Rich Dad, Poor Dad Book Summary

A book review of "Rich Dad Poor Dad". This is one of the most popular personal finance books on the market today.

You might have read Robert Kiyosaki's books, but "Rich Dad Poor Dad" is the one that started it all.

Its charm lies in the storytelling while providing personal financial education that isn't taught in schools.

Non-fiction books that teach through stories tend to resonate more with readers.

Rich Dad, Poor Dad Backstory

"Rich Dad Poor Dad" narrates how Robert learned the habits of the wealthy from his best friend's dad.

Robert's own dad was a well-paid, highly educated government official but ended up poor.

In contrast, his friend's dad, though not highly educated, became wealthy through businesses, real estate, and stocks.

Robert didn’t become rich right away. He joined the Navy to learn sailing, then the Marines to fly helicopters in Vietnam. Later, he became a top-selling Xerox rep and started a business selling Velcro nylon surfer wallets in the eighties, which eventually failed. He then invested in income-producing real estate, allowing him and his wife to retire within a decade. Six months later, he launched his financial education business, including books, games, tapes, and seminars.

10 Lessons From Rich Dad, Poor Dad

His activities focus on passive income so let's dive into 10 lessons from "Rich Dad Poor Dad" to boost our financial education.

1)The rich don’t work for money

Rich people let their money work for them, creating passive income streams. This means investing in assets that generate income without needing constant effort, paving the way to financial freedom.

2) Improve your financial intelligence

Always keep learning about money, investments, and personal finance. The more you know, the better decisions you can make, ensuring a more secure financial future.

3) Don't be scared to take risks

Building wealth means stepping out of your comfort zone and taking calculated risks. Embracing uncertainty can lead to opportunities that you wouldn't encounter otherwise.

4) Understand the power of leverage

Leverage other people's time, money, or resources to grow your wealth faster. Proper use of leverage can amplify your efforts and accelerate your path to financial success.

5) Control your spending

Live within your means and keep expenses low. This frees up money for investments, helping you build wealth rather than deplete it.​

6) Learn how to handle debt

Use debt wisely. Good debt can generate income and build wealth, while bad debt can drain your finances and impede your progress.

7) How to achieve financial success

Focus on financial education that offers practical wealth-building strategies. Real-world financial knowledge often outweighs traditional education when it comes to achieving financial success.

8) Develop an abundant mindset

Shift from a scarcity mindset to one of abundance. Believing in your ability to generate wealth attracts new opportunities and fosters a positive approach to money.

9) Accept and learn from failure

Embrace mistakes and setbacks as learning opportunities. Failure can be a powerful teacher, guiding you toward personal and financial growth.

10) Invest in yourself

Prioritize personal development and continuously improve your skills. This investment enhances your earning potential and opens doors to greater financial success.

A Few More Lessons From Rich Dad, Poor Dad

Some more lessons or themes that keep coming up:

*School prepares you for a job while financial education prepares you for better financial habits that lead to a more prosperous life

*The rich invest in ways that the poor and middle class do not

*The rich invest in assets that produce class flow, and then reinvest that cash flow into other assets

*The poor invest in liabilities, or things that take money out of their pockets

*The middle class tend to go to school, get a job, buy everything on credit, get raises, then buy bigger houses and nicer cars, under-save and under-invest, and then retire on less than what they should have.

*There are 3 kinds of income:
-Earned income (what you make when you're there)
-Passive income (money that comes to you when you're not there...that can come through businesses, real estate income, intellectual property, etc)
-Portfolio income (money that also comes when you're not there...but specifically from stocks, mutual funds, and other such paper investments)