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