Paying oneself first is something that Kiyosaki, the creator of the well-known Rich Dad Poor Dad book and brand, strongly advocates. Additionally, citing inflation as a reason, he exhorts people to invest their money rather than letting it stay in a bank account.
Kiyosaki was broke until he and his wife realised that in order to fulfil their aspirations, they needed to take care of themselves before their creditors. This is where the 10/10/10 plan was developed, in which the money placed away was considered a cost rather than an asset each month. The 30% that this plan with the three tens adds up to is the portion of your earnings that should go towards paying yourself first. In this scheme,
Although Kiyosaki is against putting money in a savings account that yields little return, he does advocate for you to develop the practise of paying yourself first so that you have money for investments. You will never have enough money to invest in assets that will eventually lead to financial independence if you don’t take care of yourself first.
Kiyosaki has stated on several occasions that he thinks savers are losers, thus it would seem that he holds this opinion. This makes sense because most individuals don’t understand the distinction between saving and investing. When you save money and keep it in a basic bank account, the interest rate is minimal. Let’s assume that inflation is 8% and that you make 1% on your investment. Because your income isn’t increasing quickly enough to keep up with the expanding expense of living, you are losing out.
The following was stated in the blog post by Kiyosaki on investing as opposed to saving:
You don’t have to invest all of your money in the stock market or go out and purchase a ten-unit apartment complex. However, you must take action!
This article aims to motivate readers to invest their savings rather than having them languish in an account that barely yields interest when there are worthwhile investments to be made.
When it comes to investment and financial outcomes, Kiyosaki advises his readers to learn from the experiences of the successful and to follow their own counsel. He thinks that since you’ll probably receive a sales pitch, financial planners are not a good choice for education.
As long as you start learning and acting, you may invest in other assets, even if Kiyosaki started by buying one-ounce silver coins.
According to Kiyosaki, your financial trajectory is ultimately determined by what you do with your money, not by how much of it you have. The idea is to always have money to invest and to pay yourself first. After you have money to invest, you should research investments that are worthwhile so that your money increases more quickly than the rate of inflation. As usual, we advise you to do your research before spending hard-earned cash.