Rich Dad Poor Dad Review

This is one book that everyone is recommending everyone. The last time I watched someone talking about this book on YouTube, she said this book should be in the academic curriculum. While I was curious, I never got to read the book. This rich dad poor dad review will show you what you can expect to have in this book.

Finally, I decided to give it a try, and I was searching online to order the book, but before that, I thought, let’s check our home library, whether it’s already been bought by any of my family members or not. 

To my utter surprise, the book was silently sitting on the top shelf, so I just picked it up, and without wasting any time, I started reading it.

So, the title kinda says it all. Someone has two dads, one dad is rich, and the other one is poor. Now, who’s this someone? 

It’s none other than Robert T Kiyosaki. This book is basically him sharing his life-long story of how he got to know about personal finance and gained financial literacy.

Let’s take you to the beginning of the book, Robert is 9 years old, and he wants to be rich. While his biological father was very educated, with multiple degrees in his arsenal, he wasn’t rich. He was a government employee who was living paycheck to paycheck.

So when Robert approached him with the question of how to become rich, he couldn’t reply properly. He always told Robert to do well in school, get a college degree, get a job, all those sayings that you and I heard growing up. 

Now there’s nothing wrong with this advice. While this path will make you lead a safe life, it won’t make you rich. And Robert wanted to be rich. So it was a dead end talking to his biological father.

Robert’s poor father couldn’t give his son an answer, but he told him to talk to his friend Mike’s father, who was not nearly as educated as him, but he had a decent knowledge of personal finance.

Robert went to Mike’s father, whom he later referred to as Rich Dad. Rich dad was quite surprised because everyone came to him and asked for a job or money. But no one ever asked how to be rich. And having this unusual question from a 9-year-old was quite rare.

Mike’s father decided to teach both Mike and Robert. But with one condition, that they will work for him for free, and in exchange, he will teach them how to become rich. That’s how a lifelong journey started.

Robert T Kiyosaki is a multi-millionaire today, and this was only possible because he had financial literacy from an early age of his life. He listened to both rich and poor dads and chose whom to listen to. 

He grew up having different opinions about making money, and that’s the beauty of this book Rich Dad Poor Dad.

In this book, Robert discussed 7 lessons.

Rich don’t work for money: 

One of the biggest lessons of this book is not working for money. When you work somewhere, you get a paycheck at the end of the month. But ask yourself, can you really save and invest the money you’re earning? 

You’re just receiving money and buying things that you think are important. People who are rich avoid this trap. They don’t work for money; rather, they use the money to work for themselves. Then they use the profit from that and use that profit to buy necessary items. That’s how it should be.

Everyone wants a pay raise, but no one wants to start a business and make more money. Just remember the paycheck you’re getting won’t make you rich. You have to invest and make more money and repeat the process. Only this will allow you to gain financial literacy.

Robert was young and was working under his Rich Dad, but at the end of this lesson, you will see how he started a comic book business and made money with that.

I think that should be the lesson people can take from this.

Why financial literacy is important: 

They don’t teach you this in school, but how many times have you seen someone winning a lottery and a year later they went bankrupt and losing all the money? 

Also, people inherit insane wealth from their families, but most of them can’t handle the money, and within a very short amount of time, they lose everything.

To avoid all these, you need to be financially educated. You have to know what is an asset and what is a liability. This chapter is mainly focused on identifying the differences between assets and liability. 

If you are earning money from something, that is an asset. If you’re losing money from something that is a liability.

One of the famous lines that I liked in this book is, Rich has asset, poor has expenses and middle-class family has liabilities.

How does that work? Well, rich people invest in land or real estate. Over time the price of real estate will increase as there’s a finite amount of real estate in our world. So, this will only grow in value. 

The poor have only expenses, and they live paycheck to paycheck. They can’t save anything, let alone invest. The middle class buys stuff that decreases in value over time. Like cars, the moment you step inside a car, it loses 25% of its value. The middle class thinks they have assets but in reality what they really have is liability.

Mind your own Business: 

This chapter will tell you how you can build an empire. How can you use the money to work for you? Every dollar that you have can work for you if you invest it in the right manner. 

Now you must be wondering what I can invest in. Well, there’ll be opportunities in your life that you need to see for yourself and chip in. There are stocks, bonds, intellectual property, real estate, etc, that you can use to grow your money.

Wouldn’t it be nice if your money making more money for you while you’re sleeping? Well, that’s only possible when you’re invested in the right thing.

You need to work and make more assets. If you’re smart, you’ll be able to do that easily. It’s not rocket science. Most people have this fear in mind that they will lose all the money if they invest. But this is the game; when you invest money, you make more money or lose money, and you take the lesson and move on. That’s how it should be.

Tax & History of Tax: 

This chapter will teach you about tax. Did you know that the tax system wasn’t always like this? 

In fact, there wasn’t any tax introduced for a long time at all. People didn’t have to file taxes. Only when there was a war or emergency situation at that time certain money was raised from the society. 

But as days went by government wanted this to be a permanent solution. They decided to tax the rich people first, and for obvious reason, everyone voted for it. 

People were happy that rich people were taxed because, come on, people don’t like rich people unless they provide charity.

Once rich people started giving tax, it was slowly introduced to everyone. Now as a result, we have to file tax. How not cool is that, right?

But now, the rich don’t really file taxes because they use corporations and use all the loopholes of tax system.

Rich knows to account, they know how to invest, where to invest, and they know the relation between supply and demand. And on top of everything, they play by the rule.

If rich people don’t understand something or some topic, they hire some professional who works for them to save money.

This chapter will teach you how they do that.

Isn’t this the irony that once poor and middle-class people used to enjoy rich giving taxes but now rich people can easily escape from the tax system using all loopholes?

Rich Creates Money: 

In this chapter, Robert showed some practical examples of his life and how he made money from some opportunities. 

There will be opportunities in life, and one needs to know how to react when these opportunities come. 

Maybe you want to buy a piece of property, but you don’t have any money; what will you do in that case? Maybe you have spare money in your bank account but don’t know which real estate to buy; what to do in that case? Maybe you have money in your bank account and know which real estate can be profitable, but you don’t have the mindset to buy that right now; what to do in that case? 

Each solution is provided in this section. Moreover, this section will show you that opportunities will come and go in your life, and if you miss them, someone else will grab them and reap the benefits in the long run.

Work to Learn, Don’t work for Money: 

This chapter is also very interesting as in this chapter, Robert showed how he worked in different sector different times to gain knowledge and experience. 

This knowledge later helped him to make an empire. Don’t you agree that knowledge is power? I certainly do. Robert showed us how to be better salespersons. How to know accounting, how to invest in different things. When you work for money, you limit yourself to that money. You’re basically trading your time with money. 

But when you make a product, do a business, or build assets, those will generate cash flow for you. This cash flow will provide you with profit, and these profits will help you live your life.

According to Robert, there are 3 types of income. Earned, Portfolio, and Passive Income. 

When you have a job and getting paychecks every month, that is earned income. When you have Apple stock, and you gain profit from that, that’s portfolio income. When you have an established business / real estate, you earn passive income from that. 

Most people focus on earned income. They never think of portfolio income or passive income. That’s why they can never leave the rat race and work hard all their life building someone else’s business. 

Robert tells us that there are 4 types of people, employee, self-employed, business owner, and investor. 

Most people become an employee or self-employed. But very few think of having a business or becoming an investor. It’s very important to know scope and perks of each of these 4 types of people. 

You can only do that by gaining financial literacy.

The book is a very good book, I must say. But if I had this book earlier in my life, then I would’ve been more satisfied. But better late than ever, what do you say?

Should this be in the academic curriculum? Yes, I think so. Everyone in this world should read this book and get the idea of how money works. If you know how money works, then you’ll be able to make that money work for you.

Me laughing at this point, thinking a bunch of 1 dollar bills are working on the construction site for me building me a positive cashflow system. Wouldn’t that be a sight to see?

At the end of this book, Robert talks about his game also. It’s maybe a board game. I don’t know, I haven’t got the chance to check it for myself yet. If I ever play it, I’ll write another review on that, I promise.

To close this review, I want to end this with some famous lines from this book that I personally liked a lot. That is;

Most people work for 3 people, one is actually the company they’re doing their job under, 2nd they work for the government because they have to pay taxes, and 3rd they have to work for the banks to pay for their installments and mortgages and all.

This book was an eye-opener for me. I’ll definitely read this couple of more times. If you want, you can give it a go as well.

Till next time take care.

If you like this book review, you can check out atomic habits summary as well.