“Rich Dad Poor Dad”
In this week lecturer, I have watched the video “Rich Dad, Poor Dad” by Robert Kiyosaki. This video is about Kiyosaki and his two fathers – his real father is poor, and his father’s best friend is wealthy, and the way both of them manage their finances differently had helped him develop his mindset about financial knowledge and investing. As a business major student, I have learned a lot of financial advice and lessons from this video, and I was genuinely inspired by his experiences, especially the concept of “wealthy people don’t work for money”. According to Kiyosaki, passive income such as investments, dividend stocks, rental is one of the ways the rich get richer. The poor and the middle class would work for money, while the rich have money working for them. Generally speaking, most people would work hard for a high salary, but as soon as they stop working, their income stops too. However, if you invest in passive income, it will generate income even if you are not working. After watching this video, I will manage my expenses well, save money, invest in passive income and tend not to spend money on luxuries items until I really can afford it. In university, I saw many of friends who collect their parent’s allowance and spend them on luxuries things such as expensive shoes and clothes just to show off; and when it’s almost end of the month, they don’t have money to buy food and always ask others to lend money to them. I think this is terrible money management and they didn’t have a consideration about their long-run financial sustainability. If I have free time, I will show this video to them and have an interpersonal conversation with them to improve their money management. Instead of spending on luxuries items, they should invest in passive income.
I have also watched the video “How to Get People to Say Yes” by Robert Cialdini. In this video, Cialdini shared his psychology tips and his six principles of influence that greatly persuade customers or clients. This video is truly inspiring as it applies to the science of persuasion, which is one of my favourite subjects. From this video, I learned his six principles of influence:
- Reciprocity– When someone gives you something, you will feel committed to giving them something back. In other words, doing right by others is an excellent way to get others to do the same for you; this is the old “give and take” scenario. Many businesses use this basic principle of influence to encourage customers to purchase things from them by offering them free gifts or treating them with great respect and friendliness.
- Consistency – People enjoy being consistent with the things they had done. People are more willing to be moved in a particular direction if they see it as consistent with an existing commitment. This means that small actions could slowly turn into a more significant action in the future. An excellent example of the commitment principle is used in retail sales – notice how a good salesperson will try to get you to try something on – once you are committed to trying, you are closer to buy.
- Social Proof – People hugely rely on social cues from other people in many uncertain situations. People look to take a recommended action as a guide if they are unsure about what to do, and if they see evidence of many other people doing it, they are likely to take it as well. Have you ever noticed how a small group of people could attract crowds, and it turns into a mob? That’s is because of social proof. Having that first-person take action makes all the difference and unlocks the power of social proof.
- Liking -According to persuasion science, there are four essential factors that will increase the chances of people saying yes, that is, people who are attractive, who pay us compliments, people who share common goals, and people who we know and perceive as friends.
- Authority -People tend to defer to experienced, credible and knowledgeable experts. A lot of advertisements use this strategy to promote their products by having experts recognized their products and getting approved.
- Scarcity -As things become scarce, its value rises and people want it more, just like diamonds and jewels. People want more of those things they can have less of. Many businesses use this strategy by showing that the items are limited edition, limited time or limited supply.
In conclusion, this week’s lecture is super beneficial to me as a business student. Although I have learned many concepts and ideas, the key to it is to know how to apply. I will try to use these strategies and concepts in the future as I know it will be handy. In short, I have learned the importance of having passive income and the science of persuasion.
*The video “Mindset” by Carol Dweck was done in week two and the video “5 Seconds to success” by Mel Robbins was done in week 6. *