Uncomfortable Truths about Getting Rich

It turns out that money is important for more than just buying beer and the occasional video game.  Recently, I read an eye opening book, Rich Dad Poor Dad,  that puts you into the mindset of how the rich think about money.  Its a great book but I have to tell you that it really is hard for me to accept some of the points that the author makes.  The eye opening thing I realized is that I don't actually like or really even care about money.

This is a problem.

Here are a few things I learned recently that have made me squirm:

1.)Pay Yourself First

I always thought this meant buying myself that shiny new iPod before paying the taxes.  The reality is that the book recommended that you put aside 30% of your income to invest in assets.  Assets are things that make you money like rental properties.  That is a lot of money and a lot of possible angry bill collectors.  They call this motivation to go out and "invent money".  This is also money you need to be able to risk (aka: lose).

2.) Outsource

This goes deeply against my middle class brains, but living richly means delegating.  Hire a cleaning lady, a plumber, or whatever professional you need to do your work.  A rich person values their time.  Delegating the tasks that you are not needed for frees you up to make the money or spend your time wisely with the family.

3.) Borrow to Invest

I don't like being in debt, but the author of Rich Dad Poor Dad believes that you should use the bank's money to invest and not your own.  This makes sense for real estate since essentially your tenants pay your debt off and you use the banks money to pay all your liabilities.  Obviously, if you really believe that an investment will give you a 20% return then getting the bank to loan you 4 times your savings will net you a much bigger return.