Rich Dad Poor Dad Book Summary and PDF
Rich Dad Poor Dad book is the finance and self-help book author Robert T. Kiyosaki. The author wants to explain through their book that everyone should become financially independent and make the path form passive income.
Some of the examples of passive income investing in Real Estate earning from the rent, Investing in the Stock Market, Participating in MLM, etc. The book quote to get a quite idea of the book of explained summary, "The Wealthy People buy Luxuries at last, while the Poor and Middle-Class People tend to buy Luxuries first. Because of Emotional Discipline."
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Rich Dad Poor Dad |
Everyone
has the question in mind that, why only a few people get really rich and why most
of the people die living a poor or middle-class life.
Let’s begin
with a story of Robert who had two fathers in which one had a Ph.D. Degree and
the other never finished his 8th grade. Both were very smart and
hard-working but had a very different point of views regarding success and them
gave different teachings to Robert.
One said
that money is the root of all evil while others said lack of money is the root
of evil, one always said we can’t afford expensive things while the other told
Robert to find ways that how can he afford it. As that exercises the brain to
come up with ideas. One told him to study hard and try to get a job in a big
company while the other told him to study hard and try to open his own company
and create jobs.
Robert had
an advantage as he had 2 Dads and saw both of them grew from his childhood. He used
his logic and followed his second Dad's advice who later became the richest man
in Miami (Florida). With his teaching, Robert Kiyosaki himself became
multi-millionaire, while his 1st
Dad kept on struggling financially throughout his life. One of the most
important keys for success that Robert got from his Rich Dad was financial
literacy, which is knowing the difference between assets and liabilities.
Now read
carefully he gave a really simple definition for them i.e.
“Assets are anything
which makes money for you and liabilities are things which take money away from
you.”
The reason
rich people are rich they acquire assets while the middle class just buys
liabilities.
E.g. There
were two friends Bob and Bill, both working on the same post with the same salary. As
soon as they got their salary Bob used to go and buy stuff like the latest
cell phone, cool gadgets, branded clothes, shoes, bike or things like that
which would make him feel good and rich but he failed to think that these were
just liabilities.
As they took his money away from him not just while buying it
but also in the future for maintenance etc, even kept losing its value with
time and did not return any profit.
But Bill,
did not buy all those things unless it was really necessary. He used to save
money and spend it on Assets like Bond Stock, Real Estate or in Developing his
own skills, etc, which could generate income for him in the future and make money.
After, 2
years Bill became Millionaire while Bob kept
on struggling financially and blamed his low salary for the reason of
his struggle.
The cash the flow of poor people goes something like this they get the income and then they have
expenses which eat all their income goes into expenditure and liabilities
which they think are assets;
E.g Most of the middle-class people think that the house they own is their asset but that is not true as the house does not put
money in their pocket or make money for them, it is just a liability unless
they give it for rent.
The rich class, on the other hand, spends their income to
make assets which in return make money for them and then they mostly spend
expenditures from that income. So by doing this they continuously grow and keep
getting rich as their sources of income increase. If you really want to get
rich let this simple idea fit in your mind. It’s not the amount you earn but the
amount you keep.
You have to shift from a consumer mentality to an Investor Mentality. People keep on
complaining that they should get a better income which would improve their life
but the problem is even if their income increases, it will just increase their
expenditure as high income will make them desire to have a better, better car
etc, which again are just liabilities that will keep them away from getting
rich and struggle financially.
Related: The Intelligent Investor[Book Summary]
So to
conclude its not how much money you earn but how you spend it will make all the
difference.
These
concepts are taken from Robert Kiyosaki’s book “Rich Dad Poor Dad”. This was the 1st book that I read
which change my perspective towards various aspects of life I think you should
definitely read it once.
"In School, we learned that doing mistakes is bad but success is achieved by doing the mistakes."
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4 Comments
Excellent
ReplyDeleteThanks for the summary
ReplyDeleteWell explained Bro
ReplyDelete👍👍
ReplyDelete