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Let's start with this best rich dad poor dad quote.
“The only difference between a rich person and a poor person is how they use their time.” — Robert Kiyosaki
Did you understand the significance of this quote?
Yes!!!
It’s about TIME.
not MONEY.
Rich Dad Poor Dad is a world-class book written by Mr. Robert Kiyosaki in 1997 that focuses on financial literacy and is considered one of the best personal finance book.
In Summary, this book changes your mindset from having liabilities to building assets.
How this you know from Leverage.
In the book, Kiyosaki talks about his two dads — his friend's rich father (rich dad) and his biological father (poor dad) and how both rich father poor father shaped his thoughts about money and investing.
This book is the first that changes the mindset of the individuals. Previously this knowledge was with certain individuals who learned knowledge about assets and investment through their family, network, or own side-hustle mindset.
TOP 5 SIMILAR BOOKS TO RICH DAD POOR DAD
After this, following books like Rich Dad Poor Dad come into the picture which talk about the same thing in different styles:
Think and Grow Rich by Napolean Hill
The 4-Hour Workweek by Timothy Ferris
The Richest Man in Babylon by George Clason
The Psychology of Money by Morgan Housel
Money Master by Tony Robbins
The above books are similar to rich dad poor dad and are the most powerful and influential books on the planet which teach how to become wealthy.
Top 20 Lessons/ Main Points from Rich Dad Poor Dad
Now let's read the summary or top 20 lessons from the Rich Dad Poor Dad book, which I believe everyone in the new creator economy should know. In few lessons I added rich dad poor dad quotes as well.
1. Don’t work for money
Rich people don’t work for pay.
Your mind will learn to think like an employee if you work hard or effort for salary.
You will perceive things differently if you begin to think differently, like a rich man.
Rich people work on their assets; every dollar is the result of their diligent workers who help them build these assets to achive financial independence. 😎
2. Don’t be controlled by emotions
Some people’s life is always ruled by the two emotions:
Greed (Bull)
Fear (Bear)
People who are afraid are trapped in a cycle of
working hard,
making money, and
hoping that eventually, their dread would go away.
Second, the majority always have a desire to become wealthy rapidly.
Sometimes, people get wealthy overnight, but they lack financial literacy.
To avoid greed or fear, always educate yourself.
It’s not how much money you make. It’s how much money you keep. — Robert Kiyosaki
3. Acquire assets
On the road to financial freedom, avoid purchasing liabilities.
Many people buy liabilities thinking they are assets.
Many people invest in luxury items first, such as
large automobiles,
bulky bicycles, or
enormous homes.
But wealthy people acquire assets, and using those assets they get a luxurious life which is called passive income. Because they value their time over money.
The wealthy purchase luxury items last, while the poor or middle class purchase them early.
4. Remember the KISS principle
Keeping It Simple Stupid is abbreviated as KISS.
When you begin your journey toward financial freedom, try not to overthink matters and stuff.
Keep things simple; they are, after all, simple.
Assets put money in your pocket, whereas liabilities take money out of your pocket.
Always invest in items that will give cash inflow to you.
5. Know the difference between assets and liabilities
Assets are anything that puts money in your pocket, like
Rental Real estate,
Stocks/Shares,
Mutual funds,
Bonds.
Liabilities are anything that pulls money out of your pocket, like
Your House in which you live,
Your Debt,
Your Car.
People think their home is their biggest asset, but it is not.
A house is an asset when it generates money only when you rent a house, and if you live in that house, it becomes a liability.
Rich people acquire assets. The poor and middle class acquire liabilities that they think are assets. — Robert Kiyosaki
6. Don’t be a financial illiterate.
A person can be highly educated, professionally successful, and financially illiterate. — Robert Kiyosaki
Financial education is essential for any individual.
Our schools and colleges did not teach us financial education. They want us perfect rich slaves who pay taxes to run the government and political elites.
Many financial problems arise as a result of a lack of financial education.
There are five main reasons why financially literate people may still not develop abundant assets that could produce a large cash flow.
These five reasons are:
Fear
Cynicism
Laziness
Bad habits
Arrogance
7. Increase your Wealth
Wealth is defined as a person’s ability to survive for a certain number of days in the future if they stop working today and without cash inflow.
Measure your wealth’s health by checking can you survive or not without working?
8. Mind your own business
If you have a job, keep your job and start a part-time side hustle and work it.
Use the extra time you spend on your iPhone, parties, or any other activity, to learn and build your business or side hustle.
Never leave your job until you build your own business.
Don’t struggle all of your life for someone else.
Start your own business and grow your business.
9. Train your mind
Your biggest asset is your mind.
Many individuals watch opportunities with their eyes, but if you train your mind, you can see opportunities with your mind.
If you train your mind well, it can create enormous wealth.
“Earn with your mind, not your time.” — Naval Ravikant
“Great opportunities are not seen with your eyes. They are seen with your mind.” — Robert Kiyosaki
10. Learn four technical skills
Your financial IQ will be raised by learning these four technical skills:
Accounting: Ability to read numbers. If you want to build an empire, this is an essential skill in which you will be able to understand the financial strengths and weaknesses of a business.
Investing: It is the science of making money through compounding.
Understanding markets: Observe how the law of supply and demand works and when to react.
Tax Laws: Knowledge of tax laws, gives advantages in how businesses can get rich faster than others. Such as deducting expenses in the business accounts against business income.
11. Learn to manage risk
Investment is not risk, not knowing the investment is risk.
If you want to reduce the risk, increase your knowledge.
This knowledge you will not get from college, it will come by reading specific books or sitting with the right people who know how to do investment.
12. Learn management
The main management skills are:
Management of cash flow
Management of system
Management of people
However,
Sales and marketing are the most essential skills.
The ability to sell and the ability to communicate with another human being:
customer,
employee,
friend, or
child,
is a basic skill of personal success.
Cash flow tells the story of how a person handles money.
13. Manage fear
“Failure inspires winners. Failure defeats losers.” — Robert Kiyosaki
Everyone is concerned about losing money.
It is a generalization.
The wealthy are also afraid of losing money, and most wealthy people lose a lot of money.
You know what happened to Elon Musk in the case of Twitter, but he took a risk.
The main difference between the rich and the poor, however, is how they deal with fear.
The fear of losing money is far more terrifying for many people than the joy of having money.
14. Find a reason.
Everyone wants to be rich, but many of us don’t want to struggle.
People often ask me why I want to be rich.
I answer that I do not want to die poor.
Choose your reason, like
you want to help others,
you want to build, or
you want to travel freely.
If you don’t have a reason, then it is difficult to stay on this path.
15. Choose friends carefully
Do not choose friends by watching their financial statements.
Choose friends from among the rich as well as the poor.
Learn from both.
Both will tell you the best lessons but choose carefully.
16. Pay yourself first
If you cannot get control of yourself, then it is difficult to get rich.
If you lack management, then it is difficult to be rich.
First, pay yourself.
17. Understand the power of giving
If you want money, start giving money.
If you give, you will receive more than you give.
Always do charity in your life.
It should be your habit.
18. Read books
In this book, Robert mentions many books that you need to read.
Reading books will open your mind and you will learn many things.
Reading will give you a good direction in your life.
19. Look for new ideas
“There is gold everywhere. Most people are not trained to see it.” — Robert Kiyosaki
Let ideas come across your brain.
Read books, and articles, and listen to podcasts that provide your knowledge.
It will open up your mind and provide space for new ideas.
20. Find an expert
By expert, I mean the person who has already done what you want to do.
Make good friends who are actual doers.
Talk to financial experts like accountants, tax officers, brokers, bankers, etc if possible.
I hope you enjoy the rich dad poor dad key points summary.
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FAQ
Q1. Does the author recommend any specific books, besides "Rich Dad Poor Dad," that offer similar insights and advice on personal finance and wealth-building?
Q2. How can someone determine which of the two types of mindsets, the "rich dad" mindset or the "poor dad" mindset, they currently have, and what steps can they take to develop a more prosperity-focused mindset?
Q3. The article mentions the importance of financial education and understanding the difference between assets and liabilities. Can the author provide specific resources or action steps for readers who want to improve their financial literacy?