Rich Dad Poor Dad – Key Takeaways 

Rich Dad Poor Dad is one of the world’s leading personal finance books, written by Robert Toru Kiyosaki.

As well as being a writer, Kiyosaki is an investor and entrepreneur, known especially for the book we’re going to cover here.

It’s worth noting that the book has already been translated into 51 languages and is available in 109 countries.

Of the Rich Dad series, more than 27 million copies have already been sold worldwide.

So, today we’re going to summarize the 6 lessons presented by Kiyosaki.

Story of Rich Dad Poor Dad

The book is so named because the author claims to have had 2 fathers.

The first is his real father, who was educated and intelligent, as well as was a government official.

So he had a PhD, a stable and good job. He also told his son:

“Study hard to pass a good college and be able to work in a good company”.

Despite this, his father always faced financial difficulties and, in the book, is defined as a poor dad because he died and left bills to pay.

Secondly, Kiyosaki tells the story of his second father, who was actually his best friend’s father.

This man became the richest man in Hawaii, even though he never finished high school.

He was an entrepreneur and was named Rich Dad Poor Dad in the book because he died leaving millions of dollars to his family.

In the book, Kiyosaki states that his rich dad was a simple man, living in a modest house and having no luxuries.

Although he was growing financially, this didn’t show to anyone and one of the phrases he heard from his rich father was:

“Dedicate yourself to your studies so that you can buy and run your own companies”.

Lesson 1 – the rich don’t work for money, money works for them

The book points out a cycle that we should avoid:

Most people can observe that their parents at some point noticed that they had no money and started working harder.

By working more, the parents got money, but they also started spending more.

This becomes a cycle because the person realizes again that they have no money and have to work even harder.

In this way, the author of Rich Dad Poor Dad points out in his book that having a regular job is only a short-term solution to the long-term problem.

Out of fear, most people keep working at the same job.

They are afraid of not paying the bills, not having enough money, of being fired.

That’s the price you pay for learning a trade and then working only for the money.

On the other hand, the rich take advantage of opportunities by buying assets that generate income for them.

In the book, the author tells how his rich father proposed that he and his friend work for him for US$0.10 an hour.

After three weeks of hard work, Kiyosaki realized that he was earning little and learning nothing.

Thus, this is the first lesson from Rich Dad, Poor Dad: working for a wage doesn’t meet your needs.

Rich Dad explains that he would teach Kiyosaki the way life teaches: through blows.

And by being hit, he would be experiencing what most adults experience on a daily basis: 

Increasing the amount of monthly income doesn’t solve the problem, because the more a person earns, the more they spend.

So let’s move on to lesson two:

Lesson 2 Rich Dad Poor Dad – financial literacy

To avoid working for more money and ending up spending more, you need to be financially literate.

The author uses the story of different people who were once very rich but died in poverty.

So there’s no point in working hard and earning a lot of money if you don’t know how to manage it.

In our article on financial freedom, we explained that a person can have a high monthly income, but that doesn’t guarantee that they have financial freedom.

From here, the rich dad teaches one of his main lessons in Rich Dad Poor Dad:

“You have to know the difference between an asset and a liability and buy assets. If you want to be rich, that’s all you need to know”.

There are 2 ways to make money and 2 ways to lose it.

The first way to make money is through the salary you receive for working each month.

Secondly, you earn money from assets, whether it’s rent from a property, profit from a business or interest from investments.

As for the 2 ways of losing money, the author of Rich Dad Poor Dad says that the first is spending on education, health, leisure, etc.

On the other hand, money is also lost on liabilities such as cell phones, cars and houses.

These items are not considered assets because they generate expenses for taxes, maintenance or interest.

A person who values financial literacy knows exactly what assets and liabilities are and starts investing in assets.

Examples of gains on assets and losses on liabilities

First, let’s consider lower-class people.

They spend most or all of their resources on expenses.

Middle-class people, on the other hand, spend on liabilities such as a house or car.

Just like lower-class people, middle-class people have to work for the rest of their lives to pay off debts.

Thirdly, it is said in Rich Dad Poor Dad that rich people buy assets.

And a key point made in the book is that the risk diversify their investments and even invest in non-fiat currencies.

Simply put, a fiat currency is controlled and issued by a country or government.

For example, the US dollar is controlled and issued by the United States.

But investing in this type of currency can be dangerous due to the loss of purchasing value.

By investing in non-fiat assets, if a crisis happens in the country, you are safe.

Lesson 3 Rich Dad Poor Dad – take care of your business

Kiyosaki says that the first step is to pay off your debts and then start investing in income-generating assets.

Next, you need to stay financially healthy and invest as much money as possible in assets.

Most people confuse their profession with their business.

This results in them spending their entire lives working in someone else’s business.

This makes someone else rich.

But by taking care of your business, a large amount of income is generated effortlessly over time.

And it’s only at this point that you can start buying luxury items such as cars.

The lower- or middle-class individual goes the other way.

As mentioned in Rich Dad Poor Dad, the first interest is to buy passive items, causing assets to fall by the wayside.

As a result, this individual is held hostage by their job.

Lesson 4 – taxes and the power of the corporation 

In this chapter, Kiyosaki tells us about the history of taxes and how they burden workers.

He then explains how the rich have managed to deal with the issue through joint-stock companies and how they protect the capital invested in them.

This has the following result:

Lower taxes because first the rich earn, then they spend, and finally they pay taxes.

People who work for companies earn, then pay taxes and finally spend.

Another interesting point covered in chapter 4 of Rich Dad Poor Dad is financial IQ, divided into 4 parts:

Law, market knowledge, investment and accounting.

By knowing the law, a person understands how to benefit from legislation.

Investment knowledge is used to make your money work for you.

Accounting is used to understand a company’s situation, clearly analyzing whether it is a good or bad investment, as well as its strengths and weaknesses.

Lesson 5 – rich people invent money

Think of a house that is falling apart.

A rich person can buy that house, demolish it and have a large plot of land.

Afterward, the rich person sells the land to the developer for 3 times what was paid for it.

In this lesson, the author talks about seeing a business opportunity by taking the long view.

The author states that just as you should create your luck, not wait for it, you should also do the same thing with money.

Lesson 6 Rich Dad Poor Dad – work to learn, not for the money

We are taught to think that the only way to have money is to work for money.

That’s why we go to college and get a job to have the security of a salary.

However, Kiyosaki teaches his readers to take a different view and look for a job for the opportunity to learn.

Instead of looking only at the salary, people start to consider the type of knowledge they will gain from accepting a certain position.

This is exactly what happens in large companies with promising employees:

These individuals are groomed for high positions in the company.

So, instead of being limited to a specific area, they get to know various departments, so that they learn all aspects of the business.

In this sense, he says in Rich Dad Poor Dad:

“You have to know a little about a lot”.

That’s exactly what happened to Kiyosaki.

He joined the Marines after graduating from college and learned the essential business skills of leading and managing people. 

He then joined Xerox, overcame his fear of rejection to become one of the company’s top five salespeople.

Finally, he left the corporate world and formed his empire.

Conclusion

We learn from our mistakes, just look at the way we learn to walk.

The author of Rich Dad Poor Dad says that giving up after 3 or 4 failed attempts makes no sense.

It’s like starting to go to the gym to get going and giving up after a few days because you haven’t seen any results.

So remember:

Whoever avoids failure, also avoids success.

Daniel 29 de April de 2024