Review: Rich Dad Poor Dad
Rich Father, Poor Dad is a personal finance book by Robert T. Kiyosaki.
Many people enjoyed the book and have followed Robert Kiyosaki’s advice about personal investments.
Over the last 20 years, there has been a lot happening in the financial industry. It would be interesting to see if Kyosaki's predictions are correct.
This Rich Dad Poor Dad Review will review this personal finance book to see if it lives up to its title.
This guide will explain the basics of personal finances and wealth creation.
Here you'll find answers to many of your most frequently asked questions about Rich Dad Poor dad and financial freedom.
This system convinced them to forgo stock investments and traditional real estate by using the same skills.
Kiyosaki can be a divisive figure. He is either loved or loathed.
Simple Dollar's review of Kiyosaki’s work includes, for example, many personal prejudices that can sometimes be unfair.
See a book's evaluation based on the business experience of others
Rich Father is not meant to be a complete list of entrepreneurial activities, but rather a starting point.
Robert Kiyosaki has six core principles in his book.
These are his differences with his biological father, who was a poor man, and his father who was a rich man who taught him business and how to be successful.
- Wealthy people don't have to work hard for their money. They get rich from it.
- Financial literacy is a valuable skill
- Taking control over your affairs also known as "Minding Your Own Business"
- Corporations and Taxes
- The wealthy create wealth.
- Don't work for money
- Poor dad, rich dad
Summary Of Chapters/Sections
Rich Dad, Poor Dad has eleven chapters.
This review will focus on the Intro and 7 chapters. Its positive and negative points.
Robert Kiyosaki is the author of Rich Dad Poor Dad. In his childhood, he had two important father figures.
Kiyosaki was the son of his "Poor Father", an educated and brilliant man.
The poor dad believed that he needed to study hard and get good marks in order to find a job.
His father, "Rich Dad", was actually his best friend.
His work ethic was similar to his father's but with a twist
Rich Dad believed financial education should be taught.
He dropped out of eighth grade to become a millionaire making his own money.
This story is told from Kiyosaki’s perspective about how Rich Dad got his money and what poor financial decisions Poor Dad made.
Chapters 1-6 of The Rich Father, Poor dad book make up nearly two-thirds. These chapters cover the most important lessons Rich Dad learned.
Chapter 1 - The Rich Don't Work for Money
Many people mistakenly believe that the title of this chapter implies that only wealthy people work.
Actually, the reverse is true.
Kiyosaki meant that the chapter title "The Rich Don't Work to Make Money" was not what it seemed. "
It is worth noting that this section emphasizes the word "money", in a completely different way.
It's a known fact that wealthy people work harder than the majority of people.
People who are rich and want to become wealthy work hard and discover every day how money works for them.
Rich Dad once said that the middle and poor work for their money. "The wealthy have the money to work for their advantage.
Kiyosaki noted that a job does not solve the long-term problem (or challenge) of creating wealth or financial freedom.
Chapter 2 - Why Teach Financial Literacy?
Rich Dad, Poor Dad Chapter 2 illustrates how assets and liabilities are distinguished.
Chapter 2 will show you how much money you're losing and how much you have left.
Assets are assets that have a value that generates income or appreciates. They can easily be bought and sold in an established market.
- Assets generate Income
- Assets appreciated
Liabilities may also drain your bank accounts as you must pay the associated costs.
This phrase was controversial when it was first introduced by Rich Dad Poor Dad in 1997.
A residential home is not an asset until its value increases enough to cover the ownership costs.
A good investment is renting property. It can provide enough passive income to cover operating and financing costs.
Chapter 3 - Mind Your Own Business
This chapter focuses on two major points.
- Pay your financial obligations (aka debts) and then invest in income-worthy assets immediately.
- Maintain financial strength by investing as much of your money in assets
Kiyosaki explained that many people mistake their occupation for business.
They work all their life for another company and make more.
Many people realize this only after it is too late. It can be hard to change your mindset.
I love this quote:
"The main reason the majority of middle- and poor people are financially conservative is that they don't have a solid financial foundation. "
Chapter 4 - The History of Taxes & The Power Of Corporations
Rich Dad Poor Dad is an inspirational book. It is important that you remember this. He doesn't offer financial advice.
Kiyosaki, meanwhile, describes how he purchased a Porsche with pre-tax dollars. He considered it a business expense.
An IRS audit might be required if an investor purchases a high-end luxury automobile.
However, the arguments in this chapter are not about Porsche. These chapters are about how to play the game well.
The wealthy understands the power and importance of tax codes and company structure and use every legal avenue to reduce their tax burden.
Compare tax payments made by corporations and investors (e.g. C Corps or S Corps), to those of the majority.
Corporate-structured business owners:
- Pay taxes
- Pay taxes
It's important to remember that employees for other companies spend after taxes while owners spend and make before taxes are paid.
According to Kiyosaki, Chapter 4 consists of four components. These are accounting, investment strategy, and market law.
Rich Dad Poor Dad teaches that tax and legal benefits are an important part of establishing long-term wealth.
A corporation might pay expenses before it pays taxes. An employee, however, is subject to tax first and must then pay any remaining expenses. The wealthy person often discovers that they don't have any ownership in their name.
Chapter 5 - How the Rich Invent Money?
Inventing money is about creating new ways and transactions that other people are not able.
Chapter 5 - Rich Dad, Poor Dad identifies two types of investors
- Persons who can allow developers and fund managers to manage money can buy investment packages. This is the most common method of purchasing ETF shares or investing in crowdfunding companies to purchase the property.
- Professional investors manage their investments and search for deals on the market. They also employ specialists to monitor their investments daily.
- Recognizing the potential that others have overlooked
- Raising investment funding
- Collaboration with intelligent people
This is The closing statement of this chapter that will be remembered the most:
Many people think that real estate deals don't exist where they are. However, there are plenty of prime opportunities that go unnoticed. "Most people don't have financial skills to see the potential. "
Chapter 6: Work To Learn - Don't Work For Money
The father was bright and well-educated. He wanted to be able to work for his family's security.
The Rich Dad is exactly the opposite. He made a fortune by learning.
It is important that young people look for work that will give them the skills they need to succeed in life.
Kiyosaki actually did that. Kiyosaki joined the Marines after completing his undergraduate degree to learn the business skills necessary for leadership management.
His fear of rejection did not stop him from serving his Marines. He applied for Xerox and was one of the top five salespeople in the company. Then he left to start his business.
Rich Dad's Chapter 6 Poor Dad outlines the combination of managerial skills required for company success.
- Cash flow management
- System management
- People management
Chapter 7: Overcoming Obstacles
The poor dad starts by emphasizing that fear management is what makes the difference between rich and poor people.
This is the fifth major obstacle to financial independence.
- Bad habits
Many people struggle to create large cash flows despite being financially educated.
They were too far away.
Is Rich Dad or Poor Dad Worth Reading?
Rich Dad Poor Father is here to help you create your own financial freedom path.
This book is not intended to be a complete solution.
This foundation is a solid foundation to help you build wealth and reach your goals with real estate investments.
Flawed Educational System
Robert repeatedly stated that the current education system in America is seriously flawed throughout his book.
While the education system was designed to assist employees, it can also have a negative impact on entrepreneurs.
Kiyosaki says he does not advocate for people to avoid higher education. He says it doesn't support "street intelligence." "
Financial literacy does not take place in schools.
This means that middle-class and poor people are in debt. Medicare and Social Security could run out of money in America if millions of people require financial or medical assistance.
Education costs continue to rise faster than inflation. These flaws are increasingly apparent in the education system.
Robert's comments on the subject were spot-on.
Being An Entrepreneur Is Less Risky.
Owning a company is considered riskier than working for another company.
But, running a business is a way to develop self-reliance and independence.
The sad truth is that today's "cradle to grave" mentality makes people more dependent.
Many people see risk as something they should be afraid of until they start their own company. "
Your primary residence does not count as an asset.
"An asset" is money I have in my wallet. A liability is any money that I take from my pocket. "
Many people have criticized Kiyosaki's statement. Robert admits that it is not consistent with general accountability norms.
Cash flow is key to success.
Wealth is the ability to live as long as you want.
Recommendations for the Book
There are multiple reports that Robert's "Rich Dad", or as he is known, was just an image of a character.
It's true that personal finance books can be fiction.
Robert describes his book as nonfiction. This is a common claim. Robert is a popular choice.
It's strange that John Reed's website criticizes Robert's work while simultaneously selling his own.
Robert underestimates the risk in his investment recommendations.
While this may partially be true, he recommends that you thoroughly understand your assets before jumping in.
Robert believes that investing is not safe if you don’t understand what you’re doing.
Book Review: Summary
This book is highly recommended, particularly for new businesses. There are however some problems.
Many of the themes that he covered have stood the test of time.
However, it is important to take the salt out of it.
It is a must-read for anyone who wants to become more than a salaried worker. The wealthy invest their money in real estate deals.
These books are indispensable for anyone who chooses to read his works
- Rich Dad, Poor Dad
- The Cashflow Quadrant for Rich Dad
The other books are a repetition of the two.
These books on personal finance are essential for any library. These books will change the way you think about money.
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