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The Psychology Of Poverty and Karmic Management



The Psychology of Poverty


Rich Dad Poor Dad is a 1997 book written by Robert Kiyosaki and Sharon Lechter and is a good illustration involving the psychology of poverty.


The book centres on Robert Kiyosaki and his two ‘dads’—his real father (poor dad) and the father of his best friend (rich dad)—and the ways in which both men shaped his thoughts about money and investing.


I would recommend you read the book as this blog is a summary and does not do justice to the contents, but to summarise the book’s key principles.


In short, what separates rich people from poor is the rich make money work for them. I would recommend you read the book as this blog is a summary and does not do justice to the contents, but to summarise the book’s key principles.

  • The poor and the middle-class work for money. The rich have money work for them.

  • It’s not how much money you make that matters. It’s how much money you keep.

  • Rich people acquire assets. The poor and middle class acquire liabilities that they think are assets.

  • Financial aptitude is what you do with money once you make it, how you keep people from taking it from you, how to keep it longer, and how you make money work hard for you.

  • The most powerful asset we all have is our mind.

Some key quotations from the book provide invaluable insight into the psychology or poverty.


“There is a difference between being poor and being broke. Broke is temporary. Poor is eternal.”


“Money comes and goes, but if you have the education about how money works, you gain power over it and can begin building wealth.”


“People’s lives are forever controlled by two emotions: fear and greed.”, “So many people say, ‘Oh, I’m not interested in money.’ Yet they’ll work at a job for eight hours a day.”


“Thinking that a job makes you secure is lying to yourself.”


“Intelligence solves problems and produces money.”


“You must know the difference between an asset and a liability and buy assets.”


"Good assets put money into your wallet. A liability takes money out of your wallet"


“Illiteracy, both in words and numbers, is the foundation of financial struggle.”

“The number-one expense for most people is taxes.”


Higher incomes cause higher taxes. This is known as “bracket creep.”


“More money seldom solves someone’s money problems.”


“The fear of being different prevents most people from seeking new ways to solve their problems.”


“A person can be highly educated, professionally successful, and financially illiterate.”


“Many financial problems are caused by trying to keep up with the Joneses.”


Once you understand the difference between assets and liabilities, concentrate your efforts on buying income-generating assets.


“The problem with simply working harder is that each of these three levels takes a greater share of your increased efforts. You need to learn how to have your increased efforts benefit you and your family directly.”


“Wealth is a person’s ability to survive so many numbers of days forward—or, if I stopped working today, how long could I survive?”


“The rich buy assets. The poor only have expenses. The middle class buy liabilities they think are assets.”


“The rich focus on their asset columns while everyone else focuses on their income statements.”


“Financial struggle is often directly the result of people working all their lives for someone else.”


“The mistake in becoming what you study is that too many people forget to mind their own business. They spend their lives minding someone else’s business and making that person rich.”


“To become financially secure, a person needs to mind their own business.”


“Financial struggle is often the result of people working all their lives for someone else.”


“The primary reason the majority of the poor and middle class are fiscally conservative—which means, ‘I can’t afford to take risks’—is that they have no financial foundation.”


“One of the main reasons net worth is not accurate is simply because, the moment you begin selling your assets, you are taxed for any gains.”


“A new car loses nearly 25 percent of the price you pay for it the moment you drive it off the lot.”


“Keep expenses low, reduce liabilities, and diligently build a base of solid assets.”


Robert clearly states the concept of making money work for you. “If I have to work there, it’s not a business. It becomes my job.”


According to Kiyosaki, real assets fall into the following categories:

  • 1. Stocks

  • 2. Bonds

  • 3. Income-generating real estate

  • 4. Notes (IOUs)

  • 5. Royalties from intellectual property such as music, scripts, and patents

  • 6. Anything else that has value, produces income or appreciates, and has a ready market.

Start minding your own business. Keep your daytime job, but start buying real assets, not liabilities.


When Kiyosaki says mind your own business, he means building and keeping your asset column strong. Once your cash goes into it, keep it there to see the compounding effect materialise.


“The best thing about money is that it works 24 hours a day and can work for generations.”

“An important distinction is that rich people buy luxuries last, while the poor and middle class tend to buy luxuries first.”


“A true luxury is a reward for investing in and developing a real asset.”


“If you work for money, you give the power to your employer. If money works for you, you keep the power and control it.”


“Each dollar in my asset column was a great employee, working hard to make more employees and buy the boss a new Porsche.”


Kiyosaki reminds people that financial IQ is made up of knowledge from four broad areas of expertise:

  • 1. Accounting

  • 2. Investing

  • 3. Understanding markets

  • 4. The law


“A corporation earns, spends everything it can, and is taxed on anything that is left. It’s one of the biggest legal tax loopholes that the rich use.”


“Often in the real world, it’s not the smart who get ahead, but the bold.”


Kiyosaki sees we all have lots of but the one common trait which holds all of us back is some degree is one’s level of self-doubt.


He explains that financial genius requires both technical knowledges as well as courage.

“Financial intelligence is simply having more options.”


“The single most powerful asset we all have is our mind. If it is trained well, it can create enormous wealth.”


“The world is always handing you opportunities of a lifetime, every day of your life, but all too often we fail to see them.”


Robert uses two main vehicles to achieve financial growth: real estate and small-cap stocks.

“Simple math and common sense are all you need to do well financially.”

“The problem with ‘secure’ investments is that they are often sanitized, that is, made so safe that the gains are less.”

“It is not gambling if you know what you’re doing. It is gambling if you’re just throwing money into a deal and praying.”

“Most people never get wealthy simply because they are not trained financially to recognize opportunities right in front of them.”

“Great opportunities are not seen with your eyes. They are seen with your mind.”

“Look down the road at what skills they want to acquire before choosing a specific profession and before getting trapped in the Rat Race.”

“Education is more valuable than money, in the long run.”


The main management skills required for being successful are as follows;

  • 1. Managing cash flow

  • 2. Managing systems

  • 3. Managing people


“The most important specialized skills are sales and marketing.”

“To be truly rich, we need to be able to give as well as to receive.”

“Giving money is the secret to most great wealthy families.”

“The primary difference between a rich person and a poor person is how they manage fear.”


There are five main reasons why financially literate people may still not develop abundant asset columns that could produce a large cash flow. The five reasons are:

  • 1. Being Fearful

  • 2. Having a sense of Cynicism

  • 3. Being Lazy

  • 4. Keeping hold of bad habits

  • 5. Having a sense of arrogance


“For most people, the reason they don’t win financially is because the pain of losing money is far greater than the joy of being rich.”

“Failure inspires winners. Failure defeats losers.”

“Real estate is a powerful investment tool for anyone seeking financial independence or freedom.”

“A great property manager is key to success in real estate.”

The most common form of laziness is staying busy.

“Rich dad believed that the words ‘I can’t afford it’ shut down your brain. ‘How can I afford it?’ opens up possibilities, excitement, and dreams.”

“Whenever you find yourself avoiding something you know you should be doing, then the only thing to ask yourself is, ‘What’s in it for me?’ Be a little greedy. It’s the best cure for laziness.”


Robert illustrates how one’s flawed arrogant mindset is often used to hide their own ignorance.

“There is gold everywhere. Most people are not trained to see it.”

“Most people simply buy investments rather than first investing in learning about investing.”

Robert believes one of the hardest things about wealth-building is to be true to yourself and to be willing to not go along with the crowd.

“The rich know that savings are only used to create more money, not to pay bills.”

“The sophisticated investor’s first question is: ‘How fast do I get my money back?’”


Karmic Management for Success

Karmic Management (2009) written by Geshe Michael Roach and Lama Christie McNally outlines eight karmic rules that will impact your personal and financial life.


Karma – Whatever You Want Out of Life, You Must Do for Someone Else First

We often use karma to describe the idea that what goes around comes around. The problem with this definition is that it’s too passive –as if life is happening to you.

The authors point out that karma is the result of the “imprints” or “impressions” you leave on the world and on the people, you interact with daily. These impressions are a choice you make when you choose your thoughts, words and actions. And by consciously thinking, speaking and acting, you can positively impact your business and your life.

The idea is to put your focus on thinking, speaking and doing the “right things” and stop worrying about what happens. The assumption is that if you are doing the right things, the right things will happen. Things don’t go the way we want them to because we’re not aware of the unconscious ways that we sabotage our success.


Here is a summary of the principles:

Stop doing things that don’t work. Stop worrying about whether something will work or not. This worry wastes brain space and time. Just be sure that things will work out.


Find the cause of the cause. “If something doesn’t work each time you try it, then it doesn’t work.” The authors use the example of turning the key in the ignition to start the car (that would be a cause of starting the car) but what if that doesn’t work? What’s the cause behind the cause? Maybe the battery is dead! That would be the cause. Then they use the example of selling 100,000 units of anything. Calling customers is a cause of sales. But if calling customers doesn’t work, what’s the cause of its not working? The authors urge you to look at and make a list of your successes – then look behind those successes at ways that you might have helped someone else become successful. Perhaps you helped someone else sell more widgets by referring customers to them. These thoughts and actions will help you sell more widgets too.


1. Identify your karmic business partners. Who is playing this business game with you? Co-workers, customers, suppliers and the world. Take the time and effort to put a plan together for how you will think, speak and act with each one to help them achieve and succeed so that you will succeed too.

2. Start with yourself. This chapter brings home the point that you are responsible for the results you achieve in life. The authors offer a detailed plan with recommendations for meditation, exercise and even what to eat.

3. Stop making decisions. Decisions only matter if you are worried about whether one will succeed and the other will fail. If you are thinking, speaking and acting consciously, then whichever you choose, the results will be successful. (Yeah, I’m still struggling with this one).

4. Load your stapler. Your stapler will work – if it has staples. Again, the concept is to always be thinking, speaking and doing those things we want for ourselves – for others first. This is what “loads the stapler.”

5. Ride your problems over the top. What if your problems were a blessing? That seems sort of ironic, doesn’t it? According to karmic management principles, experiencing a problem is a signal as to where you need to act. So, if your problem is that you’re out of money – quick, run out and help someone make more money! And if something happens to you that you don’t like, stop doing it to others.

6. Re-invest the karma. Now that you’re experiencing all the blessings and happiness that come from your conscious thinking, speaking and doing, what will you do with it? Reinvest the karma in your karmic business partners. It’s the circle of business. Help others succeed.


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#higherconsciousness #balance #wisdom #happiness #poor #Karma #millionaire

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