Feb 2, 2018

Applying the Rich Dad Poor Dad principle of buying assets to Information Technology

A few years ago I wrote a post about how start-up companies should use open source technology to reduce cost. The truth is, I think ALL companies can benefit from using open source technology to reduce cost.

Well, I've been reading various financial books lately. Yesterday I mentioned Dave Ramsey's Total Money Makeover, and today I'm going to talk about Rich Dad Poor Dad. Both of these books have some opposing views, but they also give you valuable insight to money.

The specific thing I want to talk about from Robert Kiyosaki's book, Rich Dad Poor Dad, in regards to Information Technology, is the principle of the rich buying assets. You see, one of the things he talks about is that poor people buy liabilities, and the rich buy assets. In simplified terms assets are things that put money in your pocket, and liabilities are things that take money out of your pocket.

As an I.T. professional, the thing that immediately came to mind is software licensing! At my day job we have Microsoft Windows Servers, VMWare Hypervisors and Microsoft SQL servers. All of those costs gobs of money every year in software licensing costs. There are open source alternatives to these things though which don't cost anything to use! You have Linux operating systems, Xen Hypervisors and PostgreSQL databases you can use. Paying for Microsoft and VMWare is a liability! It takes money out of your pocket!

If you instead used your money wisely, and bought assets like beefy servers with high-end CPUs and boat loads of RAM, you would be buying assets that can actually make you money, and put cash in your pocket! You can then run these servers with open source solutions like Ubuntu, KVM or MySQL for nothing!

My rule of thumb is always use open source, and spend your money on hardware!

Now, Kiyosaki himself wouldn't recommend even working in Information Technology. The whole premise of his book is to buy assets, be an entrepreneur, buy companies, etc. However, if you were someone that was buying or starting a technology based company, then following the premise of buying hardware, and using open source ties in nicely with Kiyosaki's teachings in my opinion.

Just look at a couple of the largest software companies around, Google and Facebook. Both platforms run on Linux and use proprietary web applications built on open source software. They aren't paying Microsoft a damned thing!

What do you think about this? Am I right? Am I wrong? Let me know in the comments!

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