Rich Dad Poor Dad Book Review With Summary

Robert Kiyosaki learned about money from two dads, his biological father, and his best friend’s father. Both men worked hard and earned good incomes. But his biological father struggled to pay bills his whole life, while his friend’s father became one of the wealthiest men in Hawaii. The fundamental difference is that the poor dad acquired liabilities, and the rich dad accumulated assets. Assets produce income, and liabilities create expenses. He put many financial factors in his book “Rich Dad, Poor Dad.”

Robert Kiyosaki is very good at explaining the traits and characteristics you need to become a wealthy person. And he also talks a lot about why the poor stay poor while the middle class stays in the middle class and why the rich keep getting richer.

So he talks a lot about the mindset, traits, and characteristics and what you have to do with money to become a rich person. What do you have to do with money to make it into more money for yourself? And he explains it all in easy-to-understand terms.

About Author

Robert Kiyosaki is an American businessman and author. He wrote Rich Dad, Poor Dad in 1997 when he started his rich dad brand. And it’s the first in the series of Rich Dad books. So the guy behind the book, Robert Kiyosaki, has predominantly built his wealth through real estate and stock market investing. He also goes on throughout his book and talks about building wealth through owning a business. He is a very wealthy man and an expert in personal finance.

Rich Dad Poor Dad Book Summary

Kawasaki’s adopted rich dad was the father of a childhood friend who never finished the eighth grade. Rich dad owned and ran several businesses. This book and Kawasaki’s life result from the rich dad’s financial wisdom. The book says once a dollar goes into your asset column, it becomes your employee.

The best thing about money is that it works 24 hours a day and can work for generations. Turn more of your money and integrate employees by reducing expenses and acquiring income-generating assets. Don’t focus your efforts on increasing your paycheck. Focus your efforts on acquiring assets.

The poor tend to use their money the same way the middle class. The rich use their money the same way. How they think and use the money keeps them locked in those classes. So Robert builds on this first point and then discusses why the rich keep getting richer and how they handle their money.

The second takeaway is spending time and money on your financial education. It will lead to a much bigger return than working harder. So he illustrates that many people say, I don’t have time to learn about that because I’m too busy at work. But he goes through and explains how in his life, focusing on building his financial education has given him a much higher return than working harder.

So he does talk a lot about work ethic. Instead of working harder at a job, work smarter, and build your financial education. And it will lead to millions of dollars instead of working a couple of extra hours per week in your job.

The third thing is that people who wake up go to work, earn money, pay the bills, and save the rest, only to do that repeatedly. They are trapped in a vicious cycle that ends up leading them nowhere. So Kiyosaki talks about this as the rat race and says how you need to when thinking about becoming wealthy.

You need to escape the rat race, the cycle of going to work, earning money, paying the bills, and doing it repeatedly. So he talks a lot about the strategies you need to employ to start building your way out of the rat race. You have to think outside the box and think like the rich do to escape the rat race and build your wealth to retire happy and early.

The fourth point is that many people get all of this financial knowledge. They’ll read so many books and watch so many videos. They’ll research as much as they possibly can. But then they’re so scared of losing money that they will never act on anything they’ve learned.

Many people get all the education they need and then do nothing with it. Once you’ve learned all these things, make sure you go and take action because many people get this knowledge. They don’t take action and are forever stuck in that trap of working, paying bills, saving, and returning to the same cycle.

The fifth thing from this book is that you need to overcome emotions. You need to learn from emotions around money because money is not real at the end of the day. Its money is a piece of paper that we say is worth whatever number is written. So Robert talks a lot about how you have to detach yourself. You have to feel your emotions when you decide about investing and whatnot. But you have to try and detach yourself from them and observe what you observe them.

So you must try and detach yourself from them and learn from them to make excellent, clear financial decisions. He also talks about how, with increasing financial education, the fear of losing money dissipates. It is because you are much better educated. Instead, the excitement of winning takes over.

So the excitement of actually making that money that you know a lot. You know you’re competent in this investment because you’ve increased your financial education. That makes you more excited about winning and being wealthy than fearful of losing all your money.

Book Specification

Rich dad, poor dad book sold twenty-six million copies worldwide. So it’s certainly a highly regarded book and a perfect place to start when you’re thinking about your finances.

Rich Dad Poor Dad

Author: Robert T. Kiyosaki
Average Customer Review: (4.1 out of 5, on Goodreads)
Category: Business & Money, Personal Finance
Position 1, in Parenting & Personal Finance (Books)
Paperback: 336 pages
Weight: 12.8 ounces
Dimensions: 6 x 1 x 8.75 inches
Publisher: Plata Publishing

Rich Dad Poor Dad Book Review

The book starts with Robert’s life story. Stay in school, get good grades and get a safe and stable job. These are the words Robert Kiyosaki’s poor dad preached to him from a young age. It wasn’t that his poor dad was wrong. He had a different outlook than his rich dad. His poor dad was highly educated.

However, his rich dad only had an eighth-grade education and became one of the wealthiest men in Hawaii. His rich dad lacked formal education. He made up for it by understanding money in human psychology.

Chapter 1: The rich don’t work for money

The typical paradigm for the middle class is to study hard, get good grades, and get a safe job with excellent benefits that you can retire from, hopefully 30 or 40 years from now. That isn’t the norm, and that isn’t the case anymore. So what the author, Robert Kiyosaki, means is that most people want to feel secure with their money, so their passion doesn’t direct them and their everyday lives. It’s their fear of needing money to continue to be able to live.

Chapter 2: Why teach financial literacy?

Financial literacy is not about how much money you earn. It’s about how much money you keep. Two things prevent you from maintaining money spending and taxes. If you earn one million dollars per year but spend nine hundred ninety-nine thousand dollars, you’d be an idiot to think that you truly are a millionaire. What do you have to show for it?

Robert’s rich dad taught him the difference between an asset and a liability. It’s fairly simple. An asset is anything that puts money into your pocket. In contrast, liability is anything that takes money from your pocket. Don’t overthink this. Anything can be an asset or a liability, depending on whether it generates positive or negative cash flow.

So if you own a house that generates one thousand dollars a month through tenants, that house is an asset. However, if you own a house that costs you a thousand dollars per month, that house is a liability. Assets can be businesses, real estate, stocks, and bonds.

Liabilities are fairly simple. These things cost you money, paying too much for rent, buying too large of a home, and purchasing expensive cars. The rich accumulate assets, the poor buy liabilities, and the middle class buy liabilities they think are assets.

If Robert had listened to his poor dad and taken everyone else’s advice, including teachers and role models, He would have probably lived a middle-class lifestyle. He would have a safe and stable job. The problem is, He would fail to let his money ever work for him.

To change this, you need to shift the mindset and acquire assets, not liabilities. Otherwise, it doesn’t matter how much money you earn. You’ll continually match it with your liabilities and expenses. You might look rich to the average person, but you’ll never actually be rich. There is absolutely nothing wrong with having a stable job.

But in the United States, we have a rare economic system unmatched by any other country on Earth. If you work hard and acquire assets, eventually, those assets will generate enough income to replace your job. Going to school and getting a formal education should not be the end of the road.

If you have a skill set, capitalize from it and acquire real assets, not liabilities. However, you learn something every single time that you fail. It’s not like purchasing a liability where you have a hundred percent guarantee to lose your money.

Chapter 3: Mind your own business

Minding your own business means paying attention to your own business. You might have a profession, but you must also have a business and use this business to buy assets and build wealth. Selling is essential. Everyone in the world can make a better cheeseburger than McDonald’s. But McDonald’s is the best in the world at selling and delivering burgers.

The book gives a great example of a talented journalist with a master’s in English who is an excellent writer and wants to be a best-selling author. She asked Kiyosaki for advice. He says she should go to a marketing course to learn how to sell her writings. She gets mad and says, I have a master’s degree in English. Why would I go to school to learn how to be a salesperson? Kawasaki shows her the top of his book and points out that it says bestseller, not the best writer. You must not be afraid to sell yourself and your products.

Once a dollar is in your asset column, never take it out because this is money working for you. Think of the interest and the income from that money as little employees working for you rather than working against you. So first, buy an asset that generates money or throws off cash every month, week, or year. With those proceeds from that asset, and it’s throwing off that cash, you can buy whatever you want.

Chapter 4: The history of taxes and the power of corporations

A little lesson on the history of taxation: There have always been taxes or tariffs in some shape or form to pay for the roads, defense, and basic government requirements throughout American history. However, it wasn’t until 1862 that there was an actual income tax during the Civil War. But the range of this income tax was three to five percent, three to five percent.

The present income tax ranges from 10-37 percent in the United States in 1890, for the income tax was declared unconstitutional but again constitutional in 1913. The world had changed, and America was now a global power. It required a much more reliable source of income.

The income tax is a bad thing for the average person. It takes our hard-earned money into the hands of the wasteful US government. Luckily, there are legal methods that you can practice to avoid unnecessary taxation.

The government loves high earners. Even if you earn a substantial salary, the government still takes thirty-seven percent upfront income tax. So for someone earning one million dollars annually, the government takes three hundred and seventy thousand. Then the government taxes you. When you spend taxes, you when you save, and even taxes you when you die. But the rich need to pay their fair share.

A smarter method than being a big earner is taking your money and accumulating assets with it. The government has already taxed your income once with the standard income tax. The good thing is there are legal ways to avoid high taxation with your investments.

However, one of the biggest secrets of the rich is the power of corporations. You can use a corporation to take advantage of legal loopholes to protect your money. For instance, one of the smartest things a person can do is hack or purchase a multi-family home.

You live in one house unit and then rent out the second unit. So not only do you collect income from the second unit, but that in many cases covers the majority, if not all, of your mortgage. But you can also use this as a business or corporation for specific tax write-offs.

Instead of buying a single-family home or renting to increase your financial I.Q., you need to focus on increasing your knowledge in accounting, investing in markets, and understanding the law. Do not let people deter you from utilizing legal tax loopholes. After all, you’re risking money with the investment and often benefiting the community.

If you buy and flip a property, you benefit. But the community also benefits by seeing an old, beaten-down property purchased and renovated. A renovated property often attracts quality tenants, and quality tenants help the community. Investment is good, and capitalism is good. If you get one thing from this book, remember that it’s not the smart that gets ahead in life but the bold.

Chapter 5: The rich invent money

You can be the most educated individual in the world. However, you’ll fall behind if you drag your feet and never pull the trigger on an investment. Failure is inevitable, but you will learn something in the process, work to learn, and use what you learn to improve.

You will learn to identify better business opportunities, better properties to invest in, and better stocks to purchase over time. Take the next step, and don’t fear losing a welcome risk. How do you do it? Start by paying yourself first practice frugality. If you start today, this can happen within the next few years.

The author is necessarily talking about finding an opportunity that everyone else has missed, how to raise money, and how to organize smart people. So he’s talking about syndicating deals, getting in with quote-unquote, smart money, and relying on traditional investments.

Chapter 6: Work to learn, don’t work for money

The poor and middle class work for money while the rich have money to work. Most people work for a specific wage earned each hour, week, or month. They work for their money. The rich buy assets which appreciate with time. The assets that the rich have purchased make them even more money. So in a sense, their money works for them.

The main idea is to grow skills and develop yourself as a greater payoff than a little extra pay in a different job. Sometimes, an unpaid or low-paying position will get a much better experience than a dead-end job with higher pay. Never stop developing your best asset, that which is yourself.

Cons

There are two downsides to this book. The first is that it applies to everyone, but the author doesn’t specify what he looks for in a property deal. He doesn’t go into the specifics of what numbers he looks at or how he analyzes a stock, whether he wants to buy or sell it, and that thing. It’s more about the general principles and the mindset of being financially intelligent and building wealth. He doesn’t go into the specifics of the deals he’s made or what you should be looking at.

Overall, it’s more like life rules over investing rules or something like that. The other downside is that the numbers are from a long time ago. While the numbers are relative, you can still apply the principles, percentages, and returns to today’s numbers.

It’s a little harder to understand when he’s talking about buying a block of land for twenty-five thousand dollars. It seems a little bit silly because it was so long ago. So the numbers he uses when he explains the examples of his investments are a bit outdated, making it hard to gauge the relative figure for today’s standards.

Pros

It is fun and easy to read the book. Most chapters are conversations, with many examples and simple theoretical situations. It’s probably the best explanation of cash flow. His cash flow quadrant explanation is excellent. And it’s easy to emphasize the importance of assets from it.

This also shows poor, middle class, and rich differences using this quadrant explanation. In my opinion, the best chapters are number two: Why Teach Financial Literacy is the number one chapter in the book. The author uses some real-life examples, which makes them easier to understand.

Personal Review

Robert gives specific examples of his life and demonstrates his examples to help him create wealth. So it’s not like he’s telling you what to do and pulling it out of thin air. He’ll talk about how he has used a specific strategy or a certain mindset to go then and earn himself more money. So it’s quite a valuable book in that regard.

This book allows new people to finance someone interested in starting their own business or buying real estate or people who want to learn about cash flow.

Personal rating: 4.8/5

This book can apply to anyone. Anyone can read and understand it from cover to cover, which is powerful with finance books. So if you haven’t even read personal finance or an investing book before, start with this one. It’s because it will get your mind in the right space.

It’ll get you thinking about the right things so that when you read books on specific stock market strategies or real estate investing strategies, your mind will already be thinking all the right things.


Learn more: Top 10 Lessons From Rich Dad Poor Dad


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Pauline Jackson

I like to talk about popular books. My book review inspires you to read and save time. Also, I summarize the book and give you the best lessons or ideas that can change your life. As an Amazon Associate I earn from qualifying purchases.

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