“What if the secret to building wealth wasn’t about how much money you make, but the words you use every day?”

Hi everyone,

I am reading Rich Dad’s Guide to investing. This is a lesson I learnt from there. I want to share it with you. By the way, these newsletters are not advices on how to invest but rather to educate you. To make it clear, I am not advising anyone to invest. I hope you like it.

The lesson begins-

Rich Dad once said, "Most people are unknowingly setting themselves up to be poor."

"What?" I asked, shocked. "Why do you think that? How can you say that?"

"I just pay attention to what people say," he replied. "If you listen closely, you can see a person's past, present, and future just by the words they use."

The Power of Words

"Have you ever heard someone say, 'It takes money to make money?'" he asked.

"Yes, all the time," I answered. "Why?"

"Because that belief is one of the most limiting ideas out there, especially for someone who wants to build wealth," Rich Dad said.

Handing him his drink, I said, "I don’t understand. Are you saying it doesn’t take money to make money?"

"No," he said, shaking his head. "It doesn’t. It takes something far more accessible and much cheaper than money."

To illustrate this point, Rich Dad gave Robert a task: take his biological father out for dinner and pay close attention to the words he uses, noting how they reflect his mindset about money.

A week later, Robert met with Rich Dad.

"So, what did you observe?" asked Rich Dad.

"It was eye-opening," Robert said. "I listened to his words and noticed that he frequently said things like, 'I’ll never be rich,' and 'The moment I decided to become a teacher, I knew I’d never make much money."

"Has he always said things like that?" Rich Dad asked.

"Yes, over and over again," Robert replied.

"What other phrases did you notice?" Rich Dad pressed on.

"Things like, 'Money doesn’t grow on trees,' 'Do you think I’m made of money?' and 'The rich don’t care about people like I do,'" Robert listed.

"Now, do you understand what I mean when I say that you can see a person’s past, present, and future through their words?" Rich Dad asked.

Robert nodded and said, "And I noticed something else, too."

"What’s that?" Rich Dad asked.

"You use the language of a businessman and investor. My dad speaks like a teacher. You talk about things like 'capitalization rates,' 'EBIT,' 'cash flow,' and 'profit margins.' He talks about 'test scores,' 'curriculum,' and 'tenure.'"

Rich Dad smiled. "It doesn’t take money to make money. It takes words. The difference between a rich person and a poor person is often the vocabulary they use. If you want to change your financial life, start by expanding your financial vocabulary. And the good news is that words are free."

When Robert began teaching entrepreneurship and investing, he became acutely aware of how people’s words reflected their financial outlook. Research showed that most people only command a few thousand words, and those words shape their financial reality.

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Schools teach doctors the language of medicine and teachers the language of education. But if someone leaves school without learning the vocabulary of finance, investing, or accounting, they will struggle to grasp financial opportunities later in life.

To address this gap, Robert created the CASHFLOW board game. The game familiarizes players with financial terminology and the connections between words like 'asset,' 'liability,' 'income,' and 'expense.' By repeatedly playing, people learn the true meanings of these terms, which are often misunderstood.

Did you know that Robert has created a game which you can play to learn financial words and learn about finances? If you want to play the game then visit the link below. It will take you to the website where you can play the game. Did you know that this game is completely free! Click the link below 👇:

And No. I am not sponsored by them.

Back to the lesson.

Rich Dad emphasized, "It’s not just about knowing the definitions of financial terms. It’s about using them correctly. Calling a liability an asset can cause long-term financial damage."

He added, "It’s not money that builds wealth—it’s the language of money. If you want to be rich, you need to learn the words rich people use and use them effectively. And remember, words are free."

Following this lesson, Robert began to listen more closely to the words people used around him. He noticed that many people unknowingly prepared themselves for financial struggle by saying things like, "When I retire, my income will drop." And it often did.

Others would say, "My expenses will decrease after retirement, so I won’t need much money." They often failed to consider that while some expenses decrease, others, like healthcare or nursing home costs, increase significantly.

Some people relied solely on their work retirement plans without considering that comprehensive financial planning involves much more than just investments. It also involves planning for education, healthcare, and long-term care.

Rich Dad’s final lesson on the subject was clear: "The problem with being young is that you can’t imagine what it feels like to be old. If you did, you’d plan your financial life very differently."

To illustrate this, Robert conducted an exercise in one of his classes. He tied his students' ankles and necks with rope, forcing them to stoop over as if they were elderly. Then, they had to prepare a meal, struggling to cut, stack, and eat their food.

After two hours of this exercise, Robert asked if they wanted to spend some time writing a financial plan for their future. The response was overwhelmingly positive. The exercise had given them a small taste of what it might feel like to be old and unprepared financially.

Rich Dad often said, "The problem with most people is they only plan up to retirement. That’s not enough. You need to plan for decades beyond retirement. If you’re truly wealthy, you should plan for at least three generations after you. Otherwise, the money will likely be gone shortly after you’re gone."

By the way, all of the things that you have read have come from this book. There are many things in this book which will challenge your current beliefs and there are many teachings that I hope will be helpful to you. What are you waiting for, get your hands on this book with the given link—

The lesson was clear: Words shape our financial destiny. And the best part? Words are free.

You can read more on:

Why a house is a liability-

The Five Laws of Gold according to the Richest Man in Babylon

Did you know firefighters can be millionaire:

Learn what are ‘Soft Assets’-

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