Book Review – Rich Dad, Poor Dad

This is a good summary of the book. It isn’t mine, but its pretty darn good, so I thought I’d share. If this is your summary, let me know so I can credit you.

Rich Dad, Poor Dad: What the Rich Teach Their Kids About Money–That the Poor and Middle Class Do Not!
By Robert T. Kiyosaki, Sharon L. Lechter

1. The poor and the middle class work for money. The rich have money work for them.

2. Rich people acquire assets. The poor and the middle class acquire liabilities, but they think they are assets. An asset is something that puts money in your pocket, a liability is something that takes money out of your pocket. The rich buy assets and the poor only have expenses.

3. Poor people buy liabilities to look rich. Rich people buy assets to get richer.

4. The rich get richer because they continue to do things that make them richer. The poor get poorer because they continue to do things that make them poorer.

5. Rich people learn how to manage risk. Poor people are afraid of risk.

6. An intelligent person surrounds himself with people who are more intelligent than he is.

7. Wealth is accurately measured by a person’s ability to survive so many number of days forward without working. Or stated another way: If you stopped working today, how long could you survive? Wealth is determined by Net Worth, NOT by income. You can have a huge income, but still be poor.

8. You can never be too rich.

9. Rich people buy luxuries last, while the poor and middle class buy them first. Assets buy luxuries.

10. Once a dollar goes into your asset column, never let it out. It becomes your employee. The best thing about money is that it works 24 hours a day.

11. A house is not an asset – it is a liability. It produces no income, only expenses. (Mortgage, Interest, Taxes, Insurance, Maintenance, Utilities, Furnishings). Don’t be “House Rich and Cash Poor”.

12. Building wealth is like planting a tree. You water it for years and then its roots grow deep enough that it takes care of itself. Then it provides you a nice shade to rest under and it takes care of you.

13. A true luxury is a reward for investing in and developing a real asset. Buy yourself nice luxuries but make sure you have earned them and can pay for them first.

14. Rich people invent money.

15. Great opportunities are not seen with your eyes but with your mind.

16. Many people are one skill away from great wealth.

17. Rich people talk about money and learn from other rich people. The poor do not.

18. Don’t let life or people push you around. Don’t quit. Fight!

19. Don’t blindy follow the “conventional wisdom”. Have the courage to “go against the flow”.

20. It’s not what you make that counts, but what you save and invest.

21. Don’t listen to poor or frightened people.

22. Master a formula and learn a new one.

23. Rich people take advantage of economic downturns. Rich people take advantage of opportunities.

24. Rich people don’t make excuses for their financial success or failure.

25. Mind your own business. Think of your household as your own business. Profit vs. Loss and Assets vs. Liabilities. It’s “You, Inc.”.

26. Advice for those of you in debt: If you find that you have dug yourself into a hole, STOP DIGGING!

27. He who has the gold makes the rules. The rich make the rules.

28. Money comes and goes, but if you have the education about how money works, you gain power over it and can begin building wealth. The reason positive thinking alone does not work is because most people went to school but never learned how money works, so they spend their lives working for money instead of having money work for them.

29. Don’t turn yourself into a slave to money and liabilities. Choose power and freedom.

30. You always want to make sure you’ll be cash-flow positive in any prospective real estate investment. Your rents collected should always, at minimum, cover your mortgage and expenses even while you’re building equity.

I also strongly recommend Rich Dad’s Retire Young, Retire Rich by Robert Kyosaki.

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