Rich Dad Poor Dad - Lessons to achieve Financial Freedom
Rich Dad Poor Dad - Lessons to achieve Financial Freedom
Financial Freedom is all that everyone want to achieve and Rich Dad Poor Dad book will guide them in their Financial Journey.Robert Kiyosaki is the author of Rich Dad Poor Dad, a personal finance and self-help book. It compares and contrasts the life lessons and financial philosophies that the author's "rich dad" (her best friend's father) and "poor dad" (her biological father) taught her. The book emphasizes the value of entrepreneurship, the importance of financial literacy, and the difference between assets and liabilities. "Poor Dad" advocates traditional education and job security, while Kiyosaki's "Rich Dad" encourages the purchase of passive income-producing assets.
Rich Dad Poor Dad encourages readers to embrace new financial perspectives, take responsibility for their financial future, and work toward financial independence. This helped promote financial literacy and encouraged people to seek other avenues for financial success. Throughout the book, the author considers how wise use of money can help a person become rich.
About the Book
Author-Robert Kiyosaki and Sharon L. Lechter
Country-United States
Language-English
Series-Rich Dad Series
Genre- Personal finance
Publication date- April 1, 2000
Rating- 9/10
Table of Contents:-
Gist
Introduction
Chapter Wise Summary
Chapter wise Lesson
Review
Epilogue
This Books is For
Kyosaki's Advise
Gist
Rich Dad Poor Dad book depicts the journey of Robert Kyosaki towards achieving financial Freedom. It snippets Robert Kyosaki's childhood as he starts learning about money from the age of nine. In this book, Rich Dad refers to Kyosaki's friend's father who was an entrepreneur who left school at an early age and ended up as one of the richest people in Hawaii. Whereas, Poor Dad refers to Kyosaki's own father who was a professor earning a lot but was struggling financially. Kyosaki used to hear both father's verse however, rich dad's advice is what helped Kyosaki to gain financial knowledge and acquire wealth.
The book describes many important concepts and tools to achieve financial freedom such as cash flow, balance sheet, income statement and many more. The author wishes to teach each and every one about the basics of finances from childhood. This is the reason the author wrote this book.
INTRODUCTION
The books aims to teach valuable lessons about money management, investment and financial independence through practical advice. It encourages readers to think differently about wealth and offers insight on building assets, creating passive income, and achieving financial freedom. The book emphasizes the importance of financial literacy over the standard, outdated education received at school.
CHAPTER 1: The Rich Don't work for Money
In this chapter, Kiyosaki contrasts the financial philosophies and lifestyles of his "Rich Dad" and his "Poor Dad," who are actually the fathers of his two close friends."Poor Dad" represents conventional wisdom and values a stable job, a steady income, and formal education as the path to financial security. He emphasizes the importance of job security and a college degree.In contrast, "Rich Dad" is portrayed as an entrepreneurial thinker who values financial education, investing, and building assets as the keys to financial success. He encourages Kiyosaki to think differently about money and to develop financial intelligence.
Lesson:
Fundamental difference in mindset and financial education between the author's rich dad and poor dad. Here are some lessons from chapter 1
The importance of financial education
Assets Vs Liabilities
The Rat Race
Entrepreneurship and investment
Two minds are better than one: cooperative and supportive.
CHAPTER 2: Why Teach Financial Literacy
Robert and Mike asked Mike's father to teach them how to be wealthy and successful. Mike's father make both of them to work for him and get paid and spend the money wisely. Lesson 2 says, rich buy assets, the poor only have expenses and the middle class buy liabilities they think are assets.
Lesson:
Make balance sheets.
Know the difference between assets and liabilities.
Study how rich people make money and invest them
Definite mindset
Make income statement
CHAPTER 3: Mind Your Own Business
Robert says The rich focus on their asset columns while everyone else focuses on their income statement.Financial struggle is often the result of people working all their lives for someone else. Start minding your own business, keep your daytime job, but start buying real assets not liabilities. A true luxury is a reward for investing in and developing a real asset
Lessons:
Reduce expenses
Reduce liabilities
Build a base of solid assets
Mind your own business
CHAPTER 4: History of Taxes
TAXES AND THE POWER OF CORPORATION- The biggest secret of the rich. It says if you work for money, you give power to your employer. If money works for you, you keep the power and control it. The reality is that the rich are not taxed. It's the middle class who pays for the poor, especially the educated upper-income middle class. A person who understands the tax advantages and protections provided by a corporation can get rich faster than someone who is an employee or a small-business sole proprietor. Employees earn and get taxed and they try to live what is left. A corporation earns, spends everything it can and is taxed on anything that is left.
Lessons:
Pay yourself first
CHAPTER 5 : Rich Invent Money
It says " often in the real world, it's not the smart who get ahead, but the bold ". The single most powerful asset we all have is our mind, if it is trained well, it can create enormous wealth. Rich increases their asset column by doing long term investment. The problem with "secure" investments is that they are often sanitized, that is, made so safe that the gains are less. Great opportunity are not seen with your eyes, they are seen with your mind. Rich people are often creative and take calculated risks.
Lessons:
Invest in asset column
Track your investment
Be creative
Know the risk reward ratio
Do long term investment
CHAPTER 6 : Don't Work for Money
Life is much like going to the gym and the most painful part is deciding to go. Once you get past that, it's easy. Learn to develop your skills, master your skill, use your skill to earn money.
Lessons:
Learn to develop new skills
Invest on yourself
Acquire knowledge
Gather information
CHAPTER 7: Overcome Obstacles
The primary difference between a rich person and a poor person is how they manage fear. The fear of losing money keeps a person at a poor level. One should know that failure is the only pillar toward success. Most of the people surrender themself and say " I can't afford it ". This brings them sadness and often depression. " How can I or we afford it " opens up possibilities, excitement and dreams.
Lessons:
Robert says there are five obstacles which obstruct someone in the journey to financial freedom and overcoming them would be greater lessons for him.
Overcoming Fear of losing money
Building your asset column does not take hard math, but it does take courage and the right attitude toward failure.
Overcoming Cynicism - we all get a little chicken when fear and doubt cloud our thoughts.
Overcoming Laziness - One of the most common forms of laziness is staying busy. Rather than saying, "I can't afford it, " change your mindset to, " how can I afford it? " that opens the brain and forces you to think of solution.
Overcoming bad habits - Good habit says "pay yourself first".
Overcoming arrogance - Many people use arrogance to hide their own ignorance. Ignorance is not a bad thing, if you react to your own ignorance by educating youself by finding an expert in the field.
Robert says there is gold everywhere. Most people are not trained to see it. Financially, with every dollars we get in our hand, we hold the power to choose our future, to be rich, poor, or middle class.
Lessons:
Find a reason greater than reality
Make daily choices: Power of choosing
Choose friends carefully: power of association
Master a formula and then learn a new one
Pay yourself first: power of discipline
Pay your brokers well
Be a giver
Use your assets to buy luxuries
Choose heroes
Teach youself
CHAPTER 9 : STILL WANT MORE LESSONS
Stop doing what you're doing
Look for new ideas
Find someone who has done what you want to do
Take classes, read, take seminars
Make lots of offer
Shop for bargains in all market
Look in the right place
Think big
Learn from history
Action always beat inaction
EPILOGUE :
It takes only a few dollars to start and grow it into something big. With each dollar that comes to your hand defines your destiny. You are the only person to decide whether to use it to become rich, poor or be in the middle class. Earn money as much as you can, pay yourself first, spend wisely, make long term investment and become financially independent.
THE BOOK IS FOR
Parents those who want to teach their children how to become responsible and smart with money.
Young individuals who wants financial guidance
Investors
REVIEW (Personal)
I was in great financial trouble in my life at 30. I was fully bankrupt. I had no idea about money management and day by day I became poor. Then I heard about this book. I read this book in between the lines and I realized my mistake. The mistake of not understanding money. The mistake to differentiate between assets and liabilities. This book enlightened my financial thoughts. Now I am on a good track of managing all my money properly. Now I am earning, spending wisely and investing. This book is really means a lot for those who really wants to overcome their financial dilemma and achieve financial independence.
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