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 decides 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
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.
Rich Dad, Poor Dad explores the power of corporations and demonstrates how the rich use corporations to house their money. Corporations allow for expenses to be paid pre-tax, saving the business owner lots of money. Kiyosaki dispels the myth that taxes hurt the rich the most – instead he shows how many rich people avoid taxes and outsmart the system. Taxes actually hit the poor and middle class much harder.
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. He discusses at length the ways in which his rich dad and poor dad have influenced him. Although he ultimately chose to emulate his rich dad, he still retains some of the beliefs that his poor father held, such as the importance of social responsibility and empathy for what he terms as the "have-nots."
(credit to Noelle Duncan for this summary)
LESSONS FROM RICH DAD, POOR DAD
Many people work very hard, but they never seem to earn enough. In Rich Dad, Poor Dad, Robert Kiyosaki explains how to escape this "rat race" and achieve financial independence.
Everybody should go to school, get high grades and then get a good job, right? Wrong! Well, at least if financial independence is what you are aiming at. Our education system is the number one cause of why so many people struggle financially. Schools teach people how to work for money, but they do not teach them how money can work for them. This lack of financial skills taught in school means that even highly educated people generally do not know how to handle money. The result is that the majority of people get trapped in work to pay their bills and are chasing paychecks all their life.
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