Wisdom From Books

RICH DAD, POOR DAD – SUMMARY

Posted on: November 21, 2009

PDF Summary of the book Rich Dad Poor Dad

RICH DAD, POOR DAD
Author: Robert T. Kiyosaki
Year of Publication: 2000
No. of Pages (of the book): 207
Summary (PDF): 2 pages

Robert Kiyosaki refers to two fathers, his father is poor as he went to school, earned good grades, obtained his PhD and after various years of service, retired due to differences with Government. Second father, his friend’s father is a rich father who is a businessman. This book is based on advices given by the ‘rich’ father to the author.

Six Secrets of Rich
1. Rich don’t work for Money
2. Learn financial literacy
3. Mind your own business
4. The History of taxes and power of corporations
5. Rich Invest Money
6. Work to Learn – Don’t work for money!!!

SECRET 1: RICH DON’T WORK FOR MONEY

People quit jobs because jobs don’t pay well. Rich work (in jobs) to learn and not for money. Rich dad got his own son and the author to work for a very small pay in a retail store. At one time, due to small pay, both boys were ready to quit the job and Rich father told them that this is exactly why people quite job and a prospective businessman don’t. Rich Dad’s lesson: Learn the business where you do your job so that you can start your own business later. As a result of this thinking, both boys took thought about business and reviewed the available resource base. They started a comic book library, renting books and earning more money than their job of retail store.

SECRET 2: LEARN FINANCIAL LITERACY

Most people buy a house at mortgage and consider it to be an asset. However, in businessman’s vocabulary, it’s actually a liability because the house is not earning anything. The house is eating up resources of the person who has bought it on mortgage.

In school, people are taught to earn good grades, get good jobs and be good employees. Generally, financial literacy component is not taught. Therefore, people with job generally struggle to meet their day to day expenses, middle class purchase liabilities considering it to be an asset (e.g. a house bought on mortgage or a car on lease!) while rich people construct a sound asset base which generates income for purchase of other assets.

Rich dad taught author to buy house once there is another asset which generates enough cash flow to enable the person buy a house. What are the assets of rich people? Those include: Real Estate, apartments generating rents and businesses being managed by managers and generating cash. A person can start with stocks, bond and mutual funds but these are not at all a substitute of a business which generates cash flows. Rich Dad’ lesson: Learn the difference between an asset and a liability and think how to create income generating assets.

SECRET 3: MIND YOUR OWN BUSINESS

Rich Dad’s lesson: Along with your day job, start some business side by side. Don’t spend all your salary. Save some amount on a monthly basis and think about an idea which can be turned to profitable business later. Business of Mc Donald’s owner is not selling ham burgers but to have real estate. If ham burgers don’t sell, there is enough property to be sold, if required.

SECRET 4: THE HISTORY OF TAXES AND CORPORATIONS

Salaried people earn their salary, pay taxes and then spend from whatever amount is left. Rich people earn, their companies pay all their expenses including taxes and then they have enough amounts to spend, as all their expenses are paid before paying any tax.

Author advises to talk to businessmen and investment bankers to learn businesses. Reading and understanding of financial statements is a must to understand how a business operates. Rich dad’s lesson: how rich people protect themselves from heavy taxes? Their secret: Corporations!

SECRET 5: THE RICH INVEST MONEY

A person can invest money either through experts i.e. investment bankers, stock brokers etc or can go for self created investment by identifying an opportunity, raising capital and finding expert people to manage the business. Rich Dad’s lesson: Learn how to manage risk. An Investment is not risky. Not knowing how to manage an investment is risky

SECRET 6: WORK TO LEARN AND NOT FOR MONEY

One should learn to manage cash flows, systems and people. Continuous learning is the key. Learn how to sell.

    Rich dad’s lesson – What to do? Action plan

• Assess your present situation: If you keep on doing what you are doing since quite some time, you will get the same results what you are getting. To get new results, do some thing different.
• Try to find some new idea – how will you create and income generating asset?
• Take action, after finding new some new idea. Practical tip: Find Mentor. Try to find some person who has achieved what you want to achieve. Ask tips from him / her.
• Try to invest in real estate when market is down. Make offers. Don’t sit and wait for opportunity to come.
• Learn from lessons of successful people.

ACT, MANAGE RISK, THINK BIG, THINK BUSINESS, DON’T BE AFRAID TO TRY and FAIL

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29 Responses to "RICH DAD, POOR DAD – SUMMARY"

Its educative in the up coming youth like me who manage to go to school and has something to do. kiyosaki god should keep you on….

great knowledge acquired ,,am greatfull
for that

Hi Malik,
Your place is valuable for me.Thanks!

Hi sir, RICH DAD POOR DAD-is an eye opener to see the reality is! a great mentor!..i am a student and involves in a network marketing business.

[…] dad taught author to buy house once there is another asset which generates enough cash flow to enable the person buy a house. What are the assets of rich people? Those include: Real […]

how i love to be rich with R. kiyossaki’s method.PLEASE Sir ,be my mentor by sending me basic info and books/materials to help me get there.this is my e-mail; elvisken63 @yahoo.com

i have learned so many financial issues here

fit hai xar…..shortcut….

wel,l it really helped me in my assignment. thanks! :)

That was interesting to note Neha

Sir,
i admired all the things you’ve written in this book. it helped me lot with my daily earnings and now especially that i hve a child…thanks for inspiring and sharing your knowledge…

Fatima Paquibulan

Many thanks Fatima for your comments

Inspiring!

Thanks. Rich Dad Poor Dad is one of the books which tell you why are businessmen really rich! Also, if you have time, please go through the post: Do you need a college degree to be a millionaire from: http://wp.me/pHUHq-7m

Adam Khoo, the youngest millionaire at Singapore has provided with detailed reason on designing destiny in one of his books, about which you can read from the above link.

Keep visiting & keep sharing your thoughts – thanks and regards

Valuable contribution to spread knowledge, thank you malik sahib Wish you all the best

Thanks Muhammad sb for your comments and appreciation

Great Work! I have added your blog to my favourites

Good Wishes,

Farid Premani

Dear Malik,

Great effort and taught provoking as well. Wish you best of luck in every endeavor.

warm regards,
Mansoor

Finally a blog!!..good start and impressive review.

Dear Malik Bhae,

Great to see such an outstanding effort to share the knowledge.

tc and best regards,

Shaukat

Malik Bhai, It is indeed a great effort to share and enlighten others with such knowledge. Honestly, it is my wish and prayer to see you taking that GIANT STEP in crossing the bridge to entrepreneurship soon !!

The biggest RISK in life is not taking RISK !!

Wish you the very best for all your endeavors in life.

realy such a great article, much helpful for professionals as well, every body should keep on such type of practices at their position. great

Great!

RICH DAD, POOR DAD is an eye-opener book. I have read the book, two times. It is a real advisor for life that I have to stop my regular ‘salaried job’ to start my own small business. I am managing it well, and with FREEDOM.

Getaneh Gobezie

Nice review. I picked quite a few pointers from this writeup. Very well summarized.

Really Gr8 job done. We are waiting for more posts.

Good work Malik Sb. This information needs to be spread to many people as it would really help out those entrepeneurs who are stuck in their jobs and just cant decide whether to setup their own venture or not.

Malik Bhai, This is just awesome. I applaud your efforts and look forward to more such content.

Dear Sir,

I am ur student i m good to see your efforts for collection of such a nice information.

regards,

Farasat Hussain

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