Rich Dad Poor Dad by Robert T. Kiyosaki is considered as first book to read for financial education. It has a good writing, lots of learning content and a little humor. But to anyone who wants to learn financial tools or technical concepts, this book is not for you. Rich Dad Poor Dad is more of a financial mindset book than a technical guide book. It teaches one about identifying and differentiating assets and liabilities. So for absolute beginners who don’t have any idea what is personal finance and how the system works, this book is for you.
Book begins with Robert introducing his had (poor dad) who is highly educated but is less financially educated. Then he introduces his friend Mike’s dad (whom he calls his Rich dad) who is not very educated, but highly educated financially. Robert tells story of his childhood when he met Mike’s dad and how he revealed a whole world of learnings in finance and business to him. In beginning chapters, Robert tells many incidences from his childhood with Mike’s dad about how he taugh them (him & Mike) about assets, liabilities, taking risks, how taxes & corporations work, rich/poor mindset, and philanthropy.
In early chapters, the content to learn is very dense and rich in terms of mindset development. It clearly differentiates the poor and the rich mindset. But actually, the whole book is on this. Robert, being a real estate investor, gives many instances of how he used the principles mentioned in each chapters to buy great deals. Though the reader gets exposed to lots of real estate examples, but not to other financial “vehicles” as compared to it. Robert explains concepts and demonstrates them by comparing mindset of his rich dad to his his poor dad. He also impresses the idea that handling money is more important than creating it.
Robert tries to fit in an idea of why people get into being poor because of not understanding what a liability is, or because they think something is an asset but actually its a liability. He explains assets, liabilities and cashflow concepts with good diagrams. He encourages reader to build assets, minimise liabilities, save money legally from being taxed, to start generating passive income, convert passive income into assets, to take bold moves, to take risks, importance of running own business, looking for opportunities everyday, learning things fast, being surrounded by people smarter than you, and to build a solid mindset of winning.
In ending chapters, Robert gives digest of some of his best teachings that the reader should take consideration of, but its not definitely the summary of the book. Overall book is motivating for people who are just getting serious about becoming rich and have no idea where to start. Its a good book to build mindset towards creating, handling, saving, and giving away money.
Some of my highlights
An asset puts money in my pocket. A liability takes money out of my pocket.Page 68
If you can grasp the idea that money is not real, you will grow richer faster.Page 151
It is what you know is your greatest wealth. It is what you do not know is your greatest risk.Page 168
Workers work hard enough not to be fired, and owners pay just enough so that workers won’t quit.Page 185
Profits are made in buying, not in selling.Page 272
Small people remain small because they think small, act alone, or don’t act at all.Page 284