Rich Dad, Poor Dad is the best selling International book written by Robert Kiyosaki, way back in 1997.
The book provides a valuable insight into a new concept to achieve your financial dreams and aims. Whereby you will become very rich and you will learn to make money form for you, instead of you working for money.
It starts off with some background into his youthful days of childhood. With the premise that he was taught the concepts to making real wealth. These stories will explain and promote a positive mindset, so you can achieve so called wealth against the normal way that most people are taught in school. Which is to get a good education study hard and work for someone else in the corporate world.
Amazon link to buy the book: https://amzn.to/4kpJ6r1
What is the main concept of the book ?
It is that he has 2 fathers, his biological father who got a degree and a good steady and reliable well paid job. But he worked for the same employer for many years living pay check to pay check. With the security that in future his employer will pay him a secure pension on his old age in return.
With his other dad, crating numerous businesses and sources of income, so he could build wealth whether he was working or not. In other words his level of income wasn’t controlled by trading his time to an employer.
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Amazon link to buy the book: https://amzn.to/4kpJ6r1
So what lessons can we learn from the book ?
- learn to acquire assets not liabilities.
Assets are investments which are considered income producing that appreciate in value over time. Could be stocks and shares, commercial property and real estate, businesses etc.
Liabilities on the other hand are personal items that depreciate in value, such as cars, boats, holidays that only consume your money and ultimately depreciate over time.
2) Don’t work for money, let money work for you.
Most people get an education they enter the workplace for an employer. So they trade their time in return for a salary. But the employer will limit that salary in return for the number of hours they work, so it is capped.
So instead of working 9 to 5, he encourages people to build scalable businesses that aren’t limited to the number of hours in a week. With the aim being to allow them to grow and appreciate over time, without the need for ever consuming effort or work to manage.
3) Having an academic background doesn’t necessarily produce wealth.
Robert 2 dads have different level of academia knowledge. His rich dad didn’t finish college, whereby his poor dad got a doctorate degree.
However through his stories, he proves that their level of wealth and success are greatly different. So he is stating that a degree doesn’t necessarily guarantee that it will produce wealth.
It’s more about you mindset, it that a financial and positive outlook will do more to increase your financial success and wellbeing.
4) Remember money is not the root of all evil.
He states that “The love of money is the root of all evil. The lack of money is the root of all evil”
Whereby money itself isn’t the root cause if evil, it is simple a tool that can be used along the way. It’s about how you use that commodity, how you can put it to great use and meaning.
With the vast majority of people having little money or the fear of of not having enough money, makes then a slave to a job or career they are committed to.
Most people are living pay check to pay check and stuck on a hamster wheel or vicious circle and once on the circle, don’t know how to break away from it.
To emphasis this, lots of people are stuck in dead end jobs they don’t like. But are fearful of getting out of their comfort zone and taking a chance to improve their future, because of fear of the great unknown.
5) You need to develop a growth mindset
Robert states that broadening your knowledge and financial perspective about personal finance will create untold ways and opportunities to allow you to create great wealth.
His saying is “Instead of saying, I can’t afford it”, say to yourself “How can I afford it ?”
By doing this, you are actively shifting your mindset and beliefs to problem solving. So don’t become a victim of your lack of income and opportunities, learn to take advantage of them to improve your future financial circumstances.
The most single powerful asset we have is within our mind. If it is trained well, it can create untold riches and enormous wealth.
So what, if any are the negatives or downsides to this book ?
It has been highly criticised in the past, based upon the flaws and inconsistencies within it.
Are the stories or characters even real ?
The biggest concern is that are the 2 dads even real and credible. Over the years there has been constant doubts over their identity.
2) His over reliance on property investment
This book produces excessive emphasis and reliance of 1 type of assets being property investment. Although it can be a very rewarding investment asset over the long run, it may not be ideal or suitable for every type of investor out there.
Real estate requires a great capital outlay and expense to get started. Along with a high risk tolerance, and you could create a large ambit old debt to leverage your property purposes.
3) Heavily focused on creating a business or becoming a entrepreneur.
Not everyone may want to become a business or so-called entrepreneur running several business ventures.
It requires a lot of hard work, capital outlay, marketing, business acumen etc.
Most people cannot handle that degree of responsibility. Or they may not have a network of friends or qualified advisors to help them when starting out.
4) The lack of concrete business advice.
The book does raise some great points about increasing your growth mindset and how to pursue great wealth. But it doesn’t provide concrete and direct steps which can be followed or actioned by the reader.
5) Shying away from the need to have active income.
Most people will earn a living from employment. And this book was written many years ago before the idea of side hustles were even though off.
Although the idea of income generation through employment, freelancing are pursue by the majority.
It fails to explore other avenues to build and create wealth such as traditional assets such as stocks, bonds, gilts, treasury bonds. That can also lead to somebody achieving great financial wealth. These so-called other avenues of money making opportunities shouldn’t be ignored. they should be included as a way to diversify across numerous type of assets.
Key Point and conclusion:
This book has constantly been on the international best selling book list or numerous years and has sold millions of copies to date. So it is obviously doing something right.
However, it is important to approach any subject of financial advice or wealth creation with an open mind.
No one size all policy will suit all investors. It will depend upon where you start out on your financial journey, your mindset and your risk towards certain types of financial assets.
I would though highly recommend that you take the time to purchase this book and read it as part of a wider perspective.
It will provide great insight into how you can improve your financial knowledge and wellbeing. Plus the key ideas stated in the book are still relevant today, as first produced and highlighted many year ago.
Amazon link to buy the book: https://amzn.to/4kpJ6r1
Remember !
If you like this book summary, look at my other blog posts on: https://moneyminted.co.uk to cover other investing books that I recommend. It also covers posts on saving, and investing so you too can hopefully improve your investing knowledge, so you too can reach your financial goals and aims.
It’s not a get rich journey, but you will het there in the end if you you create an action plan and think long term.
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