Rich dad poor dad

Author - Robert.T.Kiyosaki

Rich Dad Poor Dad by Robert T. Kiyosaki is a personal finance classic first published in 1997.

Genre - Buisness

Notes: Rich dad poor dad

• • The book contrasts the financial lessons learned from two father figures: his biological father (Poor Dad) and his best friend's father (Rich Dad).
• • Poor Dad was highly educated, a government employee, and struggled financially throughout his life.
• • Rich Dad was a school dropout but became a successful entrepreneur and investor.
• • Poor Dad emphasized getting a good education, finding a secure job, and working hard for money.
• • Rich Dad taught that the rich don't work for money; money works for them.
• • The core lesson is the importance of financial literacy, which is not taught in traditional schools.
• • Poor Dad believed that a house is an asset, while Rich Dad viewed a primary residence as a liability.
• • The book defines assets as things that put money in your pocket, and liabilities as things that take money out of your pocket.
• • Rich Dad's advice centered on acquiring assets and minimizing liabilities.
• • The "rat race" is a concept describing the cycle of working hard to pay bills, with little left over for wealth building.
• • Poor Dad's mindset was to avoid risk and seek security, leading to a life of financial struggle.
• • Rich Dad's mindset was to embrace calculated risks and seek opportunities for growth.
• • The book highlights the difference between professional skills (being good at a job) and financial skills (managing money).
• • Kiyosaki learned to identify opportunities and take action, even when it was scary.
• • He started his first business with his friend, selling nylon wallets with Velcro closures.
• • The business failed, but the experience taught valuable lessons about sales, marketing, and perseverance.
• • Poor Dad encouraged Kiyosaki to focus on his studies and get a stable job.
• • Rich Dad encouraged Kiyosaki to learn about business and investing, even if it meant taking time away from traditional schooling.
• • The book emphasizes the power of the mind in shaping financial reality.
• • Fear of losing money can paralyze individuals and prevent them from taking necessary risks.
• • Cynicism and laziness are also significant barriers to financial success.
• • Greed can lead to poor decision-making and financial ruin.
• • Rich Dad taught Kiyosaki to manage his emotions, especially fear and greed.
• • The importance of understanding taxes and how the wealthy use corporations to their advantage is discussed.
• • The rich hire smart people and let them work for them, leveraging others' expertise.
• • The book encourages readers to find mentors who can guide them financially.
• • Investing in real estate, stocks, and businesses are presented as ways to build wealth.
• • The concept of "paying yourself first" is crucial – setting aside money for investments before paying bills.
• • The difference between an employee, self-employed, business owner, and investor is explained.
• • The book advocates for moving from the left side of the "cashflow quadrant" (employee, self-employed) to the right side (business owner, investor).
• • The power of compound interest is a key principle for wealth growth.
• • The importance of continuous learning and staying updated on financial markets is stressed.
• • The book encourages taking action and not just dreaming about financial freedom.
• • Overcoming self-imposed limitations and beliefs about money is essential.
• • The rich focus on building and acquiring assets that generate income.
• • The poor and middle class focus on acquiring liabilities they believe are assets.
• • The book uses the example of a primary residence as a liability because it incurs expenses like mortgage, taxes, and maintenance.
• • Conversely, a rental property that generates income is an asset.
• • The importance of understanding financial statements (income statement, balance sheet) is highlighted.
• • Rich Dad taught Kiyosaki to read and interpret financial reports to make informed investment decisions.
• • The book emphasizes the need for financial education to be proactive rather than reactive with money.
• • It encourages developing a strong financial IQ.
• • The idea of "working to learn, not to earn" is presented as a strategy for acquiring valuable skills.
• • The book highlights that money is a tool, and its power comes from how it's used.
• • The concept of "leveraging" – using other people's money or time – is introduced.
• • The importance of building a strong team of advisors (accountants, lawyers, financial planners) is mentioned.
• • The book challenges conventional wisdom about money and success.
• • It advocates for taking responsibility for one's financial future.
• • The ultimate goal is financial freedom, which means having enough passive income to cover expenses.
• • The book encourages starting small and building momentum over time.
• • The lessons are applicable to individuals from all backgrounds.
• • The core message is that financial success is achievable through the right mindset and education.