Does working long hours for little money, without any job security, and looking forward to a three-week vacation each year and perhaps a shitty pension after 45 years of hard work sound tempting to you?
Yes, In that case, you don't need this summary. For everyone else. Let's dive in!
Hello, friends today we are going to review an amazing book "Rich Dad Poor Dad" which is one the best-selling book on personal finance. This book was written by Robert T. Kiyosaki in this book he shared "What The Rich Teach Their Kids About Money That the Poor and Middle Class Do Not!". So let's get started.
In this review, we will discuss the 5 main points, which show the difference between the mentality of a rich person and a poor person, so the first point is:-
1: Rich people buy assets, poor people buy liabilities:
For example, My house is my greatest investment! My house is a liability, if your house is your greatest investment, you have problems.
If you want to be rich this is the main thing that you need to know. It's that simple. An asset is something that puts money in your pocket.
Let's look at how a rich person acts when making money compared to a poor person. when a rich person gets their income they straightaway buy assets. They buy assets such as stocks, bonds, and real estate. Now, in the long run, these resources will create even more cash for them in the future.
While the middle class earns their money from a good job, but the moment they get their salary, they spend it on liabilities which they think are assets. Possessions such as TVs, cars, and vacation homes.
You might look rich and your friends might admire you for it, but you will never actually be rich by doing these things.
2: The power of corporations: The rich should pay more in taxes to take care of the less fortunate. Taxes punish the productive and support the unproductive.
I guess that you've all heard the story about Robin Hood, you know the guy who takes from the rich and gives to the poor? Inspired by this tale, the poor and the middle class invented taxes. The purpose is to create a more equal society where everyone is included.
The problem is that the rich are too smart for this and in the long run, instead of taking from the rich and giving to the poor, the effect has become more like taking from the middle class and giving to the poor.
Rich people are too smart for the system and they find all types of ways and vehicles to protect their hard-earned money. One such vehicle is corporations. Corporations are good for two things primarily.
First and foremost, it allows you to pay less tax. The number one expenditure of the average household is taxes. It isn't uncommon for people to work between January and May for the government. People often pay up to 40-50 percent in taxes.
"Warren Buffett, who's the third wealthiest man on this planet is famous for paying less tax than his secretary".
3: Stop focus on your income - focus on your assets:
Many parents told their children to study hard so that they can get a good job at a great company. But in this, the real father of Robert Kiyosaki is very poor even he had a Ph.D. But he always struggled with money in his life.
While, his rich dad(his friend's dad) didn't even finish high school and yet, he had an abundance. His PhD-dad studied so many years just to get a few hundred extras in salary every month. On the other hand, his rich dad used those years to start acquiring assets.
The rich focus on their asset column, while everyone else focuses on their income statement. I find this to be an interesting subject. If the average person were to get a pay cut by 2%, he would be furious. On the other hand, if he loses 2% in the stock market (which is his assets) he shrugs it off by blaming bad luck or bad asset managers. Yet, for some people, it's a worse situation to lose 2% of their assets than to lose 2% in salary. Salary levels are taken personally, while asset levels are not. This is a common problem for poor people.
Start to take responsibility for your investment decisions!
4: Don't diversify with too little money: When it comes to money no one wants to learn how to manage your money.
Look at the top 5 richest people in the world. These are rankings from 2020.
1. Jeff Bezos
Net Worth: $116.9 billion
Founder: Amazon (AMZN)
2. Bill Gates
Net Worth: $99.9 billion
Co-Founder: Microsoft Corp. (MSFT)
3. Bernard Arnault Family
Net Worth: $91.6 billion
Owner: LVMH
4. Warren Buffett
Net Worth: $70.5 billion
Best Investor of the 20th Century
5. Larry Ellison
Net Worth: $62.4 billion
Founder: Oracle
These people became rich, not by being diversified, but by being focused. Don't do what the poor and middle-class do, which is to put their few eggs in too many baskets. Instead, focus, and put them in a few ones.
If you're savings are small compares to your annual salary, I think this is especially true. Aim to get a yield that will have an impact on your life and go for diversification as soon as you've acquired wealth that will be tough to earn back through your daily job.
In finance theory, it's argued that diversification reduces risk, but I would argue that risk is a result of uncertainty, which in turn is the consequence of a lack of knowledge.
Stay focused and you will have time to gather more info about each of your investments, and in turn, reduce your risk while keeping a high potential. Takeaway number
5: Educate in personal finance: Many people says that love of money is the root of all evil, but according to this book, lack of money is the root of all evil. Even money is a form of power.
One of the reasons why the rich get even richer, the poor get poorer, and the middle-class struggles in debt are because the subject of money is taught at home, not in schools. Many of us learn personal finance from our parents. This means that if your parents aren't rich already, you need to start getting advice from somewhere else on how to do it.
There are 4 parts of financial literacy that you should focus on, according to Robert Kiyosaki:-
1. Accounting: Accounting is the ability to read numbers from an annual report, or from your personal bank account.
2. Investing: This is the science of money making money.
3. Understanding the market. At least, you should understand the basic rules of supply and demand.
4. Understanding the tax advantages: Don't be afraid to spend your money on education that will improve your knowledge and develop skills necessary to beat your weaknesses. The author spend many thousands of dollars throughout his life on seminars, books, and so on. And guess what? The returns from these investments are unmatchable!
Arrogant people often find this hard to do. They already know everything, and rather talk about what they know than try to learn something new. Listening is more important than talking. If that weren't true. God would not have given us two ears and only one month.
Let's sum it all up:-
1. You must buy assets to start generating passive income every month.
2. A corporation is a useful vehicle to protect yourself from losses and to be able to pay yourself first, not the government.
3. Start taking responsibility of your own investment decision - they are even more important than your salary.
4. You must invest in a focused manner to grow a large fortune.
5. The advice to start educating yourself in personal finance. Focus on accounting, investing, and understanding the markets.
I hope you like this review of the book "Rich Dad Poor Dad" if I missed something or you have some doubt or query then you will leave a comment below and we will reply to you surely. If you want to buy this book then click the link below and buy it from amazon.
Yes, In that case, you don't need this summary. For everyone else. Let's dive in!
Hello, friends today we are going to review an amazing book "Rich Dad Poor Dad" which is one the best-selling book on personal finance. This book was written by Robert T. Kiyosaki in this book he shared "What The Rich Teach Their Kids About Money That the Poor and Middle Class Do Not!". So let's get started.
In this review, we will discuss the 5 main points, which show the difference between the mentality of a rich person and a poor person, so the first point is:-
1: Rich people buy assets, poor people buy liabilities:
For example, My house is my greatest investment! My house is a liability, if your house is your greatest investment, you have problems.
If you want to be rich this is the main thing that you need to know. It's that simple. An asset is something that puts money in your pocket.
Let's look at how a rich person acts when making money compared to a poor person. when a rich person gets their income they straightaway buy assets. They buy assets such as stocks, bonds, and real estate. Now, in the long run, these resources will create even more cash for them in the future.
While the middle class earns their money from a good job, but the moment they get their salary, they spend it on liabilities which they think are assets. Possessions such as TVs, cars, and vacation homes.
You might look rich and your friends might admire you for it, but you will never actually be rich by doing these things.
2: The power of corporations: The rich should pay more in taxes to take care of the less fortunate. Taxes punish the productive and support the unproductive.
I guess that you've all heard the story about Robin Hood, you know the guy who takes from the rich and gives to the poor? Inspired by this tale, the poor and the middle class invented taxes. The purpose is to create a more equal society where everyone is included.
The problem is that the rich are too smart for this and in the long run, instead of taking from the rich and giving to the poor, the effect has become more like taking from the middle class and giving to the poor.
Rich people are too smart for the system and they find all types of ways and vehicles to protect their hard-earned money. One such vehicle is corporations. Corporations are good for two things primarily.
First and foremost, it allows you to pay less tax. The number one expenditure of the average household is taxes. It isn't uncommon for people to work between January and May for the government. People often pay up to 40-50 percent in taxes.
"Warren Buffett, who's the third wealthiest man on this planet is famous for paying less tax than his secretary".
3: Stop focus on your income - focus on your assets:
Many parents told their children to study hard so that they can get a good job at a great company. But in this, the real father of Robert Kiyosaki is very poor even he had a Ph.D. But he always struggled with money in his life.
While, his rich dad(his friend's dad) didn't even finish high school and yet, he had an abundance. His PhD-dad studied so many years just to get a few hundred extras in salary every month. On the other hand, his rich dad used those years to start acquiring assets.
The rich focus on their asset column, while everyone else focuses on their income statement. I find this to be an interesting subject. If the average person were to get a pay cut by 2%, he would be furious. On the other hand, if he loses 2% in the stock market (which is his assets) he shrugs it off by blaming bad luck or bad asset managers. Yet, for some people, it's a worse situation to lose 2% of their assets than to lose 2% in salary. Salary levels are taken personally, while asset levels are not. This is a common problem for poor people.
Start to take responsibility for your investment decisions!
4: Don't diversify with too little money: When it comes to money no one wants to learn how to manage your money.
Look at the top 5 richest people in the world. These are rankings from 2020.
1. Jeff Bezos
Net Worth: $116.9 billion
Founder: Amazon (AMZN)
| Source: investopedia.com |
2. Bill Gates
Net Worth: $99.9 billion
Co-Founder: Microsoft Corp. (MSFT)
| Source: investopedia.com |
3. Bernard Arnault Family
Net Worth: $91.6 billion
Owner: LVMH
| Source: investopedia.com |
4. Warren Buffett
Net Worth: $70.5 billion
Best Investor of the 20th Century
| Source: investopedia.com |
5. Larry Ellison
Net Worth: $62.4 billion
Founder: Oracle
:max_bytes(150000):strip_icc():format(webp)/GettyImages-11832841101-2db800fe2ce544fb92f1a0d05f4499e3.jpg "Rich Dad Poor Dad Book Summary In English- Robert T. Kiyosaki") |
| Source: investopedia.com |
These people became rich, not by being diversified, but by being focused. Don't do what the poor and middle-class do, which is to put their few eggs in too many baskets. Instead, focus, and put them in a few ones.
If you're savings are small compares to your annual salary, I think this is especially true. Aim to get a yield that will have an impact on your life and go for diversification as soon as you've acquired wealth that will be tough to earn back through your daily job.
In finance theory, it's argued that diversification reduces risk, but I would argue that risk is a result of uncertainty, which in turn is the consequence of a lack of knowledge.
Stay focused and you will have time to gather more info about each of your investments, and in turn, reduce your risk while keeping a high potential. Takeaway number
5: Educate in personal finance: Many people says that love of money is the root of all evil, but according to this book, lack of money is the root of all evil. Even money is a form of power.
One of the reasons why the rich get even richer, the poor get poorer, and the middle-class struggles in debt are because the subject of money is taught at home, not in schools. Many of us learn personal finance from our parents. This means that if your parents aren't rich already, you need to start getting advice from somewhere else on how to do it.
There are 4 parts of financial literacy that you should focus on, according to Robert Kiyosaki:-
1. Accounting: Accounting is the ability to read numbers from an annual report, or from your personal bank account.
2. Investing: This is the science of money making money.
3. Understanding the market. At least, you should understand the basic rules of supply and demand.
4. Understanding the tax advantages: Don't be afraid to spend your money on education that will improve your knowledge and develop skills necessary to beat your weaknesses. The author spend many thousands of dollars throughout his life on seminars, books, and so on. And guess what? The returns from these investments are unmatchable!
Arrogant people often find this hard to do. They already know everything, and rather talk about what they know than try to learn something new. Listening is more important than talking. If that weren't true. God would not have given us two ears and only one month.
Let's sum it all up:-
1. You must buy assets to start generating passive income every month.
2. A corporation is a useful vehicle to protect yourself from losses and to be able to pay yourself first, not the government.
3. Start taking responsibility of your own investment decision - they are even more important than your salary.
4. You must invest in a focused manner to grow a large fortune.
5. The advice to start educating yourself in personal finance. Focus on accounting, investing, and understanding the markets.
I hope you like this review of the book "Rich Dad Poor Dad" if I missed something or you have some doubt or query then you will leave a comment below and we will reply to you surely. If you want to buy this book then click the link below and buy it from amazon.
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