One of the key to riches is to be financially literate. This was what the Rich Dad taught in Robert Kiyosaki’s book, “Rich Dad, Poor Dad”.

Does wealth then come automatically once you became financially literate?

Not necessarily and not certainly. Robert Kiyosaki believes that despite attaining a certain level of financial literacy, personal obstacles can prevent even the most financially literate from attaining their financial goal. These people will still continue to work a full time job, living from paycheck to paycheck instead of living a life which they dream of.

Robert Kiyosaki listed the top 6 personal obstacles to your financial success as

1. Fear

2. Cynicism

3. Laziness

4. Bad Habits

5. Arrogance

6. Disappointment

1. Fear

The main reason why 85% of the world struggle financially is fear – The fear of losing money. But fear is not the real issue here. The real issue is how you handle fear. Robert Kiyosaki explained.

Robert Kiyosaki understood from his Rich Dad that the primary difference between rich people and poor people is how they manage the fear of losing money. When suffering a loss in finance, some would just give up. Others will try to transform the loss into a win.

As John D. Rockfeller said, “I always tried to turn every disaster into an opportunity.”

Winners are those who are inspired by failures. Losers are those defeated by failures. In short, the rich will still act in spite of fear.

Robert Kiyosaki commented that people are so afraid of losing money, they played it too safe and eventually do not attain their financial success. If they have some cash, most people would go out and bug big houses, big cars and other “ego” toys. Or they would go on long vacations, which they justified as they deserved it, rather than investing.

If not, they invest all their money in balanced portfolios – in CDs and low-yield bonds and mutual funds and a few individual stocks. Drive by fear, these are people playing not to lose. Most of us, fall into this category. We want to protect our capital. We are low risker takers. Of course, a balanced portfolio is definitely a lot better than no portfolio. It seeks safety through diversity. It is important to have a financial plan for security and comfort first.

However, if you have any desire to become wealthy, you need to focus and not diversify.

You must put a lot of eggs in a few baskets rather than putting a few eggs in many, as advocated by Robert Kiyosaki.

If you are frightened by the prospects of failure, then play it safe first. Continue to keep your day job until you have accumulated enough money resources to buy bonds and mutuals. Consult with your financial advisor or planner to see what your portfolio should be if needed and adjust accordingly as you goes along. You work at attaining your security and comfort first before working on attaining your financial goal. Your journey to your financial goal will be therefore be very much slower and take a very long time.

If the prospect of failure, however, inspired you to carry on fighting for your financial success, may be you should challenged yourself to change your financial habits.

As it says “No risk, no gain”. Higher return in investment is usually accompanied by higher risk level. If you want high return in investment, you need to face higher risk level. Do not play it safe anymore. You will need to increase your risk appetite and learn to taken on some calculated financial risks based on your financial literacy.

As Robert Kiyosaki puts it, “Increase your financial knowledge and then learn to take some calculated financial risks. The more financial education you have, the more you can manage and minimized the risk.”

Managed the risks well and the gain will follow, and you will be on the fast track towards your financial goal.

In the next few articles, I will carry on to describe the rest of the personal obstacles to your financial success as defined by Robert Kiyosaki.

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