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Rich Dad Poor Dad book summary

 Introduction


Who is this book for?


This book is for those people who want to get control over their money and the people who want to get rich by building wealth 

and the people who want to know the difference between the mindset of a rich person and a poor or a middle-class person


 About the authors


Robert T. Kiyosaki is an American businessman and author. Kiyosaki is the founder of Rich Global LLC and the Rich Dad Company, a private financial education company that provides personal finance and business education to people through books and videos.


In this summary


In this book, you will learn how to get control over your financial future and how you can build a mindset which the rich people have

How you can escape the rat race.


Table of contents

  1. Lesson 1: The rich don't work for money

  2. Lesson 2: Why teach financial literacy?

  3. Lesson 3: Mind your own business

  4. Lesson 4: The history of taxes and the power of corporations

  5. Lesson 5: The rich invent money

  6. Lesson 6: Work to learn, don't work for money

  7. Lesson 7: Overcoming obstacles

  8. Lesson 8: Getting started


Book summary


Lesson 1:  The poor and the middle-class work for money.

                     The rich have money to work for them.


1} Today’s millennials are learning the hard facts of life. Robots are replacing workers by millions. Learning by trial and error is more and more important. No longer a college degree guarantee a job.


2} We go to school and college to learn a profession so we can work for money. In my opinion, it’s just as important as learning how to have money work for you. 


3} Learn to focus on what we do have control over that is ourself and if things must change first we must change. True learning takes time, energy, and a burning desire. We learn most effectively by doing things actively in real-time. So learn by doing. Learn by playing games because they are instant feedback systems. 


4} A person can be highly educated, professionally successful but financially illiterate because schools and colleges are designed to produce good employees, instead of employers.


5} So many people say, “Oh, I’m not interested in money. Yet they’ll

Work at a job eight hours a day.


6} Emotion- energy in motion- be truthful about your emotions and use your emotions in your favor, not against yourself, and when emotions go up intelligence goes down.


7} When it comes to money, most people want to play it safe and feel secure. So passion does not direct them fear does. Fear is the main reason people say “play it safe”.


8} Power of Imagination- In the information age, more and more people under 30 are getting rich by using their imagination to create apps that change the world from Facebook to Instagram and others. Those with imaginations thrive while those without it are looking for a job that soon may be replaced by robots and technology.



Lesson 2: It’s not how much money you make

                     How much money you keep  


1} Intelligence solves problems and produces money. Money without financial intelligence is money soon gone.


2} You must know the difference between an asset and a liability

    Asset- an asset puts money in your pocket.  

    Liability- a liability takes money out of your pocket.


3} Rich people acquire assets. The poor and the middle class acquire liabilities that they think are assets.


 

 

 



4} cashflow tells the story of how a person handles money.


5} As the Income of a middle-class increase he also increase his expenses that’s why they always remain middle class.


6} without a financial statement you don’t really know where you are in life’s financial game. A financial statement is your scorecard.



Lesson 3: Mind your own business


1} Start minding your own business. Keep your daytime job but start buying real assets, not liabilities.


2} Rich people focus on their asset column while everyone else focuses on their income statement.


3} Financial struggle is often the result of people working their whole life for someone else.


4} Promotions or a better job will only help you become more financially secure if additional money is used for purchasing income-generating assets.


5} Acquire assets that you love because you will take better care of them.


6} Rich people buy luxuries last while poor and middle-class people tend to buy luxuries first. 


7} There is always a risk, so learn to manage risk instead of avoiding it.




Lesson 4: The history of taxes and the power of a corporation 


1} Rich just play the game smart, and they do it through corporations- the biggest secret of rich.


2} The government uses the tax laws to provide incentives for the business owners and investors so that they can generate jobs and housing so the only place for government to drive tax revenue is from the middle-class. 


3} Income tax rates for corporations are less than the income tax

Of an individual. In addition, certain expenses could be paid by a corporation with pre-tax money.


4}                


5} Financial IQ is made from the four areas of expertise


  • Accounting- Ability to read and understand financial statements 

  • Investing- Science of money making money

  • Understanding markets- Science of supply and demand, Technical aspects of the market which is emotion-driven, fundamental or economic aspects

  • Law-  Tax advantages corporations have.

          Protections from lawsuits corporations have.


6} The Rich control everything, but own nothing. The poor try to own everything but lose it to the government. 


7} Business owners     Employees who work for Govt. and corp.

  1. Earn                    1) Earn

  2. Spend                 2) Pay tax

  3. Pay taxes            3) Spend



Lesson 6: The rich invent money.


1} In the real world, not the smart ones who get ahead but the bold.


2} Your financial genius requires both technical knowledge as well as courage.


3} The single most powerful asset we all have is our mind. If it is trained well, it can create enormous wealth.


4} Great opportunities are not seen with your eyes they are seen with your mind. 


5} Increase your monthly cash flow from your asset column to the point where it exceeds your monthly expenses. 


6} Most people have an opportunity of a lifetime flash in front of them but they fail to see it 


7} Rich people take calculated risks. Winners are not afraid of losing but losers are. Failure is a part of the process of success.


8} Which one sounds harder to you?

  1. Work hard, pay 30-40% taxes, save what has left your savings then earn 5-6% which is also taxed.

              

                                       OR


  1. Take time to develop your financial intelligence. Harness the power of your brain and the asset column.


9} It is what is know that is the greatest wealth. 

    What is don’t know is the greatest risk.

 

10} If you want to be a good investor then you need to develop three main skills.

  • Find an opportunity that everyone missed.

  • Raise money.

  • Organize smart people.


11} A intelligent person is one who hires more intelligent person than himself.



Lesson 6: Work to learn

                  Don’t work for money


1} Job security meant everything for poor mindset people 

     Learning meant everything for poor mindset people


2} Workers work hard enough not to be fired and owners pay just enough so that workers won’t quit.


3} The reason so many talented people are poor because they focus on becoming better employees and know nothing or very little about business systems.


4} The more specialized you become, the more you are trapped and dependent on that specialty. Being technically specialized has its own strengths as well as weaknesses.


5} Two most important skills in the world.

  • Effective communication

  • sales

6} The main management skills needed for success are.

  • Management of cashflow

  • Management of systems 

  • Management of people 



Lesson 7: Overcoming Obstacles


1} The primary difference between rich and poor is how they manage fear.


2} Everyone wants to go to heaven but no one wants to die. Most people dream of being rich but are terrified of losing money.


3} Most people don’t win financially because the fear of losing money is far greater than the joy of being rich.


4} Failure inspires winners. Failure defeats losers.

     Losers avoid failing and failure turns losers into winners.


5} Fran Tarkenton says “Winning means being unafraid to lose”


6} If you hate risk and worry start early. 


7} Don’t say “ I can’t afford it” These words shut down your brain. Instead of saying that say “How I can afford this” It opens possibilities.


 

Lesson 8: Getting started 


1} Without a strong reason or a purpose, anything in life is hard.


2} There is gold everywhere most people are not trained to see it


3} our spending habit reflects who we are.


4} Two biggest assets

  • Mind

  • Time


5} Listening is more important than talking. If that were not true. God would not have given us two ears and only one mouth. 


6} Hardest thing about building wealth is to be true to yourself and not to go along with the crowd.


7} Pay yourself first.

 People who pay themselves first. Each month they allocate            money to their asset column before they pay their monthly expenses

 



8} The reason rich minimize their income is because they don’t want to pay it to the government that is why their income comes from the asset column. If they work for money then the government takes it.


9} The sophisticated investor’s first question is how fast do I get my money back?


10} Wise investors must look at more than ROI (return on investment). They look at the asset they gt for free once they got their money back. That is financial intelligence. 


11} Although the process of developing cash flow from the asset column is easy, What’s hard is the mental fortitude to direct money to correct use.


12} If you are tired of what you’re doing or you are not making enough, It’s simply a case of changing the formula through which you make money. 


13} Each of us knows people who are highly educated or believe they are smart but their balance sheet tells a different picture.


14} A truly intelligent person welcomes new ideas combines with the already accumulated ones and results in something great.


15} In the end it’s your choice what you want to put in your head every day.


Congratulations you are one of the few people who invest time on getting knowledge although you can waste time somewhere else but you choose to get knowledge .

Share this summary with those who need it the most.

Thank you for reading

Rishabh


Credits

Book by Robert T. Kyosaki

Summary by summary Pedia

Written and made by Rishabh Kaushal


Comments

  1. If i Had missed some important points then you can tell me about that

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  2. This is very helpful, time saving and accurate summary.

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