I never thought about writing a ‘Book Review’ in my blog. Even though I couldn’t resist myself from adding this here. Before I say anything else, I must say this is one of the best book I have read in my life. Title of this book is ‘Rich Dad Poor Dad’ and Robert Kiyosaki is the author. If you wish to enhance your financial knowledge, please read this book. If you are a busy person and you don’t have time to read an entire book, Don’t worry! This article contains all the gems that I have collected 😉 Guys, This is a must read. Rich Dad Poor Dad will teach you things that no schools have taught you. Enjoy.
In this book Robert Kiyosaki expresses his thoughts on how to achieve financial freedom and the perspective of rich people and poor people about money as well as their respective understandings on how they utilise their hard-earned money. This book tries to provide certain advices which he consider will be helpful for financial health.
The main two characters in this book are ‘Poor dad’, his biological father and ‘Rich dad’ who taught Robert how to become rich and this book is divided into several chapters. In the First three chapters ‘Rich don’t work for money’, ‘Why teach financial literacy?’ and ‘Mind your own business’, Robert Kiyosaki come up with couple of points which I personally consider that will be the basic truth we must understand early in our life – our time is the most valuable asset. Job is a trap. It consumes our time, we have to work for money. Common people work in a 9 to 5 jobs and waste their good days for someone else just to receive a pay check. With that pay check, they will acquire a big house or an expensive car which in most cases will never generate any income.
In worst cases they take additional loans along with their salary to meet those financial needs. While the rich people acquire income generating assets (stocks/bonds/real estate) with their hard earned money and it will generate income for them in the future. So understanding the difference between liability and assets is key. Another most important takeaway is never take the time we have for granted. So we must balance our financial condition by paying off debts and investing in income generating assets rather than liabilities.
In the fourth chapter ‘The history of taxes and the power of corporations ‘, he points out they key difference between how rich people and poor people deal with taxes. Rich don’t play same rules as poor. They use corporations to pay less taxes – (Earn -> Spend -> pay taxes). But when the workers (common people) get salary, it comes with tax reductions already (Earn -> pay taxes -> spend).
In the Fifth chapter ‘Rich invent money’, he beautiful explains how the rich figure out the opportunities in front of them and invest in them early. These can be considered as the core basics of investing – The importance of getting on the boat early. The Sixth chapter ‘Work to learn- Don’t work for money’, the fascinating thing struck me was the way he prepared himself to become what he is now. Instead of choosing any profession for money, we have an opportunity to choose the jobs the jobs which improve our skills or help to learn new stuff. It must be something that prepare us in the journey for our main goal.
The seventh chapter – ‘Overcoming obstacles’ aims to help you prepare yourself mentally. It covers major points like Fear, cynicism, laziness, bad habits and arrogance. The major takeaways from this chapter is, fear of losing money makes you play safe but every rich person have lost money. Winning requires an elite mentality of unafraid to loose. He also urges us to work hard on our early days while we have the energy to do it and create positive habits in our daily routine. Last but not least, the mentality to accept criticism and learn more is key. This is one of my favourite part of this book where Robert Kiyosaki advices us – If you are arrogant and ego-ish enough to think that you know everything, you will never taste success in your life. In every stage of life, there is room for improvement.
There is always someone who knows things you don’t, learn from them. Robert Kiyosaki utilises his final pages to provide us ten steps to follow to develop the financial genius in you. Those steps includes most of the things he mentioned in the early chapters of this book. This book is worth the read and it literally opened my eyes on how rich people and poor see this financial world. This perspective is the key for rich people getting richer and poor people stay poor.
Please don’t consider any of these financial advices. I am sharing knowledge which I think is valuable. I am not your financial adviser, but I will be happy to share more, my perspective towards current economy and the inflating markets. Feel free to drop your thoughts in comments. 🙂