Many people today are struggling with their finances not because of a lack of opportunity but because of lack of knowledge. Robert Kiyosaki was lucky to have experiences from his two dads. One was his real father who was highly educated but fiscally poor. The other was the father of his best friend.
He was an eighth-grade dropout but became a self-made millionaire. Kiyosaki learned a lot about finances from his second dad and the fact that he was experiencing problems at home really pounded the points in for him. Rich Dad, Poor Dad, is a best seller number one personal finance book.
This Rich Dad Poor Dad summary is going to provide a breakdown of the book and the teachings given by Kiyosaki. Here are the 6 greatest lessons that you will get from the book.
The rich don’t work for money – This lesson is pretty obvious to many people, and many say it all the time, the rich don’t work for money. The rich have money work for them. However, very few people in the low and middle earning class really understand what it means to not work for money.
He points out that most people have a singular point of view and only look to get a higher raise or more money thinking it will make them happier.
Making money work for you means that you take risks. You get out of your comfort zone, and you use your brain to make you more money rather than just depending on a salary. Most people who are salaried have debts and earning more only gets them into more debt.
In this chapter, you will learn how to take risks and not let life beat you into submission as most people have. When you work for money, you have a price which most of the time is cheap. It is best also not to let fear and greed direct you in life.
Why teach financial Literacy? – In this lesson, Kiyosaki explains about keeping money. It is not about how much money you make but how much you keep. In keeping money Kiyosaki doesn’t mean literally in the bank. He implies that the rich get richer and keep their money by acquiring assets.
The poor on the other hand acquire liabilities that they think are assets. The middle class is caught in the rat race. If they get more money, they spend more and therefore never have anything to invest in assets.
Kiyosaki stresses the need for financial literacy. He states that “A person can be highly educated, professionally successful, and financially illiterate. Such a person is bound to fail in life regardless of how much money they make.
There are examples of some of the wealthiest Americans of his time, athletes and other people that ran broke regardless of having empires before. When you understand cash flow and how to buy real assets, then you have attained financial literacy and on your way to success.
Mind Your Own Business – Kiyosaki here teaches how to understand the difference between your profession and your business. If you are a banker, for instance,, you just work at the bank but don’t own the bank.
This chapter is all about identifying that you need to do more than just work for other people all your life. In minding your own business, you concentrate on your asset column rather than your income column.
Minding your own business doesn’t mean quitting your day job. On the contrary, Kiyosaki points out to keep your day job but mind your business by concentrating on your asset column. Invest in real estate, a business you do not have to run, bonds, stocks, and other real assets even while you are working.
The History of Taxes and the Power of Corporations – In this chapter, the author teaches what he calls “the biggest secret of the rich,” corporations. This is because the rich are able to avoid lots of taxes through corporations.
He explains what a corporation is not, as viewed by many people. It is not a big building or a group of many people. Instead, a corporation is a legal document that is used by the rich to avoid paying lots of taxes.
The rich also use corporates to protect their assets. They use corporates to earn money, spend money and be taxed only on what is left. For an individual that would be a lot of tax because everything would be taxed. In this chapter, Kiyosaki advises on the importance of gaining knowledge on finances, investing, accounting and markets.
The Rich Invent Money – This chapter is all about being bold. He states that “Often in the real world, it’s not the smart who get ahead, but the bold. It is therefore imperative that people learn how to take risks. He points out how people have talents and ideas that can make them money, but they are not bold enough to take chances. People just sit on their talents.
According to Kiyosaki, The single most powerful asset we all have is our mind. If it is trained well, it can create enormous wealth. He couldn’t have said it better because many people have lots of ideas that just go to waste because of fear. Harness your mind, increase your financial IQ and you will be able to attain financial success.
Work to Learn – Don’t Work for Money – learning a skill may make your career and your financial life change exponentially. In this chapter, the author indicates that many people do not grow in their careers and also financially because they do not learn anything new. Having a degree is good but learning just one skill with your degree can propel you to heights you did not imagine before.
The chapter stresses knowing a little about a lot so that you can have a synergy of skills. When you get that synergy, you are able to become much better at what you do because you see different points of view.
Why I Like the Book
I like that this book is highly practical and actionable. You get actionable tips that you can put in practice in your daily life to realize financial freedom. Everything is well explained in simple terms and not accounting jargon. You will learn what an asset is and what a liability is and further learn how you can acquire assets on your road to success.
Rich Dad Poor Dad is very easy to grasp. It outlines personal experiences that Kiyosaki went through which are relatable to most people and therefore the book really resonates. In your road to financial freedom, this might be the one book you should not fail to read.
Why You Should Read the Book
This book is literal and helps you understand the concept of money and how to become rich even when you are not making too much money. This is the book for you if you want to get financial IQ. The book will teach you what real assets are so you can make directed investment decisions. It also transforms you in terms of how you view your life, career, and success.
Check out the full audiobook on Audible here.