To become rich you have to go to university, get a steady job and work hard. Then your salary will increase and you’ll become rich. No? Maybe you still have to work hard, not in your job, but on your investments? Those are the ones really making you money! That’s the idea behind Robert Kiyosaki’s book “Rich Dad Poor Dad”.
The story is about the two very different mindsets when thinking about money.
In the story, Kiyosaki’s real / biological father is referred to as poor dad. Unlike what you would expect, the guy isn’t really poor. I mean, he’s got a great job with lots of security. But he has had difficulties growing his finances.
As an employee his salary is quite nice, but his lifestyle is inflated to match his income. That makes that the family isn’t moving forward.
Poor dad believes in studying, finding a job with a large and stable company. He values job security. In other words, poor dad believes in working for money.
Rich dad is the “other dad” from the story. It’s actually the father of a friend of Kiyosaki’s. This father is an entrepreneur, he employs about 150 people.
Rich dad doesn’t believe in working for money. Let others do that, so he can become rich. Rich dad tells us that self-employed individuals have higher incomes and pay less taxes than employees.
Rich dad is the dad who teaches Kiyosaki about handling money. His philosophy is that money should be working for you.
The main reason people struggle financially is because they have spent years in school but learned nothing about money. The result is that people learn to work for money… but never learn to have money work for them.Robert Kiyosaki
Early in the book Kiyosaki and his friend are trying to make a little extra money. They try different things and get very creative. However, their ideas aren’t the brightest and his friend’s father offers the boys to come work for him. He will teach them about making money and becoming rich in exchange for their labour.
The boys start out with great enthusiasm. After a while they get bored and Kiyosaki gets annoyed with the fact that he’s making a few cents per hour while rich dad is becoming richer. Rich Dad Poor Dad does a great job in painting the picture of someone who isn’t happy in their life. Then it shows how things could change.
Then he learns the first lesson. After telling rich dad he’s not happy with his little income, rich dad gives the boy an ultimatum. Either he can work for free and get a valuable life lesson, or he can get a pay raise. Kiyosaki chose the lesson over the pay raise, even when rich dad kept increasing the wage for the pay rise to very high amounts.
This lesson was about escaping the rat race. The lesson was that they had to work very hard for a few cents, making another man rich, while barely scraping by themselves. The alternative, obviously, was making other people work for you.
Rich dad teaches Kiyosaki how to handle money to make more money. He taught lessons on how entrepreneurship works. On how to keep the books of a company.
Kiyosaki also learned that there is a major difference between assets and liabilities. Assets are things that generate cashflow or wealth. Liabilities are things that cost you money.
By learning these lessons Kiyosaki realises how powerful a tool money is, and that money can make money.
Rich Dad Poor Dad is definitely a book I will reread. I’ve read it twice so far, and plan to keep reading it every now and then.
The book is inspiring, Kiyosaki’s ideas are good.
Kiyosaki has received quite some negative feedback on the book and for good reason. A lot of what he has written about apparently never happened.
Despite this, Rich Dad Poor Dad is still a great read with invaluable lessons to be learned. I don’t have an official FTB rating system but if I had, I would give the book five stars.