In this post, I summarize and review the bestselling book Rich Dad Poor Dad by Robert Kiyosaki.
You'll learn the facts as well as the 9 central lessons of this popular financial publication that will enjoy its 23rd Anniversary in 2020.
But before we dive in
2014 to Now
I went from living in a tiny apartment in Detroit to living in a nice high-rise place in San Fran by building and ranking simple websites that generate customers for small businesses, like the tree care site next to me.
Check this out:
I read this book about 7 years ago and Rich Dad shifted my mindset from trying to get a bigger paycheck to creating internet real estate that pay me and free up my time.
In 2014, I joined the coaching program below and 7 months later I left the 9-5 life forever
About Robert Kiyosaki
Robert has lead an interesting life, from growing up in Hawaii and joining the military as a helicopter pilot, to engaging in business and writing the #4 Persona Finance Book of all time: Rich Dad Poor Dad.
Fast Facts
Wondering how many copies of Rich Dad Poor Dad have sold? When Poor Dad Rich Dad was published? You've come to the right place.
2 Sentence Summary
Learn the gist of Rich Dad Poor Dad in this super short summary.
9 Lesson Summary
Get the Meat of Rich Dad Poor Dad via this summary of the 9 lessons of the rich that Robert drops on the Readers of his 21st century best seller.
Rich Dad Poor Dad Book in PDF Form
Read the Best Personal Finance Book Rich Dad Poor Dad via your computer with this free pdf.
Rich Dad Poor Dad Book Summary & Review [2020]
Two Sentence Summary
The majority of people (even the "educated") experience financial problems because they have not learned how the rich acquired their wealth and continue to make it grow.
In this book, Robert Kiyosaki shares how he learned the 9 lessons of wealth from his friend's father through comparing the difference between what his biological father (poor dad) and friend's father (rich dad) taught him.
Detailed Summary
Originally published in April 1997,
Robert Kiyosaki’s bestselling book Rich Dad Poor Dad became a cult phenomenon,
attracting fans from all over who wanted financial education explained in layman’s terms.
Banking on the comical relief and drama made from receiving contrasting advice from two differing authority figures
– a highly educated biological father who made poor financial decisions,
and an “adoptive dad,”
the rich father of his school friend who became his mentor,
Robert explored and researched common beliefs about money that usually encumber people as they grow up.
Robert examined the common misconceptions about jobs and careers and the myth of job security versus the massive rewards of building a business.
He defied prevailing beliefs that you need a lot of capital in order to succeed in a business.
He also resisted outdated middle-class mindsets about asset acquisition and shows that liabilities are really what you’ve been collecting all this time.
If you’re a parent,
it’s important to read this book,
Rich Dad Poor Dad,
and teach your children the right way to think about money,
so that they can enjoy a financially rich life.
Who is Robert Kiyosaki?
All of these can describe Robert Kiyosaki.
But before all the accolades were heaped on him,
Robert was a good son, first and foremost,
which leads us to his upbringing.
How Robert Grew Up
Born in Hilo, Hawaii in 1947,
Robert grew up in a strict middle-class home to a father who became a high-ranking government official in Hawaii’s Board of Education.
His mother was a nurse.
The family belonged to fourth-generation Japanese immigrant group.
Robert grew up with three other siblings and immediately signed up to join the U.S. Naval Academy after high school.
He served in the Vietnam War as a helicopter pilot.
After he was honorably discharged from the military,
Robert tried several business ventures selling surfer wallets and T-shirts, etc.
Both these early ventures failed.
But Robert continued moving forward,
undeterred,
knowing that his failures were laying the foundation for his success,
as they taught him what he didn't yet know.
Mindset Differences Between Rich Dad and Poor Dad
Who is Robert's Rich Dad?
Robert's Rich Dad was the father of Robert's best friend, Mike.
Rich Dad owned a chain of superettes (convenient shops), a construction company, and several restaurants.
He hired Robert to work for him at ten cents an hour working in his grocery stores:
cleaning and completing errands;
thus initiating his exposure Robert to the entrepreneurial aspect of making a living when he was only nine.
After Robert complained about the unfairness of getting paid only a dime for every hour worked,
his rich dad then asked him to work for free in exchange part for business education.
Who is Robert's Poor Dad?
Robert Kiyosaki’s biological father was a highly educated teacher who held a PhD from Stanford University on a full ride scholarship.
He loved to teach and didn’t bring home a lot of money. He gives his son staid advice about finances with the intention of making Robert grow up and taste the same life he built.
Rich Dad vs. Poor Dad
Learn the Different Philosophies of Robert's Two Dads
Rich Dad
Poor Dad
Rich Dad Pushed Robert into Reflection
How Rich Dad Impacted Robert's Mindset
His rich dad’s incisive, penetrating questions and hands-on training trained Robert re-frame his success mindset by questioning everything:
from his parents’ choices in careers,
to the process of taxation,
how financially smart people avoid getting taxed highly,
and finally, the wisdom of pursuing higher education rather than getting more training in business.
Growing up the way he did armed him with one of the most essential lessons to being a successful businessman:
gaining the courage to oppose the tide.
After such reflection,
Robert decided to listen to his adoptive dad,
the wealthy, free-spirited entrepreneur,
a decision which shaped the rest of his life.
His rich dad him taught that money and financial education are forms of power,
and if you get educated about handling money,
you gain power over it and can build wealth.
Robert realized that American schools don’t teach financial education,
and it shows when highly educated graduates emerge up to their eyeballs in debt,
sworn to a life of always chasing security because they’re not well versed in the art of building wealth.
Robert compiled a list by which he compared his two dad’s opposing views,
giving him a chance to weigh their opinions in a way that benefited him the most.
9 Lessons of Rich Dad Poor Dad: A Book Review
Lesson 1: The Rich Don’t Work for Money
The fear of going penniless motivates ordinary people to apply for jobs that enslaves them to a life of working to pay bills.
The only emotions that motivate them are fear and greed.
With the false security of a job that pays them a set amount of salary every payday,
these people will never try to get out of their comfort zone to start a business.
The Script of the Middle Class
“Stay in school, get good grades, find a secure job, retire with benefits.”
This is the old script most parents subscribed to all their life,
and they then force their kids to get good grades in school so they will also live the ‘script.’
But if asked, these people may sometimes admit their discontent at such a mediocre existence.
Before they followed the script,
they might have had passions,
artistic desires,
plans to travel the world,
plans that were dashed when the fear of an empty wallet grew bigger than the desire to pursue a life worth living.
The better alternative is to seize opportunities to master the power of money.
Use your emotions to think,
not the other way around.
“Most people never see these opportunities because they're looking for money and security, so that's all they get.”
Rich Dad
(p.62)
A job is only a short-term fix for a long-term problem.
This is where the rich is a cut above others in the way they think about money:
they set up opportunities to make money and have it work for them.
Lesson 2: The Rich Learn How Money Works
Acquiring money without sound financial knowledge is a bankruptcy waiting to happen.
If a person hasn’t been taught how to budget and manage $3,000,
he won’t be able to manage $3,000,000.
Hence the stories about broke lottery winners who burned through millions of dollars of their winnings by buying stupid stuff and not planning ahead.
Set aside time to learn how to make money your best friend, how to tend it and water it to where it grows deep enough roots that it won’t need you anymore someday.
Part of this is learning about accounting, investing, markets, taxes, inflation, and the law.
The more your grasp complex financial concepts,
the more successful you’ll be in your business.
A strong financial foundation needs the following: solid knowledge of the difference between an asset and a liability:
- An asset puts money in your bank account.
- A liability takes that money out.
Lesson 3: The Rich Mind Their Own Business (Assets)
Employed people mostly work for everyone but themselves – they enrich their employers or the owners of their company,
then they pay their taxes to the government,
then they pay the bank where they mortgaged their house.
When you see a financially struggling family,
they didn’t get into that situation overnight.
Being financially poor is culmination of a lifetime of making poor financial decisions.
You're Likely to be Financially Poor If You are:
Professionals have only their job as a source of income.
Rich people,
on the other hand,
have their assets as sources of multiple income streams.
Types of Real Assets
Companies use all kinds of feel-good type of slogans to foster a sense of community among their employees,
but the bottom line us,
they all want to work you to the bone until the workweek spits you out,
drained and exhausted,
to a parking lot of similarly miserable souls,
grateful for two days’ freedom from the grind of work.
Instead of trying to climb the corporate ladder with the goal of getting a pay raise so you can increase your income column,
focus on building up your asset column instead.
Don’t waste time making your boss richer and your company turn more profit,
they won’t lift a finger when you’re hurt and need another way to pay off your bills.
Be smart about it though.
Keep your day job but continue to increase your asset column.
Refrain from spending money on liabilities.
A lot of young couples get buried in debt because they use credit cards to buy items they don’t need to live up to a standard of life they can’t afford.
And this is where most schools fail their graduates.
An overhaul of the education curriculum must be done to address the yawning financial education gap that turns kids into credit-hungry consumers.
Lesson 4: The Rich Use Corporations
Taxes were originally voted into law only for the wealthy citizens,
but as government bureaucracies grew bigger and needed more funding,
taxes were levied on the middle class.
But the rich found ready loopholes and created corporations to limit their risks.
Knowledge of how a corporation works gives the rich an unfair playing field to lord it over the middle class.
Benefits of Corporations
Corporations protect the rich because they’re taxed significantly less than an individual worker gets taxed.
Corporations can also write off certain expenses as tax deductible,
saving even more money for the company.
Make sure each dollar in your asset column multiplies and gives birth to more dollars so that you can quit your 9-5 job and focus on nurturing your own business.
Read up and become very well versed on business law (specifically "corporate compliance" and "maintaining the corporate veil") to protect yourself from lawsuits.
A corporation can be an attractive target for lawsuit-happy individuals as corporations are perceived to have big pockets.
“It is the knowledge of the legal corporate structure that really gives the rich a vast advantage over the poor and the middle class.”
Robert Kiyosaki
(p.154)
It’s only prudent to use several layers of legal protection to make yourself immune from the litigious in our society in order to keep the hard-earned income you’ve worked so hard for.
Lesson 5: The Rich Have High Financial IQ
Each person naturally holds massive potential inside.
Each one is gifted with a skill or talent that’s more developed than a few others.
But self-doubt and insecurity get in the way of our “becoming” that we settle for safe, unfulfilling jobs that won’t rock the boat too much.
Once out of the safety of the academic gates,
a person needs to rely on more than just his scholastic degrees to make it big.
Synonyms of Financial IQ
This something extra,
when called forth and used liberally in everyday dealings,
makes the difference between a so-so future or an awesome one.
Develop your financial IQ in order to open up more options in your future.
The world is constantly changing and the secure careers of yesterday will be taken over by automatons or younger, hungrier graduates.
Kiyosaki developed and launched a financial education game called Cashflow 101 specifically to familiarize his students with investment terms and understand complex financial concepts.
Here's a 2 minute summary of the Cashflow Board Game
It was released in 1996 and was a popular game that year.
Lesson 6: The Rich Work to Learn
Learn salesmanship and awesome negotiating skills.
A skill that allows you to persuade other people to see the value of any product you’re offering is one more tool you can use and deploy from your arsenal of high-value skills.
School Skills VS Life Skills
In the 6th lesson, Robert stresses the importance of developing Life Skills in addition to School Skills.
School Skills
Life Skills
Great talent isn’t enough to succeed, unfortunately.
The world is filled with talented underpaid people.
You also need to augment your skills and the most important upgrade is how to market.
Another important skill to learn is public relations.
Even such soft skills as learning how to write exciting ad copy is very helpful to somebody who wants to grow a business that needs the attention of other people.
Learn a little bit of everything so you have an idea how to solve a wide variety of problems.
Seek work that offers a lot of learning opportunities,
not just rote assembly-line duties.
Lesson 7: The Rich Train Their Mindset
These five emotions can be major hindrance to developing a successful asset column:
Pests to Mindset Development
Fear will always be present with every new venture, but it’s how you handle it that truly matters.
Some people develop a genuine phobia about losing money so they will do everything to stretch that dollar until the eagle cries.
Don’t let the horror of potentially losing money dominate your deep desire to get rich and live a life of abundance.
Choose to fight and be inspired by your failures and mistakes,
use them as fuels to spur you further to reach your dreams.
Our minds can be such cruel little cynics, negative, whiny, and always focusing on the catastrophes that could happen if we don’t do things a certain way.
Don’t let your mind run amok and keep you awake.
Discipline it to focus only on the steps that move you forward to reach your goals.
Avoid people that amplify the “noises” in your head.
Unchecked fear results to a cynical mind,
and a cynic never wins.
“Laziness can be cured by a little greed.”
Robert Kiyosaki
(p.262)
Use your desire for a better life for yourself and your family as ammunition to get your behind off the sofa and back in the office.
Again, discipline your mind so it can sustain long periods of mental effort.
An active mind compels an active body to continue hustling despite the point of exhaustion.
Ask yourself: “What’s in it for me?” so you can unlock that creative part of your brain that spits out solutions and suggestions to every problem imaginable.
But that part of the brain is out of reach if your mindset remains negative and cynical.
Don’t let your habits control your behavior.
The number one good habit to nurture is paying yourself first (self-investment) before you hie off and pay all the other bills.
“If I pay myself first, I get financially stronger, mentally and fiscally.”
Robert Kiyosaki
(p.267)
Arrogance is ego combined with ignorance.
It’s common to encounter arrogance in people who use it as a shield to hide their ignorance of a topic.
But ignorance should be a call to educate yourself on the subject more.
How to Educate Yourself in 2020
In this day of the information superhighway (aka the internet) right at our fingertips,
there’s no excuse to remain ignorant.
Lesson 8: 10 Steps to Get Started
Each person has a financial genius inside him,
some are just asleep.
To call your genius forth,
Robert shares his 10-step process to develop your abilities to recognize God-given opportunities:
Robert's 10 Steps:
Find a reason greater than reality (Power of Inspiration)
Practice your power of choice daily (Power of Decisions)
Choose your friends carefully (Power of Association)
Learn a formula then master it (Power of Association)
Pay Yourself First (Power of Self-Discipline)
Pay Experts to Guide You (The Power of Good Advice)
Be Mindful of the Long-Term Return
Use Assets to Buy Luxuries (The Power of Focus)
Study People You Admire (The Power of Myth)
Pass on What You're Learning (The Power of Giving)
Lesson 9: Robert's Process for Continual Growth
In the final chapter of Rich Dad, Robert Kiyosaki lays out his five step process for continual growth:
Robert's Cycle for Continual Growth
Since writing the original Rich Dad Poor Dad in 1997,
Robert Kiyosaki was continued to build his own wealth through both real estate deals and constructing digital assets.
Pros and Cons of Rich Dad Poor Dad
A synopsis of both the good and the bad of Robert K's Best Seller
Pros
Quora Member Yuvraj Wadhwani explains how Rich Dad Poor Dad changed their life over a period of several years:
Cons
Reddit Member Losyram33 shares their experience:
How I Own Digital Assets That Pay Me Consistently Every Month
I read Robert Kiyosaki's book back in 2014 and it was very impactful for me.
From then on, I became obsessed with trying to figure out a way to make money work for me, or being able to get paid while I sleep... that passive income everyone talks about.
I tried multi-level marketing, affiliate marketing & even some real estate investing courses...
But at the time with very little knowledge of internet marketing I failed repeatedly.
Plus I didn't have enough money in the bank for real estate.
Well, thanks to my preserverance I finally found a business model of lead generation that had everything I was looking for.
It's simple.
We build & rank simple websites at the top of Google and we rent these properties out to local businesses.
My client pays me $2000 per month just to get all the leads (or phone calls) that this site generates every month.
What's awesome about this business is that I can go into 100 different niches and every city is a brand new market.
Imagine just building 10-15 of these sites and now you're making $10K per month potentially.
Once these sites are ranked, they don't require much maintenance. You just leave it alone and they'll keep making money for you.
So the scalability is insane.
I joined this lead generation coaching program back in 2014, and today I own over 75+ of these digital lead-gen assets.
Every year, my income is going up because I'm no longer trading my time for money.
I simply invest my money into building more of these properties and so I'm putting my money into working for me.
I simply focus on building more lead generation properties and my income continues to go up.
Thanks to the wisdom of Rich Dad Poor Dad
I will never ever go back to the old paradigm for working at an hourly job and saving for retirement.
Guys... they say money can't happiness, but I beg to differ.
Maybe its not about how much money you make...
But surely, how you make the money... definitely matters for your overall happiness.
Here's another example, of a site that I built back in 2014 still paying me today.
All I have to do is go to my mailbox each month and collect my checks.
I'm still getting paid for the work I put in 6 years ago and that feels great.
That's 100% made me a happier person.
In this picture you can see that the same company has been sending me checks since 2015.
You're telling me that I'm not a more happier individual today when I don't have to work every waking hour just to pay the bills?
When you got assets that take care of the bills for you, you get more time freedom to go live your life.
Freedom = happiness (it's that simple)
So sure you could argue that money isn't happiness but I'd argue all day, every day that how you make the money matters for your happiness.
Master this skill of lead generation and you'll be able to create life changing passive income much faster than trying to invest in real estate.
At the end of the day, the truly wealthy individuals own many different kinds of assets that make them money.
"The Long Term Rich Build Their Asset Column."
Robert Kiyosaki (p.137)
So why not build some digital assets as well?
Guess what because no one can take those sites away.
If a client decides he doesn't want the leads anymore (hardly ever happens) or they want to retire.
It's all good. I'll find another local company to start taking the leads.
Meaning as long as I own the digital asset, I will get paid on them every month longterm.
Because leads are the most valuble thing for a small business.
Without leads, they die.
It's the lifeline of a business.
And the #1 place to acquire leads today is having sites ranked at the top of Google, bar none. (Click on the button below to learn how to get started)
What Up Ippei,
Bro, to be honest your content is sick. I know Robert Kiyosaki I really follow the teachings of the man zealously myself…
I think I stumbled upon rich dad poor dad 3 years ago, it was a video interview of him. He was being interviewed & when he said "Keep them poor" that hit me right there…
So we're living in a world were the elite are plotting against us, to keep us in the middles class or poor. However I'm intrigued by the fact that he offers solutions to how to get around these pitfalls.
He became a real estate mogul doing exactly what he lays out in his book, so it's proven, actionable & really lifts the fog around the different ways the rich play the system and how the system cripples the poor – a vicious cycle.
Great article man, couldn't have chosen a better book to summarize. 😉
I've heard his book mentioned many times over the years. The summary you've given here and, more crucially, the way you've demonstrated applying the learnings, has made me finally order it. Thanks, dude. and well done
I hope you enjoyed reading it!
I loved this post, so compelling and clear. I understand now why this is a classic book for rich people how it explains in such a fun way how the rich people look at money totally different as poor people look at it
thanku for providing this
This book is one of my favorites. It is a must have for anybody who wants to achieve more by working smartly.
There is an amazing difference between the way people think about creating wealth. Most of the people in the world are stuck with the poor dad's mindset and are unable to change their minds and explore new ideas.
On the other hand people who have the rich dad's mindset look for new ideas and opportunities and acquire knowledge regularly which helps them to stay ahead and make more money than most of the people in the world.
There are opportunities everywhere in the world and having the right mindset is what separates those who take advantage and those who don't.
This is a great summary of the book and helps to take the main points from the book.
Like I am the only one person who don't read this book uptil now.
But the way you outline the detail of the book I was curious so I will definitely read this book in this week.
Thanks for this post ippei
glad you liked it
Thank you for posting this, ippei. After reading this i'm gonig to exercise my mind to be more aware of the assets and liabilities in my life. This should make my spending more concious and help me to think of ways to identify the assets around me that I can build or collect for myself.
glad u liked it
While I was reading about Robert's lessons, specifically about being able to "see" the gold around you, I immediately thought of you and Dan selling face masks during this pandemic. And the part of building your asset column, specifically real estate, I immediately thought of your digital "real estate." Thank you for the article, I need to make a plan and work on adding more to my asset column. Thank you Ippei!
100%
the more assets you have that’s valuable to the marketplace, the more mailbox money you earn!
Thanks for sharing this summary of the book! I read it like 1 year ago and reading this refreshes my mind and open my eyes to read it again! This summary is so detailed it is really amazing! What I like too was the summary of the pros and cons in the end it helps to develop a better understanding why this book is great and what kind of negative aspect it has as well!
glad you liked it