Hey Champions, Genuinely Rich Dad Poor Dad is the Best ever book I have read on Financial education.
I genuinely request you to read this masterpiece once for sure, I bet you, this will, no doubt, enlighten you on matter of finance. This is the entry point of becoming rich and thinking rich. Here we are, in this blog, pleased you with the lessons and summary from “Rich Dad Poor Dad” by Robert Kiyosaki.
In this book, the author mentions how he and his friend were encouraged to make money with the techniques used by his friend’s dad (also known as his Rich dad) which explains how to make money.
The book, which is written from the author’s perspective, tells how his Rich Dad teaches him seven lessons that he needs to follow while looking for ways to make money and they are:
Lesson 1: The Rich don’t work for Money.
Lesson 2: Financial literacy is necessary
Lesson 3: Mind your own business.
Lesson 4: Use the cover of a corporation.
Lesson 5: The rich invent money
Lesson 6: Work to learn.
Lesson 7: Overcoming Obstacles.
Lesson 8: Taking Action.
These six lessons make up the first six chapters of “Rich Dad Poor Dad” which covers up to two-thirds of the book.
Now, let us review the summary of each chapter:
Lesson 1: The Rich don’t work for money
The majority of the rich population does work hard to earn money – however, they go about it differently than most people. The author also specifies that having a regular job is just a short-term solution to the long-term challenge which is to gain financial freedom.
According to the author, it’s the fear of many things like the fear of not paying their bills, the fear of being fired, the fear of not having enough money and the fear of starting over that makes most people a slave to money.
This problem arises as a result of studying to learn a profession or trade, and then working for money.
Lesson 2: Why is Financial Literacy necessary?
In the second chapter, the author explains the difference between an asset and a liability. He defines an asset as something that has value and can be bought and sold. The function of an asset is:
- To produce income
- To appreciate
- To do both.
On the other side, liabilities take money out of your pocket due to the costs that are associated with them. For example, a personal residence is not much of an asset, however, rental property is an asset as it can generate passive income.
This lesson teaches us that if we want to grow rich, then we need to concentrate on buying assets that produce income while keeping liabilities and expenses low.
Lesson 3: Mind your own business
The key messages that the author wishes to convey to us in this chapter are to:
Firstly, pay the debts that you might have and then invest in income-producing assets.
Then try to stay financially healthy by spending your time investing as much of your money in assets.
In this chapter, the author warns his readers that most people tend to confuse their profession with business, so they spent their entire lives working for somebody else’s business to make them rich.
Lesson 4: Use the cover of a corporation
Through this lesson, the author discusses how to play the investment game smartly. He believes that the people who wish to earn should try to understand the power of company structures and the tax codes of that country.
They should use every legal means to minimize their tax burden. Through this, the author educates his readers that understanding the legal and tax procedures of a country could be beneficial in contributing to long-term wealth.
Lesson 5: The rich invent money
This lesson teaches us that it is important to find opportunities that other people may not have the skill, knowledge, resources, or contacts for.
The author explains about two types of investors found around the world:
Investors who use an Investment package where they entrust their money to a developer or fund manager. Example: putting money into a real estate crowdfunding venture.
Professional investors are people who look after their investments. These are the tasks that they take while making investments:
Identify opportunities that have not been found out by other people.
Raise funds for investments.
Work with other intelligent people.
Lesson 6: Work to learn
In this chapter, the author starts by explaining the difference between his rich dad and poor dad. His poor dad, who was a well-educated man, worked for money as the job security meant everything for him
However, the rich dad became a millionaire by working to learn. The author recommends his young readers find a work through which they will learn rather than focusing on what they can earn.
He also discusses the synergy of management skills required for the success of one’s business:
- Managing the cash flow
- Managing the systems
- Managing the people
Through the rest of the chapters, the author discusses the problems that investors might face while trying to gain some level of financial dependency and some advice.
Let’s see the summary of these chapters:
Lesson 7: Overcoming Obstacles
In this chapter, the author points out the primary difference between his rich dad and poor dad based on how they manage their fear.
The author also explains the five biggest obstacles that people face on the path of becoming financially independent:
- Fear
- Cynicism
- Laziness
- Bad habits
- Arrogance
Lesson 8: Taking Action
In Chapter 8, the author specifies that due to the lack of vision and clarity of the world we live in, we are not able to see the gold around us.
The current young generation is taught how to work hard for someone else, spend the money they earn, and borrow when they run short, but never are they taught lessons about finances.
The author explains how to develop your knowledge about finances in these ten steps:
Having an emotional reason or purpose for doing what you do. It should contain a combination of wants and don’t wants.
Understanding the power of choosing the right habits and educating yourself.
Choose your friends wisely as the right association can be advantageous.
Becoming a fast learner can help you to quickly develop formulas for making money.
Mastering the power of self-discipline can help you in the future to manage your cash flow, people, and personal time.
It is recommended to choose great team members and compensate them accordingly for their contribution.
Focus on return of investments followed by return on investments.
The money generated by assets can be used in many ways like using it for investing it in other resources.
Keeping a role model can help you by putting the strategies formed by them to use.
It is important to realize that to receive something it is inevitable that you lose something too.
In the final chapter, the author puts all the key lessons together into a checklist of actions that could be taken by his readers.
My Opinions About The Book
The main moral explained by the book “Rich Dad Poor Dad” is that not all rich people are born with silver spoons in their mouths.
Today’s reality shows us that many of us join the race where we work for money but the author explains the rules that we could follow to create a path for long-term wealth and financial freedom.
Even though this book was published nearly 25 years ago, the lessons taught to us by the author can be put to use even in modern times.
The book also teaches us that money is an illusionary idea. The process of making money involves creative thinking and identifying opportunities that help us to build revenue-generating assets.
Champions, I hope you got the gist of the Rich Dad Poor People by Robert Kiyosaki. Go and get a fresh copy for yourself or if you wish to read digital version, register yourself as Kailaba – Registered Readers and feel ease to ask for the book. We will send you pdf eBooks to you. We are always thrilled to help you learn more, read more.
Keep reading keep growing, Kailaba – always empowering you through knowledge of words.