Rich Dad Poor Dad is the #1 New York Times bestseller personal finance book of all time, written by Robert Kiyosaki inspired by the fact that he had 2 “fathers” in his life, a rich one, and a poor one.
The book is about the story of the author with 2 fathers, the biological father (the poor dad), and the other father of his childhood best friend, Mike (the rich dad).
The author compares his poor dad decisions, similar to a large majority of people who struggle really hard to achieve financial freedom, but they never do it, with his rich dad judgments.
There is a main point which is highlighted throughout the book regarding the fact that most people never study the subject of money.
…which is true, indeed!
Most of the people go to work, get their wages, pay their bills, go out for few drinks and that’s it.
It’s Not How Much You Make, It’s How Much You Keep.
After that, they wonder why they struggle with making ends meet. Just a few realize that it’s their lack of financial education that is the problem.
So now you are probably asking yourself where should I invest my money, how can I become rich?
Well, unfortunately, I cannot tell you that and neither can the author, as the book is more about making you reconsider the way you view about work or money – an investment/startup summary, rather than a list of items that you can do as an entrepreneur.
There are five key lessons from the book which we considered would make you a better financial literate person.
If you prefer reading the lesson in a short and sweet infographic and skip this blog post, then feel free to check it out.
The Rich Don’t Work For Money
The title of this lesson can be read in multiple ways, but it should be read as such: the rich don’t work for money.
It sounds confusing, right?
Well, in fact, they do work, indeed.
The only difference is that they work to learn things and those things they learn can easily be applied to make money in the future, over and over again.
It is better when you actually learn things in practice, but your main focus is on now to reproduce those and create income for yourself in the future, not for somebody else.
Another important part of this lesson is that being rich does not mean you have you drive a Ferrari.
Arghhh, sounds bad, isn’t it?
Being rich has very little connection to material possession.
Although the “rich dad” has a lot of money into his bank accounts, he is still driving a cheap car and doesn’t live in a huge mansion as most of you would like to.
Why Teach Financial Literacy?
This whole chapter, in a nutshell, defines the term asset.
Most of the people have the impression that an asset is something that has value, like your house.
Well, that may be true in theory, but Robert Kiyosaki has a different opinion.
He thinks that an asset is something which can generate income, whereas a liability is anything that has costs.
In other words, your house is a liability as it may have cash value, but it doesn’t bring you any money unless you rent it.
So what is this chapter about?
Mainly, you can become rich by accumulating assets that can generate value.
For example, a blog is an asset as it generates value or a local online shop where you sell your own paintings.
Mind Your Own Business
The main lesson of this chapter is that an individual should be spending their spare time investing as much as they can from their wages in assets, not spending them.
Pay off your debts and start investing as soon as you can into things that can generate revenue.
The lesson might seem short, but it is crucial.
The Rich Invent Money
The author tries to emphasize the importance of creating your own intellectual property and try to monetize it.
This is the way rich people actually invent money.
It is actually quite easy nowadays to sell your intellectual property with the power of the internet by selling crafts you can make, sell websites, songs, paintings etc.
If you are good at something, then why don’t you give it a try to actually monetize it instead of binge watching Game of Thrones all day long?
It might not work from the first time, but if you keep pushing, one day you would realize that it was worth putting in all the work and avoid watching TV shows aaaaall day loooong.
Work to Learn – Don’t Work For Money
As stated before, when you actually have a 9 – 5 job, it is better for you to try and learn as much as you can, not just wait for the paycheck that you receive at the end of the month.
It’s not about money especially if you are young, as the skills you might get are more important than the actual money.
Money comes and goes, but knowledge stays forever.
… and I am not referring just to the technical aspects if you are an IT guy, or just talking to people if you are a sales person.
Try to actually see all the phases of the business and how does your director put all the parts together in order to make it work.
as one day you might actually apply some similar principles in your own business.