As the title of the book ‘Rich Dad Poor Dad’ suggests, it emphasizes having adequate financial education for contended, balanced and well-informed balanced life. The book gained huge appreciation from readers as well as critics and become one of the most successful books in the history of economics and business. In this blog, we have tried to give a quick summary and lessons from the Rich Dad Poor Dad book to help you make wise and intellectual decisions in the future.
About the book
The book Rich Dad Poor Dad mentions a story that includes a rich dad and a poor dad. Both come from different socio-economic backgrounds and have different perspectives regarding money and investment opportunities. The poor dad is the biological father of the author who raised him as a child by providing appropriate schooling and morals for life. However, the rich dad is the father of the author’s friend. He inspired the author to look from a different angle towards work and simplify financial decisions with adequate financial literacy. The blog explains important lessons from Rich Dad Poor Dad book to get an appropriate financial perspective ahead in life.
Lessons from Rich Dad Poor Dad:
1. Learn about Financial Literacy
According to Robert Kiyosaki, the author of the book, investment is a crucial part of financial independence and reinvestment is more important than anything else while earning money. Here, financial literacy plays an important role in a safe and secure future. It is one of the important lessons from Rich Dad Poor Dad. The author says poor and middle-class work for money but rich people make money working for themselves. Moreover, according to him, rich people are financially literate as they know how to invest money in the right plans. You should reinvest the profits you make in any business.
2. Build your mindset as your asset
The book Rich Dad Poor Dad explains the importance of mindset while earning money. According to the author, intelligent minds might not always make progress in life but brave minds can go ahead more than people around them. The genius can also surpass the fear but again the psychology of the money maker decides how much money he/she can make in the future. Rich people tend to take more financial risks so that they can earn millions rather than worrying about raise in salary. Be your own financial advisor instead of relying on someone else.
3. Be a great learner, seller, and marketer
The ability to sell is a key skill for personal success according to the author Kiyosaki. Similarly, you should work on your communication skills to become a good leader. Writing, speaking, and negotiating are crucial parts of selling and marketing a product. Management of cash flow is at the center of the management of people and other subsidiary assets in your business. So, you should learn how to make the most of your money by inventing new ways of earning money. The author believes that people give up early on their ideas and waste their potential in winning the rat race. Instead of this, they should create new employment opportunities.
4. Inspire yourself from failures and defeat of others
The author Kiyosaki says, “There is a difference between being poor and being broke. Broke is temporary. Poor is eternal.” You should learn from others’ mistakes and attempt new mistakes so that you will step ahead of your competitors. The reasons why some people stay broke are they fail to overcome laziness, Cynicism, Laziness, and Arrogance. However, perfectionism is a myth and you can train your mind to learn from every aspect of your life. Rich dad advises their sons to think of earning money from the biggest losses as well.
5. Reduce your spending as much as possible
This is the most relatable among other lessons from Rich Dad Poor Dad as it applies to every economic class in society. The author advises keeping little debt for the next generations. He asks readers to reduce liabilities and increase assets so that the debt amount will not hinder their future growth and financial decisions. You should have multiple income sources. Hence, get your own business along with your job. Rich dad believes people fail to be consistent in their passion once they start doing jobs. So, they can keep little time aside for hobbies and passion in between their job routine. Who knows that passion will someday earn money for you!
Quick Summary of Lessons from Rich Dad Poor Dad
- Rich people focus on acquiring assets while the poor and middle-class focus on increasing liabilities.
- Most people fail to understand the cash flow and keep struggling financially throughout their whole life.
- The fear of being different prevents employees from becoming rich and earning money outside their jobs. The number one expense of mediocre mindset people is paying taxes.
- It is possible for highly educated people to be professionally successful and financially literate at the same time.
- The rich people tend to buy assets and the poor only have expenses; to be successful in your life, you should never forget to mind your own business. Most people are busy minding someone else’s business and making another person rich.
- The best thing about money is that it works for you 24 hours and can also work for your upcoming generations. True luxury is investing in sustainable assets and creating rewards out of it.
- Kiyosaki asks readers to gain an appropriate financial perspective from broad areas of money, for example studying the money market, accounting, investing, asset creation, etc.
- Everyone has tremendous hidden potential within them and is blessed with unique qualities, but self-doubt about your skills can hold you back in life. You should learn to believe in yourself and never be afraid of taking risks.
- Financial intelligence teaches you to explore more options for investments. Simple math and common sense about the market can make you financially stable in life. Great opportunities cannot be seen with your eyes but with your mind.
- Staying busy is the most common form of laziness. Robert Kiyosaki explains the acronym for JOB as ‘Just over Broke’. He says the opportunity to earn money is everywhere; you should just train your mind to see it.
Robert Kiyosaki teaches readers to upshift their financial aptitude from being just mediocre to a well-informed investor. These lessons from Rich Dad Poor Dad will surely inspire you to start managing your money from basics.