RICH DAD, POOR DAD

Quote from the Book

“Money is a form of power. But what is more powerful is financial education. Money comes and goes, but if you have the education about how money works, you gain power over it and can begin building wealth” (p.25)

The Author

Robert Toru Kiyosaki is an American businessman, investor, self-help author, educator, motivational speaker, financial literacy activist, financial commentator, and radio personality. Kiyosaki is the founder of the Rich Dad Company, a private financial education company that provides personal financial and business education to people through books, videos, games, seminars, blogs, coaching, and workshops. He is also the creator of the Cashflow board and software games to educate adults and children business and financial concepts.

Insights from the Book

Rich Dad, Poor Dad is the story of author Robert Kiyosaki’s upbringing in Hawaii and his two fathers – one rich father (not biological) and one poor father (biological). Kiyosaki was forced to choose between following in the footsteps of his poor father – a highly educated government worker – or his rich father – an entrepreneur who never graduated high school. Ultimately, Kiyosaki decided to learn from his rich dad – who wouldn’t? The book focuses mostly on the education and financial advice Kiyosaki learned from his rich dad. His rich father was able to create a multi-million dollar empire from virtually nothing, using his financial acumen and the power of his imagination. The book is organized into six main lessons that Kiyosaki presents to becoming successful: The rich don’t work for money; Financial literacy is key; Own businesses, rather than work at them; Understand taxes and the power of corporations; The rich invent money; Work to learn rather than work for money. These lessons combine the teachings of Kiyosaki’s rich dad with experiences from his own life. They contain recurring themes, such as the importance of improving your financial IQ and financial literacy, a set of skills that Kiyosaki believes is absent from the current education system.

The book also shows how the rich don’t work for money; they force money to work for them. The rich acquire assets rather than liabilities. Kiyosaki stresses the importance of being able to differentiate between an asset and a liability. He states that in order to be truly wealthy, your asset column must be robust and able to offset your living expenses. He explains that most people believe a higher income will make them rich, but in reality, a strong asset column will. Higher incomes often lead to higher expenses, higher taxes, and more debt. Kiyosaki also explores the character traits and beliefs that hold people back from becoming rich. He claims these obstacles can be grouped into five different categories: fear, criticism, laziness, bad habits, and arrogance. The book explores how each one of these factors acts as an impasse to financial success and gives real-life examples. Much of the book is devoted to self-reflection.