Detailed Book Review: Rich Dad Poor Dad by Robert Kiyosaki

Title: Rich Dad, Poor Dad: What the Rich Teach Their Kids about Money – That the Poor and Middle Class Do Not!
Author(s): Robert T. Kiyosaki, Sharon L. Lechter
Year:  First published: 1997; New edition published: 01/05/2000
Length: 272 pages
Genre: Business, Economics, Nonfiction
Get a copy: 1) Search in local bookstores to support small business 2) Amazon
Short Description: How we earn and handle our finances is essential for a quality life. You can’t be truly happy and satisfied with your life if you don’t have enough money to cover the basics for yourself and for your family. Rich Dad, Poor Dad by Robert Kiyosaki tells a great story about how we should manage our income. If you buried in depth and you don’t see light in the end of the tunnel, this book is for you.

 

About

The main reason people have financial difficulties is that they spend years at school without learning anything about money. The result is that they learn to work for money, but they do not learn how to get the money to work for them. Rich Dad, Poor Dad crushes the myth that you should get only A’s, graduate college, find a job at large firm. This is more than just a book, is a way to transform your finances. It’s an attempt to reprogram minds so we change our perception of money.

Robert Kiyosaki wrote series of book about finance and self-help. Even though Rich Dad, Poor Dad is the first, it’s the one that’s the highest rated and most recommended from people around the world.

 

My Opinion

I read Rich Dad, Poor Dad long before I read and review Rich Dad Cashflow Quadrant. To be honest, the one I’m reviewing here is way better.

In general, the book is about a boy raised by two fathers. His original dad, the poor one, is the one teaching the boy to study hard and find a stable job in a large corporation where he can support his family. The wealthy farther, on the other hand, is the one who tells the boy to invest, pursue his dream and work on a project that is of his interest. He’s the one who constantly pushes him to invest in both himself and other businesses that will give him good profit over time.

I read the book a couple of years ago and once I was over with it, I invested all of my money for one year. My profit was around 10%, which was really good compared to the deposits, where the average interest for one year is around 4% – at least for that specific year. Not that I earned a fortune, not at all, I simply wanted to mention that this book made me act and revealed another part in life, the part I wasn’t aware of. My parents are more like the poor dad described in the book. They always thought me that I should study hard and look for a “stable” job. Even though my parents weren’t even close to rich, in terms of money, they believed that this is the only way to sustain a living. Unfortunately, this way of thinking is really outdated.

The book has a lot to offer, especially to young people who are still wondering how to occupy their time.

If you really want you, and your children to have a good life without having to worry about money, you should educate them on finances. A good idea will be to start with this book.

 

Key Takeaways:

Notes, thoughts, and essential takeaways that I want to remember from the book. My main goal is to leave you with curated content, to which you can easily return to in the future for reference, that’s also holding the main insights of the book without spoiling what the book is all about:

 

The Study Hard At School Myth

Our parents teach us to listen in school, to be obedient, to have good grades. They still think that success is a reflection of the success you had in school and college. I believe that more and more people understand that this is not the case and not the way towards financial independence.

At school, we study a variety of subjects that are meant to broaden our understanding of the general things. Elementary school is a great way to find your passion and decide what you want to pursue in your life. If will be way better, however, if we weren’t constantly pushed by our parents and teachers to understand topics which we don’t find interesting. We literally fight for an A. You’re obligated to graduate with good grades, to follow the internal rules, to fit certain norms. We’re basically educated to obey commands. These things make us perfect for factory workers, not for people who want to make a positive impact in the world we all live in.

Of course, the above is good for the government and for the society. Nobody wants people who don’t obey the laws. Also, if we aren’t thought how to follow rules, there won’t be anyone working for the millions of factories around the world.

That should be the case with you, though. Most of the people are lazy and will happily work a 9 to five job as long as they can afford Netflix and having the latest smartphone in their hands. If you’re a person who wants more from his life, you should do things differently and focus your time on one specific thing.

Why the majority of people who had good grades in school aren’t millionaires?

Really simple answer: Because they’re used to obey others and they have an only general understanding of things. Straight A students end up working average jobs and earn average salary because most of them lack creativity. Instead of mastering specific craft, they know a little from everything.

People who are really successful focus on one particular subject and do things on their own terms. Such people were rebels in school. They graduated with poor grades but with something more in advantage: the ability to focus your efforts on things you enjoy most.

So, instead of wasting your time to become the best student in school, focus your time on one particular subject, project. This will make you stand out from the crowd and live the life you’ve always wanted.

 

Most People Think Everyone Else Should Change, But Not Themselves

If you realize that you’re the problem, then you can change yourself, learn something and grow wiser. Don’t blame other people for your problems.” Robert T. Kiyosaki

When you are not satisfied with job, salary, your life as a whole, you’re constantly thinking about what needs to change in order for you to be happy.

You think that your boss doesn’t pay you the right amount of money, that you deserve more attention and respect from your colleagues, that your spouse is responsible for your boring life. You consider everything external as a reason for your average life. Although it’s your life, you think that others are the main reason for your unhappiness. I felt the same way and I know the feeling. Of course, this way of thinking is completely wrong.

When something is not right, doesn’t feel right, whatever it is: your salary, job, house, kids, neighbors, parents. Thinking that everyone else should change will not lead to anything. It’s way harder to change the people around us than to change ourselves. If you don’t like something, do something about it. You, do something about it.

If you don’t earn enough money, think about the why. Is the cause the job itself or you? What are the other opportunities? What can I change in my lifestyle that will help me earn more money? Despite the answer, the change should come from you. If you don’t like your job, you should either talk to your boss for a raise, or quiet and find another way to earn a buck.

Thinking that other people should change because they’re thoughts, actions don’t correlate with your is completely absurd. In 99% of the time, people are obsessed with their own thoughts and ambitions. They don’t care you’re not happy or satisfied as long as their ass is secured.

 

How Much Money You Keep?

It is not important how much money you earn but how much money you keep aside.

We constantly hear about lottery winners who became millionaires and after a few years have even less than before. We hear the same story for famous athletes. They earn millions of dollars while they’re playing but after they retire most of them are broke and end up with nothing left in their bank accounts.

The main reason for their misfortune is their lack of financial education. A lot of people don’t do their math and spent more money than they earn. That’s why credit card companies are thriving.

You don’t have to be a math guru to know that if you earn $2000 a month, it will probably be a bad idea to spend $1000 a month on things that are not essential for your living. For example, gadgets, vacations, clothes, etc. Majority of people will think that you have $1000 left (2000 – 1000 = 1000) but that’s simply an illusion. You have bills to pay, groceries to buy, probably loans to cover.

We’re often tempted to buy the newest gadgets on the market but instead of saving money for a longer period of time, we choose the easy road and go borrow money from the bank, or sign a long-term contract.

I regret that I didn’t start saving money when I was younger. I started around the age of 25. Before that, I was living month for a month. Now I can say that I have enough if something happens. I don’t use credit cards and I save money to cover my loan in advance for the apartment I bought.

Rather than borrowing money to buy things you don’t really need, save money each month and decide whether to purchase something or not when you have the amount in you. In most of the cases, you will realize that you don’t need the new thing.

 

The Power of Choice

It’s up to us to decide whether are we going to be rich, poor or representatives of the middle-class.

A lot of people think that rich people are rich only because they have rich parents. Even though there are a lot of people born with a silver spoon in their mouth, that doesn’t mean all of the wealthy people are like that. Actually, the richest man in the history of humankind will tell you something different. The most successful people are people who didn’t had anything when they were little. They succeeded because they decided to.

Robert Kiyosaki shares really interesting exercise: to decide what you want and what you don’t want. Here are few of his personal want’s and don’t want’s:

Don’t:

  • I don’t want what my parents told me I should want: stable job and a big house.
  • I don’t want to work my whole life.

Want:

  • I want to be free and travel around the world.
  • I want this to happen while I’m still young.
  • I want to control my own time.
  • I want to make money work for me.

I didn’t want what my parents told me either. They were teaching me about money but I knew they weren’t right and that I shouldn’t listen. They both worked for big companies and they constantly complained about something. Of course, it was never their fault. I decided to go on a different path than what they were preaching and that was my best choice.

 

Make Money Work For You

At school, we learn how to work for money, but not how to harness the power of money so that they can work for us.

The sole purpose of money, according to the majority of people, is the ability to purchase something: a house, a car, phone, clothes, books, groceries, bike, perfume, a har, and other fun stuff. That’s why we borrow money with a high percentage of interest, to purchase even more stuff. That’s why we constantly desire a promotion; We save money under the mattress and go on vacation once per 5 years. All these years have been looking at the mighty dollar as a goal. Rather than looking at it as a resource.

Money, like your car, for example, is a mean to something bigger. You earn money, not for the sake of earning money, you earn money to invest. You earn money to fund your project which will potentially become your main income stream. At least that’s what you’re supposed to do.

In school, we don’t have classes about how to handle our finances. If our parents aren’t educated enough on the subject we will either never understand the real potential of investing, or we’ll learn it over the course of our life – which is a huge waste of time.

I’ve invested for the first time when I was 23 years old. I’ve done it thanks to this book. No one ever told me that you can do something like this. My parents were terrified and thought that I will lose the little I had back then. Eventually, I turned out to be a good investment with a profit of 10%.

The biggest take away from this book is probably this one: You need to understand that if you follow the money they will control you. Understand that money is only a resource and search for ways to invest them to gain even bigger profit.

 

Favorite Quote:

We all have tremendous potential, and we all are blessed with gifts. Yet, the one thing that holds all of us back is some degree of self-doubt. It is not so much the lack of technical information that holds us back, but more the lack of self-confidence.” Robert T. Kiyosaki

 

Get A Copy:

  • Local Bookstore: Search in a near, local bookstore to support small business.
  • Amazon.
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