Key Takeaways from “Rich Dad Poor Dad” by Robert T. Kiyosaki

Overview

Hello buddies! In this article, I will be sharing the key takeaways from a very handy book on personal finance, “Rich Dad Poor Dad”. With more than 40 million copies sold, it is a must-read for anyone who wants to gain knowledge of financial literacy. You can find many essential tips from the author, Robert Kiyosaki, a millionaire. He is mostly into the real estate business.

For me, I found that title unique and interesting. I was curious who exactly were Rich dad and Poor dad. But the book lived up to my expectations. It provides insights into how rich people think different from ordinary people, what is an asset and liability, why rich do not work for money, etc.

In the book, Robert suggests us to take risks and make mistakes. We get to learn only by making mistakes. It was before reading this book; without any doubt, I thought that house is an asset. 

Robert makes everything very easy; it feels like he is talking to us directly. It took me less than a week to complete the book. He shares his experiences on how he learned from his friend’s dad who he calls “Rich Dad”.  

Here are the key takeaways from Rich Dad Poor Dad:

1. Most poor and middle-class people live through their income from their profession to survive. They work hard for money. Whereas, rich people make money from their assets and investments. The rich don’t work for money. They have money work for them.
2. You must be able to generate sufficient cash flow from your assets so that you can buy whatever you want. Make sure that assets pay for the expenses and not your regular income.
3. You should invest back the income generated by your assets to acquire more assets. The aim should be to make more tangible assets, not more money. Money depreciates, but high-quality assets always increase in value.
4. It’s not how much money you make; it’s how much money you keep. Be financially literate; reduce unnecessary expenses.
5. You must know the difference between an asset and a liability. An asset puts money in your pocket; a liability takes money out of your pocket.
6. Start minding your own business. Keep your daytime job, but start buying real assets, not liabilities. There is no need to leave your job, but you can start by buying assets like stocks and bonds instead of liabilities like wasting your money on binge drinking or movies.
7. Learn how to read financial statements like income statements and balance sheets.
8. Protect your assets and reduce tax expenses. Learn about taxation laws and use them to your advantage.
9. Learn to invest before buying any investments. You should be able to make decisions for yourself.
10. Do not be afraid to make mistakes. Be bold enough to admit to learn from your failures.
11. Surround yourself with people smarter than you. Use their expertise to construct businesses.
12. Replace the thoughts of “I can’t afford it.” to “How can I afford it?” The first thought shuts down your brain whereas the second opens up possibilities, excitement, and dream.
13. Take control over emotions and lifestyle by overcoming fear, cynicism, laziness, bad habits, and arrogance.
14. Develop the skill of listening rather than talking. There is no point in arguing, instead, sit and listen.
15. Pay yourself first. Start by learning new skills like investing, marketing, communication, writing, speaking, accounting, etc.

These are my key takeaways from the book, “Rich Dad Poor Dad”. I hope you also learned something important. I recommend everyone interested in improving their financial literacy to read this masterpiece.

Note:

I provide the information and my views on the website only to educate new investors, stock market enthusiasts, and the common public on equity or stock market investments. Please consult your financial adviser before making any investments in the stock market. In case of any queries, you can contact me via email ID: shivakumar.lachapeta@valueinvesting.online.