Rich dad poor dad summary
A little bit of preface from my side. Since I graduated from University, I haven’t read any books anymore. Somehow, I’m too lazy for that. It takes so much time. Some books have even thousands of pages. How long does it take to read it? Weeks? Months? Or even years? So better to read a summary, which takes you only minutes. This book has about 200 pages, so actually, it is possible to read it. Besides, it is sold over 30 million times. A book, that is in high demand. Without further ado, let’s dive into this Rich Dad Poor Dad Summary. Here it goes:
As a young boy, Robert Kiyosaki grew up with two very influential people. One was his biological father, and another one is the father of his best friend, which he called him as his second father. He refers to his real father as the poor dad based on the way, how he deals with finances. The typical parents, especially from the Asian background want you to go to school, get straight As, become a doctor and work for money. He refers to his friend’s dad- aka second dad as the rich dad. This was also based on his mindset that having a good financial knowledge and starting a business is the most important secret to wealth. He learned great financial lessons from each father, which created the foundation of knowledge he needed to become wealthy.
Rich Dad Poor Dad is about the lessons Robert Kiyosaki learned from each of his influential father figures, and why they matter today about money and building wealth. In it, you will learn why the classical path going to school to get a degree, and find a good job no longer works the way it used to in order to build wealth and retire.
In this book, Robert Kiyosaki gives firsthand personal experiences and explanations of the 7 main lessons he learned from his “Rich Dad” on how to build wealth. He compares them to the way his “Poor Dad” viewed money, and how “the old way” of “go to school, get your degree, and find a good job” just won’t work to build wealth.
The Rich Dad Poor Dad Summary Lesson #1 – The Rich Don’t Work For Money
If the rich don’t work for money, then how do they become rich? It seems like a backward statement, but in fact, it’s spot on and a major reason why many families and individuals fail to build a good retirement. So what exactly does this mean? The rich don’t work for money, because they make their money work for them. In other words, they purchase income-producing assets with their money that can generate a consistent stream of income forever. These assets may be real estate, buying up small businesses, investing their money in growing companies, etc. Liabilities are everything, that takes money out of your pocket. A car for example can be an asset or a liability at the same time. It depends on, how you use it. In normal case, you have to spend money on your for gas, insurance, maintenance etc. In this case, that car is a liability, but that car can make money for taxi companies. So for them, it is an asset. So if your money is hard at work making more money, you do not need a job anymore because you can live off the earnings your money makes for you. That’s why the title of the first lesson taught in Rich Dad Poor Dad – “The Rich Don’t Work For Money.”
The Rich Dad Poor Dad Summary Lesson #2 – Why To Teach Financial Literacy
Many believe if they can just save enough money, or win the lottery, or something of the likes, that they will solve all their stress, problems and worries. The reality is, money will not solve their problems, and will soon be gone. In his own words “Intelligence solves problems and produces money. Money without financial intelligence is money soon gone. That is why lottery winners lost it all after a few years. I remember reading a story about a 19 years old guy, who won 19 million €, but used it all up within 1 year. I don’t know, how exactly to spend it all, but maybe it is, because I have never won on the lottery before. Here are a few more examples from lottery winners. So yeah, it is not only difficult to make much money, but also to keep it and even to multiply it like the Germany’s richest woman is doing.
The basic concepts of how money works, and why it’s important to keep a portion of everything you earn, and then turn around and make that money work for you, are surprisingly unknown to most people.
The Rich Dad Poor Dad Summary Lesson #3 – Mind Your Own Business
Keith Cunningham was a close friend of Robert Kiyosaki’s and told him of an experience he had at the University of Texas. Keith was part of an MBA class that had the opportunity to listen to Ray Kroc, the owner of McDonald’s.
Ray met with the student’s afterwork for a drink in which Ray asked the students, in which business he is in. The students laughed at his question, to which he asked again in which business he is in. One of the students responded that he is in the business of making hamburgers. Ray responded saying he knew that they’d have that response, to which Ray Kroc corrected them and said: “…I’m not in the hamburger business, my business is real estate.”
Ray continued that his whole focus of the McDonalds franchises was to locate the most potential geographical locations to place the McDonalds franchises. Today he owns more real estate than anyone in the world at some of the busiest intersections. The lesson: working for someone else your entire life is often the direct result of the current financial struggle.
Like Ray Kroc, our focus should be on building businesses and assets that produce indefinite income streams resulting in choosing whether you want a job or not, since your income is not fixed and it continues to grow.
The Rich Dad Poor Dad Summary Lesson #4 – The History of Taxes And The Power of Corporations
The author mentions that the poor let the corporations manipulate them whereas the rich know how to use the corporations. This means that the rich possess the knowledge and they use the power of the corporation to protect and multiply their assets. The advantage of a corporation versus that of the individual lies in how corporations pay taxes. Individuals earn money, they pay taxes on that money, and live with what’s left. Whereas the corporation earns money, then they spend everything they can, and are taxed on anything that’s left. People may not be aware of it. They work from January to May to enrich the government by paying income taxes. In the meantime, the rich are hardly taxed. That’s why Amazon could make billion of dollar, but still does not have to pay any taxes.
That is why it is crucial to develop one’s financial IQ. This is accomplished by gaining knowledge of accounting, investing, understanding the markets, the history and the law. He says being ignorant gets you bullied whereas being informed translates into fighting chance.
The Rich Dad Poor Dad Summary Lesson #5 – The Rich Invest Money
The author illustrates that he borrowed $2,000 from a friend for a down payment which he would pay back to his friend with $200 for interest. The $20,000 offer on the home was accepted with the down payment. He then bought the home, and at the same time started advertising the sale of the same home for $60,000. He had multiple buyers at the price of $60,000 ready to buy and he then sold that house within minutes. In other words, he took $20,000 and turned it into $60,000.
The Rich Dad Poor Dad Summary Lesson #6 – Work To Learn – Don’t Work For Money
In this lesson, the author gives an example of a great writer who went to school and got a degree in writing. She asked Robert how to be a great writer like he was, and he answered to her mentioning she should try taking a suggested sales course.
The great writer found this offending since she already had her degree. Robert responded by showing his book at the words “best-selling author”. She read it and he asked, whether she sees what it says? It says “best-selling…” not “best writing…”. In other words, she had a degree in writing, but he sold more books and made more money than her. The lesson here is that sometimes all it takes is just learning one more skill in many cases would be just enough to push you to the next big success.
The Rich Dad Poor Dad Summary Lesson #7 – Overcoming obstacles
There are five personality traits, that holds people of getting rich: fear, cynicism, laziness, bad habits, arrogance. While it’s normal to have fear, what matters more is how to handle it. Ask yourself, how do you respond to failure?
That is basically it. I hope, you like this article about Rich Dad Poor Dad Summary. Besides, I’ve got a YouTube channel covering mostly business-related topics. Check it out here! If you want to learn how to make money online, then check this out! Make money online!.