A quick book summary and review rich dad and poor dad in detailed

INTRODUCTION TO AUTHOR OF RICH DAD POR DAD-

Robert Kiyosaki s Rich Dad Poor Dad was first published in 1997 and quickly became a must-read for people interested in investing, money, and the global economy. The book has been translated into dozens of languages, sold around the world, and has become the #1 Personal Finance book of all time. 

The overarching theme of Rich Dad Poor Dad is how to use money as a tool for wealth development. 

It destroys the myth that the rich are born rich, explains why your personal residence may not really be an asset, describes the real difference between an asset and a liability, and much more. 

INTRODUCTION

Robert Kiyosaki, author of Rich Dad Poor Dad, had two main influential men in his life.

 Poor Dad was Kiyosaki s biological father, a man who was highly intelligent and very well educated. Poor Dad believed in studying hard and getting good grades, then finding a well-paying job. Yet, despite these seemingly positive attributes, Poor Dad didn t do well financially.

He believed he would never be a rich man and the author points out that this became a self-fulfilling prophecy. Poor dad s approach to the subject of money was based on working hard to have enough money to pay the bills (in contrast to rich dad s approach to make one s money work for him). 

The author compares his poor dad to the millions of fathers who encourage their sons to do well in school so they could get a good job with a good company. Poor dad believed in the traditional principles of working hard, saving money, and not buying material things that one cannot afford.

He believed that having a good job with a solid company is what one should aspire for; hence he expresses disappointment when his son leaves the employ of a large, reputable corporation. 

Rich Dad was the father of Kiyosaki s best friend. He had a similar work ethic to Kiyosaki  real dad, but with a twist. Rich Dad believed in financial education, learning how money works, and understanding how to make money work for you.

Although he was an eighth-grade dropout, Rich Dad eventually became a millionaire by putting the power of money to work for him. It was from rich dad that the author learned not to say, I can’t afford it , but instead to ask, how can I afford it?

 The author adds that while his poor dad invested time and effort in education, he did not have any knowledge on investing. His rich dad, by contrast, was very skilled in the investment game because that all he did. 

we will review the 6 lessons which Robert Kiyosaki learned from his Rich Dad.

Lesson 1: The Rich Don t Work for Money 

Oftentimes people misunderstand the title of this chapter, and mistakenly believe that t means the rich don t work. In fact, the complete opposite is true. 

Instead of reading the chapter title as The Rich Don t Work for Money , what Kiyosaki means to say is that The Rich Don t Work for Money.

Note that by putting the emphasis on the word money this section takes on an entirely different meaning. The truth is that the majority of rich people do work very hard, but they go about it differently than most people do.

Rich people and people who want to become rich work and learn every day how to put money to work for them. As Rich Dad says, The poor and middle class work for money.

The rich have money work for them. Kiyosaki also notes that having a regular job is just a short-term solution to the long-term problem (or challenge) of creating wealth and financial freedom: It s fear that keeps most people working at a job: 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 s the price of studying to learn a profession or trade, and then working for money. Most people become a slave to money and then get angry at their boss. 

Lesson 2: Why Teach Financial Literacy? ( Most Important)

The second learning is that education – and not the money – is the actual wealth. There are a lot of cases where people who became rich lost everything at once. The main mistake is that people mostly focus on the money and not on their knowledge which is the key aspect. If people are prepared to be flexible, keep an open mind and learn, they will grow richer and richer through the changes and will survive the difficult times.

It is not money what solves problems – Intelligence solves problems and produces money. Money without financial intelligence is money soon gone. Another important thing here: it is not about how much money your earn, it is about how much money you keep and then use it to gain assets instead of liabilities.

Following, you must know the difference between an asset and a liability. An asset is something that has value, that produces income, and has a market where the asset can easily be bought and sold. Examples of this are stocks, real estate, bonds, high-yield saving accounts and quite simply anything where you are putting your money to work to create future money! Conversely, liabilities take money out of your pocket and do not produce any value (or even have costs associated with them). Examples would be an over-the-top house, expensive cars, unnecessary toys, and so on.

The money which you gain doing your job just comes and goes out the window! When Rich Dad Poor Dad was first published back in 1997, Kiyosaki created a lot of controversy with this statement. That s because by definition, a personal residence isn t an asset unless it appreciates enough to offset the costs of ownership. On the other hand, rental property is an asset because it can generate enough passive income to exceed the expenses of operating and financing the real estate.

 Remember: ?? Rich people acquire assets. Thepoor and middle class acquire liabilities, but they think they are assets Want to grow rich? Concentrate your efforts on buying income-producing assets when you truly understand what an asset is. Keep liabilities and expenses low. You ll deepen your asset column. 

This is the Cash Flow pattern of an asset. As already discussed, an Asset adds to your income.

Opposed to that, a cash flow of a liability looks as follows: it increases the expenses and your money is gone. And here is a more detailed scheme with examples: on the left hand-side, a detailed cash-flow of a asset is shown: Money invested in assets like Real estate, Stocks, Bonds, Notes, Intellectual property pays off and adds to your income through Rental income, Dividend, Interest, Royalties.

On the left hand-side, an example of a cash flow of a liabilities is presented: a poor person would spend her salary for mortgage or car loans, or credit card debt, which increases her expenses and the money is gone The salary has been spent to cover the expenses.

Opposed to that, for a rich person, their assets pay them an income. This should serve as a motivation to purchase assets in order to solidify the asset column, while keeping the liabilities (expenses) to a bare minimum. The author states that poor people remain poor because they do the opposite. 

They pile up on their liabilities and have zero assets so that their balance sheets and income statements look out of kilter. People have to understand that it s not how much they make, but how much they keep according to the author, and this is an essential principle that this chapter focuses on. 

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Chapter 3: Mind Your Own Business 

Kiyosaki notes in Chapter 3 that most people confuse their profession with their business. 

In other words, they spend their entire lives working in somebody else s business and making other people rich.

Why not start a side hustle while working on your job? The little things can turn into big things over time. Minding your own business is about focusing on your assets column instead of income statements alone. Don t be overwhelmed by the idea of ownings business. Simply focusing on buying stocks is also business.

Other assets categories are:

-Real estate 

-Royalties

 -Bonds 

Once a dollar goes into your assets column, never let it come out. Never reward yourself with luxuries with your hard-earned money. Instead, buy assets with it and use the generated income to buy the luxuries.

Lesson 5: The Rich Invent Money 

Inventing money means finding opportunities or deals that other people don t have the skill, knowledge, resources, or contacts for. 

The author remarks that it s not necessarily the educated smart people who get ahead but the bold and adventurous. People never get ahead financially even if they have plenty of money because they have opportunities that they fail to tap, he stresses.

Most of them just sit around waiting for opportunity to happen. The author s idea is that people create luck; they should not wait around for it.

He says it s the same with money. It has to be created. The authors talks again about the importance of education and says that a rich mind is a trained mind . He explains it based on an 

example of 2 types of investors: 

1. Investment packages are bought by people who entrust their money to a developer or fund manager. This is the way that most people invest, such as buying shares of an ETF or putting money into a real estate crowdfunding venture. 

2. Professional investors look after their own investments, research the market to find deals that make sense, then hire professionals to manage the daily oversight.

Professional investors have three things in common: ? Identify opportunities that other people have not found ? Raise funds for investment ? Work with other intelligent people 

Lesson 6: Work to Learn Don t Work for Money 

The main message of the chapter is that in order to be successful in business or making money, it is often not enough to be a good specialist in the field – one should acquire the skills in other subjects different from the primary specialization.

For example, communication, marketing, sales. The author points out management skills, such as the management of cash flow, the management of systems, and the management of people (in particular, leadership).

Kiyosaki advises to get involved in the activities that can give you the opportunity to learn various aspects different from your specialisation – even if it might bring you less money compared to a specialised job with higher salary – in a long run those skills will definitely pay off. He says that the modern education system supports the idea of specialisation. However, the more specialised you become, the more you are trapped and dependent on that speciality. In other words, you are more vulnerable. 

the world is filled with smart, talented, educated people. They work hard, but earn little because they often lack financial literacy and other important skills. Let us take an example of McDonald s: there are many people who can cook even better hamburgers than McDonald s does, but it is McDonald s who makes the most money out of it. This is because of its excellent business system: McDonald s might not make the best hamburger, but they are the best at selling and delivering a basic average hamburger. 

That is why many organisations do one smart thing: they find young bright students out of business schools and begin grooming these people to someday take over the company. They move them from department to department to learn all aspects of the business system so that they do not specialise in one department only. 

Lesson 7: Overcoming Obstacles 

Chapter 7 of Rich Dad Poor Dad begins by noting that the primary difference between a rich person and a poor person is how they manage fear. 

In this context, fear is about the fear of losing money and how to handle that fear. It s one of the five biggest obstacles people face on the path to becoming financially independent: 

1. Fear 

2. Cynicism 

3. Laziness 

4. Bad habits 

5. Arrogance 

These roadblocks and the failure to overcome them are why people who have studied and achieved financial literacy are still unable to develop assets that generate plentiful amounts of cash flow. 

Fear 

Losing money is a fact of investing life, and so is the fear that comes along with it. Kiyosaki notes that he s never met a rich person who has never lost money, but he s met plenty of poor people who have never lost a dime because they ve never invested.

Real estate investors who choose to act only on a sure thing are paralyzed by fear in disguise. People who can t see the big picture and think big are the ones who almost never, ever succeed in investing or in life. 

Cynicism 

Everybody has doubts that affect self-confidence, and it s easy to fall into the trap of playing What if? especially when friends and family are constantly reminding you of your potential shortcomings. 

Things like the economy crashing, interest rates rising, and tenants not paying their rent are common what if fears that all real estate investors have. While these are important items to consider, it s important not to allow the cynicism of others to overtake your control. Otherwise, you may become immobilized as opportunities pass you by. 

Laziness 

Many people choose to be too busy – be it with work, or even watching TV or shopping – as a way to avoid something they do not want to face. That s the most common form of laziness. Laziness of staying busy.

Kyiosaki says that the cure for laziness is a little greed. He explains that a lazy mind would always stick to I cannot afford it ideology, whereas a little bit greedy, challenging approach by asking yourself How can I afford it? will create a stronger mind and dynamic spirit. The desire to have something better will help one to make progress.

After all, Our world progresses because we all desire a better life. New inventions are made because we desire something better. If you want to exit the rat race, just step out from the lazy track by challenging your mind with the question 

like How can I afford to never work again? 

– and your mind will begin to kick out answers and solutions. 

Bad habits 

Habits control behavior.

For example, most people pay their bills first before they pay themselves. The result is that there s usually very little left over at the end of the month for investing. Paying yourself first even if you don t have enough money to pay other people – makes you financially stronger, mentally and fiscally. In a way, it s a form of reverse psychology. 

When you develop the habit of paying yourself first, you become motivated by the fear of not being able to pay creditors. In turn, you begin looking for other forms of income like investment real estate. 

Arrogance

 Investors know what makes them money. But it s the things they don t know and dont know they don t know that makes them lose money.

When people become truly arrogant, they honestly believe that what they don t know doesn t matter. Train yourself to listen to what other people have to say, especially when it comes to money and investing. If you discover you re ignorant about a subject, educate yourself or find an expert in the field. 

Overcoming these five biggest obstacles on the path to real estate success requires a blend of balance and focus. There are plenty of Chicken Littles in the world today — people with a victimhood mentality who live their lives in cynicism and pessimism. 

Rich Dad Poor Dad suggests filtering negative people and their fears out of your life. Instead, concentrate on the big picture. The goal of Rich Dad Poor Dad is to motivate you to develop your own path to financial freedom.

Hopefully, this summary was a helpfull

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