Why The Rich Are Getting Richer by Robert Kiyosaki (Summary)

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This is the advice that most people on the planet believe in and follow.

And schools don’t even teach things about money.

Especially when jobs are at risk because of the rise of artificial intelligence.

Making money is more important than ever before.

But what are we taught most of the time? Yes, that exact same obsolete advice which is not going to make us rich. Although everyone believes in it, not everyone is getting rich.

Very highly educated people today are getting jobless.

Students have to take out debt to get an education from the university and then work to get rid of it after they complete their education.

The question arises: Is this all really worth it? Is this the best we can do?

Surely, when it comes to finance, rich people know some things we don’t.

The gap between rich and poor is only going to get wider and wider because of this.

And the biggest question of all: How do we get rich or become millionaires when income inequality is so big?

Let’s dive into the book summary of the book “Why The Rich Are Getting Richer,” written by Robert Kiyosaki, and find out.

Alrighty, so without further ado, let’s dive right in.

Lesson #1: Not all millionaires are the same.

When it comes to millionaires, we all club them into just this one category. And think they are all the same and assume they must be enjoying their lives.

But not all millionaires are the same. There are different types of millionaires based on how they make and use their money.

Knowing this is important because it will help us figure out what kind of millionaire we would like to become. Of course, becoming a millionaire is anything but easy, but still, we must imagine the kind of life we would like to live, right?

Some millionaires are employees with a million dollar salary. What if you are a millionaire employee but you absolutely don’t like the work you do?

Some millionaires have a great net worth, but when you look at their salary, it’s not that much. They have a lot of assets that make them millionaires, but they can’t really use their money, unless they sell those assets. And when you sell your assets, it lowers your net worth. Because net-worth is calculated by subtracting the total number of liabilities from the total number of assets, The more assets you have over liabilities, the greater your net worth.

Some millionaires were just lucky, they married a rich person or won the lottery. This is questionable. What if you marry a narcissist with money? Is it worth it? Is it really worth it to sacrifice your peace just for money? After all, money is just a tool to elevate your life, isn’t it?

It’s all up to you.

What kind of life do you want to live? Do you want to live just like everybody else? Or do you want to be a millionaire and maximize your life’s potential?

Most people have this dream of becoming millionaires.

But what they forget is that without financial education, even if you win a lottery, you are very likely to go bankrupt. So many athletes go bankrupt after retirement. They were rich when they were famous in their game. But just because they didn’t know how to handle all that money, they went bankrupt.

A millionaire who has the right financial knowledge will never go bankrupt.

Rich people get richer because they get richer in their assets as time goes by. And the poor get poor because they lack essential financial knowledge.

And the gap in wealth only grows wider and wider.

Remember, no one is going to save you when it comes to money. All millionaires are selfish. And they only care about themselves. Even with all their wealth, they are not coming to save you. Not even the government. So you have to gain real financial education.

In the next few lessons, we will dive deeper into this and gain more insights.

Lesson #2: Don’t be a financial idiot; otherwise, be ready to lose your money to salespeople.

Believe it or not, the world is full of salespeople. Almost every person is trying to sell you something so that they can get money from you and put some food on the table.

When you are someone with money, but lack financial knowledge, you are a hot target for everybody.

From your bank managers to your friend next door, they are all looking for an opportunity to make money off of you.

One of the stupid things people do is go to insurance and ask whether they should have insurance or not. Of course, they would tell you to buy it. Because they get commission out of it.

When you are oblivious to the scams going on in the financial world, you are a sitting duck.

To anybody who is giving you financial advice, simply ask, “Are they rich enough to give advice to other people?”

If the answer is no, then they are probably just a good salesperson. And the things they sell are their schemes, which will make them rich. Not you.

Even Warren Buffett can lose money. So who are these guys that give us a false sense of security through their schemes?

Most people who are interested in your finances aren’t there to help you. Tell them you don’t have money, and they will disappear from your life.

They are there with you and giving you financial advice because you have announced to the whole world, “Look, I have money, but I don’t know what to do with it.”

Don’t think that you are any less than those finance experts.

If you invest in your financial education, you don’t need to listen to their opinions.

Lesson #3: Strong people in power always exploit the weak, and thus the poor get poorer.

We think that saving money will help us.

But the reality is something else.

The harsh truth is that our governments don’t know how to handle the money they get from taxes.

They end up spending more than they earn.

And that too when, in most countries, the people in power get free benefits like free healthcare, unlimited sick leaves, enormous pensions, lots of holidays, etc. When they get so much for free, they don’t take money seriously.

In the worst case, when things go south, they start printing money to avoid an economic collapse.

When they print more money than is necessary, it causes inflation in the economy.

The economy is only capable of producing so much. If you have more money to chase the same goods, prices must rise.

In short, money loses its value.

Now, you have to work harder to buy the same goods.

Isn’t this crazy?

This thing happens all over the world.

The main reason behind all of this is corruption.

This type of exploitation doesn’t just happen in government. If we talk about corporations, today companies lay off people to save costs. Plus, the rise of AI or technology makes it even worse.

A robot can work 24*7 and more efficiently than a human worker.

Sure, we still haven’t reached a point where robots could replace the human workforce, but still, their effects on people’s jobs are undeniable.

You are likely to get paid less for the same job because supply is greater than demand. The demand is being met by machines, which are more cost-efficient.

Also, due to globalization, company owners can now hire people with the same skillsets, but at a much lower wage compared to Americans.

To fight all these odds that are against the common people, we must learn how rich people play money games.

We must learn their strategies.

Lesson #4: Taxes make the rich richer.

A lot of people think that if they are paying taxes, they are patriotic and contributing to their nation.

But are you sure about this?

Especially when the people on top are greedy and couldn’t care less about development. They are more worried about their own power than they are about helping the poor become rich.

Why would rich people want to lose their power? Wouldn’t it be against their agenda?

Just think about it.

Let’s say, a war breaks out tomorrow.

Poor people will be sent to fight wars, while the rich will protect themselves and even get richer.

Because even the wars are great opportunities for many people on top to make more money by selling weapons, armors, etc.

It’s always innocent people who get screwed in almost all situations.

Innocent, harmless people pay tax on almost every dollar.

Every dollar you spend, a part of it goes to the government in some way.

Anyone who works for the money ends up paying the highest taxes.

In simple words, poor people often end up paying more taxes than rich people.

Rich people are good at making money, and at the same time, they know better than poor or middle class people how to pay less taxes.

Every taxpayer can be divided into four categories.

  1. Employee (the one who exchanges time and effort for an income )
  2. Self-employed, small businesses, or specialists (the ones who own the job)
  3. Big Business (has more than at least 500 people working for them)
  4. Investor (money works for them)

Professional investors pay the least in taxes. And it’s usually the people in the Investor category that are the richest.

Why? Because they know the game and its rules.

Don’t get me wrong.

Rich people can also be found in the Employee and Self-Employed categories.

But you won’t find poor people in the Investor category so easily.

To invest, you must have a certain amount of wealth in your bank account.

Why is the money game designed this way?

That’s because people in power made the rules. Poor people don’t have the power to make the rules.

You might be a great athlete, but if you don’t put yourself in a position of power, you don’t get the unfair advantages rich people get when it comes to taxes.

People who get wealthy learn to place themselves in better situations. That’s also why they get many benefits compared to poor people.

Lesson #5: Make more mistakes to learn and grow your pocket.

Rich people aren’t afraid to learn from their mistakes. And this makes them even smarter.

If we take a look at our lives up to this point, you will see that every time you made a mistake, you were judged by other people. They all thought you were a loser.

Every time you scored less marks in the exam, your teachers thought you didn’t have any chance of doing anything great in your life.

All our education systems force students to compete against each other.

They are taught to not make mistakes.

Mistakes are seen as evil.

And we are told to be perfect, which is a myth. You can never be perfect. It’s an illusion.

Rich people know that perfection is an illusion. That’s why they see mistakes as learning opportunities.

Making money is a game too.

And you don’t learn the lessons unless you fail a couple of times. That’s just how life works.

But all our lives, we are told that making mistakes is some kind of bad thing that must never happen.

The reason many professionals never start their businesses is because they are afraid of making mistakes. They are afraid of what other people will think about them if they fail.

You really think investors never make mistakes?

You really think that big businesses just appeared without making any mistakes in the process?

Of course, not.

It’s the employees and the specialists who are too afraid of failure.

They are just stuck in a fixed mindset where mistakes are sin and other people’s opinions hold more weight.

They think, “What if I lose money? It’s too risky to begin with.”

According to them, rich people never lost any money. They think rich people just got lucky or got rich by doing shady things.

No investment is safe today.

No stock is safe. Even bonds have certain risks.

Even not investing is not safe. If you just sit on your money, you are losing it in the long run by missing out on potential growth and facing inflation.

So the idea that you can play it safe is just an illusion.

You must learn the game. That’s the safest thing one could do.

And you learn by making mistakes or by learning from the mistakes others have made.

Remember, you are afraid of risks because you have been programmed by the school since your childhood. Their goal was never to make you rich but to turn you into a decent employee so that you could spend all your life working for a company.

They never wanted you to test new ideas.

So now many people with jobs think that a safe and secure job is everything.

In reality, it’s much better to be a specialist, businessman, or investor rather than stay an employee all your life.

However, to upgrade yourself, you will have to face difficulties.

You will need to develop your spiritual, mental, physical, and emotional intelligence.

Lesson #6: Don’t become a financial fool by following popular financial advice.

Just because some financial advice is popular doesn’t mean it’s the best for you.

Poor people are always brainwashed by finance experts to follow a certain set of advice, like investing long term, diversifying, etc.

But that advice isn’t always helpful.

Moreover, they don’t consider unexpected crashes.

For example, when there is a market crash, people start selling stocks. But rich people cherrypick and buy stocks at low prices when the market is down.

Also, it’s worth noting that they don’t buy just anything.

They research well and carefully choose what to buy.

Rich people don’t buy a stock just because someone says it’ll perform well out of fear of missing out.

Poor buys when they are marketed something.

Rich buys when they know when to buy and what to buy.

The advice that you should diversify your portfolio is pretty famous.

However, no one talks about the fact that diversification does not protect you from a catastrophic crash.

Diversification is a coping mechanism against ignorance for many people.

Many people think that they can be financially ignorant and still make a fortune if they just diversify.


Diversification only helps when you are not financially blind and know what you are doing.

It doesn’t work for everyone, like it does for an investor who has financial education.

These days, anybody can call themselves a financial expert and start giving advice on the Internet.

When a lot of financially ignorant people start buying stocks without studying, you can tell that a big crash is right around the corner.

Lesson #7: Debt can either bring your downfall or help make you a fortune, depending on who you are.

While debt is viewed negatively, the truth is that not all debt is really that bad.

Poor people use debt to buy liabilities, while rich people use it to buy assets and make even more money.

When you are in debt, the money flows more into the economy.

The government and banks have an incentive to keep the poor in debt.

That’s why they’re all so eager to sell credit cards to you. A credit card is a hook to push you into debt.

Most people, as we discussed, are innocent ducks; they don’t have financial education.

So they link credit cards with money freedom.

They don’t realize that whatever they buy using a credit card, they create debt and then work extra to pay it.

Let’s say you want to buy something worth $500, but you can’t afford it.

Then suddenly, you see a great credit card offer promising you enticing perks.

You get the credit card and buy that thing worth $500.

You might think that you created money out of nowhere. But it’s not true. With that credit card, you also created a $500 debt in your name.

So you see, you bought something, which means the money went into the economy. But now you have to work to pay that $500.

And if you delay any payment, banks will charge high interest on it.

This is how banks psychologically manipulate people to get richer.

The same thing happens when students buy education loans.

Colleges and banks get richer, while the students may or may not get richer. The likelihood of students ending up even poorer is high.

Does this mean debt is a bad thing?

Not really.

Debt is just money.

If you don’t know what to do with your money, it’s your fault.

The rich know what to do with their money.

Debt can make you both rich and poor. It’s tricky.

It’s tricky because it depends on what you do with debt.

The advantage of debt is that it’s other people’s money, so it’s basically tax-free.

When you buy something with your own income, not only do you pay tax on that income, but you also pay tax on the thing you buy. But since debt is technically not your income, it becomes tax-free.

The same advantage of debt can quickly turn into a disadvantage too. If you buy liabilities with it, you will have to pay for it.

Some people confuse debt with income, and that’s why they end up losing money in the long run.

Buy the book on Amazon: Audiobook | Paperback

Shami Manohar

The Brain Behind Wizbuskout.com

I am Shami Manohar, the founder of WizBuskOut. My obsession with non-fiction books has fueled me with the energy to create this website. I read at least one book every week on topics such as business, critical thinking, mindset, psychology, and more.

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