Rich Dad Poor Dad

Robert T. Kiyosaki
About this microbook
Part memoir, part financial guide – “Rich Dad Poor Dad” is arguably the most popular personal
business book of all time. In it, Robert Kiyosaki contrasts the instruction he received from his real
dad with the ones from his mentor, explains the differences between the mindsets of the poor and
the rich, and champions the importance of financial literacy and financial independence.
Who is it for?
Best suited for people who want to become financially literate and fill some of the moneymaking-
related holes education systems can’t or won’t.
In "Rich Dad Poor Dad" you'll learn:
What the number one rule of financial literacy is.
Which four technical skills make up your financial intelligence.
Why corporations are the biggest secret of the rich.

Author's biography
Robert T. Kiyosaki
Robert Toru Kiyosaki is an American investor and entrepreneur. He is best known as the author of
the perennial bestseller, “Rich Dad Poor Dad,” which turned his name into a brand, spawned a
series of over 20 books, started a franchise of high-priced Rich Dad seminars and made Kiyosaki
the subject of class action suits. As a result, Kiyosaki’s Rich Dad Company filed for bankruptcy in
2012.
By his own admission, American businessman Robert Toru Kiyosaki had two
dads: a poor one and a rich one. The first one was highly educated and
extremely intelligent, earning a doctorate at two prestigious universities while
on full financial scholarships. The other dad never even finished eighth grade. 

While the first dad believed that the root of all evil is the love of money, the
second claimed that the root of all evil is, in fact, lack of money – so he strived
to earn as much as possible. Instead of working hard for it, he devised ways
to let money work for him. Somewhat unsurprisingly, he died as one of the
richest men in Hawaii, leaving tens of millions of dollars to his family, charities,
and his church. Despite earning substantial income as a longtime professor,
the first dad left only bills to be paid.

At the tender age of 9, Kiyosaki made an important and brave decision: to

ignore the guidance of his real dad, the brilliant professor, and follow the
advice of his best friend Mike’s father, the uneducated businessman who
worked for himself. A culmination of his surrogate father’s teachings, “Rich
Dad Poor Dad” unpacks the six great lessons Kiyosaki learned as his
apprentice. So, get ready to learn them yourself and make the first steps on
your journey toward financial literacy and economic independence.

Lesson No. 1: The rich don’t work for money

In 1956, when Kiyosaki was merely 9 years old, his rich friend Jimmy invited
three of their mutual friends to his parents’ beach house, but not him –
because he was poor. “Dad, can you tell me how to get rich?” he asked his
father that evening. “Well, use your head, Son,” his father replied, smiling
away the lack of an answer. 

Of course, Kiyosaki wanted something better, so he asked his best friend

Mike if he could arrange a meeting with his father. He was an owner of
several warehouses, a construction company, a chain of stores, and three
restaurants – so he had to know a thing or two about making money. At the
meeting, Mike’s father didn’t waste any time to make Robert a simple take-it-
or-leave-it offer: “You work for me, and I’ll teach you.” 

Kiyosaki accepted the arrangement but grew restless and disappointed after
no more than three weeks. Not only was he working for peanuts – earning
mere 10 cents an hour – but, also, he hadn’t learned anything. So, he decided
to confront Mike’s father and ask for a raise. Little did he know then that he
had already absorbed the first lesson: life pushes everybody around, but while
the poor give up or push back against their bosses, the rich use the pushing to
change and grow into a better version of themselves.

“Stop blaming me and thinking I’m the problem,” Mike’s father said. “If you
think I’m the problem, then you have to change me. If you realize that you’re
the problem, then you can change yourself, learn something, and grow wiser.
Most people want everyone else in the world to change but themselves. Let
me tell you, it’s easier to change yourself than everyone else.”

This was only a part of the first lesson. The second part was even more
important: most people accept working for 10 cents an hour instead of getting
angry about it. The reason? They prefer the safety of a regular paycheck
instead of the risk of following their passions – which are anger and love
combined. The fear of not being able to pay their bills is what keeps most
people working at a job. Rich people are rich because instead of choosing to
work for money, they have money work for them. And that brings us to the
second lesson.

Lesson No. 2: Why teach financial literacy?

Many people say, “Oh, I’m not interested in money.” And yet, they’ll work at a
job for eight hours a day to earn it. However, time is a limited resource: you’ll
never become a millionaire if you get paid by the hour. It’s simple math!

Wealth, in essence, is not about how much money you make – it’s how much
money you keep. That’s why there are so many former professional athletes
and lottery winners who’ve ended up poor – despite being millionaires at
some point in their lives. Money, contrary to popular belief, doesn’t solve
problems – it usually merely accelerates them. If the “cash flow pattern”
running in your head is “spend everything you get,” you’ll be poor no matter
how much you earn. An increase in cash will just result in an increase in
spending.

This is the main problem of so many talented people around the world –
including Kiyosaki’s real dad: they work hard to earn money, but don’t know
how to manage it once they earn it. “What is missing from their education is
not how to make money,” quips Kiyosaki, “but how to manage money. It’s
called financial aptitude – what you do with the money once you make it, how
to keep people from taking it from you, how to keep it longer, and how to
make that money work hard for you.”
For this reason, financial literacy should be a compulsory subject in school.
Kiyosaki claims that it would also probably be the easiest one, because
learning by heart the following rule should get you a good grade in itself:
“Know the difference between an asset and a liability, and buy assets.” It’s
that simple.

Lesson No. 3: Mind your own business

But what is an asset, and what a liability? Simply put, an asset is what puts
money in your pocket; liability, on the other hand, takes money out of it. The
main difference between different classes of people can be illuminated along
these lines: the rich acquire assets, while the poor and middle class acquire
liabilities that they think are assets. The poorest have only expenses.

If you want to get rich, you have to start focusing on your asset columns
instead of your income statements. “Financial struggle is often the result of
people working all their lives for someone else,” writes Kiyosaki. “So, start
minding your own business. Keep your daytime job, but start buying real
assets, not liabilities.”

Real assets fall into the following seven categories:

1. Businesses that do not require your presence: you own them, but they
are managed or run by other people. If you have to work somewhere,
then it’s not a business – it’s a job.
2. Stocks.
3. Bonds.
4. Income-generating real estate.
 5. Notes (IOUs).
6. Royalties from intellectual property, such as music, scripts, and patents.
7. Anything else that has value, produces income or appreciates, and has
a ready market.

Minding your own business means building and keeping this asset column
strong: once a dollar goes into it, never let it come out. Once again, instead of
working for your money, make it your employee. The best thing about it is that
money works 24 hours a day and can work for generations!

Lesson No. 4: The history of taxes and the power of

corporations

Simply put, “if you work for money, you give the power to your employer; if
money works for you, you keep the power and control it.” And this is of utmost
importance in terms of taxes. As an employee, you have no choice but to
earn, pay taxes, and spend the rest; however, as an employer, you can spend
before paying taxes.

That brings us to the biggest secret of the rich – the secret that puts them way
ahead of the pack: corporations. Corporations, as you well know, are not real
things – just documents that create a legal body without a soul. However, this
legal body ensures that the wealth of the rich is protected. The rich use
corporations to present their personal expenses as corporate expenses, thus
making certain that their taxes are kept at a minimum.
It may sound dodgy, but it is nothing but financial intelligence which, in
Kiyosaki’s opinion, is “the synergy of many skills and talents,” a combination
of the following four technical skills:

1. Accounting. The ability to read and understand numbers and financial

statements.
2. Investing. The science of “money making money;” here formulas make
some place for creativity as well.
3. Understanding markets. The science of supply and demand; you need
to differentiate between the technical (emotion-driven) and fundamental
(economic) aspects of all investments.
4. Law. The awareness of state and federal regulations, as well as a good
understanding of tax advantages and possible lawsuits.

Lesson No. 5: The rich invent money

No asset is more powerful than our mind. If trained well, it can create
enormous wealth; if not – it can leave you with unpaid bills. Essentially, this
means that you have two options in life:

1. Work hard, pay 50% in taxes, save what is left, and get taxed on your
savings.
2. Take the time to develop your financial intelligence and harness the
power of your brain and the asset column.

It’s not really a choice, is it? Unfortunately, millions of people make the wrong
one because they are afraid of losing and want to avoid failure at all costs.
“People who avoid failure also avoid success,” remarks Kiyosaki. Allow
yourself to make mistakes – and learn from them. “Secure” and “smart”
investments won’t make you money; in the real world, it’s the bold who get
ahead. 

So, start thinking outside the box. Look for opportunities missed by others,
raise money, and invest it in the idea, while organizing smart people to put it
into practice. It’s risky, sure – but all things that matter are. After all, it’s not
like you knew the person you loved would say “yes” when you asked them
out. But you did it anyway.

Lesson No. 6: Work to learn – don’t work for money

“Job security meant everything to my educated dad,” remembers Kiyosaki.

“Learning meant everything to my rich dad.” In time, he realized that his
second dad was right – that job is an acronym for “just over broke” and that
working for money is a trap. 

So, he chose to work to learn – even going so far to quit a secure job in the
army and join Xerox to be trained in the art of marketing and selling. He knew
that, in addition to managing your cash flow and your systems, being
successful is also about managing other people. The gamble paid off: he
became an owner of an investment company, and retired at the age of 47 as a
multimillionaire. Follow his advice – and you might too.

Final Notes

It is not an exaggeration to say that “Rich Dad Poor Dad” is one of the cultural
phenomena of our age. The longest-running bestseller on all four of the lists
that report to Publisher’s Weekly, it was named USA Today’s “No. 1 Money
Book” two years in a row, and has been translated into 51 languages.
Moreover, it launched the extremely popular “Rich Dad” series of books,
which includes over 20 titles and has sold more than 30 million copies
worldwide.

These are only some of the reasons you should read this book. Thirty million
Kiyosaki fans can’t be wrong, can they?

12min Tip

Unless you want to see them working hard for some high-school dropout, start
teaching your children about money and finance as soon as possible! Too
many things depend on your kids’ financial literacy to leave this to chance.