Rich dad poor dad

Rich Dad Poor Dad by Robert Kiyosaki

In this book, Robert Kiyosaki talks about the differences between the rich and the middle class people when it comes to managing their personal finance. Rating: ⭐⭐⭐⭐

The Book In 3 Sentences

  • You don’t need to earn a high income to be rich
  • Poor and middle class people learn how to work for money but rich people learn how money works.
  • Financial intelligence opens up more options in your life.

The 5 Big Ideas

  • The single most powerful asset we all have is our mind.
  • It’s not how much money you make that matters. It’s how much money you keep.
  • Financial aptitude is what you do with money once you make it, how you keep people from taking it from you, how to keep it longer, and how you make money work hard for you.
  • Financially, with every dollar we get in our hands, we hold the power to choose our future: to be rich, poor, or middle class.
  • Do what you feel in your heart to be right—for you’ll be criticized anyway. You’ll be damned if you do, and damned if you don’t.

Book Summary + Notes

Rich Dad Poor Dad Lessons

Lesson 1: The Rich Don’t Work for Money
Lesson 2: Why Teach Financial Literacy?
Lesson 3: Mind Your Own Business
Lesson 4: The History of Taxes and The Power of Corporations
Lesson 5: The Rich Invent Money
Lesson 6: Work to Learn—Don’t Work for Money

On Making Decisions

  • It is more valuable to establish your own point of view through different perspectives than to simply adopt the point of view from a single person.
  • Make lots of offers—nobody knows what the right offers are. Start making an offer and gauge from there.
  • You and your children’s future will be determined by choices you make today, not tomorrow.
  • Financially, with every dollar we get in our hands, we hold the power to choose our future: to be rich, poor, or middle class.

On Opportunities and Course of Actions

  • The moment you see one opportunity, you’ll see them for the rest of your life.
  • Be the kind of person who creates your own luck—be observant and notice the slight differences, these changes can be the start of a profitable opportunity.
  • Strive to understand how a system works—great opportunities are not seen with your eyes. They are seen with your mind.
  • Do what you feel in your heart to be right—for you’ll be criticized anyway. You’ll be damned if you do, and damned if you don’t.
  • Action always beats inaction—small people remain small because they think small, act alone, or don’t act at all.
  • Put a lot of your eggs in a few baskets and FOCUS: Follow One Course Until Successful.

On Wealth

  • There is a difference between being poor and being broke. Broke is temporary. Poor is eternal.
  • Wealth is a person’s ability to survive so many number of days forward—or, if I stopped working today, how long could I survive?
  • Someone’s net worth is often “worth less” than they think because the moment you begin selling your assets, you are taxed for any gains.
  • There are three types of incomes
    1. Ordinary earned—Earned income from your day job.
    2. Portfolio—Income derived from paper assets such as stocks and bonds.
    3. Passive—Income derived from real estate investments.
  • The best thing about money is that it works 24 hours a day and can work for generations.

On Assets and Liabilities

  • The rich focus on their asset columns while everyone else focuses on their income statements.
  • The rich buy assets. The poor only have expenses. The middle class buy liabilities they think are assets.
  • Know the difference between an asset and a liability, and focus on buying assets.
  • According to Kiyosaki, real assets fall into the following categories:
    1. Stocks
    2. Bonds
    3. Income-generating real estate
    4. Notes(IOUs)
    5. Royalties from intellectual property such as music, scripts, and patents
    6. Anything else that has value, produces income or appreciates, and has a ready market.
  • Kiyosaki’s statement of minding your own business means to build and keep your asset column strong. Once a dollar goes into it, never let it come out.
  • Keep expenses low—don’t get into large debt positions that you have to pay for. Reduce liabilities, and diligently build a base of solid assets first.
  • The number-one expense for most people is taxes.
  • A new car loses nearly 25 percent of the price you pay for it the moment you drive it off the lot.

On Financial Literacy 

  • Money comes and goes, but if you have the education about how money works, you gain power over it and can begin building wealth.
  • The poor and the middle class learn how to work for money. The rich learn how to make money work for them.
  • Intelligence solves problems and produces money. Money without financial intelligence is money soon gone.
  • Illiteracy, in words and numbers is the foundation of financial struggles.
  • A person can be highly educated, professionally successful, and financially illiterate.
  • Too many people are too focused on money and not on their greatest wealth, their education.
  • To Kiyosaki, financial IQ is made up of knowledge from 4 broad areas of expertise:
    1. Accounting—the ability to read and understand numbers in financial statements which allows you to identify the strengths and weaknesses of any business. A vital skill if you want to build an empire.
    2. Investing—the science of “money making money”. Involves strategies and formulas developed through creativity.
    3. Understand markets—the science of supply and demands.
    4. The Law—Understanding the law so you can leverage the tax advantages provided by a corporation and protect your assets.
  • Financial intelligence is simply having more options in life.
  • It is not gambling if you know what you’re doing. It is gambling if you’re just throwing money into a deal and praying.
  • Education is more valuable than money, in the long run.

On Financial Behaviors

  • An important distinction is the rich people buy luxuries last, while the poor and middle class tend to buy luxuries first.
  • Pay yourself first: the power of self-discipline.
  • If a person cannot master the power of self-discipline, it is best not to try to get rich. Although the process of developing cash flow from an asset column is easy in theory, what’s hard is the mental fortitude to direct money to the correct use.

On Financial Advice

  • Pay your brokers well: the power of good advice
    1. Find a broker who has your best interests at heart. Many brokers will spend the time educating you, and they could be the best asset you find.
    2. If all you can think about is cutting their commissions, then why should they want to help you?
    3. Most brokers are only salespeople. They sell, but they themselves own little or no real estate.
  • When you need advice, make sure you choose your advisor wisely—find and listen to someone who has done what you want to do and skip the advise of those who has never done it.

On Self-development

  • Life is the best teacher of all. Most of the time, life does not talk to you. It just sort of pushes you around. Each push is life saying, “Wake up. There’s something I want you to learn”.
  • The world is always providing us with instant feedback. We could learn a lot if we tuned in more.
  • One of the hardest things about wealth-building is to be true to yourself and to be willing to not go along with the crowd due to their fear of being different. This prevents most people from seeking new ways to solve their problems.
  • It is not so much the lack of technical information that holds us back, but more the lack of self-confidence.
  • The reason so many talented people are poor is because they focus on perfecting their skills at building a better hamburger rather than the skills of selling and delivering the hamburger.
  • The most important specialized skills are sales and marketing. The ability to sell—to communicate to another human being through writing, speaking, and negotiating—be it to a customer, employee, boss, spouse, or child—is the base skill of personal success.
  • Instead of thinking to argue, ask questions.

On Emotion

  • People’s lives are forever controlled by two emotions: fear and greed. They fear being poor, start amassing tons of money, and then fear losing the money.
  • Learn to use your emotions to think, not think with your emotions—be truthful to your emotions and observe them. Are you comfortable with that feeling? If not, ask yourself: “how can you change it?” “Is there another way?” “Are you missing something?”
  • Ignorance intensifies fear and desire.

On Minding Your Own Business

  • Start minding your own business. Keep your daytime job, but start buying real assets, not liabilities.
  • Before committing yourself into a certain task, ask yourself—where is this daily activity taking you? What does the future hold?
  • The mistake in becoming what you study is that too many people forget to mind their own business. They spend their lives minding someone else’s business and making that person rich.
  • The rich know that savings are only used to create more money, not to pay bills.
  • The main management skills needed for success are:
    1. Management of cash flow
    2. Management of systems
    3. Management of people

On Mindset

  • It is normal to want everyone else to change. But it is easier to change yourself than everyone else.
  • The way you package your thoughts determines the outcome of your life. A statement “I can’t afford it” often let’s you off the hook, while a question “how can I afford it?” forces you to think.
  • The five main reasons why financially literate people may still not develop abundant asset columnts that could produce a large cash flow:
    1. Fear
    2. Cynicism
    3. Laziness
    4. Bad habits
    5. Arrogance
  • Limiting your options is the same as hanging on to old ideas.
  • Failure inspires winner. And failure defeats losers.
  • There is a big difference between hating losing and being afraid to lose.
  • The primary difference between a rich person and a poor person is how they manage fear.
  • Cynics criticize, and winners analyze.
  • “What I know makes me money. What I don’t know loses me money. Every time I have been arrogant, I have lost money. Because when I’m arrogant, I truly believe that what I don’t know is not important,”
  • Find a reason greater than reality: the power of spirit—without a strong reason or purpose, anything in life is hard.
  • Human are great inventors. If you think being rich is too much of a hassle, you invent sayings that goes “I’ll never be rich”. If you think being rich is your desire, you invent ways to do it.
  • A truly intelligent person welcomes new ideas, for new ideas can add to the synergy of other accumulated ideas.

On Investing

  • Profits are made in the buying, not in the selling.
  • If you hate risk and worry, start early.

Financial Terms

  • Higher incomes cause higher taxes. This is known as “bracket creep”.
  • Cash flow tells the story of how a person handles money.
  • Income statement—often called a Profit-And-Loss Statement—measures income and expenses.
  • Balance sheet is used to balance assets against liabilities.

Personal Thoughts

Rich Dad Poor Dad is a modern version of the personal finance classic “The Richest Man In Babylon”. Although the book has received much criticism over the years, it is worth reading for the insights to how your thoughts can shape your life and to have you reconsider the purpose of your day job. 

Recommended for beginners who just got their first salary, the employee who’s worried about losing his job, and the introvert who dreams of having a successful burger business while focusing on building a better hamburger rather than on the skills to sell and deliver the hamburger. 

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About Stephanie Jyet Quan Loo

Founder of, a science geek, sports freak, and polyglot. Loves food, books, and snow. Feel free to say hi! 

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