Rich Dad Poor Dad is a 1997 book written by Robert T. Kiyosaki and Sharon Lechter. It advocates the importance of financial literacy, financial independence and building wealth through investing in assets, real estate investing, starting and owning businesses, as well as increasing one’s financial intelligence.
Rich Dad Poor Dad Summary
Rich Dad Poor Dad is about Robert Kiyosaki and his two dads—his real father (poor dad) and the father of his best friend (rich dad)—and the ways in which both men shaped his thoughts about money and investing. Rich Dad Poor Dad!
He says that his poor dad went to Stanford and earned a Ph.D., and his rich dad never finished the eighth grade. The book consists of 8 chapters, lessons that everyone must learn. The central message conveyed by Kiyosaki is that you don’t need to earn a high income to be rich.
He says that many are too afraid of being branded as a weirdo, in order to exit the rat race. People let the two main emotions everyone has around money dominate our decisions which are fear and greed. He says this is the reason people should not just look for a job as no job is safe anymore.
Example- If you get a raise in a job you should invest the extra money in stocks or fund that increases your income but because of the fear that we may lose some money by investing in these assets, many people resist investing.
The other opinion is when greed takes you over, a person might take the extra money that he/she receives from a raise and spend it on stuff that he doesn’t need like buying a fancy car and the payments for that car will eat up your money.
These lessons tell us how important it is for us to be educated financially, the burden of this lies on the person itself as no school teaches us this.
The Book also mentions that we should start now to avoid falling into a debt trap and develop responsible financial habits. We should take a careful look at what we can and cannot afford so that we are able to set realistic financial goals for ourselves.
The author recommends that we keep our job and build our asset column, meaning we keep investing and building assets and think of our dollars as employees who work for us. Rich people acquire assets. The poor and middle class acquire liabilities that they think are assets.
The author emphasizes the fact that knowledge is power and we should work to learn, not to earn. Money should work for you, not the other way around and do jobs that we do not know much about to learn different skills. “Money comes and goes, but if you have the education about how money works, you gain power over it and can begin building wealth”
He emphasizes that fear often suppresses genius in people and that the first step to building wealth is to manage risks, instead of avoiding them and learning about investments will teach you that it’s better to not play it safe because that always means missing out on big potential rewards. Rich Dad Poor Dad!
Don’t start big, just set aside a small amount every month or so to invest in asset building like stocks, bonds, etc.
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About the Author
Robert Toru Kiyosaki is an American businessman and author. Kiyosaki is the founder of Rich Global LLC and the Rich Dad Company, a private financial education company that provides personal finance and business education to people through books and videos.
