Rich Dad Poor Dad Summary is one of the best book summaries on personal finance. This book is written by Robert Kiyosaki and translated into dozens of languages.
Blog Title: Rich Dad Poor Dad Summary
Book Name: Rich Dad Poor Dad: What the Rich Teach Their Kids About Money That the Poor and Middle Class Do Not!
Author: Robert T. Kiyosaki
Book Size: 179 Pages
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Robert had two fathers. Both were successful. One is highly educated, earned Ph.D. and doing a job for government. But, still, he struggles financially. Where another father is an 8th pass but Hawaii’s richest man whom Robert call rich dad.
Their thinking is also different. Poor dad says,” Money is the root of all evil”, where rich dad says “lack of money is the root of all evil.” When Robert demands expensive toy poor dad used to say” I can not afford this.” Where rich dad used to say,” How can I afford this?”
Robert chose to follow rich dad and following lessons are the learning from rich dad which describes how rich people and poor people look at money and the reason behind their lack of money.
Rich Dad Poor Dad Summary Lesson 1: The Rich Don’t Work For Money
Fear and desire are the two traps the most people are in. Most people do a job for security and money. Well, they actually have fear of not paying the bills and desire of buying the stuff like TV car, etc.
Money is not the solution to life’s problem. The solution is financial education. The real answers lie in how to handle money and let it work for you.
Lesson 2: Why Teach Financial Literacy
Our educational system focus on literacy but not on financial literacy. Thus, we see even people having high paying job struggles financially. When you become financially literate you can handle the money in difficult situations.
We see some people earn a lottery but after some time they become poor because of lack of financial knowledge. That’s why invest first on your mind because your mind is one of the biggest assets.
Attend financial seminars, courses, learn new ways of making money.
Know The Difference Between Assets and Liabilities
Assets are the things that put money in your pocket and liabilities are the things that take money away from your pocket.
Rich people spend their money on buying assets like real estate, stocks, bonds, etc which put money in their pocket.
The poor and middle class spends their money on liabilities like buying a car, TV, home, etc which take money out of their pocket. Thus the rich become more rich and poor become poorer.
Cash Flow of Poor and Middle Class
When money comes in their hand, first government cut taxes then they spend on loans, bills, insurance and buying stuff.
As their income increases their expenses also increases and their asset column remains empty. Thus middle-class struggle whole life.
Cash Flow of Rich
Rich people build their asset column first and then their money works for them and create more money. At last, as their cash flow grows they spend on buying luxuries.
Lesson 3: Mind Your Own Business
Money works like a tree. When you start savings it will be like a seed. You have to take care of it properly for years but one day comes when it doesn’t need your attention to growing. Then you will enjoy its deep shadow.
Once money goes into asset column it becomes your employee. money works for 24 Hrs. Mind your own business by building more assets.
With this, we come to the end of rich dad poor dad summary. More lessons are there in the book, I recommend to buy and read those also. To understand how money works, play the rich dad’s CASHFLOW game.
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