Rich Dad Poor Dad Book Summary

 

“The richest people in the world look for and build networks; everyone else looks for work.”

            -Robert T.Kiyosaki                                                                                                              

Introduction:

To achieve financial freedom, financial literacy is crucial. Having a strong education is most essential, and according to experts, one of the best ways to enhance financial education is through reading books. This is why numerous books have been written on this topic worldwide. One such book is 'Rich Dad Poor Dad' written by American author Robert Kiyosaki, which many people read to achieve their goals and attain success in life. Hence, it is regarded among the most famous books on financial education globally. The book is based on Robert Kiyosaki's own life story. In this book, he writes about his two fathers, one being his biological father whom he refers to as his 'Poor Dad,' and the other being his rich dad, who is actually a friend's father, named as the 'Rich Dad' in the book. His biological father is highly educated and hardworking but financially less proficient, working as a teacher and earning modestly. That's why Robert refers to him as 'Poor Dad' in the book. On the other hand, his rich dad, though not formally educated, is financially strong. This enabled him to be counted among the biggest and wealthiest businessmen in his city. Robert calls him 'Rich Dad' due to his financial prowess. Through his rich dad's teachings, Robert imbibes crucial lessons for success, wealth accumulation, and maintaining affluence throughout life for over 30 years in the village. These lessons are instrumental in achieving success, becoming wealthy, and staying affluent. Six lessons shared by Robert's 'Rich Dad' can potentially make anyone in the world successful and prosperous, regardless of their educational background. Now, let's dive into the six important lessons outlined by Robert in the book.

Lesson Number 1: The Rich Don't Work for Money, Money Works for Them: 

 Robert's 'Rich Dad' explains that most people have been trapped in a particular cycle for decades, a circle often referred to as the rat race. In reality, most individuals aim solely for a good college education, a decent job, and a stable salary for material possessions like houses and cars. They fail to realize that while they work the hardest in this kind of life, the benefits of their hard work go to someone else. Many become part of this rat race and feel unhappy, yet due to their fears, greed, and responsibilities, they continue to be stuck in it. It is said that one should first eliminate their fears and break out of this rat race, then strive for something where money works for them. After all, the saying goes that money begets money. Similarly, you need to do something now in your life where your money is working for you."

Lesson Number 2:The amount you retain matters more than the amount you earn:

 This is because there's a lack of financial education within them, meaning they lack the skill to maintain and grow their money. Rich Dad gives an example of financial literacy by stating that while the entire world perceives a house as an asset, according to him, a house is not an asset but a liability. Assets, according to him, are things that grow your money over time. He argues that in the case of a house, for many years it becomes an expense, resulting in money going out of your pocket rather than coming in. Rich Dad considers only those things as assets that generate income for you while you sit at home. He emphasizes that simply earning money isn't enough to become wealthy; it's crucial to learn how to earn, maintain, and grow that money.

 Lesson Number 3: Mind your own business: Go Tenure Business Along with Your Job:

 In the world, when someone gets their favorite job, they tend to dedicate their entire life to that job without thinking twice. Rich Dad states that anyone in the world, if they wish, can pursue another job alongside their primary job. They can become an entrepreneur. To understand this, let's take the example of the founder of the world's largest fast-food chain, McDonald's, Ray Kroc. If we were to ask anyone where Kroc makes his money, most would answer from the fast-food business. But in reality, Kroc's main business? It's not fast food; it's real estate. By expanding McDonald's, he has become the largest real estate owner in the world. Meaning, while engaging in the fast-food business, he established an empire in real estate that genuinely made him rich. Similarly, an ordinary person can create assets and sources of income while working their job. For this, the writer provides examples such as starting a business, investing in the stock market, putting money into real estate, and buying properties that generate profits. By adopting any of these methods, one can create a new source of income. Rich Dad advises everyone to consider this because this is the path to true wealth. So, you know of the best and fastest rides you have to check. By adopting any of these methods, you can create a new source of income for yourself. Rich Dad advises everyone to consider this because this is the path to true wealth.

Lesson Number 4: The rich are not taxed : 

Tax, Serves Only Middle Class and Poor. Friends, this is why Rich Dad narrates the history of taxes, stating that taxes were originally created to bridge the gap between the rich and the poor. Initially, only the rich were taxed, and that tax money was spent on the welfare of the poor. However, over time, this gradually shifted to include the middle and upper-middle classes. In today's context, the scenario has completely reversed. Wealthy individuals use their intellect and cunning to evade taxes, leaving the burden of the highest tax collection on the middle and upper-middle classes. Large, wealthy businessmen and industrialists previously increased their wealth with the money that they would otherwise pay as taxes. In contrast, middle and upper-middle-class individuals not only earn money but also pay taxes. In the end, whatever remains is spent on themselves.

 Lesson Number 5: Failure inspires winners and defeats losers:

 If we talk about global figures like Jeff Bezos, Bill Gates, Mark Zuckerberg, and in the context of India, figures like Dhirubhai Ambani, Shiv Nadar, and Ajim Premji, these are names that brought an idea to the world, an idea that no one else had thought of before. They made money from their revolutionary ideas. Before anyone else could capitalize on the opportunities present in the market, these individuals sought out those opportunities and took immediate action upon them. That's why it's said that these individuals didn't just earn money; they invented it, something that didn't exist before. Similarly, for you, it's not just about earning money but about investing that money afterward.

Lesson Number 6: Rich Learns All the Time and Knows How to Sell Their Idea:

This underscores the significance of continuous learning and the art of selling one's ideas. In the American landscape, numerous individuals excel in crafting burgers that surpass the quality of those made by McDonald's. However, the key difference lies in the ability to market and sell these burgers on a grand scale. While some may produce superior products, their limitation lies in their capacity to market and distribute their offerings on a broader platform, often confined to specific regions or limited quantities. In contrast, McDonald's transcends boundaries, distributing its burgers globally without constraints. This scenario serves as a poignant lesson: the wealthy consistently engage in learning and skill acquisition. This perpetual learning allows them to adeptly sell their products or ideas on a global scale, a skill that distinguishes them in the world of commerce and success.