Rich Dad, Poor Dad by Robert Kiyosaki, is one of the best books I have ever read in my life. It was a New York Times best seller and the most famous book by the author. The first time I read it was in May 2008, I read it again this year and even decided to write a review to remind me of the golden rules of the rich.
I started to read the Rich Dad series in 2007 with Rich Dad's Cash Flow Quadrants, since then I have bought 14 books from the Rich Dad's series and his advisor's books. Personally I do not like to read the same book twice, but Rich Dad books are exceptional, I have read many of them twice, and every time I read it I always pick up something new or spot something I did not realise at first reading or have already forgotten. I am a big fan of Rich Dad and I rated this book five stars at Amazon.
Rich Dad, Poor Dad book is very inspirational and one of the best mindset books you can ever read; he combined stories and also used simple English to make it easy to understand. There are lots of people in this world who are much richer than Robert Kiyosaki, however, there are not many people willing to share the secrets of the rich and teach you how to build wealth. I truly admire and respect Robert Kiyosaki's generosity and courage to share his wealth secrets with the world and his determination to educate people for their financial intelligence and the well-being of humanity.
Robert Kiyosaki had two dads; one rich one and one poor one. The poor dad was his real dad; he was highly educated with a PH.D, and once was the head of state education of Hawaii, however he struggled financially for his entire life. Rich dad was Robert Kiyosaki's best friend's dad who started mentoring him when he was a child and had a massive influence on his life and wealth building.
Rich dad never finished the eighth grade, however, he owned substantial real estates, investments and he owned businesses and later became one of the richest men in Hawaii. Rich dad died leaving tens of million of dollars to his family, charities and his church , while his poor dad left bills to be paid. Robert Kiyosaki's decision to listen and follow his rich dad's guide and advice has ultimately made him rich and shaped who he finally became.
Poor dad often said “The love of money is the root of all evil”, while rich dad said “The lack of money is the root of all evil.” Poor dad often said to Robert Kiyosaki “Go to school, study hard, get a degree and find a good job”; he believed in hard work and loyalty. However, Rich dad often said to Robert Kiyosaki “Mind your own business”, “Invest and build your own assets and create jobs”; he believed in working smart and always said work to learn rather than work for money. Poor dad believed his house was his biggest asset, while rich dad taught Robert Kiyosaki your house is a liability to you and an asset to your bank.
As you can see Robert Kiyosaki's Rich dad had a completely different mindset compared to his poor dad, that's why they saw the world and money in a different way. Most of us are too familiar with poor dad's philosophy and that is why most of us are not rich. Robert Kiyosaki said our mindset is our most important asset and that is why it's very important for us to financially educate ourselves first in order to become rich.
Lesson # 1 The Rich Don't Work for Money, They have Their Money Work for them. When Robert Kiyosaki was nine years old, he already had a strong desire to get rich. His best friend Mike and himself then decided to ask Mike's dad to teach them how to become rich and their journey began. At first they worked for 10 cents per hour for rich dad and then later they worked for him for free. Rich dad told them “The poor and middle class work for money, but the rich have money work for them.”
Lesson #2 Why Teach Financial Literacy? Rich Dad said the most important and only rule in getting rich is that you must know the difference between an asset and a liability and buy assets.
He said that most people struggle financially because they do not know the difference between an asset and a liability. The rich acquire assets and the poor and middle class acquire liabilities, but they think they are assets. To simplify, an asset is something that puts money in your pocket, and a liability is something that takes money out of your pocket.
Rich dad also said that in order to get rich, we have to read and understand numbers and he drew diagrams of the cash flow pattern of an asset and of a liability. Most people do not get financially ahead, because they do not understand cash flow, and do not know how to have their money work for them. Rich dad said in order to be rich and maintain your wealth, you must know how to read numbers and be financially literate in words as well as in numbers.
Lesson # 3 Mind Your Own Business. This means to build and keep your asset column strong.
Lesson #4 The History of Taxes and the Power of Corporations. Tax is the biggest secret of the rich, this is because the rich use their corporations to earn, spend and then pay taxes, while middle and poor class people earn, pay taxes and then spend. According to rich dad, tax is the single biggest expense for most people, however, the rich know about and use the tax laws to become richer and richer.
Lesson #5 The Rich Invent Money. Financial intelligence requires various skills including the ability to read numbers, understand the investment strategy of money making money, the supply and demand of the market and the laws and regulations. Opportunities are everywhere, but if you do not develop your financial intelligence you will not able to identify them.
Lesson#6 Work to Learn – Don't Work for Money. Rich dad said do not specialise in one thing, but learn a lot of different things, what he means is that you should generalise in order to learn all the different aspects of a business. Rich dad also advised Robert Kiyosaki that he must work to learn skills not work for money.
Rich Dad books have had a life changing impact on me and this book is no different. Like his Poor Dad, I believed in excellent education, getting a good job and then climbing the corporate ladder. I thought the only way to get rich was to get promoted to higher positions in a big corporation or run my own company. Until I read Rich Dad's book series, I had no idea that the chances of getting rich just being an employee are very slim and I realised what was wrong with the way I thought.
As Rich Dad said whether you like it or not the laws are written by the rich and for the rich, if you want to get rich you must use the same laws that the rich use. I did not know that tax laws are one of the biggest reasons why the rich are getting richer and the poor are getting poorer. Even at business school, I learned nothing about money, investment and wealth management.
After reading his book, I realised that I need to acquire and create assets and learn to make my money work for me. This book has completely changed my mindset and helped me to think outside the box. As it is such a brilliant book I also bought it for other members of my family and have no hesitation in recommending it to anyone.