You’ve probably seen the title “Rich Dad, Poor Dad” at the top of Google searches for “best personal finance books to read.” Since its release in 2002, the book by Robert T. Kiyosaki and Sharon L. Lechter has allegedly sold more than 32 million copies in 40 languages and 40 countries.
“Rich Dad, Poor Dad” is an allegory about Robert Kiyosaki and his two fathers, and how spending time with them as a child influenced his outlook on money. Kiyosaki’s biological father, a highly educated college professor, is the “poor dad.” The father of Kiyosaki’s best buddy is the “rich dad,” a successful businessman who owns numerous companies. On money, both dads give contradictory counsel.
“Poor dad” mentality
According to “poor dad,” one should work for money as a salaried employee in a steady job and one’s worth mostly depends on their family’s financial situation. He feels that reading and studying the lives of great people is one of the most crucial things you can do to ensure your financial survival (or wealth accumulation). Many individuals believe that this way of thinking can force someone to stay in a job they don’t enjoy just to make ends meet.
“Rich dad” mentality
Kiyosaki is advised to work a job in order to acquire the necessary abilities to become an entrepreneur by “Rich Dad.” Multiple income streams and learning from experience are the keys to wealth. When the “poor dad” advises climbing the ladder, the “rich dad” chuckles and counters, “Why not own the ladder?”
The book “Rich Dad, Poor Dad” offers a number of power lessons that can be helpful to anyone trying to widen their ideas on money, even though the advice it offers and from Kiyosaki himself has drawn some controversy.
Here are some significant conclusions:
1. The rich buy assets, not liabilities
Anything that puts money in your pocket, such as a bond or house, is considered an asset (that you purchase and then rent out to other people). Anything that costs you money because it depreciates over time, such as an expensive car or television set, is a liability. It’s crucial to be able to tell the two apart. “The wealthy acquire assets. Only expenses exist for the poor. The middle class purchases obligations they believe to be assets, claims Kiyosaki.
2. Financial literacy can only be learned through experience
The well-educated “poor dad” asserts, “The only way to land a decent job at a huge firm with fantastic benefits is to study hard and achieve good marks. However, according to the “rich dad,” the most crucial objective is to understand how money functions so that you may make it work for you. According to Kiyosaki, you need to be an expert in law, markets, investing, and accounting to be financially savvy. You’ll be more successful the more you diversify your skill set.
3. Learn to sell
In the book, Kiyosaki is questioned by a woman who has a master’s degree in English literature on how to become a best-selling author. He advises her to sign up for a sales training programme. She expresses shock at his response and asks, “You’re not serious, are you? There is a reason successful books list best-selling authors rather than best-writing authors, Kiyosaki explains as he picks up a book off the coffee table. If you want to be wealthy, he says, learning to sell is an essential talent. Expand your comfort zone, focus on your sales skills, and network. You won’t ever be able to run your own business if you don’t.
4. Fear and self-doubt are your greatest barriers to success
How the wealthy and the poor deal with fear is the main distinction between them. “Poor dad” plays it safe and steers clear of danger. Long-term costs may result from this viewpoint. “Rich dad” asserts that “often in the real world, it’s not the smart that go successful, but the daring.”
5. Always think in terms of opportunities
“I can’t afford that,” the “wealthy dad” prevents his children from saying. He advises them to ask, “How can I afford it?” instead. A person’s brain is turned off with the first phrase, so they are free from having to think. “Possibilities, excitement, and dreams” are unlocked by the second one. It makes the brain work harder to find solutions. According to Kiyosaki, the lack of a solid financial foundation is the “main reason the majority of the poor and middle class are economically conservative—which means, “I can’t afford to take risks,”