Rich Dad Poor Dad Book Summary

Book Summary

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Brief Summary

"Rich Dad Poor Dad" is a personal finance book written by Robert Kiyosaki. The book shares Kiyosaki's experiences growing up with two fathers: his real father (poor dad) and the father of his best friend (rich dad). Through contrasting their different approaches to money and wealth, Kiyosaki imparts valuable financial lessons.

In "Rich Dad Poor Dad," Kiyosaki challenges conventional wisdom about money and highlights the importance of financial literacy and building assets. He encourages readers to adopt a mindset that focuses on creating passive income through investments and entrepreneurship, rather than relying solely on a paycheck.

The book covers various topics, including the importance of financial education, the difference between assets and liabilities, and the power of taking calculated risks. Kiyosaki emphasizes the value of financial independence and escaping the "rat race" of working for money.

"Rich Dad Poor Dad" serves as a motivational guide, providing readers with insights and strategies to change their mindset and approach to money. By embracing the principles outlined in the book, readers can gain a better understanding of how to achieve financial success and create a more secure future.

About the Author

In 1974, Kiyosaki’s career and life were transformed after attending an Erhard Seminars Training session. He then went on to found the Rich Global LLC and Rich Dad Company, the latter of which provides personal financial education through literature and multimedia products. Aside from Rich Dad Poor Dad, Kiyosaki has written over 25 books. Rich Dad Poor Dad has sold over 27 million copies internationally. Kiyosaki has founded several business ventures, including a retail clothing company and a velcro wallet company, both of which have since gone bankrupt.

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Key Insights

What do rich parents teach their children that the poor don’t? Robert Kiyosaki uncovers this difference through a series of parables based on his own boyhood. The unnamed main character’s father, known as Poor Dad, teaches him little about money. But when he lands a summer job at a small restaurant owned by a friend’s father, he gains another father figure in his boss, known as Rich Dad. Rich Dad teaches the boys about the value of financial smarts. Through these lessons, the boy learns about the ways rich people pass on their wisdom and set their children up for financial success.

The school system doesn’t teach us how to build wealth so financial success starts with self-education.

Many parents trust the school system to teach their children financial literacy. In reality, schools primarily teach children traditional middle-class values: stay in school, get good grades, and go to college. Kiyosaki notes that this sort of mentality may help students find work eventually, but it hardly teaches them anything about how to escape financial struggle altogether.

Even the students who follow these guidelines exactly may end up living paycheck to paycheck, unable to grow their money, or save for important future goals like retirement. In fact, nearly 50% of people in the United States are without a pension, while up to 80% have ineffective pension plans. What can we do to break out of this cycle?

Kiyosaki explains that the first step to growing the rich is taking financial education into our own hands. We must not be afraid to transcend traditional thinking and seek out better resources. Self-education can mean a lot of things; it could mean reading the ideas from books like this one, seeking out mentors who grew their wealth, or watching lectures. Kiyosaki advises us to take time to teach ourselves about accounting, economics, investing, and tax law. In carefully learning as much as we can about each of these subjects, we expose ourselves to the reality of money in this day and age.

Learn the difference between assets and liabilities.

Kiyosaki explains that in order to know the state of our finances, we have to understand that everything is split into two categories: assets and liabilities. Many people don’t know how to differentiate the two, and therefore have little idea of how their money is working for them.

So what is the difference? An asset is something that puts money into our accounts. This could be everything from an investment portfolio to a nice computer that allows you to work without interruption. A liability, on the other hand, is something that takes money from our accounts. This could include debts like student loans, owed taxes, or credit card bills.

Rich people understand that the more assets they have, the more their money is going to grow in the long run. They focus on growing their assets while reducing their liabilities as much as possible. Kiyosaki recommends that everyone appraise their finances to find out how much of the money they have in each...