Rich Dad Poor Dad by Robert Kiyosaki teaches you why it is crucial to get financial education and how you can become wealthy by building high-quality assets that would make money work for you.
Rich Dad Poor Dad Summary
Are you struggling to pay your bills?
Probably, you are slouching on your sofa and wondering if you should cancel next month’s Netflix subscription as it is getting difficult for you to meet everyday requirements.
Maybe the stock market is down and that is affecting your lifestyle.
You want to invest in the share market but fear that you’ll lose all of your hard-earned money.
Perhaps, you are tired of your corporate job and thinking about how rich people make so much money while you’re struggling to buy even a Choco Lava cake you desire so badly.
Well if you’re experiencing any of the above, you aren’t alone.
Most of the people in this world are going through the same dilemma.
Kiyosaki explains in this book what makes a rich dad rich and an educated dad poor.
And in this Rich Dad Poor Dad summary, I’ll share insights or the nine lessons I learned from this book.
Let’s get started!
1. Work on your assets, destroy your liabilities
First, let’s understand what do we mean by assets and liabilities:
An Asset is something that makes your pocket heavier. By “heavier” I mean — heavy with money or something of value.
Common assets may include a product that you purchased, a business you own, or any passive income source that puts money in your wallet.
Anything that gives you returns after you own it, is an asset for you.
Liability is something that makes your pocket lighter. It reduces your bank balance and hardly gives you any return.
Common liabilities may include your house tax, electricity bill, food bill, water bill, a subscription you purchased, a debt you’ve to pay, and many more.
Your focus should be on buying or owning assets and reducing liabilities as much as you can.
But the truth is, it’s difficult to live with zero liabilities. You need to pay bills, right?
And that’s why you need to understand cash-flow.
2. Become curious about how money works
Back when I was a kid, money was something, I thought only adults could deal with so never bothered to learn about it.
I don’t want anybody else to make the same mistake I did.
Learn as much as you can about the money.
But the thing is, it isn’t something you can learn overnight, it’s a lifetime process.
Read blogs and listen to the podcasts discussing mutual funds, stock market, investing, budgeting, income statements, cash flow, taxes, and the list goes on…
Here are a few blogs that’ll help you enrich your knowledge of financing:
When you’ll start learning about money, you’ll develop the attitude rich people have, and see various ways you can build high-quality assets by leveraging the opportunities and resources you have.
3. Never let your fear guide you
Most of the people struggle when it comes to financing because they are too afraid to risk money.
Such people don’t invest money in building their assets that have the potential to generate thousands of dollars.
Everybody knows that risk is a part of the money-making business but being wrapped up with fear, many miss out on golden opportunities.
Their fear guides them.
Such people compromise with low income and never dare to leap in the territory of rich.
If you want to make your way up to the realm of royalty, you mustn’t let your emotions get the better of you.
4. Break out of the infinite loop of misery
If you ever observe an average person, you’ll see a loop.
A loop of certain actions that he performs every day like waking up, going office, working hard till 5 pm, coming back home, eat and then sleep.
This is what I call an infinite loop of misery, also known as the rat race.
Most of the people are stuck in it. They have become so comfortable running in that race that they don’t even bother about it anymore.
You might be thinking what’s wrong in that?
Well doing so, you trade your time with someone else’s work, and that brings you to the next lesson.
5. Strive to learn, not to work
What do you think prevents an average middle-class person from getting rich?
It’s the reluctance to learn and invest in skills that they can capitalize on.
When you work just for the sake of earning money, you don’t strive to learn.
Such people don’t learn about building assets.
All they believe is in the notion of working and getting paid for it.
When you do this your assets are soon outclassed by your liabilities.
And by not having proper knowledge about assets and liabilities, they unintentionally grow their liabilities.
The result? They spend their life paying debts.
It is way easier to build liabilities than it’s to build assets.
Unless you have valuable assets, and the knowledge to build money from them, joining the class of riches is out of the question.
6. Don’t chase after a few bucks
Who doesn’t love money?
After all, it buys you all the basic stuff like food, water, shelter, etc.
People get so obsessed with acquiring wealth that they start participating in get-rich-quick schemes.
They do stuff that brings them a few bucks in the short term.
When you nurture the idea of accumulating wealth quickly using money-making hacks, you forget that the royal road to riches is long.
One needs patience, persistence, courage, and perseverance to walk this road.
There will be times when you’ll hit a wall but he, who will persevere, will enjoy the fruits of victory.
7. Job isn’t a long term fix
There is a myth among all the people that if you want to live a good life then go to a decent college, get a nice degree, find a job and then get paid for it. This is what an average person thinks, says Kiyosaki.
Job isn’t going to fix all your problems.
By doing a job you only fool your mind into believing that you’re moving ahead in your life and building a bright future.
What you actually do is, you trade your life span for all the money you get paid, you invest your time building someone else’s asset.
Why do people don’t put any effort to get out of their job and build assets that will bring them more wealth than they could ever make from a job?
This is because it’s hard to overcome obstacles that kick you in the face while you get out of the rut and escape the rat race.
Job has never been a long-term solution to the problems and it never will be.
8. A little greed beats laziness
When it comes to laziness if you are slouching all day and binge-watching Rick And Morty then you’re lazy.
On the contrary, if you are busy working all day long then you are hard-working.
But laziness isn’t limited to just that, even if you’re a busy bee and yet avoid stuff you should be doing — you’re still lazy.
You’re lazy when you choose not to get out of the rut you’re stuck in.
Laziness can be a roadblock to producing large cash flow.
The question is how do you overcome laziness? It’s simple — by becoming greedy.
Poor people feel guilty when they feel greedy and often try to suppress their desires.
They avoid stuff they’re supposed to do to become rich.
On the other hand, rich people embrace their desires or greed, doing so they look for possibilities and answers.
But there is a caveat: too much greed can harm you.
Therefore, by becoming a little greedy, you can beat laziness.
9. Make the right habits
How much wealth you will acquire depends on your spending and saving habits.
Choose the right habits and money will come to you, choose the wrong habits and money will go away.
If you spend more than you earn, you’ll be on your way to poverty.
You should always save yourself a few bucks and then invest the rest on building assets.
When you do this every single day, you accumulate more wealth and also keep a
Practicing the right habits might make you wealthier over time.
After all, if you aren’t Richie Rich, you must make sure you adopt the right habits.
Rich Dad Poor Dad Review
Robert Kiyosaki gives an interesting angle to the concept of rich vs poor debate by introducing the story of a kid who had two fathers — a rich one and a poor one.
I liked the concept of building assets.
I had never thought that building an asset can put one on his way to become rich.
This book brings clarity on what things you should focus on if you wish to get rich.
It categorizes a person as rich or poor based on his wealth.
But I think there is more to why a person gets rich or stays poor.
Who should read Rich Dad Poor Dad summary?
- Anyone lacking financial literacy.
- Anyone curious about what differentiates rich dad from poor dad.
Now you tell me
What do you think about the rat race?
What is the biggest asset you have?
Do you believe that home is a liability?
Tell me in the comments.
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