more demanding boss. We have become slaves to the business.

The Rich Dad, Poor Dad philosophy is that we should identify investments that do not consume a lot of our time. If the operations need to be managed then hire talented people to drive the process. If you reflect on any time that you have spent being employed to others you can immediately see many benefits from having someone steering your ship while you provide the direction and monitor progress.

The spin-off benefits go beyond providing the business with objective and professional management. It also frees you up to develop your financial intelligence and to identify and manage other investment opportunities.

If you make the point that the business cannot afford to pay for professional management then you will be guilty of breaking two of Rich Dad, Poor Dad's fundamental principles.

Delete: I can't afford it

The first one is to delete the term "I can't afford it" from your vocabulary. Replace it with the Rich Dad question "How can I afford this?"

To insert an empowering concept outside of Rich Dad, Poor Dad content, this is the value of the concept of Afformations - the power that comes from asking "Why questions".

So, "Why am I able to engage professional management and grow my investments?is substituted for "I can't afford to pay for professional management."."

The sub-conscious mind actually determines our future. Our sub-conscious mind is set up to seek solutions for problems that we present to it. Finding answers is part of its core duties. Consequently, when we pose a desired outcome in the form of a question, our subconscious mind is set to work to find answers. Start asking your sub-conscious to find answers for outcomes that you desire and watch for a transformation in those areas of your life.

Pay yourself first

The other reason why many small business owners become slaves to their operations is because they are subsidizing the business with their free labour. Self-imposed slavery!

Rich Dad, Poor Dad pointedly insists that to make the shift to financial independence we have to pay ourselves first. In fact, the more scary the owners of your debt or liabilities are the greater the benefit of paying yourself first.

The reason is simple. If you face terrible consequences for not paying up on time, you are going to be forced to find creative ways to make that happen. However, you are not going to be scared of yourself so if you can't ante up when it is your turn to collect you will just let it slide.

Paying self goes beyond just a salary. It means investing in assets - income generating resources. To move to financial independence, we must add and sustain income generating resources BEFORE taking care of liabilities.

The logic is clear for anyone who has been caught up in the throes of running a marginal small business. There is a recurrence of the cycle of funds coming in and immediately going out to clear pending expenses and debt. There is nothing left to fund growth activities or to even think of diversifying the investment portfolio.

The lack of investment in growth leads to stagnation and a deepening of the vicious cycle. It is clear that one way to break free is to develop nerves of steel and heightened creativity. Take those into the decision to consistently make payments that are income generating before settling liabilities.

Take care not to neglect the need for additional creativity. The objective is not to build up a poor credit rating. The goal is to settle all bills on time. This approach just means that having taken care of the income generating activities off the top, you now have to find some way to get enough to take care of the wolves that are camping at your door.

About the Author:
TrevorESSmith has been a CEO in the corporate world and founder of the INFOSERV Group. He has authored many articles and "Success in Marriage" - Amazon. He is a people skills and performance enhancement coach with the Success with People Academy

As a hands-on leader he shares practical thoughts on Inter-personal relations, Team-building, Marketing, Sales, Customer Service, HR & Leadership.



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