I read the book Rich Dad, Poor Dad 25 years ago after seeing it in a bookstore, the title immediately drew my interest. I saw the contrast of what the author was going to discuss in the differences between having the lessons from a rich dad versus a poor dad. He used a narrative story that was easy and entertaining to read instead of a more traditional nonfiction book filled with explanations, data, and anecdotal stories.

I had some experience of these contrasts in my own life with many family members across the financial spectrum. It was interesting when spending time with them that the mental model with which people at different financial levels see the world was obvious to me from a young age.

I was inspired by rich people, entrepreneurs, traders, investors, business owners, and anyone performing in their field at a high level. I believed if they could do it then so could I. The book Rich Dad, Poor Dad was a turning point in my own financial education.

I had mastered personal finance at a very young age and understood the stock market and investing, this book gave me the last piece of the puzzle in financial literacy, understanding cash flowing assets, business operations, risk, uncertainty, and basic accounting. This was a lynchpin book for me in my mid-20s and lived up to its claim: “What the rich teach their kids about money that the poor and middle class do not!”

Rich Dad, Poor Dad Summary

Rich Dad, Poor Dad is one of the best selling personal finance books of all time for its ability to teach the secrets of wealth building through an interesting narrative. The book tells the story of the financial lessons a young Kiyosaki learned growing up with the contrast between his own dad who was a state employee  and the father of his best friend who was a business owner. The lessons contained in this book can give the reader many aha moments for those never exposed to higher financial education.

This book does a great job filling the gap for young people that never received a financial education in school or from their parents. Most people learn only two financial lessons in their early years, got to college and get a good job. The author explains that this is not always the best path for financial success, financial independence, or wealth building. Readers must understand cash flowing assets, business building, and the power of asset ownership if they ever want to escape the rat race.

Kiyosaki’s book can give readers financial literacy in the basics of business finance a level higher than personal finance. Dave Ramsey’s books tell you what to do to fix your personal finances, this book tells you the financial principles that Dave Ramsey used to get rich. Both are great books but there are two steps in the process but you need Kiyosaki to see step 2.

Rich Dad Poor Dad Lessons

    1. Schools train students to be employees not entrepreneurs or investors. There are more choices in life than just working a job.
    2. Financial literacy is rarely taught in school, instead they focus on reading, writing, and math.
    3. Working to learn new skills is more important than working to earn a paycheck. Choose a job that allows you to learn, gain experience, and build skills don’t just sell your time.
    4. Assets pay you but depreciating assets cost you.
    5. Only go into to debt for cash flowing assets, don’t go into debt for depreciating assets.
    6. Pay yourself first before you pay your bills. Savings is your most important first step in acquiring capital to invest with. Convert earned income into assets.
    7. A financial business plan is more important than a resume in your financial life.
    8. The poor and middle class look for a job, the wealthy create jobs.
    9. Being broke is temporary for someone with entrepreneurial skills while a poor mindset can be permanent.
    10. Your financial IQ is your courage, creativity, and financial knowledge that creates skills, assets, and wealth.
    11. The middle class focuses on school, specialization, job security and retiring with benefits which is not as safe a path as they believe in the modern world.
    12. Money emerges from good ideas executed well.
    13. Without a financial education it will be difficult to hold on to any money over the long-term.
    14. Business taxes are structured in reverse compared to employees. Businesses pay taxes on earnings after expenses, employees pay taxes directly on income before expenses.
    15. The poor and middle class focus on a paycheck while the rich focus on businesses and assets.
    16. Education is one of the greatest investments but only when it’s from the right source at the right price.
    17. A good employee is an asset on a business balance sheet.
    18. Customers are cash flowing assets on a business balance sheet.
    19. The greater your financial knowledge the better your chance of building wealth.
    20. The primary lesson of the book is to learn how to make money work for you instead of selling your time for money in a never ending rat race.

Best Rich Dad, Poor Dad Quotes

“The single most powerful asset we all have is our mind. If it is trained well, it can create enormous wealth in what seems to be an instant.” – Robert Kiyosaki

“In school we learn that mistakes are bad, and we are punished for making them. Yet, if you look at the way humans are designed to learn, we learn by making mistakes. We learn to walk by falling down. If we never fell down, we would never walk.” – Robert Kiyosaki

“The lack of money is the root of all evil.” – Robert Kiyosaki

“Workers work hard enough to not be fired, and owners pay just enough so that workers won’t quit.” – Robert Kiyosaki

“Most people fail to realize that in life, it’s not how much money you make, it’s how much money you keep.” – Robert Kiyosaki

“In the real world outside of academics, something more than just grades is required. I have heard it called “guts,” “chutzpah,” “balls,” “audacity,” “bravado,” “cunning,” “daring,” “tenacity” and “brilliance.” This factor, whatever it is labeled, ultimately decides one’s future much more than school grades.” –  Robert Kiyosaki

“The poor and the middle class work for money. The rich have money work for them.” – Robert Kiyosaki

“I can’t afford it’ shut down your brain. it didn’t have to think anymore. besides, it also brings up sadness. a helplessness that leads to despondency and often depression. ‘How can I afford it?’ opened up the brain. forced it to think and search for answers. it also opens up possibilities, excitement and dreams and created a stronger mind and dynamic spirit.” – Robert Kiyosaki

“Rule #1: You must know the difference between an asset and a liability, and buy assets. If you want to be rich, this is all you need to know. It is rule number one. It is the only rule. This may sound absurdly simple, but most people have no idea how profound this rule is. Most people struggle financially because they do not know the difference between an asset and a liability. “Rich people acquire assets. The poor and middle class acquire liabilities that they think are assets, “ said rich dad.” – Robert Kiyosaki

“Wealth is a person’s ability to survive so many number of days forward — or, if I stopped working today, how long could I survive?” – Robert Kiyosaki

“They get up every day and go work for money, not taking the time to ask the question, ‘Is there another way?” – Robert Kiyosaki

“There is a difference between being poor and being broke. Broke is temporary. Poor is eternal.” –  Robert Kiyosaki

Poor is more of a state of mind in temporary circumstances than a permanent condition.

I have written what has been called the Rich Dad, Poor Dad of trading books, my book New Trader, Rich Trader capturing the lessons of my decades in the market and from the 400+ trading books I’ve read . I have also captured the lessons from the 100+ books on finance in my book The Working Dead. 

20 Lessons From Rich Dad Poor Dad That Changed My Life
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