RICH DAD POOR DAD SUMMARY

RICH DAD AND POOR DAD SUMMARY:

Hey guys, you may often hear about the famous book Rich dad and Poor dad. The author of this book is Robert T. Kiyosaki.

         

THREE CARDINAL RULES OF BUSINESS ADDRESSED IN THIS BOOK:

1. In this book, Robert Kiyosaki writes about his two dads. The first one was his real father whom he says poor. Another was the dad of his friend, he called him Rich dad. He judges both of them by their thinking about earning money.

2. You don't need to earn high to become rich.

3. Rich people do not work for money. They make money to work for them.

 FIVE GREAT IDEAS:

1. The poor and the middle-class people work for money but the Rich people have money work for them.

2."How much money you make" doesn't matter. The thing matter is that "how much money you keep".

3. The rich people acquire assets while the poor acquire liabilities that they think are assets.

4. Financial amplitude is the most important thing you need with money once you make it, how you keep people away from taking it from you.

5. The most important thing you need to earn money is your mind.

LESSONS:

The book contains 10 lessons in total, the contents of those lessons are:

LESSON 1: In this lesson, the author gives an introduction to his rich and poor dad.

LESSON 2: Rich people do not work for money.

LESSON 3: Why we should provide financial literacy.

LESSON 4: Always mind your own business.

LESSON 5: History of tax and power of the corporation.

LESSON 6: Rich people invest money.

LESSON 7: Never work " to earn" always work "to learn".

LESSON 8: Overcoming the obstacles.

LESSON 9: The beginning.

LESSON 10: Need more.

MAIN POINTS OF EACH CHAPTER:

CHAPTER-1:

In this chapter, Kiyosaki tells about his two dads. The RICH DAD and POOR DAD.

CHAPTER-2

• The rich do not become rich by being paid by salaries from someone, They become rich by owning properties which make money for them. 

• Rich people do not waste money in buying liabilities they use this money in buying assets which make them richer. Rich people do not buy luxury cars, houses etc. Instead of wasting money on these things, they invest money in the stock market. which give them good returns.

• To become financially independent the most important factor you need is money. To make more money you need money.

CHAPTER-3

• If you do not have financial education then even if u have plenty of money, you gonna lose it one day.

• There always comes a period of financial loss and if use money to solve it, you will never be able to overcome it and even become bankrupt.

• You should always use your mind to overcome problems at the time of financial loss.

• If you are flexible, open-minded and eager to learn then only you can overcome the financial loss.

CHAPTER-4

• In chapter 4, Kiyosaki reveals secret #3 of the rich. The secret is to "Mind Your Own Business." To explain this concept, Kiyosaki started off the chapter with a story about Ray Kroc, the founder of McDonald's. Knowing that McDonald's is a fast food restaurant, it is easy to make the assumption that its business is in the fast food industry. However, Ray Kroc would say that his business is real estate. If you think about the location of all the McDonalds restaurants that you have seen, you will notice that it owns the land on some of the busiest intersections. Though the primary focus of the business is selling fast food franchises, the company is acquiring some of the most valuable real estates in the process. Ray Kroc never lost focus of this important distinction.

• Robert Kiyosaki advised to stay focused on your business instead of diverting your mind here and there.

CHAPTER-5

• In this chapter, Kiyosaki did a brief about the history of tax. Tax is the most important factor of expense for people. Most of the people work 3 to 4 months in the year only to pay tax to the government. Earlier when the tax was introduced, the government told that it was only imposed on Rich so that some money can be deducted from their money but as time passes population increase country started developing and development needs money, so the government started imposing taxes on the middle class and poor people also rich people managed to find loopholes to get rid of tax.

• The rich people started corporations to get rid of taxes. Corporations are very important tool to save yourself from taxes. Corporation has many tax waivers provided by the government. 

• Aside from these Kiyosaki mentioned four areas to expertise your knowledge and get more knowledge about corporations. The areas mentioned are:

1. Accounting - Ability to read and understand financial statements; allows you to identify strengths and weaknesses in a business
2. Investing - Kiyosaki refers to this as the "science of money making money". This includes real estate, stocks, bonds, etc...
3. Understanding Markets - There are two types of analysis that you need to understand: 1) Fundamental analysis - an economic sense of the investment based on current market conditions. 2) Technical analysis - the study of emotion-driven price movements and indicators
4. The Law - Simply, a person with knowledge of corporations, accounting, investing, tax advantages, etc... will be able to get rich much faster than someone without that knowledge.

CHAPTER-6

In this chapter, Robert Kiyosaki talks about how the rich are able to invest money. When it comes to making more money, most people have tendencies to simply work harder instead of exploring their options. The other theory people subscribe to is to put a little money away every month into some type of savings account and let the interest compounding work for them over time. The problem with this theory is that it works extremely slow. If you take inflation and taxes on your interest into account, you'll see that you're getting a very poor return on your money.

The reason that people except for such low returns for their money is generally because they don't have any other options. To emphasize the importance of having options, Kiyosaki told the story of a 45-year-old manager who was fired by his employer due to downsizing. The manager was on his knees, in front of news cameras, begging the guards to let him talk to the owners to reconsider his termination. He had a wife and two babies, and he was also afraid of losing the home that he had just bought. This manager had no financial stability outside the comfort of his job and no other options due to his lacking financial intelligence. He was holding on to the old ideas of financial stability and believing that his company would always take care of him. According to Kiyosaki, "limiting your options is the same as hanging on to old ideas." After hearing this story and knowing that there are millions in similar situations, it is easy to see that this hanging on to old ideas is dangerous.

• In this chapter, Kiyosaki mentioned many examples of how he invests and earn good returns.

CHAPTER-7

In this chapter Kiyosaki advises that we should do work to learn new things and skills instead of doing work for money. You should do work which you do not have any experience so that you get to learn something new. Kiyosaki advises developing financial intelligence.

• Financial intelligence includes knowledge in accounting, marketing, tax and stocks.

• Financial intelligence allows to overcome financial problems, vet the ones that are more likely to work and have the technical ability to execute them.

• Knowledge compounds rapidly If you Improve yourself just 1% every day It will bring out very good outcomes.

CHAPTER-8

In this chapter, Kiyosaki tells about some of the most common mental Obstacles comes In between you and success.

SELF DOUBT-

• Apart from intelligence and grades you need one more thing to start anything new, guts and courage are those things.

• When you recognise anything new you have to enough courage to chase it.

FEAR-

• Fear of losing will always make you play safe and you will many opportunities.

• Always remember that failure will always give you an opportunity to learn. Use failure to inspire yourself and always " bounce back".

LAZINESS-

• Counterintuitively, rich people are lazier. The stay busy as a way of avoiding they don't want to face.

• Be lazy but do not lose any opportunities of investing and growing.

ARROGANCE-

• When you are ignorant In a situation recognize It and educate yourself.

• Intelligent people welcome new Ideas since new ideas add synergy with others.

CHAPTER-9

This chapter provides insights and tips on building personal wealth. Kiyosaki says that If you want to get rich, you must find a reason greater than your current reality to motivate yourself. And then he goes on to say that you also need to feed your mind to continue to learn.  Next, he also advises people to choose their friends carefully and does not be afraid to make friends with people who talk about money because there may be great lessons to learn. After that, he says that one must learn to pay himself first, even if short of cash.

CHAPTER-10

In the final chapter, Kiyosaki continues to offer great insights about achieving personal wealth. He stresses that one should stop doing things that are not viable. He encourages people to look for new Ideas, experience and keep learning curve alive through taking courses, attending seminars and learning from other successful people in the industry. After all, "the more you learn the more you can earn."

NOTE: All the contents of this book are not available here but I tried to put at least all main important topics and conclusion.