Many people around the world struggle to manage their money, even though there are plenty of opportunities.
The main reason is a lack of financial knowledge. Robert Kiyosaki, the author of Rich Dad Poor Dad, was lucky to learn from two dads—his own father and his best friend’s father.
Kiyosaki’s real dad was highly educated but not financially stable. On the other hand, his best friend’s dad, who only completed eighth grade, became a millionaire.
Kiyosaki learned about money from his best friend’s father, which caused tension at home but led to his financial success.
Rich dad Poor dad became a bestseller for personal finance, and here we’ll explore the key lessons Kiyosaki shares in his book.
The Middle Class Work for Money and The Rich Make Money Work for Them:
Mike’s dad was happy, and Robert was angry because it showed passion.
He explained that most people are controlled by fear—fear of losing their jobs, not paying bills, or not having enough money.
This fear keeps them working in jobs they don’t enjoy, earning little while taxes take a big chunk of their pay.
At just nine years old, Robert learned that the rich don’t pay as much in taxes as the middle class.
Later, Robert and Mike made a new deal with Mike’s dad. They worked for him again, but this time without pay.
After three weeks, they learned another important lesson: Work for what you love, not just for money or out of fear.
This lesson inspired them to start a comic book library, earning $10 a week. Although the business didn’t last long, they learned how to make money at a young age.
The Rich Don’t Work for Money
Many people think a raise will make them happier, but real wealth comes from taking risks and stepping out of your comfort zone.
To be financially successful, you need to use your knowledge and invest wisely instead of relying solely on a paycheck.
This chapter explains how to break free from being controlled by fear and greed and start making money work for you.
Why Teach Financial Literacy?
Kiyosaki stresses that it’s not about how much money you earn but how much you save and invest.
People with lower incomes often make the mistake of thinking liabilities are assets, which keeps them stuck in the “rat race.” The more they earn, the more they spend, leaving nothing to invest.
According to Kiyosaki, middle-class people work in three groups:
- The Company – Making the owners and shareholders richer.
- The Government – Paying a large portion of their income in taxes.
- The Bank – Paying off mortgage and credit card debt, which eats away at their income.
Kiyosaki explains that assets add money to your wallet, while liabilities take it out. Financial education is key to breaking this cycle.
Many people are educated but financially illiterate, and without financial knowledge, they are more likely to fail.
He gives examples of millionaires who lost everything because they didn’t understand how money works.
When you learn how to invest in valuable assets, you become truly financially literate, which is the foundation of success.
Short Lessons On Rich Dad Poor Dad:
Mind Your Own Business
Kiyosaki explains the difference between a profession and a business. For example, as an accountant, you may work for a firm but not own it.
To improve your finances, you need to focus not just on your job but also on building your own assets.
However, Kiyosaki doesn’t suggest quitting your job. He recommends investing in real estate, which grows in value without much effort.
The History of Taxes and Corporations
Kiyosaki reveals that the rich save on taxes by using corporations.
Many people misunderstand corporations, but they are simply legal entities that help protect assets and reduce taxes.
The rich use corporations to earn money, spend it, and then pay taxes on what’s left.
Individuals, however, pay taxes first and then cover their expenses, which costs them more in the long run.
The Rich Invent Money
In this chapter, Kiyosaki emphasizes being bold. It’s not always the smartest people who get ahead, but those who are willing to take risks.
Many people have great ideas but never pursue them because they are afraid. Your most powerful asset is your mind, and a well-trained mind can generate millions.
Work to Learn – Don’t Work for Money
Kiyosaki encourages continuous learning. Many people don’t grow in their careers because they stop learning new skills.
He believes that to stay competitive, you must keep updating yourself and learning new things, especially as technology evolves.
The Main Differences Between the Rich and the Poor Dad As Per the Book:
Poor Dad said that rich people should be paying more taxes. Â
Rich Dad said if you produce taxes, it will reward you. Â
Poor Dad asked him to study hard so that he could find a job in a good company.Â
Rich dad asked him to study so that he could buy a good company.Â
Poor Dad told him that he couldn’t become rich because he had children.Â
Rich dad told him that he became rich because he had childrenÂ
Poor Dad would be asked not to talk about the money and business during dinner.Â
Rich dad asked him to do the exact opposite.Â
Poor Dad would ask him not to take the risk.Â
Rich dad, on the contrary, told him to manage the risks.Â
Poor dad told him that the house is an asset, while the rich dad told him it is a liability. Poor Dad: Pay your bills first
FAQsÂ
Why did I read this book and what do I like about this Book?
This book offers practical financial advice in simple terms that are easy to grasp and apply. It focuses on increasing your financial IQ and provides relatable experiences that many people can connect with. The tips in the book can lead you towards financial success and help you overcome common financial issues.
Why is this book a must-read?
The biggest dream for many people is to become wealthy, and this book addresses this aspiration. It explains the concept of money and offers guidance on how to build wealth even with limited funds. If you're looking to improve your financial IQ, this book is highly recommended. It differentiates between financial liabilities and assets and advises on investing in real assets. Overall, it's a must-read.
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Final Words: Rich Dad Poor Dad Book Review 2024
Rich dad Poor dad is a must-read for anyone who dreams of financial independence.
It provides practical lessons on money, investing, and how to break free from financial struggles. Apply its teachings, and you can start your path to financial success.