Rich Dad Poor Dad: Summary Review & Takeaways

This is a summary review of Rich Dad Poor Dad containing key details about the book.

What is Rich Dad Poor Dad About?

Rich Dad Poor Dad is a story about the author, his two fathers, and how they both teach him about money and investing. The book explains the difference between working for money and having your money work for you. It also promotes the importance of financial literacy, financial independence, investing, and increasing financial intelligence.

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Rich Dad Poor Dad is written in the style of a set of parables, ostensibly based on the author's life. The "rich dad" is his friend's father who accumulated wealth due to entrepreneurship and savvy investing, while the "poor dad" is claimed to be the author's own father who he says worked hard all his life but never obtained financial security.

Who is the Author of Rich Dad Poor Dad?

Robert Toru Kiyosaki is an American businessman and author. He is also an investor, entrepreneur and educator whose perspectives on money and investing fly in the face of conventional wisdom. Kiyosaki is the founder of Rich Global LLC and the Rich Dad Company, a private financial education company that provides personal finance and business education to people through books and videos.

What are the main summary points of Rich Dad Poor Dad?

Here are some key summary points from the book:

  • "Poor Dad" represents the traditional view on work and money - go to uni, get a 9-5 job, climb the corporate ladder. This worked well in the 20th century, but not anymore.
  • "Rich Dad" represents the independently wealthy views on work and money - build assets, invest wisely, work for salary only if you enjoy and have to.
  • The fear of not having money makes people work hard, which in turn leads to compensation through frivolous spending. This is the "Rat Race", a never ending loop between fear and greed.
  • Fear of losing makes you play safe. "Failure" is a learning experience that will make you stronger and wiser. When you recognize a great opportunity, exercise the courage to take it.
  • The rich don't work for money - money work for them. They are getting rich by owning assets.
  • Every dollar that you spend (and not invest) is a dollar that does not work for you. Think of each dollar as your employee that can work 24 hours a day.
  • Buy assets, not liabilities. An asset is anything that produces income, appreciates in value, and does not require your active management. For example, stocks, bonds, income-generating real estate, businesses that generate profit, royalties from intellectual properties such as book, music, etc.
  • Investments can often be deceptive. They can look like an asset, where in reality they are liabilities. A house, for example, is a liability if it's taking money out of your pocket and an asset when it's bringing in money. While real estate can appreciate over time, there’s no guarantee of this.
  • Staying busy is often a way to avoid emotions and things you don't want to face in your life.
  • Condemning money is a trained defense. Embrace it as an empowering force.
  • Financial intelligence (e.g. investing, accounting, marketing, sales, communication, negotiation, etc) is key. Always develop it. Knowledge, very much like money, compounds over time.
  • The journey to financial independence is less about how much money you make and more about how much money you keep.
Poor Dad Mindset Rich Dad Mindset
"I can't afford it" "How can I afford it?"
Being the smartest person in the room Hiring the smartest person in the room
Buys and grows assets Grows liabilities
Decisive Over-hesitant
Thinks clearly around money Gives into emotions around money
Needs a paycheck. Exchanges time for money Creates income-generating assets
Uses dispensable income for frivolous spending Uses income to buy assets that return more income
Avoids risk. Fear of losing money. Manages risk. Embraces fears.
Afraid to fail and make mistakes Failing is part of the process
Motivated by safety Inspired by growth and learning
"I'm not interested in money." Greed is bad. Money and greed can be used constructively.
How can I have a higher salary? How can I have more assets?
"The government will and should take care of me" Believes in financial self-reliance.
"I'm poor because of the economy and the job market." Believes in financial self responsibility.
"Academic degrees will make me wealthy" "Investing and financial literacy will make me wealthy"


What are key takeaways from Rich Dad Poor Dad?

Takeaway #1: Why We Struggle To Leave The Rat Race Behind

Despite hating being caught up in the rat race that has you working so hard only for the reward (money) to go to your boss, the government, and on bills the major thing stopping people from breaking free of the cycle is a fear of what society will think of us if we succeed.

Takeaway #2: Fear and Greed

These are the two emotions that we have around money that cause us to make poor financial decisions. As an example of these emotions in action, imagine you get a pay rise at work. The fear of losing this extra money prevents you from investing it in stocks and shares or other assets that could bring your wealth in the future. Meanwhile, greed takes over and has you buying a new car or a new house with that extra money because it seems a 'safer' and more tangible option, despite there now being a larger mortgage, higher gas bills, and so on which leave you back in square one.

To overcome fear and greed you must take it upon yourself to increase your financial knowledge yourself because no one else will. Learn accounting, learn how to save, learn how to invest, learn what all the terminology such as compound interest means, and learn how to secure your future with a pension fund. The earlier you educate yourself financially, the better since the later you leave it the more catching up you have to do.

Takeaway #3: Taking Risks

You probably learned from your parents or the media that it's bad to take risks where money is concerned (no one wants to lose their fortune) but know that everyone who is financially successful has taken a risk in order to get to where they are.

To grow your money you can't play it safe and keep it in a regular checking or savings account. This is where the risk of investing whether in stocks and shares or property comes into play, do you want to remain stuck where you are or do you want to take a calculated risk that could grow your income substantially?

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Takeaway #4: Keep Motivated

The road to financial abundance is often a long and winding one, you need to be in it for the long-run and keep going despite the hurdles the pop up along the way.

Create a financial list of what you do want and what you don't want – It might be that you want to pay off your mortgage within 5 years, that you want to be financially independent – not relying on your partner or the government for help, and that you don't want to end up in the same financial situation as your parents. When you get discouraged, pull this list out and remember your reasons for increasing your wealth.

Another way to motivate yourself, although this must be done carefully, is to treat yourself before your earnings go on paying the bills. If you paid your bills first you would be unlikely to motivate yourself to earn the extra money to treat yourself afterward, figuring that you'd postpone until next month... and the next month. When you look after yourself first, whether that's with buying yourself some finance education (a book or a course) or something more frivolous, you'll have to come up with the money to pay the bills later – Just don't allow yourself to use credit cards as a way to find that extra money!

Takeaway #5: Avoid Laziness and Liabilities

There are two pitfalls to watch out for as you go further along the road of financial success. Laziness can look, from the outside, like you're being very productive but you may actually be burying your head in the sand. You also have to be aware of arrogance, this can be defined as ignorance + ego and will get you into financial trouble with shady 'too good to be true' investments.

Be sure to know the difference between an asset (something that makes you money I.e income from real estate (rental properties), a business, stocks, bonds, and royalties) and a liability (something that costs you money) i.e a house bought with a mortgage that requires upkeep.

Takeaway #6: Why You Must Build a Business

A profession and a business are two different things when discussing personal finances. Your profession pays your day-to-day living costs, your business grows your assets. Your profession and your business, or side hustle, can be two completely unrelated things – Let's use the example that your profession is in real estate and your business (funded by the leftover money from your profession) is trading stock. You know that your day-to-day expenses are covered, but in order to grow financially you need to grow your assets which is done through your business. Eventually, you'll be able to drop your profession and live on the income from your assets, but only if you've learned and understood the legal loopholes of the tax system in your country – Don't hand your money away when it's not necessary!

Book details

  • Print length: 195 Pages
  • Audiobook: 6 hrs and 9 mins
  • Genre: Business, Nonfiction, Finance, Self Help, Personal Finance

What are the chapters in Rich Dad Poor Dad?

Chapter 1: Lesson 1: The Rich Don’t Work for Money
Chapter 2: Lesson 2: Why Teach Financial Literacy?
Chapter 3: Lesson 3: Mind Your Own Business
Chapter 4: Lesson 4: The History of Taxes and the Power of Corporations
Chapter 5: Lesson 5: The Rich Invent Money
Chapter 6: Lesson 6: Work to Learn—Don’t Work for Money
Chapter 7: Overcoming Obstacles
Chapter 8: Getting Started
Chapter 9: Still Want More? Here Are Some To Do’s

What are some of the main summary points from the book?

Here are some key summary points from the book:

  • The Importance of Financial Education: Kiyosaki emphasizes the significance of financial education. He argues that our school system focuses on traditional academic education but neglects financial literacy, which is crucial for building wealth.
  • The Difference Between Assets and Liabilities: Kiyosaki introduces the concept of assets and liabilities. Assets are things that generate income or appreciate in value, while liabilities are things that drain your money. To become wealthy, Kiyosaki suggests acquiring more income-generating assets and reducing liabilities.
  • The Cash Flow Quadrant: The book presents the Cash Flow Quadrant, which categorizes individuals into four groups: employees (E), self-employed (S), business owners (B), and investors (I). Kiyosaki argues that shifting from the E and S quadrants to the B and I quadrants can lead to financial independence and wealth.
  • The Power of Passive Income: Kiyosaki highlights the importance of generating passive income, which is income earned without being actively involved in the day-to-day operations. He encourages readers to invest in income-producing assets, such as real estate or stocks, to create passive income streams.
  • The Wealthy Mindset: The book emphasizes developing a wealthy mindset. Kiyosaki encourages readers to challenge conventional thinking about money, take calculated risks, and overcome the fear of failure. He believes that having the right mindset is essential for achieving financial success.
  • Rethinking Traditional Education and Work: Kiyosaki questions the traditional path of getting a good education, finding a stable job, and relying on a paycheck. He suggests that individuals should focus on acquiring skills, starting their own businesses, and investing to achieve financial freedom.
  • Understanding Taxes and Debt: Kiyosaki discusses the importance of understanding taxes and debt management. He encourages readers to learn about tax laws and how to use them to their advantage. Kiyosaki also differentiates between "good" debt, which generates income or appreciates in value, and "bad" debt, which takes money out of your pocket.

Rich Dad Poor Dad Summary Notes

Here are a few summary notes from the book:

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Chapter 1 Summary - Lesson 1: The Rich Don’t Work for Money

Synopsis: Lesson 1 teaches us the importance of financial education and understanding how to make money work for us. The key takeaway is that the rich focus on acquiring assets that generate passive income, while the poor focus on acquiring liabilities that drain their finances. By understanding the difference between assets and liabilities and adopting the right mindset we can build wealth and achieve greater freedom.

Summary: This chapter is all about understanding the difference between working for money and making money work for you. Kiyosaki stresses the importance of financial education and understanding the difference between assets and liabilities.

Kiyosaki shares the story of his two fathers: his biological father, who worked hard his entire life but struggled financially, and his best friend’s father, who was a successful businessman and investor. Kiyosaki's poor dad believed that the key to success was getting a good education, finding a stable job, and working hard. On the other hand, his rich dad believed that the key to success was financial education and understanding how to make money work for you.

The main theme of this chapter is that the rich don't work for money; they make money work for them. In essence, there are two main mindsets when it comes to money: the employee mindset and the investor mindset. The employee mindset is focused on working hard, earning a paycheck, and relying on a job for financial security. The investor mindset is focused on building assets that generate income, such as rental properties.

Kiyosaki emphasizes that it's important to understand the difference between assets and liabilities. Assets are things that put money in your pocket, such as rental properties, stocks, or a business. Liabilities are things that take money out of your pocket, such as a car payment, a mortgage, or credit card debt. The rich focus on acquiring assets, while the poor focus on acquiring liabilities.

Chapter 2 Summary - Lesson 2: Why Teach Financial Literacy?

Synopsis: Lesson 2 highlights the importance of financial education and why it's essential for people to take control of their finances. Traditional education does not teach individuals how to manage their money and create wealth, and that financial education is critical for achieving financial independence. By understanding taxes, saving, investing, and building assets that generate passive income, anyone can create a better future for themselves.

Summary: The main theme of this chapter is that financial education is not taught in schools and that people need to take responsibility for their own financial education. Kiyosaki argues that traditional education teaches people to become employees, not investors or business owners. He believes that people need to learn how to create wealth and build assets if they want to achieve financial independence.

Additionally, the tax system is designed to benefit business owners and investors, not employees. By learning how to take advantage of tax deductions and other tax-saving strategies, individuals can keep more of their hard-earned money and invest it in assets that generate income.

Another important concept is the difference between saving and investing. Simply saving money in a bank account will not build wealth. Instead, individuals need to learn how to invest their money in assets that generate income, such as rental properties, stocks, or businesses.

Chapter 3 Summary - Lesson 3: Mind Your Own Business

Synopsis: Starting your own business is the key to financial freedom, and adopting an entrepreneurial mindset is essential for success. By finding a need in the marketplace and continuously learning and developing new skills, we can elevate our financial independence.

Summary: Working for someone else will most probably not make you wealthy. Instead, starting your own business is the key to elevated freedom. Kiyosaki argues that traditional employment is a form of modern-day slavery, where individuals trade their time for money and have limited control over their income and future. In contrast, starting your own business allows you to take control of your financial destiny and build wealth on your own terms.

Kiyosaki encourages readers to adopt an entrepreneurial mindset and to think outside the box when it comes to generating income. He stresses the importance of finding a need in the marketplace and creating a product or service that fulfills that need. By creating value for others, individuals can build a successful business and generate passive income that can lead to financial independence.

Another important concept is the idea of using other people's money (OPM) to fund your business. Successful entrepreneurs use OPM to leverage their investments and maximize their returns. This can include borrowing money from banks, partnering with investors, or using other creative financing methods to fund your business.

Traditional education often focuses on memorization and regurgitation of information, rather than practical skills that can be used in the real world. By continuously learning and developing new skills, individuals can stay competitive in the marketplace and adapt to changing economic conditions.

What are good quotes from Rich Dad Poor Dad?

[Favorite Quote]: "Failure is part of the process of success. People who avoid failure also avoid success.” (Meaning)

"Winners are not afraid of losing. But losers are. Failure is part of the process of success. People who avoid failure also avoid success... 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 T. Kiyosaki, Rich Dad Poor Dad Quotes

* The summary points above have been concluded from the book and other public sources. The editor of this summary review made every effort to maintain information accuracy, including any published quotes, chapters, or takeaways

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Chief Editor

Tal Gur is an author, founder, and impact-driven entrepreneur at heart. After trading his daily grind for a life of his own daring design, he spent a decade pursuing 100 major life goals around the globe. His journey and most recent book, The Art of Fully Living, has led him to found Elevate Society.

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