Chapter 5 of "Rich Dad Poor Dad" by Robert Kiyosaki is titled "The Rich Invent Money." This chapter focuses on the idea that rich people don't rely solely on traditional forms of income to become wealthy, but instead create their own sources of income.
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Kiyosaki begins by talking about his friend's father, who he refers to as his "rich dad." Rich dad was an entrepreneur who started with nothing but ended up becoming very wealthy. Kiyosaki says that one of the reasons his rich dad was successful was because he had a different mindset about money than most people. Rather than simply working for money, he found ways to make money work for him.
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The author goes on to explain that one way rich people make money is by creating assets. An asset is anything that puts money in your pocket, such as a rental property or a stock that pays dividends. Kiyosaki emphasizes that assets are not the same as liabilities, which are things that take money out of your pocket, like a car payment or credit card debt.
Kiyosaki also discusses the concept of cash flow, which is the amount of money that comes in and goes out of your pocket each month. He explains that rich people focus on increasing their cash flow by acquiring assets that generate passive income. Passive income is money that you earn without having to actively work for it, such as rental income or investment returns.
The author then gives examples of different types of assets, such as real estate, stocks, and small businesses. He also talks about the importance of education in creating wealth, stating that it's important to learn about different investment opportunities in order to make informed decisions about where to put your money.
Kiyosaki concludes the chapter by saying that creating assets and generating passive income is the key to becoming wealthy. He emphasizes that it's important to have a different mindset about money and to focus on creating assets that will continue to generate income for you over time.
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