Categories: Motivation

Rich Dad Poor Dad Review 2024: #1 Personal Finance Book? (Why)

People all over the world are finding it difficult to manage their finances due to a lack of knowledge.

In his book, Robert Kiyosaki shares his experience of learning about finance from two dads – his own father and his best friend’s father.

Despite being highly educated, Kiyosaki’s real father was not financially stable and had to drop out of school after eighth grade.

However, he became a millionaire by applying the financial knowledge he gained from the second dad. This book’s teachings have helped many people manage their personal finances better, and it has become a bestseller.

I will provide you with more details about the lessons taught by Kiyosaki in Rich dad Poor dad.

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Rich Dad Poor Dad Review 2024: About Rich Dad Poor Dad

Robert, despite being poor, attended a school that was mainly attended by wealthy students. As we all know, teenagers can be harsh towards those who don’t fit in, and Robert has to face similar issues.

This drove him to find an answer to the question, “How can I make money?” He and his best friend Mike came up with an illegal idea of extracting nickels from lead.

However, Robert’s financially struggling father explained the downside of this business to him, and they eventually gave up the idea.

Robert’s journey towards financial independence began when his poor dad suggested that he learn about making money from Mike’s dad, who was known to be very good at it.

Mike arranged a meeting with his rich dad, who agreed to teach them but in a way that life would teach them and not in a classroom style. Rich dad asked them to work for him for 10 cents per hour on Sundays for 3 hours.

However, the duo was not supposed to ask any questions about the deal. The first lesson that they learned from the rich dad was that you must jump on opportunities when they come.

After a few weeks, Robert wanted to quit, but his poor dad advised him to demand 25 cents per hour and quit if he didn’t get a raise.

At the meeting, Robert had to wait for 60 minutes, which angered him. He told the rich dad that he was only exploiting him.

Rich’s dad explained to him that he was sounding like an employee and suggested that he find another way to earn money, which is by working with anyone else.

He told him that he had two options: become an employee and blame everyone else for his problems, or choose a tough path and become a wealthy man. Rich dad suggested that the two boys find a new way to make money outside of working for someone else.

Lesson 2 that Robert learned was that the middle class works for money while the rich make money work for them.

He also told them that he was happy that Robert was angry because, apart from passion, you must have anger and a spark within you. Employees are controlled by fear, and that’s why they let themselves get exploited.

Despite being unhappy with their paychecks, employees continue to work for a lifetime, and tax deductions make them even unhappier.

This was Robert’s introduction to the tax system, and at that time, he was only 9 years old. This is how he learned that rich people don’t face the same issues, and they don’t pay huge taxes.

After that, Robert and Mike made a new deal and started working for Robert again, but this time they worked for free. Rich’s dad taught them the third lesson: that they should work because they love their job and not because they want money or because of fear.

This inspired both the boys, and they started a comic library and earned around 10 dollars a week.

Although they had to shut down the business after three months due to a fight, both the boys learned how to make money at a very young age.

This chapter of the book is quite evident, and many people can relate to it. The book says that rich people never work for money. According to the book, rich people make money work for them.

However, most people who are struggling to arrange their finances don’t understand the meaning of this phrase.

Many people worldwide are seeking salary increases because they believe that more money will make them happier.

In reality, making money means taking risks and getting out of your comfort zone. To take a risk, you will have to use your knowledge, put in effort, and not fully depend on your salary.

But because of limited income options, low salaries, and debts, it seems impossible.

This chapter will tell you how you can take a risk and not succumb to your financial problems. Working for money creates fear and greed that direct your life, and it also tags you at a cheap price. But you can get out of this vicious circle.

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Rich Dad Poor Dad Book & Why Teach Financial Literacy?

In this chapter of the book, the writer talks about saving money. He says that it is not about how much money you earn, but it is all about how much money you save.

By saving money, he means acquiring assets and not keeping them locked in your bank account.

However, people who have low incomes do the exact opposite. They take liabilities thinking they are their assets and get stuck in the rat race. The more money they get, the more they spend, and thus, they have no money to invest in.

According to “Him,” middle-class individuals work for three main groups:

1. The Company – they contribute to making the owners and shareholders wealthier.

2. The Government – a significant portion of their income goes towards taxes.

3. Banks – middle-class people often have to deal with the expenses of bank mortgages and credit card debts.

The author explains that having assets will bring money to your wallet, while liabilities will take out your cash and slowly empty your wallet.

Therefore, he believes that people should have a financial education. In his book, he points out that many people around the world are educated but financially illiterate.

Without financial education, you risk failure in life. The author also provides examples of millionaire Americans from different professions who suddenly lost everything.

When you understand the importance of financial flow and learn to invest in valuable assets, you become financially literate in the true sense. This financial literacy is the starting point for your success.

Examples of Liabilities Commonly Owned by Middle-Class People:

Car loans
Mortgage
School loans
Credit card debt
Bank loans

Examples of Liabilities Commonly Owned by Rich-Class People:

Shares
Real estate
Stocks
Bonds
Intellectual property
Notes

The Chapter is Summarized in Three Points, the Resulting Outcome is As Follows:

The rich people will buy assets.
The poor people will only have expenses.
The people who belong to the middle class only buy liabilities, and they misunderstand them as assets.

One of the major rules explained in this chapter is to learn the difference between liabilities and assets.

Mind Your Own Business:

In this section of the book, the author clarifies the distinction between a profession and a business. For instance, if you work as an accountant, you are an employee of a company, and you do not own it.

If you wish to improve your financial situation, you need to put in more effort than simply working for someone else. To achieve this, you should focus not only on increasing your income but also on building your assets.

Robert Kiyosaki, the author of the best-selling book “Rich Dad Poor Dad,” suggests that investing in real estate is one of the best ways to create wealth.

This is because real estate is an asset that doesn’t require constant management like other investments. Once you buy a property, you can just leave it and let it appreciate in value over time.

However, if you decide to sell your home, it’s important to work with a reputable company that will provide you with a competitive cash offer.

The History of Taxes and the Power of Corporations:

According to him, corporations save a lot of taxes.

The speaker clarifies that corporations are not a group of people but a legal document that helps in tax-saving and asset protection.

He explains that corporations can be used to earn money, make expenses, and pay tax on the remaining amount. However, individuals pay higher taxes because they often don’t invest in the right assets.

The Rich Invent Money:

In this chapter, the author encourages everyone to embrace boldness.

He argues that, in the real world, boldness often trumps intelligence. Boldness involves taking calculated risks and not allowing fear to govern your decisions.

The author also highlights the plight of people who possess great talent and ideas but struggle to monetize them. He emphasizes that the human mind is our most powerful asset, and with the right training, it can create immense wealth.

He is quite right. Many people can do nothing despite having many ideas due to their fear. To increase your wealth, you will have to enhance your financial IQ, he says.

Work to Learn – Don’t Work for Money

In this chapter, the author discusses the importance of learning new things.

He points out that many individuals fail to progress in their lives because they don’t acquire new knowledge and skills, which restricts their career and personal growth.

The author stresses that we must continuously update ourselves as technology advances, and having a single skill may not be adequate to achieve our aspirations.

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What Are The Main Differences Between the Rich and The Poor Dad, As Per The Book?

Poor Dad said that rich people should be paying more taxes.

Rich Dad said if you produce taxes, it will reward you.

Poor Dad asked him to study hard so that he could find a job in a good company.

Rich Dad asked him to study so that he could buy a good company.

Poor Dad told him that he couldn’t become rich because he had children.

Rich Dad told him that he became rich because he had children

Poor Dad would be asked not to talk about money and business during dinner.

Rich Dad asked him to do the exact opposite.

Poor Dad would ask him not to take the risk.

Rich Dad, on the contrary, told him to manage the risks.

Poor Dad told him that the house was an asset, while Rich’s dad told him it was a liability. Poor Dad: Pay your bills first.

FAQs

📚 What is 'Rich Dad Poor Dad' about?

Rich Dad Poor Dad is a book that contrasts the financial philosophies of the author's two father figures. One dad is rich in knowledge and attitude towards money (Rich Dad), while the other struggles financially (Poor Dad). The book offers insights on investing, real estate, creating wealth, and financial independence.

💡 What can I learn from 'Rich Dad Poor Dad'?

You can learn the importance of financial education, the difference between assets and liabilities, why acquiring assets is key to wealth, and the power of passive income. The book emphasizes thinking like an investor rather than a consumer.

🤔 Is 'Rich Dad Poor Dad' suitable for beginners in finance?

Yes, it's highly recommended for beginners. The book uses simple language and real-life examples to explain complex financial concepts, making it accessible to everyone, regardless of their financial background.

💼 Does 'Rich Dad Poor Dad' offer practical advice on getting rich?

While it offers foundational financial principles and mindset shifts, it's more about changing your perspective on money and investing rather than providing step-by-step investment strategies.

📉 Are there any criticisms of 'Rich Dad Poor Dad'?

Yes, some critics argue that the book lacks specific financial advice and overly simplifies complex financial concepts. Others caution readers to research further before making financial decisions based on the book alone.

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Conclusion: Rich Dad Poor Dad Review 2024

This book is a bible for those who dream about becoming financially free and getting rid of their debts and liabilities.

So, if you want to become rich and increase your financial IQ, I recommend that you read this book and apply it practically in your life.

I hope this post suits your purpose well. If it helped you, kindly share it on social media channels as well.

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Sonia Allan

Sonia Allen is a freelance content writer and a senior SEO and content marketing analyst at Digiexe, a digital marketing agency specializing in content and data-driven SEO. She has more than seven years of experience in internet marketing & affiliate marketing. She likes sharing her knowledge in a wide range of domains ranging from eCommerce, startups, social media marketing, making money online, affiliate marketing human capital management, and much more. She has been writing for several authoritative SEO, Make Money Online & digital marketing blogs on these authority websites like AffiliateBay, and Digiexe.com and SchemaNinja