According to rich dad poor dad summary. There are two types of people in this world, first is rich and second is poor.
Do you ever think why rich people become more rich day by day and on the other hand, poor remains on the same.
Everyone wants to know the secret behind it, how to create massive wealth? it is practical knowledge based on the live experience.
So today I am going to talking about how to get rich. It’s not off-topic, but this is the essence of this book, rich dad poor dad summary.
Well, this book is purely based on real life based experience which shows that how to overcome financial problems?
I have already published a summary of think and grow rich book, which can help you to overcome your financial issues.
But that is different from this book because that book is based on psychological studies on wealthy people around five hundred. Book has written by Napoleon Hill.
Although, that can be great book for you, so according to this book rich dad poor dad it is a story of a boy Robert Kiyosaki, who is also a author of this book basically it is based on his life.
Well, Robert had two father I mean, one his real father and other one his friend’s father. Now here is comparison between his two fathers this is main base of this book.
His real father was Ph.d holder and job person, his philosophy for the success is do hard work on your studies get excellent marks and do the job for income.
Almost every parent is obsessed with this thinking, especially parents in India.
On the other side his friend’s father who is totally opposite of Robert’s father. His friend’s father philosophy is, do hard work on studies, learn new skills, open a company, and become a self employer.
As you can see here is a huge difference between in it, after all of it. Robert very carefully chooses his friend’s father as a mentor and starts his financial learning from his rich dad.
Here two quotes available from his two fathers. First from poor dad is- Love for money is the root of all problems.
Second is from rich dad- Lack of money is the root of all problems.
This is initial part of rich dad poor dad summary.
Rich dad taught some essential lessons to Robert which you can quickly learn and implement in your life
- Always take calculated risks.
- Save money for you.
I think everyone knows about the first point risk and I am explaining second point. So how you can save money? Example- A sports player earns millions of dollars at the age of 20-25 years but after 10-15 years. He faces tough problem in his life due to financial problems.
So this lesson teaches us always save money for your survival.
His wealthy father always encouraged him to focus primarily on financial education and to learn it. Because it helps to make money and explains the flow of money in the market and many things.
After all these things, you felt that his rich father is very knowledgeable and highly educated. But hope is not true every time. His rich father had never completed school.
Now come on the main lessons of this book which his rich dad taught him. Basically it is financial education and everyone should know it.
Rich Dad’s Lesson
There are 6 lessons in this book, which clears your misunderstanding about money.
Assets and Liabilities(Financial Literacy)
Now, What is assets and liabilities? let’s understand it in pieces first one is assets. Now assets are those things which give money or fill your pocket with money.
Asset is not the name of any person. You must be feeling so funny, but it is definition of asset by Robert Kiyosaki. You can search little more complicated and more explainable definition. But I found this definition easy to understand.
Example of an asset like- a nice house which you can give for rent and make money or fills your pocket with money, the share of a growing company can give you a lot of money.
It’s turn for liabilities. Liabilities are those things which take money from your pocket. Example- television, costly shoes, costly wrist watches and most important liability loan.
Now learning from this point- First of all, you have to keep in mind that there should be more assets than liabilities. It will help you a lot to earn money fast and more.
As an example of the above point- his real father was Ph.D holder and very intelligent person, but he didn’t have financial knowledge. So as a result he didn’t know how to mange money and invest in right place.
And on the other hand, his rich father never completed school, but the financial knowledge he knew was very well.
And, asset and liability points owns a very essential place in financial knowledge. For further points it is necessary. It is one of the six lessons from this book.
the asset and liability section from rich dad poor dad summary.
The Rich Don’t Work For Money
As you know poor do work for money, like doing the job. Their main focus on creating expenses, therefore they remain on the same place. One more thing of poor people which make them poorer is a single source of income.
On the other hand, rich people is just opposite of poor in this case, where poor main focus on expenses or creating liabilities, there rich creates assets from his income and creates one more source of income and use that money as per need.
In simple way they have multiple source of income. They invest their money on bond, shares, real estate, etc.
Robert’s rich father said there are three types of income source- Ordinary, Passive and Portfolio. The salary is kind of ordinary income source.
Where passive income source includes real estate and related to it and portfolio income source contains stocks, bonds, shareholding.
As a example of portfolio income source Jeff Bezos richest person in the world, earns most of the income from Amazon as a 17% shareholder, this is portfolio income.
His rich father told him, if your income source is ordinary then convert it into passive and ordinary income source, it means in other words create assets.
Mind Your Own Business
This section is divided into two parts, the first is to pay your remaining debt like a car loan, home loan, and anything. Start investing your money in income-generating assets as soon as possible. So this is also a necessary line for the middle class and poor mentality person.
Here I am using mentality because everyone is rich and everyone is poor by his mentality and this book encourages us to change our poor mentality to rich mentality and become rich in reality.
Now suppose a middle-class man got his salary, so first, he’ll pay off his loan such as home loan, vehicle loan, or maybe any electric appliance loan. After it pays his fixed expenses and in the last either save it or buy other liability like a brand new mobile phone, TV, Air conditioner.
As this book wants to understand, create more and more assets, and expense this money.
So, don’t buy any useless liability just invest it in right place.
Mind your own business is very essential part of rich dad poor dad summary.
My favorite quote from this section-
The primary reason the majority of the poor and middle class are fiscally conservative is that they have no financial foundation. They have to cling to their jobs and play it safe. They can’t afford to take risks.
The History of Taxes and the Power of Corporations
The tax was made for people’s welfare, the government collect tax from the people and use it for their welfare. There are many taxes like income tax and the most famous GST in India. Tax is given by an individual or a corporate. But what thing makes it essential that is very important to know you.
Here the author told us about tax and explains how corporate pays tax. They earn, spend, and in the last get taxed. But for the individual, he earns and gets taxed before spend.
There are some points can help an individual to get out this. The four points are follows- Accounting, Investment Strategy, Market Law and Law.
Rich dad advice us legal and tax knowledge can help us to make great wealth.
This legal knowledge helps businessmen very much to expand their business or even to create a monopoly in the market using the patent. You can also use it for your financial welfare.
Under this section, you’ll got very good knowledge about tax in rich dad poor dad summary.
Rich Invent Money
Here invent money means invest your money. For this firstly you have to find opportunities or deals, It can only happen when you skill, financial knowledge, network of people.
There are two types of Investment according to this book-
Investment Packages– This type of investment includes, investment in shares, real estate. Such investment does not take much effort and good opportunities are available in market.
Professional Investors– From the word professional you can guess, it is not an easy job. A professional investor research market, finds the best deal for him, hire professional people and in the last raise funds for investment.
one more worthy quote from author.
Some people argue that there aren’t real estate bargains where they are, but there are prime opportunities everywhere that are overlooked. Most people aren’t trained financially to recognize the opportunities in front of them.
Work for Learn
Here I am comparing rich and poor again because I think it is the best example to understand his teachings. So let’s start, first of all start with a rich mindset people. Their main work is to learn life skills such as communication, management, and people skill.
These are very important for financial freedom and especially, it is not teach in the school. As you can see this owns importance. You should acquire such skills to become financially free.
On the other side, Poor learns academic skills and do hard work to get good marks, and struggle whole life due to financial problems.
I know, academics are also very important to the develop mental ability of an individual, but for freedom, you have to learn such life skills. This is the essence of this point and a little bit similar to the above points.
As Robert Kiyosaki says in the context of it and one of the rich dad poor dad quote-
I recommend to young people to seek work for what they will learn, more than what they will earn. Look down the road at what skills they want to acquire before choosing a specific profession and before getting trapped in the Rat Race.
An individual has many emotions some are good and some are bad. But here I am talking about only five obstacles that make a lot of difference between a rich and a poor. The obstacles are Fear, Cynicism, Laziness, Bad habits, and Arrogance.
Everyone face such obstacles while struggling or trying to become successful. Well everyone know such problems or may experience in his life.
But here I want to explain them all to you, so it will kill all the misunderstanding and then you can easily implement it in your life and get good results.
According to rich dad poor dad summary control emotions-
Start from the first fear-
It is not that type of fear like fear of ghost, here it is fear of losing money in any investment. Losing money is common thing in investment, don’t worry about that and take calculated risk, so it decreases the chance of failure.
Calculated risk is not in this book, I use this term to clear your thoughts about risk. Kiyosaki notes that he never met a rich person who never lost his money, but I met poor people many times who never lost their a dime.
It is because they never invested their money. I hope you understand it, If you any doubts then you can ask in the comments.
Now let’s jump on the next one “Cynicism”
Cynicism, What a typical term? well, Everyone has doubts about his dream, career, and much more that affects his self-confidence. Well, this is an internal thing but powerful.
Now on the external problem, suppose when your friend, acquaintance, family member reminds your shortcomings. It’s important to note and it’s more important to not allow cynicism of others because it decreases your self-esteem and snatches your productivity.
So believe in yourself and be positive. It for the external problem.
Now it’s turn of internal problem, here you also have to become optimistic towards your aim. And clear your doubts by gaining knowledge.
This is some thing that can help you.
According to rich dad poor dad, busy people are usually lazy. They avoid all other important work and spend their time on fishing, playing golf and other things. Consider them as a busy person.
Suppose, a busy person arrive at office do hard work whole day, even put some work on home and work on weekends. They are very lazy.
The cure of this problem- whenever you find yourself procrastinating or avoiding something and you know it is important, you should do this, then don’t worry, just think about that thing and ask yourself “what’s in it for me?” and try to know that and be some greedy about it. This is the best cure from this book.
In the words of rich dad poor dad summary or book, laziness is not a good thing.
Habits affect behavior. As an example- Most poor mindset people, pay their bills first from their income. Well, this is a nice thing, paying bills. But it is wrong when you are trying to get wealth.
Robert Kiyosaki tells us that most people do this, they pay their bill and fixed expenses first but after it, few amount left for investment. According to the author, it is the wrong way.
Pay yourself first, even if you do not have enough money to pay your expenses. According to the author, it is a habit to become rich. Because when you do not pay your expenses then you have enough money to invest in assets and it makes money for you.
It is difficult in initial stage, but excellent habit for better future. So save yourself from such habit.
After few investment, most people thinks they know everything about investment, this behavior makes them arrogant in nature. A one main effect of arrogance, you’ll not learn new things.
This increases the chances of failure again. So be prepared, train yourself to listen to others and be humble with others which boost your respect in the eye of others.
This all from this Rich dad poor dad summary.
Rich Dad Poor Dad pdf & audio book
As you know rich dad poor dad is a very interesting book and everyone wants to read it in a very comfortable way. As keeping in mind the need. Rich dad poor dad pdf is available.
Along with, if you want to hear it. A audio book is available
Rich Dad Poor Dad Review
First, start from Forbes, It is an interview between Griffin and Shelly Sun, CEO and founder of Brightstar Group. Sun said, someone gave me this book and, in this book described business ownership is less than employment. She said after her grandmother’s death in early 2002, she read Rich dad poor dad, which I mentioned I received as a gift.
As you can see, how this book adds value to his life and improve herself.
Times of India listed it on the list of the helpful book read during the free time in lockdown. Which shows its significance.
Although many newspaper and influencers praise it and promote this book as must read book.
On Goodreads the rating of this book is 4.07 out of 5 which is pretty good
Some things you should know which increase the value of this book in your eye. Rich dad poor dad has sold over 32 million copies in 51 different languages and more than 109 countries. It was published in I April 2000.
This all from rich dad poor dad review.
For doing a great business it is necessary to have a network means, having good relations between your industry’s people. So it is almost impossible if your communication or people skill is weak so, I have a solution for you How to win friends and influence people summary. A great book.
About Robert Kiyosaki
Rober Kiyosaki is an American businessman and author. He is the founder of Rich Dad company and Rich Global LLC. Robert’s full name is Rober Toru Kiyosaki born in 1947 in Hilo. It important and inspirational story you have already read above.
Some more books written by Robert Kiyosaki- Rich Dad’s cashflow quadrant, Rich Dad’s guide to investing, Increase your Financial IQ, and many more books to develop your financial skills.
One more thing, Robert kiyosaki net worth is 80 million dollar.
rich dad poor dad summary is very small, but the essence of the whole book.
As you can see rich dad poor dad summary in which the story of Robert which shows how he started learning from his rich dad and then after started his career. Very valuable teachings from his rich dad. These seven points are main and direct lines from the book.
Financial freedom is very important for every individual, but very few achieve it. So I hope you understand his teaching through me.
This is all from rich dad poor dad summary.
One question from me- what is your first step to become successful? tell me in comments.
Read it, learn it, and implement these things and monitor changes and very important share it, to your friends.