Lessons from Rich Dad Poor Dad

This is the first time that I’m writing about the lessons or summary kind of thing of a book. I had read this book two years back and this was the first book that I read. The book’s written by Robert Kiyosaki. Robert Kiyosaki is the author of more than 26 books including the internationally published personal finance book named Rich Dad Poor Dad. 

Rich Dad Poor Dad is a great book about personal finance. Here the author describes the things which Rich teach to their kids and poor and middle don’t. The author says, “The main reason people struggle financially is because they have spent years in school but learned nothing about money. The result is that people learn to work for money.” 

Rich Dad Poor Dad has been described as the #1 personal finance book of all time by USA today.

Now lets see many of the lessons that is being taught by Robert Kiyosaki in this book – 

1. *Put your money to work* – 

Many people think that we can get rich by working a 9 to 5 job and saving a part of the salary, now that’s not completely wrong. But that’s not how rich people do it. They put their money to work, they know money isn’t gonna just grow in their savings account. You gotta put it to work by investing it into growing assets. That’s the way of Rich people. The main difference comes here, the poor and middle class work for money and the rich put their money to work. They kow how to multiply their money and built their wealth. They know retained income is very important in being rich.

2. *Acquire Assets* – 

This is the main thing where most people lack. The rich buys luxuries at last where poor and middle class people buy that latest iphone out of their salary even if they can’t afford to. The rich acquire assets and get their money growing. They buy luxury from the money earned by the dividends or other retained income. The rich know how important it is to acquire assets rather than acquiring liabilities.

3. *You are not born to work for others for your lifetime* – 

You are meant to live a life of your dreams. You do not have to work under someone for your whole life. It’s possible to live on your own terms if you start early in your life. Now I know this takes time, you’ve got to be patient for around 10 to 15 years to be financially independent. We forget that there is a great life beyond the typical 9 to 5. This would be possible when you put your money to work for you

4. *Gain Financial Knowledge* – 

Now, enough with the (a+b)², that’s not gonna help you in being rich. It was fine till your high school. We don’t want that now. What we need now is real financial knowledge, how money works, what are the rules of wealth, knowledge about investing, etc. This is the shit which will help you in getting rich. Getting financial knowledge will help you in making stronger financial decisions which will lead you to the riches! Kiyosaki says, it’s not about how much you make, it’s about how much you keep. And financial knowledge plays a big role in that. At last, a person can be highly educated but if he’s financially illiterate than it’s of no use.

5. *Winning is not being afraid of losing* – 

Now people give the excuse of not investing as “it’s too risky”. Let me tell you one thing, taking a loan to buy your so called “dream car” has more risk than the market. Calculated risks should be taken as you’re not gonna make a fortune by playing it safe. The 3 or 4 percentage of your savings account interest isn’t gonna buy you the trip to New York City, so you better take the risks.

 

6. *Pay yourself first* – 

Now paying yourself first does not mean buying the branded shirts and jeans. Paying yourself first means to invest in income generating assets. You should always invest first and then make your monthly expense. This will help you to not buy the things you do not need. You must know how to handle your cash flow and paying yourself first will surely make it look awesome. Rich people buy assets from their primary income and then they buys the luxury from the income they earned from that assets. 

7. *Dream Big* – 

Dreaming of getting a full time job with an average income is not why you’re here. You’re here to live freely and on your own terms. Dream big, invest more and in around 15 years you’re gonna live the life of your dreams. You just need to control the two emotions, fear and desire. Fear of losing and desire to buy every brand new item that comes into the market. Have a control over them and you’re good to go.

These were some of the teachings that Robert Kiyosaki gave in this book. You should surely read this book. It’s very well written and it’ll give you plenty of knowledge about personal finance and money. The knowledge about money is very important for each one of us as it will not buy you “happiness” but it will buy you your trip to Las Vegas which I think is equivalent to happiness. 

Thank you for reading,

Hope you liked it.

Yash.