The rich become wealthy by making their money work for them. They don’t spend all their money on fancy things; instead, they invest some of it in different things that can make them even more money. They let these investments do the hard work, rather than working for money. But let’s go back to when Robert was just a kid and didn’t know much about money. Mike’s dad, who was rich, taught them an important lesson. He said that rich people buy things that make them money, like assets, while others buy things that take their money, like liabilities.

An asset is something that adds money to your pocket, like when you get paid. A liability takes money away, like when you have to pay for things, like a house. Even though most people think a house is an asset, it’s often a big liability because you have to pay for it every month. Buying a house with a mortgage means you’ll be paying for it for a long time, and it takes money away from you. Rich dad told the boys that to become rich, they should focus on buying real assets that make them money and avoid spending on liabilities.

Rich people don’t rely on a regular salary to cover their expenses. Instead, they have assets that bring in money and still leave some to invest in things like stocks, bonds, or properties they rent to others. This investment keeps making their income grow, so they keep getting richer. Here’s the important lesson: If you can keep your expenses low and invest what’s left in assets, your money will work for you, and you’ll gradually build wealth.