Book – Rich Dad Poor Dad (What the Rich Teach Their Kids about money, that the Poor and Middle Class do not)
Author – Robert Kiyosaki
Genre – Personal Finance – Non-Fiction
Published in – 1997
Whether you just started working for a while or working for a long time and don’t seem to be getting ahead financially, Rich Dad Poor Dad will help you understand why and provide guidance to gain financial independence.
With perspectives on money and investing that often contradict conventional wisdom, Robert has earned an international reputation for straight talk, irreverence, and courage. He has become a passionate and outspoken advocate for financial education.
He claims that one of the reasons the rich get richer, the poor get poorer, and the middle class struggles with debt is that money is taught at home, not in school.
About The Book –
Rich Dad and Poor Dad share an unconventional yet powerful perspective on money and how it works, and we must make it work for us rather than working for it if we ever want to attain financial well-being.
In this best-selling book, he shares what he learned from his two dads, One rich (His friend’s Dad) and one poor (His real Dad), starting from age nine. Though both were successful in their respective work, one flourished financially and struggled.
Robert claims money is one form of power. But what is more powerful is financial education. Money comes and goes, but if you have the education about how money works, you gain control over it and can begin building wealth.
The book is mainly about six lessons he learns from his rich Dad, which were repeated to him over 30 years in various forms. I loved the way Robert turns complex topics into simple ways with simple pictures and words, which makes learning fun, practical, and memorable.
Here are Excerpts From Each Lesson
Robert doesn’t claim these lessons to be answered but guideposts that will assist you and your children to grow wealthier no matter what happens in a world of increasing change and uncertainty.
Lesson # 1 – The Rich Don’t Work For Money – The Rich Have Money Work For Them –
- Rich Dad told Mike and Robert that the rich don’t work for money; they work to learn and build assets, which generates cash flow, whether they work or not.
- On the other hand, the poor and middle-class’s lives are forever controlled by two emotions: Fear and Greed. The fear of not having enough money to survive, and once they have enough, greed & desires take over and keep the person trapped in the rat race. Get up, go to work, pay the bills.
Lesson # 2 – Financial Literacy –
- If you want to be rich, you need to be financially literate. Rich people acquire assets. The poor and middle class accept liabilities that they think are assets.
- You must know the difference between an asset and a liability and buy assets. Definition of Asset & Liability: An asset puts money in my pocket. A liability takes money out of my pocket.
- Robert defines Financial aptitude as what you do with the money once you make it, how to keep people from taking it from you, how to keep it longer, and how to make that money work hard for you.
Lesson # 3 – Mind Your Own Business –
- Financial struggle is often the direct result of people working all their lives for someone else. Many people will have nothing to show for their efforts at the end of their working days.
- When Robert says mind your own business, He means to build and keep your asset column strong. Once a dollar goes into it, never let it come out. Think of it this way: Once a dollar goes into your asset column, it becomes your employee. Keep your day job, be hardworking, but keep building that asset column.
- The rich focus on their asset columns while everyone else focuses on their income statements. An important distinction is that rich people buy luxuries last, while the poor and middle class tend to buy extras first.
Lesson # 4 – The History of Taxes and The Power of Corporations –
- The reality is that the rich are not taxed. The middle class, especially the educated upper-income middle class, pays for people with low incomes.
- The taxes were initially levied on the rich and eventually applied to middle and poor-class people. By the time taxes were normalized, only the middle and poor class paid more in taxes than the rich. Rich saved on corporations by routing their income through it.
Lesson # 5 – Rich Invent Money –
- With the help of many real estate deal examples in the book, Robert explains that Rich invents money by putting together deals, which is not seen by financially untrained eyes.
- Robert explains that Rich people can be well-versed in the four essential skills of making money: Accounting, Investing, Understanding Markets, and The Law.
Lesson # 6 – Work to Learn, Don’t Work for Money –
- Robert suggests that many people struggle financially despite being talented at a particular skill. He means that most people are one skill away from building wealth.
- He insisted on learning little about a lot rather than a lot about little and encouraged them to learn to manage people, as that is one of the most challenging business tasks.
- The world is filled with talented, poor people. All too often, they’re poor or struggle financially or earn less than they can, not because of what they know but because of what they do not know.
Overcoming Obstacles to Become Wealthy
The primary difference between rich and poor people is how they manage fear.
Robert claims that there are five main reasons why most people, despite getting financially literate, don’t build strong asset columns that produce large cash flow: fear, Cynicism, Laziness, Bad Habits, and Arrogance.
1) Overcoming Fear –
- Roberts claims that I have never met anyone who likes losing money. And in all my years, I have never met a rich person who has never lost money. But I have met many poor people who have never lost a dime—investing.
- Most people don’t win financially because the pain of losing money is far greater than the joy of being rich.
2) Overcoming Cynicism –
- All of us have doubts: “I’m not smart.” “I’m not good enough.” “So-and-so is better than me.” Our doubts often paralyze us. We play the “What if?” game.
- His point is that those doubts and Cynicism keep most people poor and playing it safe. The real world is simply waiting for you to get rich.
3) Overcoming Laziness –
- Robert claims that the most common form of Laziness is Laziness by staying busy. Most people who claim to be active are avoiding real issues they know they should be dealing with.
- 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.
4) Overcoming Arrogance –
- Robert explains what I know makes me money. What I don’t know loses me money. Every time I have been arrogant, I have lost money. Because when I’m arrogant, I truly believe that what I don’t know is unimportant.
- Roberts suggests learning what we don’t know rather than ignoring what we don’t know through our Arrogance.
A few Suggestions to Get Started
1) Stop doing what you’re doing – Take a break and assess what is working and what is not. Stop doing what is not working and look for something new.
2) Find someone who has done what you want to do – It is much better to seek people who have done what you want to do and ask for suggestions and guidance. When you genuinely seek advice, you often find it.
3) Take classes, read, and attend seminars – Robert suggests taking courses, reading more books, and following a meeting to learn constantly. Robert claims that he is wealthy and free from needing a job simply because of the courses he took.
I have also created a video of a few quotes from the book – I hope you like it. Please subscribe to my YouTube channel – Myread4change.
Rich Dad, poor Dad is one of the best books on money. It will give you a fresh perspective on money and encourage you to move in the right direction of wealth building.
If you have money concerns and are open to digging into money, this book will lay a great foundation.
I hope this summary helps you understand money better. Please leave your suggestions/feedback in the comment section.
Thank you for Reading.