Rich Dad Poor Dad : Book Review and Summary

Rich Dad Poor Dad : Book Review and Summary

Author :  Robert Kiyosaki (Rich Dad Poor Dad)

What is this book about ?

This book focuses on teaching us what the rich teach their kids about money , that the poor and the middle class don’t. 

Who should read it ?

This is one of the must read books for the youth belonging to poor/middle class background. It gives a sense of direction if you’re just starting out to invest. This book takes about a week to finish and is easily understandable.

Top quotes from the book: 

A) The single most powerful asset we all have is our mind. If it is trained well, it can create enormous wealth.

B) The richest people in the world build networks; everyone else is trained to look for work.

C) There is a difference between being poor and being broke. Broke is temporary. Poor is eternal.

D) Rich people acquire assets. The poor and middle class acquire liabilities that they think are assets.

E) So many people say, ‘Oh, I’m not interested in money.’ Yet they’ll work at a job for eight hours a day.

F) The philosophy of the rich and the poor is this: the rich invest their money and spend what is left. The poor spend their money and invest what is left.

G) Financial struggle is often the result of people working all their lives for someone else.

H) Often in the real world, it’s not the smart who get ahead, but the bold.

I) Don’t be addicted to money. Work to learn, don’t work for money. Work for knowledge.

J) It’s more important to grow your income than cut your expenses. It’s more important to grow your spirit that cut your dreams.

Take home message: Summary

A) One was his Poor, educated dad and the other one was his friend Mike’s Dad who was not well educated but Rich. 

Poor dad had a very different perspective on life and finances. He believed that getting good education and working a 9-5 job is the solution to financial problems . He believed in working hard in our jobs to get promoted and that’s the only way to earn more income. 

Unlike Rich dad who believed that education was necessary, but not just to do a job and get a salary. He strongly believed that financial literacy is very important. He said that ” The poor and the middle class work for money. The Rich have money work for them”. Buying or building assets that deliver cashflow is putting your money to work for you ! Here you do not have to be physically present all the time, yet the cash flows. Where as working a 9-5 Job is working for money. Most people have a price. They have a price because of fear and greed. The fear of having no money or losing it motivates us to work hard and then once we get the salary, greed/desires to buy luxurious things that are out of our affordability. So we work harder for promotion and better salary. Hence this cycle is set in. The middle class are taught that this is the only way to afford better things in life. If you don’t handle your fear and desire, and you get rich, you’ll only be a highly paid slave. The Rich dad says , ” Learn to use your emotions to think and not think with your emotions”. Which means we’ve to consciously choose thinking rather than reacting to our emotions.

B) Most people fail to understand that in life, it’s not how much money you Make. It’s how money you keep. Rich people acquire assets while the poor and middle class acquire liabilities. An asset put money in our bank accounts. Eg: Rental income, Stocks, bonds etc. A liability takes money out of your account. Eg: taking a loan to buy an expensive car, mortgage payments for the house etc. And due to the fear of losing and little to no financial knowledge , the middle/poor class always “play it safe and avoid risk”. Hence they live paycheque to paycheque. They work their ass off for an employer making him rich, then once the payday arrives , they pay taxes to make the government rich and finally they make the banks rich by paying the loans, mortgages etc. The rich dad explains that we have to learn how our efforts can maximally benefit us and our family directly. He says that we have to mind our own business ! We have to concentrate on how to acquire assets rather than getting a bigger paycheque.

C) The author says that financial struggle is often the result of people working all their lives for someone else. He says , that we’ve to mind our own business, keep our daytime job but start buying real assets and not liabilities. And think of how we can add on to our assets column. 

D) If we work for money we give the power to our employer. If  money works for us ,we keep the power and control it. 

E) The single most powerful asset we all have is our mind. If it is trained well, it can create enormous wealth. Train yourself in these 4 things: Accounting, Investing, Understanding markets and The law. The problem with “secure” investments is that they are often sanitised, that is, made so safe that the gains are less. So learn new skills. Add financial literacy to your self improvement goals.

F) Rich dad focussed on learning! He always said , Work to learn, dont work just for money. You want to know a little about a lot of things. Instead of just working for money and security, take a second job to learn a second skill. Most people resist this because they are not ready for change ! 

G) Reasons why even financially literate people may still not be able to develop abundant assets  is because of fear, Cynicism, Laziness, Bad habits and Arrogance. 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. Rich dad says that we’ve to always pay ourselves first , however short of cash we are. Because it gives you a motivation to work harder . Once you’ve paid yourself and you’re short of cash, the pressure to pay taxes and other creditors is so much that it forces us to seek other forms of income.

H) Many want to be financially rich but they turn away because the road seems to be difficult. Attach a purpose or find a reason for why you want to be rich and work towards it. Make conscious choices everyday to spend less and add more to your assets column. Always associate with the people who have better knowledge than you or like whom you want to become one day in the future. Learn from them .

I) If something’s not working out for you after repeated efforts , stop doing whatever you’re doing , take a break and assess what is working and what is not working, look for something new. Find someone who has done what you want to do. Ask them for tips and tricks of the trade. Learn from history ! Al big companies on the stock exchange ones started as small companies. Bill Gates was one of the richest men in the world before he was 30 ! So who is stopping you ?  Act Now !

My Review : This book is a must read for all the youth who want to improve their finances. I could finish this book in a weeks time and to be honest not a single minute did i feel bored. Its filled with knowledge and the author has been successful in holding my attention till the end of the book. I’ll rate it 9 /10.

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