Hey there all, I recently completed reading Rich Dad Poor Dad: What The Rich Teach Their Kids About Money That the Poor and Middle Class Do Not!. Let me tell you that this book has been in my peripheral vision for quite some time. Or at least the title of it has been! I finally read it and found that it completely fits in my current learning cycle, so there was much that I was able to readily see and almost immediately able to apply.
First off I will preface this with a fact that the title always sounded to me like it was how to transform yourself from a poor dad to a rich dad. This was not so. Although it has the information within to create that transformation, at least if you choose to apply some fo the principles, and of course in theory! Know this, though, this is not a rags to riches overnight book. It is a journey over a fair span of a lifetime.
Robert T. Kiyasaki tells his tale as a young man growing up in Hawaii, his paternal father being a well-educated man who throughout this book always seems to be on the verge of monetary disaster, even though he followed in seemingly appropriate steps required to climb the ladder to success.
His adopted father had the school education of 8th grade; what his adopted father had was a key understanding of finance, of assets, debits, expenses etcetera and had over time become incredibly wealthy.
Now how Robert came to adopt rich dad is by way of Rich Dad's son Mike. The two of them were close friends and at a young age (3rd grade). They had made the decision that they would like to become rich. The wanted to make money. Which is what they quite literally did attempt to do. They went around and collected empty toothpaste tubes, created a cast, and began to mint their own nickels. Rich dad saw this and while found the overall situation to be humorous, he informed them of the imposing legalities of their situation and offered to have them stop by his office to work for him. Initially, the boys worked for him for a very low wage, 10c an hour! After some time, Rober becomes fed up and demands a raise or else he is going to quit. Whereby rich dad imparts a critical lesson: Most people will work for the money and if they don't receive the respect or monetary wage that they feel is appropriate, they will go elsewhere. However, once they do so, they find themselves in the same situation. They were more than likely going to accept a paycheck knowing that they will struggle financially. Some may even take a second job, working harder and still accepting a measly gain. Robert asks "So what will solve the problem?"
Rich dad points to his head and says "This stuff between your ears." All of this is distilled into what Robert calls lesson #1 :
"The poor and the middle-class work for money. The rich have money work for them."
What's entertaining is that immediately following this even, rich dad has the boys work for him for free! This imparted the lesson that you work to gain knowledge, not necessarily money AKA the rich don't work for money.
He then proceeds to illustrate in the book through a few diagrams of how the rich and poor view their money in a cash flow pattern and how the poor view the job as income and expenses as food, shelter, transport, etc, neglecting the assets and liabilities columns. The middle class is fairly similar with income being received for their job, however, they do tend to recognize the liabilities column.
Where the rich differ is that they have an assets column in which you will find stocks, bonds, real estate and intellectual property which will provide them with their income, which they continue to invest into more assets. Assets create wealth. Seems like a fairly simple formula. The major takeaway here is not so much that assets create wealth, it's how to identify an asset, that little gem didn't really seem to present itself clearly while reading, but it is there nonetheless!
These views and philosophies are fully fleshed out in the remainder of the book, denoting that most or many will fall prey to the ongoing rat race whereby they build a substantial amount of debt through poor financial education and ultimately have to work in order to stay the course. Rarely being able to lift above and see a way out.
Robert offers some alternative views on how we are taught to view finances, and not everyone may agree nor may follow his advice. He does suggest that if you are not willing to take risks and prefer to follow another route, that you should begin at a very young age to invest. It may take a while longer to create a fortune for yourself, however, it is the recommended way! I don't think that you can look anywhere in the financial world and that same advice is not given!
While this touches on the surface of what is in this book, I do hope that it whets your appetite to continue to read even if it is to teach your children or others about financial literacy.
Overall the book was a simple read with an easy flowing storytelling style, and it filled my own head with plenty of food for thought!
On a scale of Rich Dad to Poor Dad, I found this to be a fairly enrichening read!
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Popular Highlights in this book
The poor and the middle class work for money. The rich have money work for them.Highlighted by 482 Kindle readers- An asset puts money in my pocket. A liability takes money out of my pocket.Highlighted by 423 Kindle readers
- People’s lives are forever controlled by two emotions: fear and greed.Highlighted by 347 Kindle readers
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ASAP
My favorite book ever. I learned alot from this book. If you consider, go get one ASAP.
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- Ewald RuppReviewed in Germany on February 7, 2017
ENTSCHULDIGUNG, IST DAS BUCH GEIL
- Aravind NaickReviewed in India on October 13, 2016
Personal Investment Fundamentals explained brilliantly
- Cliente AmazonReviewed in Spain on October 8, 2021
The Best book I've read in my life, please read it, it will change the way you see things.
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Alexandre Fernandes dos SantosReviewed in Brazil on November 1, 2024
Best Seller merecido.
