Rich Dad Poor Dad By Robert T. Kiyosaki

Rich Dad Poor Dad is quite a well-known book in the world of personal finance and I am sure you would have heard of this book. Though the author, Robert T. Kiyosaki, might not ring a bell though. Robert T. Kiyosaki is a Japanese-American businessman and author. He is best known for this book ‘Rich Dad Poor Dad’ but has written 13 more books and is quite active on social media, where he teaches people about the ‘importance of financial literacy’ and ‘the rich don’t work for money’. But the way he teaches these lessons in why ‘Rich Dad Poor Dad’ has established itself as ‘THE #1 PERSONAL FINANCE BOOK OF ALL TIME… AND A CLASSIC THAT HAS STOOD THE TEST OF TIME’.

The book itself boils down to 5 core principles.

• It explodes the myth that you need to earn a high income to become rich — especially in a world where technology robots and a global economy are changing the rules.

• It teaches why acquiring and building assets can be more important to your future than a big pay check — and the tax advantage that investors and business owners enjoy.

• It challenges the belief that your house is an asset — as millions of people learned first-hand when the husing bubble burst and the sub-prime mortgage fiasco raged.

• It reminds us why we can’t count on the school system to teach kids about money — and why this critical life skill is more important today than ever before.

• It explains what to teach to your kids about money — so they can be prepared for the challenges and opportunities of today’s world and enjoy the rich life they deserve.

And while you might disagree with some of these statements. Lots of people do. In fact, when Robert Kiyosaki was trying to get his book published in 1997, every publisher who sent him a rejection slip criticized rich dad’s lesson that ‘your house is not an asset.’ Ten years later, in 2007 when subprime borrowers began to default on their subprime mortgages, the world’s real bubble burst and millions of homeowners found the truth in that lesson the hard way. Their house was not “an asset”.

Now that I have told you a bit about the author, I will move onto the book. What is so special about the book that makes it the #1 personal finance book of all time? And there is only one word that answers that question: simplicity. I am currently in high school and have not earned a single penny. But I clearly understood the concepts outlined in this book. I think the most interesting chapter in the book is the first chapter because of the way Robert teaches us the lessons of Rich Dad from his perspective, the perspective of a 9-year-old boy.

The chapter is about how Robert and his best friend, Mike, are not invited to a classmate’s beach house because they were the ‘poor kids’ in an affluent area. Frustrated, Robert and Mike go to Robert’s dad, ‘Poor Dad’, for advice. Poor dad, a teacher who makes a good living but struggles to make ends meet, simply tells them to visit Mike’s dad, ‘Rich dad’, who runs many successful businesses despite not finishing 8^th Grade. Rich dad agrees to teach them and makes them work at one of his convenience stores for 3 hours every Saturday for 10 cents an hour. Quickly disenchanted from this monotonous job, Robert goes to meet Rich Dad and complains about how he hasn’t been taught anything but instead exploited. Rich dad counters this accusation by emphasising personal responsibility over blaming others. The lesson leads to them creating a profitable library by repurposing unsold comics. Despite a setback, they learn about passive income and how to take advantage of an opportunity.

Another thing that I think is very important to take from the book is how the balance sheet and income statement of different wealth groups in the social hierarchy. A poor person earns money from their salary from their job and spends it on expenses like: taxes, food, rent, transportation and clothes. A middle-class person’s money flows in a similar way except for the fact that they can afford liabilities like a mortgage, car loans, credit card debt, and school loans. Finally, a rich person’s money flows in a completely different way. Their assets like real estate, stocks, bonds, notes, intellectual and property provide their income in rental income, dividend, interest and royalties. These pay for the expenses created by their liabilities like taxes and mortgage payments.

I hope you enjoyed that review of Rich Dad Poor Dad by Robert Kiyosaki. I really enjoyed this book and would recommend it to any someone who might be struggling with managing their finances or someone looking to activate their money. I hope you also enjoyed reading this review and I hope I inspired you to read this book because this a gross simplification of what the book taught me. I only talked about what I think will apply to the majority of people reading my newsletter but if you want to find out more, I urge you to read the entire book. And if you are intrigued by his work you can always read the rest of his books and also check out his youtube for more information on how to achieve financial freedom. Please tell me if you found my newsletter informative and helpful and please recommend any books you want me to review. See you in the next one.