Rich Dad Poor Dad: This book will change the way you look at MONEY

Rich Dad Poor Dad

“I had two fathers, a rich one and a poor one” — That’s how the book – Rich Dad Poor Dad – starts.

Recently, I forcibly told my small brother to read this book. He is not a kind of guy who read books, out of syllabus (that too without images).

“Bullshit” is what he said.

….but still, I forced him to at least read the founding chapter.

And guess what?

He swallowed up all the book in just 1 week. I was astonished but he is not only the one who is inspired by this book. There are many all over the world.

This book has been the best selling for a long time and inspired many people al over the world.

Many of you had already read it but if haven’t then it’s the time, you should.

When I first read it, I felt like run outside and start something. I don’t know what, but Yes! something innovative, inspirational or whatever.

I got a good insight of how money works? How the cash travel inside the corporate? How can I plan my personal finance? And most important, How can I stop working for others and start my own venture?

However, my main motive for writing this quick book review is to deliver you some financial literacy which is an essential thing if you want to start investing (or already started) in Stock Market.

“The #1 Personal Finance Book of all time” and “RDPD is a starting point for anyone looking to gain control of their financial future” (US today) is how media channels appraised this book.

Believe me, you’ll thank me after reading the book.

Here are some key points from the book, which might disturb your mind upside down:

Biggest Myth: You need to earn a high income to become rich

The whole system is designed in a manner to make you work like hell. People are result oriented, not knowledge oriented.

Students – by whatever means – are looking out for marks. We are looking out for money and others are looking out for fame, fortunes and all other shits.

Nobody looking out for Literacy. Knowledge. Experience.

As per the Author, “Money is one form of power. But what is more powerful is Financial education. Money comes and goes, but if you have education about how money works, you gain power over it ad can begin building wealth.”

One of my favorite lines from the book:

Most people never study the subject [money]. They go to work, get their paycheck, balance their checkbooks, and that’s it. On top of that, they wonder why they have money problems. Few realize that it’s their lack of financial education that is the problem.

The first chapter of the book is “must read” chapter.

The Rich Never Works For Money

The reason, positive thinking, alone does not work is because most people went to school and never learned how money works, so they spend their lives working for money.

Again, few lines from the book:

The main reason people struggle financially is because they have spent years in school but learn to work for money…. but never learn to have money work for them

School will teach you to study hard, be a loyal student, do your homework and get good grades. And ironically the one who teaches all these things are already struggling financially to settle their life.

Then what to do? Build your own corpus and let that corpus work for you.

Always remember a secret of growing wealth. Never let any penny out of your corpus instead fed more and more (grow up your portfolio). Every penny in your portfolio will invent an another new penny for you.

Think of it this way; Once a penny goes into your portfolio, it becomes your employee. The best thing about money is that it works 24 hours a day and can work for generations, for my son, grandson, so on until someone destroys it.

It’s that simple. It’s that hard.

For more insights, consider reading this article: Secret Revealed: Why Rich are Rich and Poor are Poor?

Your house is not your asset

What Sowmay?…. Yesterday, I bought a house to live, is not an asset.”

No! it is, in accounting terms but in the terms of RDPD, it’s not.

The asset is something which brings you returns, year after year, while if you bought a house for living purpose then it’s not generating any further returns instead, increasing your maintaining charges & loan interest.

When it comes to houses, most people work people work all their lives paying for a home they never own. In other words, most people buy a house every few years, each time recurring a new 30-year loan to pay off the previous one.

And houses do not always go up in value. I have friends who owe lakhs of money for a home that today would sell for far less.

The greatest loss of all – You missed the opportunity of putting your money for another best Investment opportunities.

No, I’m not saying, not to buy your dream home. Just want to convey that first create a sustainable source of income then fulfill your all sky-high dreams.

One can’t rely on school system to learn about money

One of the reason the rich get richer, the poor get poorer, and the middle-class struggles in debt is that the subject of money is taught at home, not at school. Most of us learn about money from our parents. So what can poor parents tell their child about money about money? they simply say, “Stay in school and study hard”. The child may graduate with excellent grades, but with a poor person’s financial programming and mindset.

Miraculous lines by Robert Kiyosaki.

Sadly, money is not taught in schools. Schools focus on scholastic and professional skills, but not on financial skills. This explains how smart bankers, doctors, and accountants who earned excellent grades may struggle financially all of their lives.

It’s possible to become rich by following school system but it’s it doesn’t mean, you can become wealthy.

Don’t get confuse between rich and wealthy. Wealth is a person’s ability to survive so many numbers of days – or, if I stopped working today, how long could I survive.

So, while I’m not rich but I’m wealthy. I’ve income generating investment vehicles that fully cover up my monthly expenses. If I want to increase my expenses, I must increase employees in my portfolio. And also note that at this point, I’m no longer dependent on my salary.

So what you want to become: Rich or Wealthy?

Learn to read numbers

Number crunching is one of the most crucial step for planning your financials.

Nothing is explainable in qualitative terms. Whether it is profit margins or revenue growth or debt level or anything else. You should know how to read numbers. Go quantitative.

Accounting is financial literacy or the ability to read numbers. This is a vital skill if you want to build an empire. The more money you’re responsible for, the more accuracy is required, or the house comes tumbling down.

This is the left side brain or the details which allow you to identify the strength and weakness of any business.

However, you also need to use the right side of your brain to understand the current prevailing market conditions.

You need to understand the technical aspects which are driving the crowd emotions (Demand & Supply), in addition to fundamental and economic conditions.

That’s the key point of this book. I don’t want to spoil the suspense of the book.

About the Author:

Robert Kiyosaki (author of Rich Dad Poor Dad) has challenged and changed the way tens of millions of people around the world think about money. With perspectives that often contradict conventional wisdom, Robert has earned a reputation for straight talk irreverence and courage. he is regarded worldwide as a passionate advocate for financial education.

What? You had already read it. Great, and please consider sharing your quick reviews with other fellow readers, below in the comments.

About Sowmay Jain 59 Articles
Hello! I’m from Hub of IT (ha!) Hyderabad, India. I work full-time from home, making a living from my blog and another dynamic medium from my investments. Like so many other people, I’m on my Plan B career. At the same time, I share ideas and techniques to help my readers in mastering stock market and overcoming losses.
  • Prashant Selvan

    I had read it twice and both time enjoyed it a lot. Must read book for all the newbies stepping in the world of finance.

  • Varun

    Rich and wealthy are different things, I know. You’re rich if you have an uncanny amount of money you might never need, and that you could never use for your own personal benefits.

    I mean, think about all those rich people; they’ll hardly use up all their wealth in their lifetime (considering they’re kinda old now) and all of that would just pass down to their spoiled children and grand-children (which I think is unfair and an impending disaster, iykwim).

    Wealth is when you have enough to cover all your monetary needs, no matter even if you don’t have a single penny left over…… because you’d never need that penny. I say THIS is the perfect optimization of money.

    You don’t just buy a whole lot of food and say “I’ve go so much to eat, I’m so rich.” People would call you a fool for wasting so much food. I see wealth in the same way.

  • Karthik Rajasekaran

    Just ordered the book yesterday based on your previous articles recommendation and today I’m seeing an article about that book…
    Curious to read RDPD

  • Ganesan

    Just gone through most of your articles and this one too, as i have read this book earlier, and found that most of the important points are listed which may be helpful for the rest of the people.

    Detailed and excellent write up ! ! !

  • Soudip Sanyal

    I started reading The Intelligent Investor with the pursuit of building the fundamentals of investment, but I am finding the language too complicated which is why I am losing interest and also ending up wasting lots of time. I am just 23+, have been working in IT in India for around 1 year. My plan is to start investing with a budget of 2k-4k/month. But I am still searching for the first step of the stair. It will be very helpful if you can suggest me something.
    Thanks in advance.

    • Beginners should not read Intelligent Investor. It’s too complicated. Consider reading Indian versions of that book. This article might help you.

      Our “Get Started investing: 14 Day challenge” will be helpful to you. It’s starting from tom, 21 Nov.