Rich Dad, Poor Dad: A Personal Review

Rich Dad Poor Dad, authored by Robert Kiyosaki is an international bestseller on personal finance, and rightly so. I first came across the book some years ago. I read it halfway and dump it when it started getting technical. Having garnered more knowledge over time, I was able to finish reading the book twice in the last couple of months.  I read the edition published by Plata Publishing LLC.

With the objective to point out to the reader the need for financial education and with the aim to introduce the basics of same, the author uses his supposed personal story to pass across the lessons – most of which he learned from his rich dad.  Throughout the book, he contrasted his rich dad – his friend’s dad – to his poor dad (his biological dad) to point out how they differ and how their differences contributed to their financial status.

Key Ideas

The key ideas in the book include:

[bctt tweet="The way one handles fear determines whether they become poor or rich. If you hate risk, start early. To become wealthy, don’t be afraid to lose money and you also need to overcome fear, cynicism, laziness, bad habits and arrogance." username="Olaidozen"]

People’s lives are controlled forever by two emotions: fear and greed. It’s easier to change yourself than it is to change everyone else. The trap of the Rat Race is fostered by reactionary living based on fear and greed.

[bctt tweet="It’s not how much money you make; it is how much money you keep that determines how wealthy you will become. " username="Olaidozen"]

The rich mind their own business – They don’t confuse profession (scholastic skills/knowledge) with business (income generating assets or investments).

Assets put money in my pocket. Liabilities take money out. Real Assets include Businesses, stocks, bonds, Income-generating real estate, royalties and IOUs. One’s home is a liability, not an asset.

[bctt tweet=" Corporations are the biggest secrets of the rich because they follow the order: earn-spend-taxes as opposed to employees earn-taxes-spend. Corporations afford tax advantage and protection against lawsuits." username="Olaidozen"]

Financial IQ is based on expertise in four essential areas: accounting, investing, understanding markets and the law (it’s expensive to not know the law). If you desire to become wealthy, financial literacy, understanding the science of making money and markets, and knowing the law are non-negotiable skills.

[bctt tweet="The single most powerful asset we all have is our mind. If it is trained well, it can create enormous wealth seemingly instantaneously. Old ideas are biggest liabilities. Opportunities are seen with the mind, not the eyes. " username="Olaidozen"]

Work to learn, not to earn. It’s better to know a little about a lot than to know a lot about a little.

Specialisation can be dangerous. Job is an acronym for just over broke. Mind your business.

Worry about what it is you are learning from your daily activities and how it affects your financial future. Financial education, is more valuable than money, in the long run. Selling, marketing, teaching and learning are important life skills.

[bctt tweet="The way one handles fear determines whether they become poor or rich. If you hate risk, start early. To become wealthy, don’t be afraid to lose money and you also need to overcome fear, cynicism, laziness, bad habits and arrogance." username="Olaidozen"]

Never say you can’t afford something. Find ways by which you can afford it.

The feeling I get every time I read this book is the joy of discovery and the enthusiasm to apply the acquired knowledge. Rich Dad Poor Dad opened my eyes to see the things I have been doing wrong in the aspect of my finances. The knowledge makes me confident that I will be on my way to wealth if I apply it properly. The book is a big eye-opener with inexhaustible insights. Every time I reread, there’s a new point to take away.

The book’s writing style is simple, relatable and easy to grasp. Although, the concepts in the book might look oversimplified, the points are passed across. I will recommend it to all my friends and family. I like the clarity and internal consistency of the book.

Take away

I’m discarding old ideas about money, assets and liabilities. I’m determined to consciously grow assets column and reduce liabilities column and expenses. I’m putting in place a structure to earn more and spend less. I now actively seek opportunities to grow my assets column through portfolio and passive income.

I choose to become a little greedy and pay myself first so that I can seek other ways to meet my financial responsibilities. I choose to analyse rather than be cynical. I will approach my work with the desire to learn and not just to earn. I’m making sure that the value I actively seek to get in terms of knowledge is more in the long-term than the financial gains I make in the interim.

I will invest in my financial education (through books and courses on accounting, investment and corporations) to have an edge and fast-track my journey to wealth. I will give more, teach more and learn more. I will seek ways to become better at selling and marketing. I’m placing more priority on my financial intelligence and education. I’m going to make better daily choices in terms of how I spend my time and money, and what I put in my head.