Rich Dad Poor Dad
Rich dad poor dad book is the story of a person (the narrator and author) who has two fathers: the first was his biological father – the poor dad – and the other was the father of his childhood best friend, Mike – the rich dad. Both fathers taught the author how to achieve success but with very disparate approaches. One died leaving tens of millions of dollars to his family, charities, and his church.
The other left bills to be paid.
It became evident to the author which father’s approach made more financial sense. Throughout the book, the author compares both fathers – their principles, ideas, financial practices, and degree of dynamism and how his real father, the poor and struggling but highly educated man, paled against his rich dad in terms of asset building and business acumen.
1 – Rich Dad, Poor Dad
The lesson to get out of the “Rat Race” and instead of spending your whole life working to put a little money in your pocket and a bunch of money in someone else’s pocket, have people work hard to put money in your pocket. Out of all the lessons that were taught to the boys, this one was the most important.
“Businesses that do not require my presence I own them, but they are managed or run by other people. If I have to work there, it’s not a business. It becomes my job.”
2 – The Rich Don’t work for Money
This chapter talks about people who are more comfortable in playing it safe because they were not taught early to take risks. The author develops the ideas that the poor and the middle class work for money, fear and greed cause ignorance and poverty, and the importance of using one’s emotions versus thinking with emotions.
“The best thing about money is that it works 24 hours a day and can work for generations.”. “If you work for money, you give the power to your employer. If money works for you, you keep the power and control it.”
3- Mind Your Own Business-
According to Kiyosaki, real assets fall into the following categories:
- Income-generating real estate
- Notes (IOUs)
- Royalties from intellectual property such as music, scripts, and patents
- Anything else that has value, produces income or appreciates, and has a ready market
Chapter 4 – The Rich Invent Money
The world is always handing you opportunities of a lifetime, every day of your life, but all too often we fail to see them. Great opportunities are not seen with your eyes. They are seen with your mind.”
The author encourages people to hire people more intelligent than they because by capitalizing on the knowledge of others, an intelligent individual builds his own knowledge base and therefore has more power over those who don’t know.
5: Work to Learn, Don’t Work for Money
Job security meant everything to my educated dad. Learning meant everything to my rich dad.
This is the chapter where the author talks about the skills individuals need to develop for financial success. The reader is given an example of a young woman who had a Master’s Degree in English Literature and who was offended when it was suggested that she learn to sell and do direct marketing. The author mentions management skills to get success and those are –
- Management of cash flow
- Management of systems
- Management of people
To that he throws in selling and marketing skills. He puts equal emphasis on communication skills. He says there are many people who have the scientific bent and hence have a powerhouse of knowledge, but they fail miserably in communications. These are the people who are “one skill away from great wealth.”
6: Overcoming Obstacles
The primary difference between a rich person and a poor person is how they manage fear. There are five main reasons why financially literate people may still not develop abundant asset columns that could produce a large cash flow. The five reasons are:
- Bad habits