Rich Dad, Poor Dad Book Summary
Rich Dad, Poor Dad book is all about one child (Robert) grew in a middle-class family where his father was a banker and the child faces problems like running low for money, fewer toys, humiliating by other boys in the school.
Robert has a friend named Mike and Mike's father was a businessman. So both Robert and Mike went to him and told them to teach him how to be Rich and Mike's father agreed to teach him.
In this way, the learning journey of a nine-year-old boy started towards becoming Rich. Now the boy got two father one is his real educated, hard-working still poor father doing a great job and another is a businessman who is richer and knows much more about money than his real father.
Having been raised by two fathers, he had been taught to strive for two different goals. His educated dad advised him to work for a corporation. His rich dad advised him to own the corporation. Both life paths required education, but the subjects of the study were completely different.
The difference between Poor and Rich lies in their thoughts, words, and actions. Poor may say that "I'll never be rich", "I'm not interested in money," or "Money doesn't matter". On the other hand, Rich people would say that "What actions should I take to achieve that goal, to make this amount of money".
Some of the lessons that are mentioned in the book are:
#1: The Rich Don't Work For Money
Rich work to learn. They use their feelings like Desire, Fear to make money instead of becoming a slave to the money. They observe instead of reacting and think for a way to get a better option.
#2: Study Financial Literacy
Financial Literacy in terms of the understanding difference between assets and liabilities. Assets put money in your pocket and Liabilities take money out from your pocket. Poor buy liabilities like loan, Home, car while Rich buys assets like Stocks, bonds, notes, real-estate, etc.
#3: Mind Your Own Business
Financial struggle is often directly the result of people working all their lives for someone else. To become financially secure, a person needs to mind their own business. Your business revolves around your asset column. Invest money, try new ideas and work on yourself.
#4: The History and The Power of Corporation
One needs to broaden their knowledge in the field of Accounting, Understanding Markets, Investments, and Law. This helps to build and run the corporation easily and effectively.
#5: The Rich Invent Money
Robert strongly urges to take risks, be bold, bring your genius out and convert the fear of losing, being broken into power and brilliance. Always welcome change, be creative and take calculated risks.
#6: Work to Learn - Don't Work for Money
Most people need only to learn and master one more skill and their income would jump exponentially. For example, if you are a writer and if you learn the skills of sales and marketing, your income would jump dramatically. Seek work to learn, more than earn.
#7: Overcome Obstacles
Things to overcome in life:
#a: Fear of losing money.
#b: Cynicism, remove doubts about yourself and others, and stop talking about negative things.
#c: Beat Laziness, to beat laziness one should be the greedy inside.
#d: Bad Habits, Our lives are a reflection of our habits.
#e: Arrogance, Arrogance is ego plus ignorance.
Some of the key points mentioned in the book are:
- One should have a reason greater than reality.
- Spend every day, every action wisely.
- Choose Friends Carefully.
- Master one Formula and then Learn a New one.
- Pay your brokers well, if you are trading stocks.
- Buy assets that bring luxuries.
- One should have an ideal in life.
- Teach and you shall receive.
Robert said to follow this ToDo's to change way of life:
- Look for new ideas. Ideas, books for investments.
- Take classes for investments, trading.
- Jog, walk and drive a certain area once a month
- Observe other than react.
- Take Actions.
- Invest in mind and learn how to acquire assets.
In this way Rich Dad, Poor Dad book is all about diverting your thinking regarding money from being poor or middle class to Being rich.
One Great Quote I would like to mention from this book is:
"Awaken the financial genius that lies within you. Your genius is waiting to come out."