Written by Robert T. Kiyosaki, Rich Dad Poor Dad is termed as #1 Personal Finance book of all time.
It tells exactly what the rich teach their kids about money- That the poor and middle class do not!
The aim of the book is to make you financial literate. Once you start reading the book, your views on money and finances will start getting clear.
Robert Kiyosaki says,
“The main reason people struggle financially is because they have spent years in school but learned nothing about money. The result is that people learn to work for money…but never learn to have money work for them.”
As you read this book, it will…
• Explode the myth that you need to earn a high income to become rich.
• Challenge the belief that your house is an asset.
• Show parents why they can’t rely on the school system to teach their kids about money.
• Define once and for all an asset and a liability.
• Teach you what to teach your kids about money for their future financial success.
Robert Kiyosaki has challenged and changed the way tens of millions of people around the world think about money. With perspectives that often contradict the conventional wisdom, Robert has earned a reputation for straight talk, irreverence and courage. He is regarded worldwide as a passionate advocate for financial education.
Rich Dad Poor Dad is written in a very interesting way. It will show you everything with a different perspective and you will be amazed as you read the book.
It advocates financial independence among the readers, especially the youth. He emphasizes on investing, real estate, owning businesses, making corporations and using various other techniques.
It has many diagrams which are easy to understand and tell the difference between the habits of the rich and the poor and what makes them rich or poor.
It tells you that you must first invest in assets rather than in liabilities. It doesn’t see your home as an asset. According to the writer, an asset is something that generates cash flow.
This is the cash flow of an asset:
This is the cash flow of a liability:
USA Today has reviewed this book as, “ Rich Dad Poor Dad is a starting point for anyone looking to gain control of their financial future.”
The book has six main lessons:
Lesson1. The Rich Don’t Work For Money
This chapter tells us how the poor and the middle class work for money. And the rich have money work for them. It has many valuable lessons such as- People’s lives are controlled by two emotions: fear and greed.
Lesson 2. Why Teach Financial Literacy?
It’s not how much money you make. It’s how much money you keep.
Here, Kiyosaki tells us that an asset puts money in my pocket. A liability takes money out of my pocket. Hence, we should be careful before investing or spending our money.
Lesson 3: Mind Your Own Business
The golden rule here is that the rich focus on their asset columns while everyone else focuses on their income statements.
In this lesson, the writer further tells us that financial struggle is often the result of people working all their lives for someone else.
This is how you mind your own business- Keep your daytime job, but start buying real assets, not liabilities.
Lesson 4: The History of Taxes and the Power of Corporations
The writer tells that corporations are the biggest secret of the rich. He tells that his rich dad played the game smart, and he did it through corporations- the biggest secret of the rich.
If you work for money, you give the power to your employer. If money works for you, you keep the power and control it.
The summary of this lesson is:
Lesson 5: The Rich Invent Money
Often in the real world, it’s not the smart who get ahead, but the Bold.
The author says that great opportunities are not seen with your eyes. They are seen with your mind.
Lesson 6: Work to Learn – Don’t Work For Money
The writer says, “Job security meant everything to my educated dad. Learning meant everything to my rich dad.”
This lesson tells the main management skills needed for success are:
1. Management of cash flow
2. Management of systems
3. Management of people
After the six lessons, the book further tells the ways to overcome various obstacles.
Rich Dad Poor Dad can be termed as a must read if you want to be financially literate (as the author says!). It has many good concepts that might help you on your way to living a financially independent life.
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