Menu Home

Rich Dad Poor Dad Lessons on Money

The book “Rich Dad Poor Dad” has changed the way I looked at money forever. It was written by a man named Robert Kiyosaki who is an American businessman who owns a private financial education company that provides personal finance and business education to people through books and videos. The first time I read the book it made me motivated and inspired to cut my expenses and save up as much money for my self. It changed the way I look at working for businesses and made me want to create my own asset in the future. The book has six main lessons about working for your own asset and business. A great thing the author does in the book shows how frugal the rich dad is. He does not drive a nice car lives in a house below his means but has a bunch of money invested in the bank. The book does a good job explaining how important it is to live below your means, it shows how being rich isn’t all about owning materialistic things and driving nice cars.

Lesson 1: The Rich don’t work for money

Kiyosaki explains how his rich dad taught him that the rich do not work for the money. He explains how his rich dad taught him that the rich don’t work for money but they make money work for them by investing in long term assets that will appreciate in the future. He continues to say that the poor and the middle class are the ones who work for money. Kiyosaki explains how the poor and the middle class are stuck in the rat race endlessly doing the same thing 5 days a week and living for weekends, he explains how these two classes of wealth work for money because of fear and greed. The poor and middle class were not taught to take risks, and they rather stay in their comfort zone at a “safe” job that is a stable salary. The author explains that opportunities come and go in life, and the rich are the ones that recognize the opportunities and eventually profit from them, but the poor are the ones who ignore the Opportunites like this. because they are too busy seeking money and security and our fearful of investing in appreciating assets.

Lesson 2: Why Teach Financial Literacy

Screen Shot 2020-05-07 at 11.01.09 AM.png

In chapter 3, Kiyosaki explains the difference between assets and liabilities. He also explains that it is not how much you make, but how much you save which is what truly makes you wealthy.  I think is one of the most important financial lessons in the whole book. The author stresses the importance of financial literacy and how the broken education system does not do enough for the average student to learn financial literacy. Kiyosaki explains that without financial literacy even if you are rich, you can still end up broke because of mismanaging your money and investing and spending it foolishly. Many athletes celebrities and even doctors have gone broke because the more money they make the more spending they do and it leads to being broke or bankrupt.

The diagram above is what Kiyosaki uses to show a simple way to differentiate assets and liabilities. The diagram shows that the rich continue to gain wealth because they purchase assets and keep their liabilities to a bare minimum. On the other side, it shows how the poor and middle class do the opposite and pile up their liabilities which makes them have endless payments and sadly work for the bank with all of the debt from liabilities.

Advertisements

Lesson 3: Mind your own business

Kiyosaki says that one should mind their own business if they want to become financially free. He feels that employers should mind their own business when it comes to there bosses because it’s not their own business. He feels that employers should instead, strive for ways to create there own business and become there own bosses then working for someone else. Kiyosaki continues to talk about building assets. According to him, anything with the value that is able to bring in the cash flow is considered an asset. For example, stocks, bonds, income-producing real estate, mutual funds, royalties, notes, etc. Assets put money into your pockets. Rich people acquire assets. The poor and middle class acquire liabilities that they think are assets like Cars, Boats, Timeshares, Fancy Clothes, etc. most people work for everyone but themselves. They work first for the owners of the company, then for the government through taxes, and finally for the bank that owns their mortgage.

Lesson 6: Work to Learn, Don’t Work for Money

In this chapter, Kiyosaki discusses the skills a person needs to develop financial success in life, to be successful at this you need to be disciplined and avoid fear and self-doubt. In this chapter, Kiyosaki had an interview with a young reporter from Singapore. She had her master’s degree in English and In her opinion, it was considered a waste of time to even become educated in the area of being a salesperson. This young woman’s dream was to become the best selling author like Kiyosaki.  She was offended and did not think it was the right thing to do. He then goes on to explain that most people only need to learn and master one more skill, to exponentially increase their income. Kiyosaki explains that if she diligently learned the skills of sales and marketing, her income would jump dramatically. Take some courses in advertising copywriting as well as sales. Then, instead of working in the newspaper, I would seek a job at an advertising agency. Spend time learning public relations, an important skill. How to get millions in free publicity. Then on nights and weekends, could be writing a great novel and sell her book.” Great talent is not enough he explains “many smart, talented, educated and gifted people faced financial struggle because they specialize in one skill only. focusing on developing a skill of financial literacy will help anyone with their financial futures.Rich Dad Poor Dad Summary | Rich dad poor dad Lessons

Financial literacy is a synergy of:

  • Accounting
  • Investing
  • Marketing
  • Law
  • When it comes to money the only skill most people know is to work hard.

In the last chapter, Kiyosaki continues to talk about insights into achieving personal wealth. He stresses that one should stop doing things that are no longer viable. He encourages people to look for new ideas, experience, and keep the learning curve alive through taking courses, attending seminars, and learning from other successful people in the industry. After all, the more you learn, the more you can earn. he shared five to does with us. Understanding the philosophies this book proposes has changed my life since I read it. This book has really changed my life and I recommend it to anyone looking to improve their financial literacy. Kiyosaki is very motivational and this is a book that I will refer back to for the future. If interested in purchasing it you can do it right from the link below! I hope you read and Enjoy it.

Categories: Book Review Financial Advice

Bodhi G.

1 reply

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: