This principle has more or less held true throughout history. You don't need to be a genius, talented, or have wealthy parents to do so. All you need is information and a great business idea. Robert Kiyosaki is an author and entrepreneur.
In Rich Dad's Guide to investing, he shares principles to elevate both your financial status and your mentality to the level of the financial elite. Kiyosaki first focuses on mentality and mindset, as he outlines the differences between how the rich think compared to everyone else.
Then, he outlines a structure for taking your finances to the level of the super-rich, through becoming an expert at creating businesses. My poor dad advised me, 'Go to school, get good grades, and then find a safe secure job with benefits.
The rich get richer. The poor get poorer. Robert Kiyosaki reveals the secrets of how the wealthiest Americans become even wealthier, and how ALL Americans can learn how to benefit from some simple investing secrets -- merely by knowing where and how to invest their money. We've all heard that plaint many times before. But finally, that long standing monetary tradition has been shattered, as Kiyosaki explains how even the smallest investor can start benefitting from the investing patterns of the richest folks.
Robert Kiyosaki knows all this first hand. There was a time in the s when he and his wife, Kim, were so cash poor that they were forced to sleep in their car. Today, however, the Kiyosakis are multi-millionaires, and are considered highly sophisticated investors. Based upon the four tenets of Rich Dad, Poor Dad are you an employee, self-employed, business owner, or an investor?
Along the way, Kiyosaki explains how he's invested his monies as his own wealth has grown over the years. What Should I Invest In? In , I returned home from my tour of Vietnam. I felt fortunate to have been assigned to a base in Hawaii near home rather than to a base on the East Coast. After settling in at the Marine Corps Air Station, I called my friend Mike and we set up a time to have lunch together with his dad, the man I call my rich dad.
Mike was anxious to show me his new baby and his new home so we agreed to have lunch at his house the following Saturday. Mike was beaming from ear to ear as he held his seven-month-old son. Write your own review! Fortune In Your Cookies. About this book. Combines the sensuality found in food with the stoic subject of money, creating a uniquely enchanting and informative personal finance book that can be described as Chocolat meets Wall Street.
The 9 Steps to Financial Freedom. More by this author. The first personal finance book that gives us not only the knowledge of how to handle money, but also the power to break through the barriers that hold us back. A genre-bending debut collection of stories full of desire, wisdom, and magic blooming amidst decay.
For readers of Ottessa Moshfegh this fearless debut chronicles one woman's escape into a world of obsessive imagination. In celebration of the movie release on July 15, we have three signed copies to give away. Your guide to exceptional books.
Read in: 4 minutes Favorite quote from the author:. Table of Contents. Rich Dad Poor Dad is a modern classic of personal finance and our favorite finance book of all time. His own father and the father of his best friend. While he speaks affectionately of both, they were very different when it came to dealing with finances. The summary on Blinkist starts with the idea that many of us are too afraid of being branded as a weirdo, in order to exit the rat race. We let the two main emotions everyone has around money dominate our decisions: fear and greed.
For example, when you get a raise at your job, a wise choice would be to invest the extra money. Put it into something that builds wealth like stocks or bonds, which has risk, but a lot of potential. However, most likely your fear of losing the money altogether will keep you from doing so. But when your greed takes over, you might then spend the extra money on an improved lifestyle.
You might buy a fancy new car, and the payments eat up the money, for instance. This already gives you a glimpse of how important it is to educate yourself financially. Since we receive no financial education in school or college, sadly, this is entirely up to you.
Just take a look at local politicians. Is their city in debt? If you want to save this summary for later, download the free PDF and read it whenever you want. Download PDF. The only way for you to counteract this is to start now. Take a job in a field you have no clue about, such as sales, customer service or communications, to develop new skills — you never know what they might be good for.
The first step toward building wealth lies in the mindset of managing risks instead of avoiding them. Another idea is to pay yourself first each month. Take the portion of your salary you want to spend on stocks or your financial education, invest it, and pay your bills afterward.
Use your money to acquire assets instead of liabilities. Assets are stocks, bonds, real estate that you rent out, royalties for example from music and anything that generates money and increases in value over time. Liabilities can be cars with monthly payments, a house with a mortgage, and of course debt. Anything that takes money out of your pocket each month is a liability.
In this case, your job is what pays the bills and your business is what makes you wealthy. And before long, their liabilities column is filled up with a mortgage and credit-card debt. Thus, trapping them in the rat race. The secret to knowing how to make money is simply about creating assets instead of liabilities. As teenagers, Mike and Robert would work with their rich dad. They studied how he held meetings with his bankers, attorneys, accountants, investors, so forth.
Even though his rich dad had left school at 13, he was now directing some very educated people. As a teenager, Robert realized he had more financial literacy than his poor dad as he was able to keep books and spent a lot of time listening to bankers, tax accountants, real estate brokers, and others like them. Sometimes people buy million-dollar houses that would sell for far less. However, they are not owners of the company they work for. They still need their own business.
In one instance, Robert Kiyosaki tried to get a loan. The loan committee saw that he owned a lot of real estate properties. Even though, at the time, he did own many assets such as Armani suits, art, golf clubs, and of course, property. Here are a few more assets that Robert recommends that you or your children acquire:.
You can keep your day job, but you should also start buying assets like those listed above. People who buy luxuries first are often in much debt. The aim is to build income-generating assets that can buy luxuries. The people who pay taxes are the educated, middle class.
While poor dad knew the history of education, rich dad knew the history of taxes. Taxes originated in England and America temporarily to pay for wars. It started in for Americans. An interesting tidbit about taxes is that it was initially only for the rich to pay. That was how it got voted into law in the first place. Poor dad: paid to spend money and hire people; government gains respect the bigger it gets. Rich dad: gains respect of investor by spending and hiring less. Thus, the government is dependent on the middle class for their tax revenue.
The rich put their money into a corporation. Their asset puts income into their corporation, and then corporate income can be used as income for their personal income statement. And the expenses from their personal income statement can go into the expenses for the corporation. Even though the masses continuously try to find ways to tax the rich, the rich consistently outsmart them. Yet, entrepreneurs are rewarded for financial efficiency.
The mindsets between the two are polar opposite. The rich look for legal loopholes to avoid paying taxes. In real estate, Robert Kiyosaki uses one of these legal loopholes as well. Thus, by consistently trading up, he delays getting taxed until the time comes to liquidate. This strategy also allows him to continue building his asset column. Knowing the law can help save you money while also making sure you follow it.
When Robert was in his mid-twenties working for Xerox, he realized how disappointing it was to look at his paycheck. His bosses would talk to him about promotions and pay raises. However, that only made him see his deductions rise too. He could see himself becoming his poor dad. This newfound motivation made him work harder at selling Xerox machines at work.
He knew he was building something bigger than himself. After three years of hard work, his real estate business was making more than he was at Xerox. His company bought him his first Porsche. When companies downsize, employees often blame the owners for being unfair. He had just bought a house and was afraid of losing it. This period is a great era to be building assets. It is possible to have the money yet still struggle to move ahead financially.
Some people have a great opportunity present itself only to fail to have enough money to take advantage of it. If it is trained well, it can create enormous wealth. Today, savers are considered losers. The reason for this is because interest rates have never been lower. Plus, banks now charge you for holding your money.
During the stock market crash, Robert Kiyosaki was short of cash as he had his money in the stock market and apartment houses. However, he knew this was the time to buy. He and his wife had about a million dollars to invest in some amazing deals. It sold within minutes. Thus, giving his friend his money back without using any of his own money.
The whole process took him five hours. At the time Rich Dad Poor Dad was published, there had been three stock market crashes in 30 years. All of these stock market crashes were investment opportunities. The first year he rented it out to a local professor.
Since he had used the money to buy a bigger property, a unit apartment, he was able to defer the payment of capital gains. In the past, Robert has bought , shares at 25 cents a share before a company goes public. That is why I found school so silly. 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.
Learning meant everything to my rich dad. During an interview with a journalist, Robert Kiyosaki learned that the journalist strived to become a best-selling author. He realized she was a great writer and that she should pursue that. She told him that she had tried, but no one was interested. He accidentally offended her when he told her to take a sales course so she could promote herself. She became defensive. Why would I go to school to learn to be a salesperson? I am a professional. I went to school to be trained in a profession, so I would not have to be a salesperson.
I hate salespeople. All they want is money. Robert Kiyosaki gently pointed out that he was the best-selling author, not the best-writing author. This statement only infuriated her more, and the interview ended. The world has many successful and talented people: doctors, lawyers, dentists. And still, they struggle financially. If that journalist had instead picked up a job at an ad agency to learn how to sell, she could go on to create great wealth with her writing. Those who earn promotions tend to be specialists.
He was expected to attend meetings with lawyers, bankers, accountants. It was essential to the rich dad for Robert to know every aspect of creating an empire. When Robert Kiyosaki had quit his high-paying job, his poor dad had a heart to heart talk with him, failing to understand his mindset for quitting. Rich dad: knew Robert went there to study international trade.
Robert Kiyosaki recommends taking on jobs where you can learn new skills instead of jobs that pay the most. The biggest fear for aging Americans is running out of money before they die. But remember, you go to the gym not because you want to but because you want to be healthy and live a long life.
He used the money to run ads in an expensive magazine that targeted the rich. However, not a single person reached out. He lost his entire savings. The artist is now trying to sue the magazine for misrepresentation. Your ability to sell— to communicate and position your strengths— directly impacts your success. One part of me is a hard-core capitalist who loves the game of making money. The other part is a socially responsible teacher who is deeply concerned with this ever-widening gap between the haves and the have-nots.
I personally hold the archaic education system primarily responsible for this growing gap. Not even the rich, like losing money. No one does really. Some people are terrified of losing money. Both are phobias. The younger you are, the easier it is to become rich. Approach risk like a Texan. Texans both win big and lose big.
They feel a sense of pride when they win, but they still brag even if they lose. They lack a fear of loss. Their loss inspires them. Before you win, you lose. Like all those times you fell off a bicycle before you learned how to ride it. Before people became rich, they lost money. Most people are more afraid of the pain of losing money than the happiness of becoming rich. Losers are defeated by loss. Winners are inspired by loss.
You can still hate losing without being afraid of it. He bought it. But after talking to a neighbor, he backed out, thinking he got a bad deal. Doubt can be a deal killer. When it comes to financial education, you need to know the difference between good debt and bad debt.
Kiyosaki, and his financial mentor, whose identity Kiyosaki has kept confidential. Blind faith in academia and a drought of real financial education, Kyosaki expresses, are what engineer the financially self-destructive mindset that led his father to a life of financial struggles and unresolved debts. Ultimately, Rich Dad, Poor Dad encourages readers to critically reexamine their fundamental interpretation of wealth.
Kiyosaki describes the difference between poor mindsets and rich mindsets as a simple divide between outward-based and inward-based focus. Rather than fixating on the assets that signify wealth, Kiyosaki presents the true form of wealth as a base state of mind. Kiyosaki begins by declaring that the poor and wealthy classes have a fundamentally different comprehension of work.
The rich have money work for them. The notion that poor and middle class people interpret money as something exclusively earned through extensive human effort is what Kiyosaki identifies as the basis for their conventional, linear framework of life — that framework being a hard-earned traditional education which, hopefully, leads to a secure job that provides a consistent salary in exchange for their continued effort.
Kiyosaki suggests that the powerful influence of this uncontested conventional framework results in most people never considering any kind of life apart from it. While the idea of the conventional path through life that Kiyosaki states the poor and middle subscribe to appears comfortable in concept, he goes on to state the the reality is generally far from satisfying. The end result of this constant oscillation between fear and compulsive spending is a massive hole of debt that grows increasingly difficult to escape from.
That concludes the first lesson of this Rich Dad Poor Dad summary. In this chapter of this Rich Dad Poor Dad summary, Kiyosaki addresses the lack of comprehensive financial education in traditional education systems. Even in classes designed for financial literacy, he observes, the material is usually limited to nothing more than one or two stock market term definitions. What is missing from the curriculum, Kiyosaki asserts, are the tools that students will need to apply financial knowledge to succeed, prosper, and protect themselves in the real world.
Being conditioned to spend everything on liabilities and nothing on assets virtually ensures that many in the poor and middle class never have a chance at escalating. To represent the asset versus liability problem more clearly, Kiyosaki states that the majority of people consider a house to be something that grows in value after they purchase it. In addition to confusing liabilities for assets, Kiyosaki also points to widespread confusion of wealth for net worth.
Net worth, unlike wealth, is not a figure that represents what a person has to feed themselves. Only by correcting the mistaken comprehensions of wealth, net worth, liabilities and assets can a person stand a chance at escaping the cycle of poor-mindedness. The next keystone of poverty that Kiyosaki highlights is the poor and middle class devoting most of their time and effort to serving one of three entities: their company of employment that pays them, the government taxing them, and the bank that disburses their loans.
The formula that Kiyosaki suggests is to buy assets first and liabilities later. Instead of purchasing anything on impulse, Kiyosaki asserts the value of instead buying an asset that can eventually cover the cost of the liability on its own. The fourth lesson begins by examining the advent of income taxation, along with a look at moments throughout history in which the rich were targeted for their means.
In the current day, Kiyosaki states, wealthy people have developed a greater level of finesse in legally circumventing taxes while the middle class takes the brunt of the blow. With , one may legally choose not to pay taxes on real estate sales if the proceeds go towards funding another real estate purchase.
The corporation is another favorite tax-beating tool. Corporations, unlike individuals, are taxed after expenses instead of before them. One of the most important lessons of the Rich Dad Poor Dad summary. Kiyosaki beings the fifth lesson by referencing a point in history when land itself signified wealth, approximately three centuries ago.
The conventional framework of working, saving, and borrowing prevents them from seeing the manufactured nature of both probability and capital; this is in direct contrast to the rich, whose livelihood is oftentimes owed to being conscious of hidden opportunities that most would overlook. Kiyosaki highlights three essential skills to develop in order to follow the investment creation process of the rich:. While the steps to achieving investment mastery do necessitate some risk, Kiyosaki states that these risks can be managed by ensuring that enough time is dedicated to understanding both the investment itself and being fully informed about the nature of the market.
This finishes up the 5th lesson of my Rich Dad Poor Dad summary. Kiyosaki urges young readers to pursue fields of work that mentally challenge and enrich them, rather than making the mistake of qualifying jobs based entirely on the salary. Is their city in debt? If you want to save this summary for later, download the free PDF and read it whenever you want.
Download PDF. The only way for you to counteract this is to start now. Take a job in a field you have no clue about, such as sales, customer service or communications, to develop new skills — you never know what they might be good for. The first step toward building wealth lies in the mindset of managing risks instead of avoiding them.
Another idea is to pay yourself first each month. Take the portion of your salary you want to spend on stocks or your financial education, invest it, and pay your bills afterward. Use your money to acquire assets instead of liabilities. Assets are stocks, bonds, real estate that you rent out, royalties for example from music and anything that generates money and increases in value over time.
Liabilities can be cars with monthly payments, a house with a mortgage, and of course debt. Anything that takes money out of your pocket each month is a liability. In this case, your job is what pays the bills and your business is what makes you wealthy. Build your business on the side and use it to invest in assets until your assets eventually become the main source of your income. The most important thing is that you start today. You are your own biggest asset, so the first thing you should put some money into is yourself.
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