Rich Dad Poor Dad Book Review- What Nobody Told You About It

Are you aware of your personal finance? If yes, then you probably heard of the book Rich Dad Poor Dad written by Robert T. Kiyosaki. This book is a life-changing manual for everyone. It helps a person rethink his financial goals and try to achieve financial freedom.

Rich Dad Poor Dad is considered one of the best personal finance books ever written. Throughout this book, the author guides readers on how finance thought leaders look at money and make sure the best use of resources. Robert also emphasizes the need for financial education at our schools.

Here, the word ‘rich’ doesn’t refer to the abundance of wealth. Rather it implies the financial freedom of an individual. On the contrary, the poor doesn’t mean destitute here. It refers to the typical mentality of working hard and trading our time in exchange for money.

By the end of this Rich Dad Poor Dad book review, you’ll grow a new dimension of thought regarding personal money management.

Navigate through this Rich Dad Poor Dad review by following the table of contents.

A Quick Overview of Rich Dad Poor Dad

1- What Is ‘Rich Dad Poor Dad’ All About?

• A Bit About the Author And His Journey

2- Rich Dad Poor Dad Book Review: Terms You Need to Know

• Assets Vs. Liabilities

3- Rich Dad Poor Dad Book Review: Lesson Summary

• Lesson 1: The rich don’t work for money
• Lesson 2: Why teach financial literacy?
• Lesson 3: Mind your own business
• Lesson 4: The history of taxes and the power of corporations
• Lesson 5: The rich invent money
• Lesson 6: Work to learn, don’t work for money

4- Rich Dad Poor Dad Book Review: Five Obstacles to Overcome
5- Learning from “Rich Dad Poor Dad” to Become Rich

Now let’s get started.

What Is ‘Rich Dad Poor Dad’ All About?

This book depicts the journey of Robert from his childhood to his adult years. The author presents personal experiences that support the propositions he wants to make through all the lessons of this book.

The book is all about pointing out how we can make our money work for us instead of ourselves working for the money. Robert mentions assets and liabilities as two different things that we often confuse. Assets are something that generates more money, whereas liabilities are something that adds up to the cost.

The author successfully depicts the different viewpoints of two dads who used to advise him how to achieve his economic goals. His friend’s dad, whom he refers to as rich dad encouraged him to use his money to generate more money. His dad, (the poor dad) advised him to study well, get a good job, and live a conventional or so-called successful life.

To understand the content and context of this book, we need to first explore the author, Robert Kiyosaki’s life. Let’s embark on a short journey to the life of the author with us.

A Bit About the Author Robert Kiyosaki

Robert Kiyosaki was born and raised in a small town in Hawaii and attended college at Kings Point Merchant Marine Academy in New York. After completing graduation, he joined the Marine Corps during the Vietnam war.

After his tenure in military service, he joined Xerox Corporation and became the number one salesperson at Xerox. His success as a salesman inspired him to take on entrepreneurial ventures for the first time. He and his brother founded Rippers, the first-ever company to bring nylon and Velcro surfer wallets in the market.

In 1996, Robert along with his wife Kim, introduced the CASHFLOW board game to help educate young minds about money in an entertaining manner. Then in 1997, he went on writing the book Rich Dad Poor Dad, compiling his lifelong experiences of becoming rich.

He was all through inspired by the Rich Dad mentioned in this book. The following section has more about the relationship between Robert and the Rich Dad.

The Presentation Style & Characters

This book sounds like an autobiography from many aspects. The writer cites his personal experiences to justify his thoughts and philosophies regarding personal money management. He presents the contrast of the ideologies of the two dads he had.

One is his own father, and the other is the father of his classmate and best friend Mike. He refers to the former as Poor Dad and the latter as Rich Dad.

The poor dad was a renowned university professor who achieved success as per the stereotyped parameters of our society. The rich dad was a school dropout and a local entrepreneur who had skilled people working for him.

The poor dad is the representation of the typical consumerist mentality which focuses on earning a high income and investing in houses, cars, or retirement plans. These assets don’t yield more money and finally turn into liabilities.

The rich dad shares a different viewpoint on money management. He spends his money on things that generate further wealth. A car used as a taxi, a real estate property for rent, an enterprise that generates passive income is a few examples of buying assets instead of liabilities.

Rich Dad Poor Dad Book Review: Terms You Need to Know

You might have already noticed that the terms assets and liabilities appear repetitively in this review. This is the true reflection of the book. The author discusses these two terms several times when distinguishing the two mindsets of the two dads. Let’s learn what they actually mean according to accounting.

Assets Vs. Liabilities

Our balance sheet mainly comprises two things – assets and liabilities. Your assets are the things you own that can provide economic benefits in the future. Liabilities are the things you owe other people. Liabilities take money out of your pocket, and assets put it in!

If you want to read further, this detailed article on assets vs. liabilities might help.

Examples of assets:

1. Investments
2. Accounts receivable
3. Inventory
4. Cash
5. Real estate

Examples of liabilities:

1. Bank debt
2. Mortgage debt
3. Accounts payable
4. Wages owed
5. Taxes owed

Rich Dad Poor Dad Book Review: Lessons Summary

Robert Kiyosaki wants to convey a few messages through this book. One of these messages is that people emphasize the need for formal education. They spend many years in education but learn almost nothing about money and investments. Let’s explore the other messages and unfold them from the summary of each of the lessons.

Lesson 1: The rich don’t work for money

Robert and his best friend Mike asked the rich dad for advice on how to become rich. They started cleaning the rich dad’s stores and wanted to give up after only three weeks. They felt that they were underpaid. That’s when the rich dad imparted the first lesson to the 9-years-old boys.

He told that some people quit because they think they deserve more wages. Some others take it as an opportunity to learn something new and grow using this hands-on experience.

This intrigued their thought process, and soon they built their first company. They made use of unused comic books in the shop and built a library with those books. They charged a small entrance fee of 10 cents for two hours of reading and hired Mike’s sisters to manage the operations.

Thus, they started making almost $10 a week without involving in the library management hassles. Their first venture came into existence being inspired by the first lesson from the rich dad.

Lesson 2: Why teach financial literacy?

The education system we have is flawed at so many levels. Lack of financial education is one of the drawbacks. This education system doesn’t teach us to identify the gaps and earning opportunities. Rather, it teaches us to fit ourselves perfectly in the existent ecosystem and become good employees.

We focus less on becoming a good employer. The education we get forces us to think like that. This typical mindset keeps us poor for a lifetime.

Robert addresses this universal problem in this chapter and emphasizes the importance of teaching the basics of personal finance management. Such financial literacy will help us buy assets that can generate more money. We will understand it’s not about how much I make; it’s about how much I can keep.

Lesson 3: Mind your own business

It’s not wise to invest in a business right away. You need to work somewhere to know how things work and how you can make your money work.

Give your best to your current job and think about opening your own business simultaneously.

Kiyosaki started out as a salesperson at Xerox. He proved his worth there and earned a substantial amount of money. Then he invested this money in the real estate business. Within three years, the revenue generated through this new business exceeded his salary.

Then he left the job and focused fully on building his own empire. He also advised readers not to spend all their earnings in the same sector. Diversify your investments, buy potential assets; money will follow you for sure.

Lesson 4: The history of taxes and the power of corporations

In this chapter, Robert discusses the history of taxes in England and the United States. England introduced the tax system in 1874 and the US introduced it in 1913.

The initial plan was to make the rich people contribute to the growth and overall development of the nation. With time, the responsibility extended upon the poor and middle-class people too.

Rich people can avoid taxes legally since they own companies, and the government offers waivers for employers at many levels. Ultimately, the lion’s share of tax revenue generates from the less rich people of the country.

Robert Kiyosaki invites the readers to understand a few components of financial management such as accounting, investment strategy, market law, and local law. This knowledge will help them develop financial IQ and operate their businesses smartly.

Lesson 5: The rich invent money

High financial IQ associated with confidence are the two prerequisites for an entrepreneur to start his journey. You shouldn’t take loans to achieve financial freedom. Debts are not assets. They are liabilities.

Save a portion of your money each month, accumulate the required capital before investing. Once you have the money, you need to identify an opportunity that has a high potential of generating revenue.

For example, Robert acquired houses for $20,000 and later on sold them for $60,000. He used the time wisely and invested in a promising field that yielded him a good profit margin.

Most importantly, you have to grow a mindset capable of accepting risks. Failure is an integrated part of each entrepreneurial journey. You need to control your emotions and bounce back with more energy and enthusiasm.

Lesson 6: Work to learn, don’t work for money

Robert had an exciting professional journey starting from joining the Marine Corps and building his own business.

During this whole journey, he learned leadership, sales, marketing, finance, accounting, and other essential lessons required to operate a business successfully. He also overcame his fear of rejection throughout this period.

Rich Dad Poor Dad Book Review: Five Obstacles to Overcome

Robert listed 5 negative emotions and habits that we should be careful of. We need to overcome the following obstacles to achieve financial freedom.

1. Fear: Don’t fall into the trap of fear. Fear of losing or failure hinders our thought process and prevents us from thinking big.

2. Cynicism: Avoid your surrounding people who themselves aren’t doing anything to achieve financial freedom but criticize your efforts.

3. Laziness: Don’t restrain yourself from escaping the “rat race” everyone is participating in. Leave your laziness behind and develop a proactive attitude to make your money work for you.

4. Bad habits: Get rid of unnecessary expenses. Try to turn your costs into savings and build assets for future investment. This will pave your way to financial freedom.

5. Arrogance: Be humble and listen to others’ advice. Don’t act like a know-it-all person. Accept that you don’t know everything about money and some people know more.

Learning from “Rich Dad Poor Dad” to Become Rich

How to make money/how to become rich are the two questions we have asked ourselves since the beginning of our childhood. These questions haunt us until we can attain our financial goals. Robert shares a few effective tips in his book to help his readers. I compiled some of the best advice here in this Rich Dad Poor Dad Book Review.

• Do something that you’re passionate about
• Build the right habits and seek useful education
• Choose friends who have a positive attitude
• Learn how to master skills quickly
• Develop a fool-proof formula for making money
• Pay yourself first and manage your cash flow wisely
• Hire talented people and offer them deserving wages
• Focus on the short timeframe of ROI
• Use your assets to create more money
• Search for inspirations in successful people in your field
• Accept that you need to give something to get something
• Audit your activities and find out what’s not working well
• Always look for new ideas
• Upskill yourself and keep yourself updated with the external world
• Invest in education to learn how, when and where to invest
• Broaden your mind and think big
• Take lessons from history as history repeats itself

Rich Dad Poor Dad- What I Didn’t Like so far

In this section, I want to share my two cents on the book. Is Rich Dad Poor Dad worth reading? Surely it is. It focuses on guiding people on how to achieve a progressive mindset and build a positive attitude about money management.

At the same time, Robert demeans his own father just because of the flaws in his viewpoint about personal financial management. His father was a university professor, still couldn’t be successful in Robert’s eyes.

The approach of referring to him as poor is not so wise. He was a highly educated person, rich in wisdom. The only parameter of success isn’t money. It should not be in my viewpoint.

I oppose the idea of Rich Dad Poor Dad on this very ground. Besides, Robert didn’t focus on the mental wellbeing of his two dads. His discussion was all about making money, becoming rich, achieving financial freedom, buying assets, avoiding liabilities, and receiving financial education.

What if you lose mental peace being obsessed with making money only? What’s your philosophy about life, family, friends? I think this book deserved at least one chapter comprising the discussion about the other things of life that make us happy.

FAQ on Rich Dad Poor Dad

Final Thoughts

Rich Dad Poor Dad is an excellent resource that can shape the minds of youth. They can learn how to manage their personal finances and make the best use of their money by buying assets, not liabilities.

But the success stories and shared experiences are only specific to the author’s own life. These references may not fit well in someone else’s life. If you can relate his experience to your personal life, you will find this Rich Dad Poor Dad book review helpful.