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Book Summary: "Rich Dad Poor Dad" by Robert Kiyosaki

Rich Dad Poor Dad, one of the most influential and best-selling books that played an important role in the financial industry, is written by the famous Robert Kiyosaki who stresses on the importance of financial education through the book. The book is a New York Times bestseller and sold over 40 million copies worldwide.

This book is about the story of Kiyosaki who has two fathers. The poor dad was his biological father, and the rich dad was the father of his childhood best friend, who taught him the financial education to become rich.

Chapter 1: Rich Dad, Poor Dad

In the first chapter, the author describes how he and his best friend, Mike, want to get rich and make money using the illegal method of creating nickels. Their plan was foiled by Mike’s father or the rich dad. Rich dad then shares the necessary financial education with both of them and their first lesson is about escaping the Rat Race.

Chapter 2: The Rich Don’t Work for Money

In the second chapter, Kiyosaki explains how his rich dad taught him that the rich do not work for the money. He continues to say that the poor and the middle-class work for money, fear, and greed because they were not taught to take risks, and rather to stay in their comfort zone and work for a stable salaried-job. Kiyosaki also writes that opportunities come and go in life, and the rich recognize them and grab them, but the poor ignore the opportunities because they are too busy seeking money and security.

Chapter 3: Why Teach Financial Literacy

In chapter 3, one of the most important financial lessons to learn is differentiating assets and liabilities. Kiyosaki continues to stress on the importance of financial literacy because without it, even if you are rich, you can end up broke like some of the professional athletes and celebrities who make poor financial decisions.

The author shows a diagram to easily differentiate assets and liabilities. The rich continue to get rich because they purchase assets and keep their liabilities to a bare minimum. On the other hand, the poor remain poor because they do the opposite and pile up their liabilities. Another important lesson from this chapter is to understand that it is not how much you make, but how much you can keep that truly makes you rich.

Chapter 4: Mind Your Own Business

Kiyosaki says that one should mind their own business if they want to become financially free. They should not mind their employer’s business because it is not their business. Instead, they should strive for ways to become their own boss and build their own business. After that, Kiyosaki continues to talk about building assets. According to him, anything with value that is able to bring in the cash flow is considered an asset. For example, stocks, bonds, income-producing real estate, mutual funds, royalties, notes, etc.

Chapter 5: The History of Taxes and the Power of Corporations

In this chapter, Kiyosaki explains how the poor let big corporations manipulate them, while the rich use big corporations to protect and enhance their assets. For instance, the rich have the advantage of using corporate to earn money, spend everything it can, and only be taxed on anything that is left. The author also recommends one to develop their financial IQ by gaining knowledge about investing, accounting, law, and understanding the market.

Chapter 6: The Rich Invent Money

Kiyosaki writes that each person is born with talent, but the talent is suppressed because of fear and self-doubt. He also says that it is not necessarily the smart people, who get ahead, but the bold and adventurous. People do not get ahead financially even when they have a lot of money because they fail to tap into opportunities and are afraid to take the risks. Most of these people just sit around and wait for the opportunity to come to them.

Chapter 7: Work to Learn, Don’t Work for Money

In this chapter, the author discusses the skills an individual needs to develop financial success in life. He gives an example of a woman who had a Master’s Degree in English Literature but is offended when the author suggests her learn to sell and direct marketing. Kiyosaki says that if someone wants to get rich, he must learn how to manage his cash flow, people, and the system. And this is why selling and marketing is an important part of financial education. He also mentions that communication skill is another important skill to acquire to be financially successful in life.

Chapter 8: Overcoming Obstacles

In chapter 8, Kiyosaki talks about the five personalities that hamper human beings. And they are fear, cynicism, bad habits, laziness, and arrogance. He also states that it is normal to have fear, what truly matters is how you handle it. He also suggests people focus on the reward rather than the problem. The author gives an example that most people say they want to get rich, and when he suggests them buying real estate, their initial reaction is “but I don’t want to fix toilets,” which is ironic.

Chapter 9: Getting Started

This chapter provides insights and tips on building personal wealth. Kiyosaki says that if you want to get rich, you must find a reason greater than your current reality to motivate you. And then he goes on to say that you also need to feed your mind to continue to learn. Next, he also advises people to choose their friends carefully and do not be afraid to make friends with people who talk about money because there may be great lessons to learn. After that, he says that one must learn to pay himself first, even if short of cash.

Chapter 10: Still Want More? Here are Some To Do’s

In this final chapter, Kiyosaki continues to offer great insights about achieving personal wealth. He stresses that one should stop doing things that are no longer viable. He encourages people to look for new ideas, experience, and keep the learning curve alive through taking courses, attending seminars, and learning from other successful people in the industry. After all, the more you learn, the more you can earn.

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Regards, Sophia
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