If there is one book that started me down the path to be successfully unemployed, it is Rich Dad, Poor Dad by Robert Kiyosaki. This book was the inspiration for me to invest in passive income so that I can quit my job and never work for somebody else again.
I'll tell you the main thing you must learn from this book and the one thing that allowed me to quit my job when I was 37 years old.
Rich Dad Poor Dad Summary Lessons
The rich don't work for money
Why teach financial literacy
Mind your own business
The history of taxes and the power of corporations
The rich invent money
Work to learn – Don't work for money
Among these lessons, Rich dad poor dad summary really shows us that we need passive income in our lives.
This is a huge shift in thinking from when we went to school. We were taught to be employees in school.
Now we need to change our thinking to be business owners and investors.
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Rich Dad Poor Dad Teaches Passive Income
If you take anything away from Rich Dad Poor Dad review is that you need to start making passive income instead of working a J.O.B. (Just Over Broke). Buying investments, starting businesses, and creating items where you work one time and get paid over and over again.
When you learn the amazing way to make money with passive income, you will not want to make money in any other way.
In reading Rich Dad Poor Dad, Robert Kiyosaki shares how he got started with passive income by investing in rental properties. So, that is exactly what I did. Because of his example, I started investing in real estate.
To give you an understanding how amazing real estate rental properties are, check out this article showing you how rental properties makes you money 6 different ways.
For the Rich Dad Poor Dad Summary Review, it is my intention to help you to understand the financial lessons that helped me on my journey to financial freedom.
It was in 2005 when I first read the book and got my inspiration to quit my job. Since then, I’ve read the book two or three times and constantly go back to it for motivation and wisdom.
Robert Kiyosaki Learning from Poor Dad and Rich Dad
Robert Kiyosaki tells the story of his life growing up in Hawaii with his biological dad who he calls his poor dad, and his best friend’s dad who he calls his “rich dad”.
The majority of the book is written from the perspective of Robert learning financial principles from his “rich dad” and seeing the mistakes and failures from his “poor dad”.
Watch the Entire Rich Dad Poor Dad Summary Book Review:
Poor Dad Lessons To Not Work A Job Summary
His “poor dad” was a schoolteacher who worked his way up all the way to the highest levels of the educational system and even ran for public office.
At the end of his working career, he basically had nothing to show for it financially. He had a pension and a small retirement but couldn’t really live off of it.
After years and years and working his dad would have to continue to work and never be able to retire.
Rich Dad Lessons to Become An Entrepreneur Summary
Robert shares of his rich dad and all that he learned from him from when he was young growing up with his best friend.
His rich dad had multiple businesses, real estate investments, many employees, and worked hard to create passive income for himself.
Robert wanted to learn how to make money so he asked his rich dad to show him how.
Through a series of jobs, lessons, and experiences Robert learned six major lessons about how the rich earn money and how the poor earn money differently.
The book is basically financial wisdom told in story form to help reinforce and solidify the principles in the reader’s memory.
Similar to “the richest man in Babylon” Robert writes in a way that helps somewhat complicated financial principles become very easy to understand.
They say that a smart man learns from his mistakes and a wise man learns from others mistakes.
Reading this book, you can learn the experiences of two different men and understand the path you should take to become financially independent.
Robert has also written many other financial education books. As we go through the Rich Dad Poor Dad Summary review of the book, we will learn the lessons his rich dad gave him.
Rich Dad Lesson 1: The Rich Don’t Work For Money
One of the very first lessons Robert learned as a kid was that rich do not work for money.
What rich dad explains is that the poor continue to work a job for many different reasons but they all boil down to fear and greed.
Fear and greed cause ignorance and poverty because the poor keep their heads down and work their job to earn a paycheck day after day without challenging the status quo.
The poor stay comfortable and play it safe in their jobs while the rich take chances and make themselves uncomfortable.
The quote ”nothing ventured, nothing gained” stands as a reminder that if you don’t try and break out of the mold, you will stay in it.
The rich challenge themselves, take risks, break (preconceived) rules (not laws), and seek financial freedom.
The rich get themselves ready for opportunities when they come not get ready after the opportunity is come and gone.
Because opportunities in life come and go, the rich make sure that they are ready to jump on them when they come.
Rich Dad Lesson 2: Importance of Financial Literacy
In this lesson, rich dad teaches Robert the difference between an asset and a liability.
We are all taught through the educational system that an asset is something that you own, and a liability is something that you owe. Rich dad challenges this understanding of what an asset and liability are.
Rich dad defines an asset as something that earns you money in the form of positive cash flow every month.
He also defines a liability as something that takes money out of your pocket every month.
Even though bankers will tell you that your home is an asset because it has value in itself, the rich see their home as a liability.
The reason why is that a home takes money out of your pocket every month.
That same home can actually become an asset if you move out of the house and rented the property to a tenant who paid you enough to cover the expenses plus the extra money in the form of rent.
If a home puts money in your pocket every month it’s an asset, but if that same home takes money out of your pocket every month it is a liability.
The rich become rich by accumulating assets and these assets put money in their pocket every month.
Robert explains that if you want to be rich, you need to play Monopoly.
We all know the monopoly was a fun game but not many of us knew that it actually had financial principles that we could all learn to help us be financially free.
Rich dad said that if you want to be rich you need to play Monopoly because it will show you how to gain assets that make you money.
In Monopoly you can earn money through hotels, houses, utility companies, railroads, etc. The way you win in Monopoly is by collecting the most assets and gaining the most money than your opponents.
In Monopoly you are buying businesses and real estate that make you money if you work or not. The Business or property is doing all the work for you so you don’t have to work.
Rich Dad Lesson 3: Mind Your Business
This lesson is about putting your mind toward your business every chance you can.
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The rich spend their spare time creating more businesses and finding more investments which will in turn make them more money.
The poor spend their time and money on liabilities and “doodads” that essentially waste their hard earned money.
If you do not spend your spare time on building your business, when we do it? Are you able to do at work?
Most people don’t have that luxury to be paid by somebody else while they are building their business. Think about what you spend your spare time on.
Is it creating a business in a make you money or watching ESPN? If you’re not building your business nobody is going to do it for you.
The key take away is to put your mind toward your business and work on it every bit of spare time you have.
Rich Dad Lesson 4: The History of Taxes and the Power of Corporations
In this lesson, Robert explains the power that corporations have and how the rich use them to their advantage.
Many people work for corporations but very few actually create corporations of their own.
There are many good reasons why someone would start a corporation, everything from tax advantages, liability protection, asset protection, and the like.
His poor dad would earn money from his job, pay taxes on that money, and then live on what’s left.
If you factor in state and federal taxes as well as sales tax and property taxes, a person could potentially be paying 50 to 60% of their income in taxes.
The poor sees taxes as an inevitability but the rich see it differently.
The rich you taxes as something that everybody must pay but they use the tax code to benefit them by learning how the tax code is written and figure out how to pay less in taxes or defer them to a later date.
A corporation pays taxes differently than an individual.
A corporation earns money, spends what it needs to in order to keep up the business and is taxed on what is left over.
If you think creatively, you are the owner of the Corporation and you decide what the Corporation needs to run or doesn’t.
If your corporation needs a brand-new truck in order to drive you from job-site a job-site, then that is your decision to make.
The government does not tell you how to spend your money only that you are taxed on the profits once all the business needs are paid for.
If a corporation does not make any profit, they do not pay any taxes because there is no profit since the Corporation is taxed on its profits.
Rich Dad Lesson 5: The Rich Invent Money
The rich create ways for them to make money.
Think of any business and remember that it took someone to create a business in order for it to now in place making money.
The taxicab had cornered the market on paid transportation and Uber came in, started this new business concept, and has invented a new way for private transportation and invented the company which is basically inventing money.
They basically invented a company that is now making them millions of dollars but that is not all the lesson to be learned here.
The other part of the lesson is that you want to be the creator of Uber rather than a driver.
The driver that works for Uber is basically an employee and gets paid only when they are working.
The rich invent money because they invent businesses that create money and wealth for them.
They also employ people who are fine with spending their time in exchange for money. The rich are business owners and investors.
Rich Dad Lesson 6: Work to Learn – Don’t Work For Money
The poor work for money while the rich work to learn.
The rich work to learn because learning will help them make more money from the value that they bring not the hours they work for an employer.
The rich work to learn things that can be applied to making money over and over again gaining them more income while working less.
He is not saying that the rich do not actually work, that’s far from the truth. The rich work very hard but they work in a different way than the poor do.
The rich work hard building businesses and other passive income generating investments so they will make them money even when the rich are not working. Rich dad would work to build passive income and poor dad would work for a paycheck.
The key is that they are both working, but each are working in a different way.
Rich dad worked for and built lasting wealth while poor dad worked for a paycheck that only pays once and when it is spent it’s gone.
A few other key points to pull from this lesson are looking at how rich dad lived his life.
He was a frugal man and was not ruled by possessions. He drove old beat up cars, lived in a normal house, and lived a normal life. You would never expect him to be a multimillionaire by the way he lived.
He saw himself as an employer helping others to have a job in order to provide for their families.
What it comes down to is that being rich is not connected to having material things but rather being financially independent and not depend on a job for money.
Rich Dad Poor Dad Summary Review Conclusion
While this book is not without its faults, very few books are, it does a great job helping the reader to take financial principles that can be hard to understand and makes them very understandable.
You are able to learn how the rich become rich and stay rich.
Robert demystifies the way the rich make money and stay rich he puts it in very simple to understand languages and helps the reader to understand that they can do it too.
After reading Rich Dad Poor Dad I made the decision to focus all my efforts on creating passive income so I can quit my job in 10 years. I was 27 years old when I made that decision and I was 37 when I quit my job.
Taking the principles and applying it to my life, I have created enough passive income from my rental properties to quit my job and I continually look for new ways to earn passive income.
If you would like to purchase this book, please click here to use my amazon affiliate link to help me feed my four kiddos. 🙂
The greatest thing about America is that we all play by the same laws.
Some people may say that the rich have different laws than we do, but they are wrong the rich just understand how to use the laws to their favor rather than their disservice.
If you apply these principles to your life, you too can create lasting wealth for you and your family and quit your job with passive income.
I hope you got a lot of financial wisdom from this summary and review of the book Rich Dad Poor Dad. What do you think about this book? Leave me a comment below and let me know your thoughts.
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