Rich dad Poor Dad story of Robert Toru Kiyosaki

Rich Dad Poor Dad

About the Author:

Robert Toru Kiyosaki (born April 8, 1947) is an American businessman and author. Kiyosaki is the founder of Rich Global LLC and the Rich Dad Company, a private financial education company that provides personal finance and business education to people through books and videos. The company's main revenues come from franchisees of the Rich Dad seminars that are conducted by independent individuals using Kiyosaki's brand name for a fee.

Summary of book:

Rich dad poor dad is a story of a boy with two fathers one rich, his friend’s father and poor one, his own father. Both father teaching him how to achieve success in life but completely in a different manner. It is more visible to author and to us also which father makes more financial sense. Although his biological father is highly educated than his rich father but paled against his rich dad in terms of assets and businesses.

The author compares his poor dad to those people who are scampering in the rat race and helplessly trapped in the cycle of needing more but are unable to satisfy their dreams of being wealthy because of one reason that is financial literacy. They have acquired so much knowledge in school learning how to deal with this world only and never taught any lessons about money. On the other hand his rich dad represents the independently wealthy core of society who deliberately takes advantage of the power of corporations and their personal knowledge of tax and accounting (or that of their financial advisers) which they manipulate to their advantage.  

The author have presented below lessons in this book:

1.  Poor people work for money; Rich make money work for them.

2.  Rich people acquire assets; poor people acquire liabilities and think they are assets.

3.  The single most powerful asset we have is our mind.

4.  It is not how much money you make that matters what matters is how much you keep.

5.  There is the difference between being broke and being eternal. Broke is temporary but being eternal is permanent.

Let’s have a quick summary of lessons in each chapter:

Chapter 1: Rich dad, Poor dad

The story started when both boys were 9 years old in 1956 in Hawaii. The first get-rich scheme was of making non genuine nickel, they made plaster molds of nickels and melted toothpaste tubes and then fill the molds to produce nickels. Their plan was unsuccessful as Mike’s father informed them it is an illegal activity. After that day both boys started taking lessons on finance and economics lessons from Mike’s father, rich dad. The first lesson taught by Mike’s father was hatred of Rat race. To start this they were told to work at one of the Mike’s father’s grocery shop with a little pay per hour. After few weeks Kiyosaki, tired of being exploited of labour asked about a raise but Mike’s father cut his pay and asked him to work for free. Eventually both boys tired of being underappreciated and unpaid met with Mike’s father individually. In the conversation he apologized for lack for pay asked both of them if they want moral of the lesson or rise in pay, surprisingly both chosen for moral. After someday Mike’s father started at twenty-five cents, a dollar, two dollar and even five dollar, but boys still remained for their decision to choose for moral of the lesson. The lesson to get out of the Rat race and instead of working for whole life for someone and putting a bunch of money in someone else pocket instead of putting those in yours, have people work hard to put money in your pocket. In this chapter author wants to talk about the mentality of people of playing it safe and they are comfortable in it and they haven’t taught to take risks in early stages of their life. The author also tries to say that opportunities in life come and go; the rich recognize them instantly and turn them into gold business.

Chapter 2: Why Teach Financial Literacy

The major lesson author want for convey here is that you need financial literacy to be and stay safe. This stamen was given because a reporter stated that a large majority of extremely wealthy people either ended up in jail, dead or penniless. This specific lesson is meant to teach people not to be wise with your money once you have it, but rather be smart with your money before you have it. In a way, don’t try to build a skyscraper or even a house without building a strong foundation first. As per author financial literacy starts with a working knowledge of accounting.

Chapter 3: Mind Your Own Business

In this chapter author says that individuals need to mind their own business if they wish to become financially self-sufficient. The author introduces concepts of real state and investment by taking example of McDonald’s. According to him real assets are anything with value- stocks, bonds, mutual funds, royalties form intellectual properties etc.  This chapter also reveals the author’s investment preferences: real estate and stocks. For real estate, he says he starts small, and trades his properties for bigger ones and then delays paying taxes on capital gains through one IRS mechanism.

Chapter 4: The History Of Taxes And The Power Of Corporations

In this chapter author makes a point clearly that poor let the corporation manipulate them whereas rich know how to use it. As we all know individual earns money. Pay tax on that money, and live with what is left but on the other hand Corporation earns money, spends everything it can, and after that they are taxed on which is left. Author have clearly stated that individual may not know that they work from January to mid-may and pay taxes on their income and in that time corporations are hardly taxed.

Chapter 5: The Rich Invent Money

In this chapter author discussed he importance of education and state that “A trained mind is a rich mind”. People never get ahead financially even if they have plenty of it because they fail to tap on opportunities; most of them sit around and wait opportunity to happen. As stated by him people create luck they should not wait around and this same attitude goes for money.

Chapter 6: Work To Learn, Don’t Work For Money

In this chapter author mention management skills, he says individuals need to know how to manage cash flows, systems and people. He have given equal importance to communication skills also. Communication skills an how to manage people should be learnt by all individuals who are eager to be financially good as at last we have to manage people around us and we will be paid to do so.

Chapter 7: Overcoming Obstacles

In this chapter author says he constantly hears from people saying they want to be rich, but when he suggest that money can be made from real state, their reaction is but I don’t want to fix toilets.” The author believes it’s ironic that they’re more concerned about trivia like fixing toilets rather than what lies ahead in real estate. As a final point, the author states that it is healthy to be greedy, so when faced with a decision, a person must always ask, “What’s in it for me?”

The author believes that true luxuries are experienced when they are the outward manifestations of intelligent investing and asset building. He cites the example of his wife purchasing a Mercedes Benz because it was the car she liked and worked hard to be able to purchase it. The author cautions however about keeping up with the Joneses and getting into debt because of this human frailty.

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