Rich Dad Poor Dad by Robert Kiyosaki
This book is written with the intention of demonstrating how the rich people differ in their mindsets from the poor and middle class.
Robert Kiyosaki is committed to providing basic financial education to people at a mindset level. Robert starts his book saying he had two dads, one his actual dad who is a Ph.D. and the head of education in Hawaii, he refers to him as -poor dad. The other dad is his friend’s dad who did not even study until 8th grade but managed to accumulate a fortune. He calls him his rich dad. Robert works without pay for his rich dad. He gets irritated as he did not receive pay for his work. When he goes to confront his rich dad asking him for pay, the rich man educates Robert with lessons that would make Robert a rich man. This book is a collection and point by point logical explanation of all those principles which his rich dad taught him and how they are different from what his poor dad believed.
The book shows the vast contrast in the thinking of the rich, the poor and the middle class. He establishes through simple diagrams to illustrate that the rich do not work for money, they have money work for them. One will be able to relate to the examples that he gives to illustrate that the rich accumulate assets which drive them passive sources of income. He clarifies the difference between assets and liabilities and explains how the rich, poor and middle class have understood these terms differently.
In the next chapters, he goes on to explain the loopholes in the taxation system of America and how the rich have been benefiting from such loopholes. The rich use the power of corporations to smartly end up paying the least tax while the poor and middle class are taxed heavily in every single step of their money making process. The book gives clear examples to help the reader understand this crucial loophole. He explains the actual meaning of a corporation and how it can help the rich save tax, while the poor and middle class end up paying the most taxes. He quotes examples from Robin Hood to explain taxation.
Robert is an advocate of financial education. He gives us a firm road map on the topics one needs to educate oneself to acquire and improve financial intelligence. Accounting, Investing, Law and taxation, understanding supply and demand are the areas to find relevant information with which one may increase his financial intelligence. Robert’s board game “Cashflow” is recommended as an effective way to increase financial intelligence.
He discourages people to work for money and asks them to work to learn instead. He quotes the example of a lady who had interviewed him in Singapore to illustrate her inability to learn marketing as a skill to succeed with her career as an author. A best-selling author educates a good writing author to learn the art of marketing to change her fortunes, but the young lady with a middle-class mindset refuses to learn. He points out the mindset of the middle class and the fact that they work for money and not to learn. Work to learn a new skill, even if you work for free, he says.
He goes on to explain the obstacles one needs to overcome to become wealthy. Fear, cynicism, laziness, bad habits, and arrogance are the obstacles in the way of making one rich. He gives a practical approach as to how one can overcome these obstacles to acquiring wealth, with personal examples. The mind is the greatest asset one can have and one needs to invest in his mind to develop the appetite for wealth. He brings out the difference in approach towards failure, of a person with a rich mind and a person with a poor mind. He urges the importance of surrounding yourself with people smarter than you and insists the importance of listening over talking. One should aim at a higher reason than money to acquire wealth because gold is everywhere and most people aren’t trained to see it, he observes.
Reading this book enabled me to think about “How can I afford it?” rather than settling for “I cannot afford it.” It helped me activate my creativity to find passive sources of income or assets to supplement the money I make out of my day job. It clarified my middle-class confusion about assets and liabilities. If you need to develop a rich mindset and think like a rich person to pursue wealth for a purpose greater than acquiring just money, Rich Dad Poor Dad by Robert Kiyosaki is the right book for you.
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Thank you and Happy Reading.
31st January 2017