Rich Dad Poor Dad: What the Rich Teach Their Kids About Money That the Poor and Middle Class Do Not!

“Rich Dad Poor Dad: What the Rich Teach their Kids about Money that the Poor and Middle Classes don’t!”. is a personal finance book written by Robert Kiyosaki that provides insight into the financial mindset and strategies of the rich. Kiyosaki shared the lessons he learned from his “Rich dad” (his best friend’s father) and compared them to the lessons he learned from his “Poor dad” (his biological father) on issues of money, investing, and wealth building.

✍️ My Top 3 Quotes :

1. “In school we learn that mistakes are bad, and we are punished for making them. Yet, if you look at the way humans are designed to learn, we learn by making mistakes. We learn to walk by falling down. If we never fell down, we would never walk.”
2. “You’re only poor if you give up. The most important thing is that you did something. Most people only talk and dream of getting rich. You’ve done something.”
3. “Workers work hard enough to not be fired, and owners pay just enough so that workers won’t quit.”

The Key Takeaways:

1. The Rich Don’t Work for Money

Kiyosaki explains the importance of not working just for the pay. The goal of the rich is to make money work for them by building assets that generate income and accumulate wealth over time. He advises readers to shift their focus from making money to building wealth, such as starting a business or investing in real estate.

2. Cash Flow is King

Kiyosaki emphasizes the importance of cash flow, or the amount of money going in and out of your pocket. He compares the idea of accumulating cash, which may lose value over time due to inflation, to the idea of accumulating assets that bring a steady stream of cash flow. Readers are encouraged to strive for positive cash flow, meaning their property generates more income than its expenses.

3. The Importance of Financial Education

Kiyosaki emphasizes the importance of financial education, as it provides investors with the knowledge and skills needed to make informed investment decisions. Financial education includes learning about taxes, accounting, real estate, stocks and bonds. He advises readers to take control of their financial education, as it is their responsibility to invest their hard-earned money in profitable opportunities rather than relying on a financial advisor.

4. Know the Difference Between Assets and Liabilities

Kiyosaki encourages readers to understand the difference between assets and liabilities, as this is important for building wealth. Assets are things that put money in your pocket, like stocks or rental property. Liabilities, on the other hand, are things that take money out of your pocket, like credit card debt or car payments. He advises readers to prioritize investing in assets and reducing liabilities to increase their net worth over time.

5. Take Calculated Risks

Kiyosaki advocates taking calculated risks when it comes to investing. He emphasizes that playing it safe and sticking to traditional investments will not yield significant returns. Instead, investors have to be willing to take risks and invest in opportunities that offer high potential returns. However, he emphasizes the need to do thorough research before investing and maintaining a diversified portfolio.