Insights on Robert Kiyosaki’s Guide to Investing – Chapter 41

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And now to end the Phase 4 of the book, we’ll now go on this Chapter that answers the question “Why do rich people go bankrupt?”. This has been a familiar sight to every person who have attain such successful milestones in their life ~ to declare bankruptcy. Most businessmen went through bankruptcy before they know it. The common downfalls was that they get into gambling, drug or liquor addiction or even depression but the most common of it was that they have poor financial literacy skills.

A lot of notable people who have attained great success over the years have declared bankruptcy like Allen Iverson, 50 Cent, Mike Tyson and Cyndi Lauper. There were a huge list of entrepreneurs who have also declared bankruptcy like Donald Trump, Walt Disney and Henry Ford. Actually, according to rich dad, the average entrepreneur went bankrupt three times before learning how to maintain the wealth gained from the business.

The good thing though is that with this book, I have learned a pretty good thing like identifying which are the good expenses against bad expenses as well as the good debts against bad debts. Though expenses and debts do have a negative connotation when it comes to business, there were some of them that might save us from any bankruptcy issues. If we have attain such riches we often think of a lot of things to splurge the money and never realize that we splurge ourselves into bad expenses like a yacht, fast car or a mansion. Whereas if we use such money to acquire a bigger building for the business, a warehouse or a new machinery that would help in the production, it would boost the wealth.

There also comes some good debts in availing of mutual funds, insurance or investment portfolios to secure the retirement funds for the employees or to be used in future expansion. The problem with the common entrepreneur was that they do not think that way. All they want was to have enormous profits and minimal expenses without thinking on where to put that amount of money that they have generated.

Solving the problem of having less money is good but being able to solve also the problem of having too much money is way better. There is no sense in solving that B-I triangle formula or in gaining the wealth you have dreamed of if you do not know where to put the earnings over the years. Every entrepreneur must learn on how to create and build more assets as they grow their businesses because it is the only way to maintain and continue further on the road to riches.

NOTE: IF YOU MISSED THE EARLIER CHAPTERS HERE ARE THE LINKS:
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