This is further to our series of summary and review about hand picked books, below we will see: Rich dad poor dad summary of the book.
- Rich Dad Poor Dad summary and review of the book
- Author: Robert T. Kiyosaki
- Genre: Non-fiction
- Awards: New York Times best sellers
- About: Financial education book. About building wealth and achieving financial independence.
Rich dad poor dad book summary:
The book by Robert T Kiyosaki: Rich dad poor dad aims towards increasing one’s financial intelligence. This book is based on 2 characters in Kiyosaki’s life. The first character is Kiyosaki’s own father, who is the poor dad in his book. And the second character is his friend’s father who is the rich dad. Based on experience from these both characters, Robert Kiyosaki guide readers about what rich dad teaches their kids about money that the poor and middle class do not!
The Rich dad:
Rich dad as per the book is father of is Kitosaki’s friend. He is the school dropout and also one of the richest men. One of the advices in this book is “The rich don’t work for money.” Rich work towards the learning and further things which can be applied or invested to make money again and again. This book also suggests that being rich does not mean having materialistic possessions. So being rich means never having to worry about paying your bills.
The Poor Dad:
Poor dad is Kiyosaki’s own father, who according to the book, worked hard all his life but never obtained financial security. In fact he has a collection of degrees and diplomas. The poor dad trades his time (and of course skills) to earn money.
The Education System:
In this book, Kiyosaki also point outs the flaws in traditional education system. According to the author, education system is designed to create employees and not the entrepreneurs. The education might help you to gain skills to work but it does not discuss about financial literacy. However, he does not recommend skipping the higher education. But he says that only higher education is not enough and one should also be street smart to be a business person to gain financial independence.
Below is one of the famous quotes from the book which talks about only working for money without financial education doesn’t help.
“Most people never study the subject [money]. They go to work, get their paycheck, balance their checkbooks, and that’s it. On top of that, they wonder why they have money problems. Few realize that it’s their lack of financial education that is the problem.”– Robert Kiyosaki in his book “Rich Dad Poor Dad”
Understanding of Asset and Liability:
Robert Kiyosaki challenges the concept of considering one’s primary residence as an asset. Many people spend their life’s saving or also commit to a debt for a decade or two as mortgage loan to acquire a primary residence and consider it as an asset of their life. According to Robert, Primary residence does not generate any positive cash flows for you so cannot be considered as an asset.
“Rich people acquire assets. The poor and middle class acquire liabilities, but they think they are assets.”
Kiyosaki further says in his book, Asset is something that puts money in my pocket. On the other hand, a liability is something that takes money out of my pocket. This statement does not follow general accounting standard. But the point made hear is to focus on cash flow to get wealthy.
Criticism about the book:
First, It could not be proved that the “Rich Dad” of the book who gave all advice about wealth creation to Kiyosaki ever existed. There are talks about this rich dad was made up and so the book cannot be treated as a work of non-fiction. This books also has a section about taxes which has been critised by few.
In conclusion, Let’s leave the discussions about being fiction or non-fiction, this book is really the thought provoking for many of our beliefs when it comes to earning money or being wealthy. The book surely explains the importance of financial education which is generally ignored by most people even though everybody wants to become rich.
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