Rich Dad, Poor Dad: What the Rich Teach Their Kids About Money That the Poor and Middle Class Do Not!

Rich Dad, Poor Dad: What the Rich Teach Their Kids About Money That the Poor and Middle Class Do Not!

by Robert T. Kiyosaki

Nearly everyone wants to be rich, but no one really knows how. Right?


In Rich Dad, Poor Dad: What the Rich Teach Their Kids

Summary Notes

Rich Dad, Poor Dad

“People really do shape their lives through their thoughts.”

Our thoughts are powerful. Choosing what kind of thoughts to adopt will influence our decisions and, overall, our lives. Since we are surrounded by people with different beliefs and perspectives about nearly anything, we have to choose where to listen. This choice would greatly impact how we view the world, the opportunities, and the problems around us. 

Many people look at the hardships that life puts them through and get angry or they give up. Neither of these options will help you achieve what you want. However, when you learn the lesson that life is trying to teach you and begin to change yourself to solve the problem you face, you will grow into a wise, healthy, and happy person.

Actions to take

The Rich Don’t Work For Money

The poor and the middle-class work for money. The rich have money work for them.

If you want to be rich, a job is only a short-term solution to a long-term problem. It will help you pay the bills this month, but if you want to have money in the long-term, you must change the entire way that you view money and make it work for you instead of you working for it.

The first step to changing your thinking is to focus on yourself and realize that you’re the problem. Only by recognizing this fact will you start to learn and grow. Then, learn how to deal with your emotions. 

Most of us are driven by two primary emotions — fear and desire. The fear of not having money pushes us to work as hard as we can, and when we already get the paycheck, our desire then takes over: pushing us to constantly buy things that we wish for, thereby increasing our spending. 

This cycle of working hard and spending more repeats, and we get trapped in the Rat Race. To escape from it, we must learn not to let these emotions control our thinking. 

Once you remove your emotions from the picture and take a cold, hard look at your job, you may realize that you are just wasting your time and that you could be working in a more efficient manner to make a lot more money.

Actions to take

Why Teach Financial Literacy?

The assets are large enough to grow by themselves.

How many stories have you heard about poor people who won the lottery but unfortunately just returned to being poor?

These kinds of stories are not new to us. In fact, these don’t just happen to poor lottery winners. On several media platforms, you’ll also hear several athletes or actors who went back to the same financial mess even after they were at the peak of their careers before. Why is that? 

This problem mainly stems from a lack of financial foundation. Regardless of how much money they have at first, chances are they will still just lose it if they do not know how to manage it. 

If you want to be rich and build a wealth empire, you must be financially literate. This means building a strong financial foundation by understanding accounting. While many may consider it a boring subject, it is beneficial for anyone wishing to acquire long-term wealth. 

The most basic yet very important principle you must learn in accounting is the difference between assets and liabilities. Simply defined, assets are what put money in your pocket, while liabilities are those that take money out of your pocket. 

Rich people buy assets, middle-class people buy liabilities that they think are assets, and poor people only have expenses. If you want to be rich, stock up on assets that will generate a good cash flow for you.

Actions to take

Mind Your Own Business

A true luxury is a reward for investing in and developing a real asset.

You don’t have to rely entirely on your assets; you can definitely work a day job too. However, do not use your day job as an excuse to forget about your asset column—you must work hard to build it up.

When building up assets, remember to acquire those that you love. It could be an income-generating business, stocks, bonds, notes, or anything else that produces value and already has a market. Once you’ve chosen what kind of assets to build, focus all your attention and efforts on it. Mind your own business and strategize how you will make the most out of it. 

Remember that it is one thing to become rich, but staying rich is not as easy as you risk losing your money to bad investments, careless endeavors, or debt.

Actions to take

The History Of Taxes And The Power Of Corporations

An employee with a safe, secure job, without financial aptitude, has no escape.

We all demand the rich be taxed more than any other lower-class people heavily. However, in reality, it’s the other way around: it is the poor and middle class that pays more in taxes. 

This fact can better be understood by first understanding the history of taxes. Back then, only the wealthy were taxed, but as the needed funds for the government increased, the collection was extended to middle-class people. They continue to be punished by it, while the rich have found a more efficient way to avoid paying more taxes - by running a corporation. 

Business owners who own a corporation are legally paying a reduced amount of tax. In addition to this, they also enjoy the legal protection that was offered to them from lawsuits. 

The corporate structure allowed business owners to earn first, spend for their expenses and pay taxes last. While the corporate employees earn first, pay taxes, and spend the rest. This cycle of constantly trying to live on what’s left is why the poor people badly want to escape the rat race. 

If you truly want to be rich, running a corporation is a surefire way to get there. When you rely solely on a paycheck from a corporate employer, you’re essentially a docile cow ready for milking - your salary will be but a small fraction compared to your employer’s.

Actions to take

The Rich Invent Money

Financial intelligence is simply having more options.

Becoming a financial genius starts with having the courage to play bold and take risks despite our fears and doubts. Then, recognizing the fact that we must constantly work on building our greatest asset - our mind. 

Having a strong financial intelligence is crucial to becoming rich. Instead of being stuck in the cycle of constantly paying taxes, spending, and saving what’s left, we must learn how to grow our money. This happens when we first develop our knowledge about investments and actually apply what we’ve learned. The more we become financially equipped, the lower the risk of losing our money. 

Investments have the potential to generate a lot more money than your day job ever will. Even if you want to keep your day job, spend some time investing, too, and you will become rich.

When investing, there may be moments when you’ll feel like you’re losing the game. However, this naturally happens. Failure is a part of the process; sometimes, you’ll win; other times, you won’t. Whatever happens, just enjoy the process, learn from experience, and constantly seek knowledge. In time, you’ll master the game of playing with wealth.

Actions to take

Work To Learn - Don’t Work For Money

Life is much like going to the gym. The most painful part is deciding to go.

Specialization in a certain field/industry narrows your job prospects and opportunities. However, learning a wide range of skills allows you to get involved in a multitude of jobs and investment opportunities, so you can make more money and become rich.

Some of the most crucial skills we must learn are management, communication, selling, and marketing skills. 

Management skills include managing your cash flow, systems, and people involved in your business. On the other hand, communication skills include writing, speaking, and negotiating effectively. 

To master marketing and sales, we have to learn how to deal with our fear of rejection. The better we handle this fear, the more effective we can be as communicators and sellers.

Aside from being students who always seek to learn new and crucial skills, we also must be good teachers and givers. As humans, we are all responsible for helping others learn about what they do not know and giving them what they don't have. After all, the essence of becoming rich isn't just acquiring a massive amount of money but also giving a portion of what we've received to those in need.

Actions to take

Getting Started

You must take action before you can receive the financial rewards. Act now!

Reading about becoming rich will do very little to help you actually become rich. If you want to achieve monetary success, you will have to take action!

There are ten “powers” you have to cultivate to awaken your financial genius: 

  1. The power of spirit - find a greater reason why you want to get rich. This will push you not to give up on your goal even when things get tough.

  2. The power of choice - be wise on where to spend your time and money for. If you want to get rich, choose to invest in constant learning.

  3. The power of association - choose your friends carefully. Surround yourself with people who can help you build a strong financial intelligence.

  4. The power of learning quickly - when your formula to getting rich doesn’t work, it means you need to change it. Train yourself to find and learn new formulas faster.

  5. The power of self-discipline - have the discipline to pay yourself first by investing in assets before letting your bills and other expenses interfere.

  6. The power of good advice - find a good broker who is smarter than you and those that will provide you with valuable financial information. Seek advice and learn from them.

  7. The power of getting something for nothing - be an Indian giver when it comes to investing and acquiring assets, meaning you have to get back your initial investment quickly.

  8. The power of focus - learn to grow your assets and use them to buy the luxuries you want instead of borrowing money.

  9. The power of myth - choose your financial hero and adopt their habits. If they could become rich, you can do so, too!

  10. The power of giving - if you feel the need for something, try giving it to someone first, and you’ll be surprised how much you’ll get in return!

Actions to take

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