Rich Dad Poor Dad can be summarized in three terms; assets, liabilities and rat race. Robert Kiyosaki presents a untraditional way of thinking when it comes to the path of life. His real father was middle class because he played it safe. His friends father was filthy rich because he took chances. “Don’t just play it safe and climb the corporate ladder, own the ladder.”
My biggest takeaway is before you jump into the rat race, buying a house, have kids, set yourself up so that you’re financially stable with multiples sources of income and a solid asset portfolio. He makes the point that if you have more liabilities than assets you will fall into the rat race. Make the money work for you. Build your assets so that they cover your liabilities. Take chances and make the investments in yourself early on.
If you keep an open mind and understand the perspectives of both fathers this book can possibly change the way you look at your personal finance or at the very least motivate you.
- Often in the real world, it’s not the smart that get ahead but the bold.
- One dad had a habit of saying, “I can’t afford it.” The other dad forbade those words to be used. He insisted I say, “How can I afford it?” One is a statement, and the other is a question. One let you off the hook, and the other forces you to think.
- Rule number one. You must know the difference between an asset and a liability.
- Rich people acquire assets. The poor and middle class acquire liabilities, but they think they are assets.
- The rich buy assets. The poor only have expenses.
- The middle class buy liabilities they think are assets.
- Concentrate your efforts on only buying income generating assets. Keep doing that, and your asset column will grow. Focus on keeping liabilities and expenses down.
- Start minding your own business. Keep your daytime job, but start buying real assets, not liabilities or personal effects that have no real value once you get them home.
- The first lesson of having money work for me, as opposed to working for money, is really all about power. If you work for money, you give the power up to your employer. If your money works for you, you keep and control the power.
- Life pushes all of us around. Some give up. Others fight. A few learn the lesson and move on. They welcome life pushing them around. To these few people, it means they need and want to learn something. They learn and move on. Most quit and few fight.
- If you realize that you’re the problem, then you can change yourself, learn some thing 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.
- The main reason most people are not rich is because they are terrified of losing. Winners are not afraid of losing. But losers are. Failure is part of the process. People who avoid failure also avoid success.￼
- For winners, losing inspires them.
- For losers, losing defeats them.
- Everyone wants to go to heaven, but no one wants to die. Most people dream of being rich, but are terrified of losing money.
- Great opportunities are not seeing with your eyes. They are seen with your mind. Most people never get wealthy simply because they’re not trained financially to recognize opportunities right in front of them.
- Learn to use your emotions to think, not think with your emotions.
- Too many people are focused too much on the money and not the greatest wealth, which is their education. If people are prepared to be flexible, keep an open mind and learn, they will grow richer and richer through changes. If you think money will solve problems, I’m afraid those people will have a rough ride. Intelligence solve problems and produces money. Money without financial intelligence is money soon gone.
- It is what you know that is your greatest wealth. It is what you don’t know that is your greatest risk.
- When you know you are ignorant in a subject, start educating yourself by finding an expert in the field or find a book on the subject.
- The most important specialized skills are sales and understanding marketing. It is communication skills such as writing, speaking and negotiating that are crucial to a life of success.
- If you are going to build the Empire State Building, the first thing you need to do is dig a deep hole and pour a strong foundation. If you’re going to build a home in the suburbs, all you need to do is pour a 6-inch slab of concrete. Most people, in their drive to get rich, are trying to build an Empire State Building on a 6-inch slab.
- For adults, keep your expenses low, reduce your liabilities and diligently build a base of a solid assets.
- For young people who have not yet left home, it is important to start building a solid asset column before they get married, buy a house, have kids and get stuck in a risky financial position, clinging to a job and buying everything on credit.
1. Businesses that do not require my presence. I own them but they’re managed or run by other people. If I have to work there, it is not a business. It becomes my job.
4. Mutual funds.
5. Income-generating real estate.
6. Notes (IOUs).
7. Royalties from intellectual properties such as music, scripts, patents.
8. And anything else that has value, produces income or appreciates and has a ready market.
- Employees earn and get taxed and then try to live on what is left. A corporation earns, spends everything it can, and is taxed on anything that is left. It’s one of the biggest legal tax loopholes that the rich use.
The Rich with Corporations:
1. Earn 2. Spend 3. Pay Taxes
People who work for corporations:
1. Earn 2. Pay Taxes 3. Spend
Financial intelligence is made up of these four main technical skills:
1. Financial literacy. The ability to read numbers.
2. Investment strategies. The science of making money.
3. The market. Supply and demand.
4. The law. The awareness of accounting corporate state and national rules and regulations. I recommend playing within the rules.
Main management skills needed for success are:
1. The management of cash flow.
2. The management of systems.
3. The management of people.
The five obstacles in the way of getting rich:
4. Bad habits.
- “Do what you feel in your heart to be right—for you will be criticized anyway. You’ll be damned if you do, and damned if you don’t.” -Eleanor Roosevelt
- Listening is more important than talking. If that was not true, God would not have given us two ears and only one mouth.
- Wealth is a persons ability to survive so many numbers of days forward… or if I stop working today, how long could I survive?
You can check out Rich Dad Poor Dad at the links below!