Robert T. Kiyosaki's Rich Dad Poor Dad Book Summary

The famous book that financially inspire so many people worldwide. Rich Dad, Poor Dad is basically what I like to call a personal finance perspective told in the form of a parable. But Rich Dad, Poor Dad is about a complete rethinking on how we work and how many can work too, the cash flow logic way.

I am lazy this time so I just key in the book into the summary generator. And below it goes as the computer made it short. MiddleEastPost: Rich Dad Poor Dad

Six lessons that highlight the entire ideal idea of money. The title Rich Dad, Poor Dad refers to the two main male influences that Robert had as a child. His own father, the figurative “poor dad,” worked at a steady job for a living, while the “rich dad” (the father of a friend) ran a multitude of businesses. Most of this book is told from the perspective of Robert learning from his “rich dad” about how to make money – and seeing how his “poor dad” made huge money mistakes. The first two thirds of the book covers six lessons taught to Robert by his rich dad.

Lesson 1: The Rich Don’t Work For Money
This lesson has an ambiguous title that gives two separate meanings based on how you read it – actually, based on where you put the emphasis. If you read the title as the rich don’t work for money, that’s the wrong one. The rich in fact do work, and they work quite hard. The way the title should be read is that the rich don’t work for money. They work to learn things, and the things they learn can easily be applied to make money over and over again. I agree with this sentiment entirely – good ideas are always more valuable than good labor, because you can keep mining good ideas, while good labor is spent the second you do the work.

Another part of this lesson I liked is that the “rich dad” is actually quite frugal. Although he has a lot of money in the bank, he drives a cheap car and doesn’t live in a mansion. Too many people equate rich with material things, so I enjoy it when it is shown that being rich often has very little connection to material possessions. Being rich means never having to worry about paying your bills – it doesn’t mean driving a Ferrari (well, at least not until you can pay cash for it and not break a sweat).

Lesson 2: Why Teach Financial Literacy?
Well, this section of the book redefines the word. To Robert Kiyosaki, an asset is something that generates income, while a liability is anything that has costs. In other words, by this definition, your primary residence is not an asset but a liability. It may have cash value, but it doesn’t generate income. Instead, assets are forms of passive income that you control, like a rental property or intellectual property.

So what’s the overall lesson here? Basically, you become rich by accumulating assets. Wealth comes from having enough assets that generate enough income so that all of your expenses are covered and there is enough left over to invest in more assets.

Lesson 3: Mind Your Own Business
The point of this chapter is that a financially healthy individual should be spending their spare time not spending their paychecks, but investing as much of it as possible in assets.

Lesson 4: The History of Taxes and the Power of Corporations
There’s a big difference between forming a personal corporation and buying a company car for use with that corporation. You can justify a company jet as being needed for travel, but what necessity for business does a Porsche provide that another car does not? Kiyosaki mentions various tax dodges in this chapter, but almost all of them aren’t tax dodges at all, but merely tax delays. With almost all of them, you either have to hold an asset until you die or you’re going to be hit with a monstrous tax bill. If you ever need to liquidate out of a need for cash, playing these games will mean that the IRS will eat you alive.

Lesson 5: The Rich Invent Money
That’s not to decry the overall lesson of this chapter; you can invent money. However, the easiest way to mint your own money in today’s arena is through creating your own intellectual property. With the internet, there are many ways to distribute and monetize your intellectual property: sell crafts you can make, create websites out of your own ideas, sell your music or performances.

Lesson 6: Work to Learn – Don’t Work For Money
While I agree in general with the lesson, the tone here was extremely insulting towards people who choose to be employed, referring to them as “hamsters.” That’s ridiculous and insulting. Everyone should strive to learn as much as they can when they work, because it can transform your understanding of the world and perhaps build into methods of starting your own business and being self-employed.

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