In the realm of personal finance literature, few books have resonated as powerfully as “Rich Dad Poor Dad” by Robert T. Kiyosaki. Since its publication in 1997, this classic has sold over 32 million copies worldwide, leaving an indelible mark on how people perceive money and wealth. It is also a fun read!
I first read Rich Dad Poor Dad when I was in my late teens. My father loaned me his copy. It was the first finance book that I had read and immediately this book sparked my imagination around ‘buying assets – not liabilities’. I’ve read this book three times now, in different stages of life. While I don’t agree with everything in this book, there are some thought-provoking concepts.
Here are some of my key points:
- If you want to be rich you need to be financially literate.
- Know what is an asset. Acquire assets. Simple
- an asset puts money in my pocket. A liability takes money out of my pocket.
- The rich acquire assets. The poor and middle class acquire liabilities that they think are assets.
- The rich focus on their asset column while everyone else focuses on their income statements.
Here are some of the key concepts from ‘Rich Dad Poor Dad‘:
Two Dads, Two Views:
Kiyosaki’s book revolves around the stark contrast between his “Rich Dad” and “Poor Dad.” The “Poor Dad,” (is his real father) who represents a more traditional belief that focuses on job security and a steady income. On the flip side, the “Rich Dad” (who is actually Robert’s friend’s dad), who is an entrepreneur and investor, advocating for financial education, entrepreneurship, and the creation of wealth through assets.
Assets vs. Liabilities:
A key takeaway from “Rich Dad Poor Dad” is understanding the difference between assets and liabilities. Kiyosaki underscores the importance of accumulating income-generating assets, like real estate and stocks (think like shares), while minimising liabilities—expenses that don’t contribute to wealth creation. This strategy is pivotal for achieving financial independence.
The Need for Financial Education:
Kiyosaki argues that conventional education often overlooks vital financial skills. He encourages individuals to take charge of their financial education, learning about investing, market trends, and cultivating a mindset geared towards wealth creation. For him, financial literacy is the bedrock for making well-informed financial decisions.
I haven’t added in all the concepts from the book. It is worthwhile reading the whole book: Rich Dad Poor Dad
MY THOUGHTS:
The overall concept of this blog is to learn simple living to find financial freedom. Rich Dad Poor Dad is not about simple living, but it is a personal finance book. I didn’t agree with everything in this book. Here are my personal (but still evolving) thoughts:
- It is probably good to be wise with money.
- Acquiring assets sounds logical.
- But, desiring to be really rich sounds like a recipe for a life of discontentment.
Read the book and make up your own mind.
I like what Dave Ramsey says in his book, The Total Money Makeover: ‘After years of studying, teaching, and even preaching on this subject across America, I can find only three good uses for money. Money is good for FUN. Money is good to INVEST. And money is good to GIVE.’
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