Rich Dad Poor Dad
Robert T. Kiyosaki
Introduction: Rich Dad Poor Dad
one dad would say ‘the love of money is the root of all evil’ and the other said ‘the lack of money is the root of all evil’
the difference: ‘I can’t afford it’ vs ‘how can I afford it’ if you say you can’t afford it that’s mental laziness
one dad thought ‘study hard so you can find a good company to work for’ the other dad said study hard so you can find a company to buy’
learn to mange risk — people shape their lives through their thoughts
there is a difference between being poor and being broke, broke is temporary and poor is eternal
Chapter 1: Lesson 1: The Rich Don’t Work For Money
Robert and friend Mike try to make money asks Robert poor dad he told them to find a way, tried to make nickel and literally make money
that got turned down quickly, Mike dad is actually rich but does thing differently
they go to learn from him, he agrees and tells them to work at his store for .30 cents/hr
Robert gets frustrated after 3 weeks without rich dad teaching him anything cause he didn’t even see or talk to him
but does teaching mean talking or lecturing? — only in school yes
we learn best through action — experiential learning
life pushes us around, we can learn and move on welcoming it or quit or fight back
you really wanted to win buy the fear of losing was greater than the excitement of winning
rich dad got 150 employees and none ask what he knows about money, most will spend thru best years of their lives working for money not really understanding that I’d if they are working for
most people want everyone else in the world to change but themselves. It’s easier to change yourself than everyone else. Don’t blame others for your problems
the poor and the middle class work for money. The rich have money work for them
if Robert haven’t gotten angry and just accepted the 10cents then that’s it. Learning takes energy passion and a burning desire.
passion = anger and love
most people want to play it safe and feel secured, passion does not direct them, fear does
fear keep most people working at a job: fear of not paying their bills, fear of being fired, fear of not having enough money, fear of starting over
people’s lives are forever controlled by fear and greed
desire is the other emotion people work for, think money will sooth their souls that are troubled by fear
the avoidance of money is just as psychotic as being attached to money
avoid the trap that causes the 2 emotions — ignorance intensify fear and desire, when you stop searching for info and self knowledge ignorance sets in
never exploring your dreams is cruel — to live a life dictated by the size of a pay check is not really living a life
learn to use your emotions to think, not think with your emotions
a job is only a short term solution to a long term problem — the rich knows that money is an illusion
the sooner you forget about needing a pay check the easier your life will be
Robert and Mike finished the talk with mikes dad, they went back to the store and saw that the comic books are being thrown away. Decided to take them and open up a comic book library, mikes sister did the check in and out and charged 10cents for the 2hrs books stay in the room. Eventually bullies came and it got shut down but the idea was there and rich dad knew imagination was there
Chapter 2: Lesson 2: Why Teach Financial Literacy
not how much money you make but how much you keep — money will not solve your problems
not about how to make money, but how to mange money
people work harder than they need to because they learned to work hard but not how to have their money work hard for them
fear of being different prevents most people from seeking new ways to solve their problems
intelligent people hires people who are more intelligent than them
Chapter 3: Lesson 3: Mind Your Own Business
McDonalds is not in the hamburger business it’s real estate
there’s a difference in a business and a profession, you own the business — too often people become what they study!
the rich focuses on their assets, everyone else focuses on income statements
financial struggle is often the result of people working all their lives for someone else
rich people buy luxuries last, while poor and middle class tend to buy luxuries first
the poor abs middle class buy luxuries with their own seaway, blood abs children inheritance
financial struggle is often directly the results if people working all their lives for someone else
Chapter 4: Lesson 4: The History of Taxes and The Power is Corporations
the rich will never be taxed, more and more often we see governments use tax laws to provide incentives to business owners and investors
understand the history of taxes where it was a ‘tax-the-rich’ concept but it got adjusted to hit the people that voted in, middle and poor class
knowledge is power, and with money comes great power that requires right knowledge to keep it and make it multiply
highly educated dad suggested to land a good job and work way up the corporate ladder, rich dad suggested to own the ladder
who are you working for? Who are you making rich?
financial IQ: accounting (ability to read numbers and evaluate strengths and weaknesses of any business), investing (science and strategies of money making money), understanding markets (science of supply and demand and market conditions), the law (tax advantages and protections)
a corporation is simply a legal document that creates a legal entity
corporation can pay expenses before paying taxes, whereas employees get taxed first and must try to pay expenses on what is left
Chapter 5: Lesson 5: The Rich Invent Money
once we leave school, college degrees and good grades don’t really count — often it’s not the smart that get ahead, but the bold. Learn to take risks!
rather welcome change than dreading change — old ideas are the biggest liabilities
create your own luck, take whatever happens and make it better
money is not real, poor and middle class work for money. The rich make money, the more real you think it is the harder you work for it
the single most powerful assets we all have is our mind
investments come and go, market goes up and comes down, economies improve and crash. The world is always handing you opportunities of a lifetime
it is not gambling if you know what you’re doing, it is gambling if you’re just throwing money into a deal and praying
most people never win because they’re more afraid of losing
winners are not afraid of losing but losers are — failure is the process of success
people who avoid failure also avoid success
find an opportunity that everyone else missed: you see with your mind what others miss with their eyes
raise the money: it’s what you know more than what you buy
organize smart people: don’t have to be smartest person, just hire a person who is more intelligent
it is what you know that is your greatest wealth, it is what you do not know that is your greatest risk
financial intelligence is simply having more options, figuring out ways to create opportunities or altering situations to work in your favour
great opportunities are not seen with your eyes. They are seen with your mind.
Chapter 6: Lesson 6: Work to Learn - Don’t Work For Money
job security meant everything to my educated dad. Learning meant everything to my rich dad
constantly shocked at how little talented people earn
when it comes to money, the only skill most people know is to work hard — schools teach us to read and memorize — we must apply what we learn
‘you want to know a little about a lot’
the hardest part of running a company is managing people
‘workers work hard enough to not be fired, and owners pay just enough so that workers won’t quit’
seek work for what they will learn, more than what they will earn
the world is filled with talented poor people
main management skills needed for success; management of cash flow, systems, and people
the ability to communicate to another human being is the most important specialized skill
skills of sales and marketing are difficult for most people, primarily due to fear of rejection
to receive money, you had to give money
Chapter 7: Overcoming Obstacles
the primary difference between a rich person and a poor person is how they manage fear
5 main reason why financially literate people may still not develop abundant assets columns: fear, cynicism, laziness, bad habits, arrogance
it’s how you handle losing and failure — people are so afraid of losing that they lose
for most people, the reason they don’t run financially is because the pain of losing money is far greater than the joy of being rich
failures inspires winners. Failures defeats losers
winning means being unafraid to lose — difference between hating losing and being afraid to lose
school conditioned us to avoid mistakes and punish students for making them
seemingly worst of times is actually the best of times to make money — when everyone else is too afraid to act, you pull the trigger and are rewarded
only a persons doubts keep them poor
cynics criticize, and winners analyze
investing to win instead of investing not to lose
many people are too busy to take care of their wealth, and there are people that are too busy to take care of their health
the cause is the same, they are busy and they stay busy as a way to avoid something they do not want to face — laziness by staying busy
“I can’t afford it” vs “how can I afford it”
the world progresses because we all desire a better life — our lives are a reflection of our habits more than our education
many people use arrogance to hide their own ignorance
Chapter 8: Getting Started
1. Find a reason greater than reality: the power of spirit — wants and don’t wants… don’t want to work all his life, don’t want what parents aspired for of security and a house. Hated when dogs father missed his sports games. Want to be free to travel and live a lifestyle he loves,
2. Make daily choices: the power of choice — we have the power to choose to be rich, middle class or poor. Most people choose not to be rich as it’s too much of a hassle, time is the most precious asset, then learning
3. Choose friends carefully: the power of association — can’t go with the crowd when building your wealth, if you want to be rich, need information
4. Master a formula and then learn a new one: the power of learning quickly — you become what you learn. But in today’s fast changing world it’s not so much about what you know since it often is old. It’s how fast you learn
5. Pay yourself first: the power of self-discipline — if you cannot get control of yourself, do not try to get rich. This step is the most difficult to master, it’s the management skills = cash flow, people, personal time
6. Pay your brokers well: the power of good advice — their service should make you money. Ex. Tipping restaurant 15-20% even sometimes for bad service, but complain about paying a broker 3-7%.
7. Be an Indian giver: the power of getting something for nothing — people who hate risk put money in the bank, in the long run, safe savings are better than no savings. But in most instances, you don’t get anything for free with it
8. Use assets to buy luxuries: the power of focus — if a person can’t master the power of self-discipline, it is best not to try to get rich. The east road often becomes hard, and the hard road often becomes easy
9. Choose heroes: the power of myth — By habit heroes we tap into a source of raw genius
10. Teach and you shall receive: the power of giving — if you want something first you need to give, when you feel short or in need of something, give east you want first and it will come back in buckets. Money, love, friendship. Poor people are more greedy than rich people
your world is only a mirror of you
give for the joy of giving
Chapter 9: Still Want More? Here Are Some To Do’s
stop doing what you’re doing: assess what is working and what is not, insanity is doing the same thing over and over and expecting different results
Look for new ideas: look for formulas of new things
Find someone who has done what you want to do: take them out for lunch
Take classes, read, and attend seminars: it’s what you learn is valuable
Make lots of offers: Don’t matter what the offer is, just make it it’s a game
Jog, walk, or drive a certain area once a month: look for any change in the neighbourhood
Shop for bargains in all markets: profits are made in the buying, not in the selling
Look in the right places:
Look for people who want to buy first. Then look for someone who wants to sell: most look for what they can afford, so they look small and end up paying more for less
Think big: small people remain small because they think small
Learn from history
Action always beats inaction
Act now!
Final Thoughts
money is only an idea, don’t play it safe, play it smart
The 3 incomes:
1. Ordinary earned
2. Portfolio
3. Passiveto convert earned income to portfolio or passive
self-confidence — they are less afraid of losing
risk comes from not knowing what you are doing
the rich do not work for money they know how to have money work for them
all you were given are two gifts: your mind and your time