About the Author
Robert Kiyosaki is an American businessman who founded Rich Global LLC and the Rich Dad Company. The latter focuses on private financial education through the mediums of books, videos, and speeches.
He has also written over 26 books, including the best-selling Rich Dad, Poor Dad (which sold over 41 million copies worldwide).
RICH DAD POOR DAD SUMMARY
Summary in one sentence Rich Dad Poor Dad tells the story of a boy who has two fathers, one rich and one poor, to help you develop the mindset and financial knowledge needed to build a life of wealth and freedom.
The Book in Three Sentences:
- Rich Dad Poor Dad is about Robert Kiyosaki and his two fathers—his biological father (poor dad) and the father of his best friend (rich dad), and how both men influenced his views on money and investing.
- You don't have to make a lot of money to be wealthy. Little money can compound into great wealth if you invest it in the right assets.
- Rich people make money do their bidding.
The Five Big Principles
- The poor and middle classes both work for a living. The wealthy have money working for them.
- What matters is not how much money you make. It is the amount of money you keep.
- Rich people amass assets. The poor and middle classes accumulate liabilities that they mistake for assets.
- Financial intelligence refers to what you do with money once you have it, how you keep people from taking it from you, how you keep it for a longer period of time, and how you make money work hard for you.
- Our minds are the most powerful asset we all have.
Rich Dad, Poor Dad Lessons:
Lesson 1 - We all need financial education
Lesson 2: The difference between the rich and the poor.
Lesson 3: Change yourself
Lesson 4: Use Accounting to keep your money
A liability is something that takes money out of your pocket.
Lesson 5: How taxes have benefited the rich
Lesson 6: Don't confuse your profession with your business
LESSON 7 - Your mind is your most valuable asset
- How to find a chance that no one else has seen
- How to get funding
- How to arrange bright individuals
- You'll need to take chances.
- Assume you are knowledgeable about investments and understand them; in such instance, it is less dangerous than it would be for someone who is just rolling the dice and hoping for the best.
LESSON 8 - Become a generalist rather than a specialist
LESSON 9 - The asset columns of the financially literate
1. In every fruit, there is a seed. Don't eat the fruit with the seed. Invest the seed in an income generating asset no matter how small, never bring it out again and watch the principle of compounding make you rich.
2. Focus on growing your asset column by using most of your money to buy income generating assets like stocks, bonds, real estate, intellectual property royalties and anything else that is valuable, generates income and has a ready market.
3. Use your assets to generate the money you use to pay for luxury.
4.Find a way to earn passive income. Create a business that you don't have to work on everyday that brings in steady cash flow. For example, you only create a digital product once and it keeps generating income for you even while you sleep. That's passive income because you are not exchanging you time to earn money with the product any more.
5. Don't work for money. Use your job as a means for acquiring knowledge in areas like sales, marketing, business systems management etc.
6. Keep more of the money you earn. The more money you are able to keep and invest, the more wealthy you will be. Wealth is not about how much money you earn, but about how much you are able to keep.
7.Have a motivation larger than reality: You must have a motive for wanting to get wealth. Riches for their own sake won't shield you from the harsh facts of life. Knowing what you don't want (such as to work your entire life, etc.) and what you do want is the first step in determining this reason.
8.Decide each day to be wealthy or poor every day and with every dollar.
Our purchasing patterns will reveal who we are (not the other way around).
9. Make smart friend selections.
Avoid cynics who are reluctant to discuss money. Surround yourself with financially educated people.
"Money comes and goes, but if you understand how it works, you gain power over it and can start building wealth."
"There is a distinction between being poor and being broke. Broke is only temporary. "Poor lasts forever."
"You must understand the distinction between an asset and a liability and purchase assets. An asset is a source of income for you. A liability drains your bank account. The foundation of financial struggle is illiteracy, both in words and in numbers."
"Cash flow reveals how a person manages money."
"More money rarely solves someone's financial problems."
"Trying to keep up with the Joneses causes many financial problems."
"The wealthy acquire assets.
The poor have only expenses.
The middle class purchases liabilities that they believe are assets."
"Financial hardship is frequently the direct result of people working their entire lives for someone else. When it comes to becoming what you study, too many people forget to mind their own business." They spend their lives looking after someone else's affairs and making that person wealthy. A person must mind their own business in order to become financially secure."
"Keep expenses low, liabilities low, and work hard to build a solid asset base."
"When you work for money, you give your employer power. If money works for you, you retain and control it. Each dollar in my asset column represented a great employee who worked hard to hire more people and buy the boss a new Porsche."