Rich Dad Poor Dad, Robert Kiyosaki - Executive Summary

download

of 8

Embed Size (px)

transcript

`

Submitted by: Nishchay GargThe main reason people struggle financially is because they have spent years in school but learned nothing about money but never learns to have money work for them.- Robert T. Kiyosaki

Robert Kiyosaki 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 passionate advocate for financial education.

Rich Dad Poor Dad-The# 1 personal Finance book for all time! Rich Dad Poor Dad is a starting point for anyone looking to gain control of their financial future.- USA TODAY

Robert KiyosakiRobert T. Kiyosaki is best known as the author of Rich Dad Poor Dad. This is the #1 personal finance book of all time, which has challenged and changed the way tens of millions of people around the world think about money.

His book title holds four of the top ten spots on Nielsen Bookscan List's Lift-to-Date Sales from 2001-2008 alone. In addition, Robert has been featured on shows such as Larry King Live, Oprah, The Doctors, Bloomberg International Television and CNN.Educational Entrepreneur, co-creator of the CASHFLOW board game, founder of the financial education-based Rich Dad Company and author of New York Times Bestsellers: Rich Dad Poor Dad, Conspiracy of the Rich: The 8 New Rules of Money, and Unfair Advantage

Summary

Robert T. Kiyosaki is a simple 9-year-old boy living a simple life with his father, the educated one (poor dad). Robert regard his biological father as the poor one because he is educated person but not financially intelligent. Together with Mike, his best friend they want to become rich because other kids do not want to play with them, they said they were poor kids. Thats the time they ask help from Mikes dad, the less educated one (rich dad). He considers his best friends dad as his rich dad because he became his first mentor on financial literacy. The rich dad agreed when the two boys said they want to learn how to become rich. The first lesson that mikes dad teaches them is how to get out into a rat-race . The rich dad said Most people are afraid of not having any money. That's why they take a low paying job. He said to them that they must not work for money and let the money work for them. The rich dad wants the two boys to overcome the fear of working for nothing. Those teaching give them the lessons that they had adopt it in life. Years after, Mike inherits his fathers business and grows this into an empire. And like his father he raises his son to control the business when he gets older. On the other hand, Robert became successful in life together with his wife Kim and at the age of 47 he retired. People around keep asking him how to become rich and he always say that if you want to become rich, you must need to be financially literate. He also said that Intelligence solves problems and produces money. Money without financial intelligence is money soon gone. This teaches the lesson of teaching people not to be wise with your money once you have it, but rather be smart with your money before you have it. He also said that in financial literacy a person must know the difference between an asset and liabilities. An asset can put money on your pocket and a liability can take your money out of your pocket. Robert also point out the idea of minding your own business. In other words, one should not mind their employers business but rather strive to be their own boss and have their own business. Rich people owned a business while poor people work for business but anybody can have business as long as they have determination and these skills cannot be learned from school.

Kiyosaki remember what his rich dad told him about the history of taxes and how important owning a business can make a person rich and avoid taxes. He explains that corporations are just a legal body created by a legal document. The rich used the power of corporation against taxation because it offers a lot of tax advantages and protection from lawsuits. He also emphasizes in the story about a woman who is a newspaper reporter. She has a Masters Degree in English Literature. This woman wants someday to be a bestselling author like Robert but her novels not seem to go anywhere thats why she sticks into that paper job. She asks for any suggestion from Robert and he suggested that she must study sales, but the woman get offended, why would she study sale if she want to be a bestselling author. Kiyoskis point is to study sales in order to know some strategies of advertising products especially her novels but schooling is not enough, a person must gain knowledge through experience. The rich people create money; it is not necessarily that you need to be educated to become rich and successful because in business it is a matter of using mind and talent. Although schooling is important but there are some lessons in life that cannot be learned from school and sometimes it is by a persons own experience. In learnings Robert said it is important to find employment where you will learn a lot of different skills even if it means earning less in you take home pay meaning, working not for money instead work to learn.

Evaluation

The book does a fantastic job teaching how to think about work and money. I like the way it is explained at a level that anyone can understand, specifically the concept around how the rich buy assets, and the poor buy liabilities. This book has valuable lessons for people of all ages. It was written because the author believes that traditional schooling is also very important but no longer enough in regards to financing. Let me say right away that I am very glad it was written and I found the book very valuable. The thoughts and ideas I obtained from the book have made me realize that I can control of my financial future. Most people are not rich, wealthy and not even literate when it comes to the world of money. Rich Dad Poor Dad simply helps guide the average person to start thinking differently when it comes to money. It is the best starting point that one can take on the road to financial literacy. For all of those who have always believed there is more to life than our everyday routine and for those who know there has to be a better way, but just don't know what it is. You have to read Rich Dad Poor Dad, I guaranty it will open your eyes and mind, explode the myth that you need to earn a high income to become rich, challenge the belief that your house is an asset, show parents why they cant rely on school system to teach their kids about money, define once and for all an asset and a liability and teach you what to teach your kids about money for their future financial success. In case you believe working on a company can make you out of struggle, think again, you will never be rich working for someone else instead, look for someone that can work for you. Rich Dad Poor Dad will relate to you in so many ways, and if youre open minded, it may just help you to change your life.

Learning

Chapter 1: Rich Dad, Poor Dad You can learn some valuable lessons from the two dads but when you compare them you can see the contrasts between their views about working hard, getting an education, saving and investing and realizing how habits of the rich and poor significantly differ. One would say go to school, and after you finish your studies find a high paying job. The other would say there are some skills you cannot learn from school. There are many different views and ideas that can influence a lot of mind.

Chapter 2: The Rich Dont Work for MoneyBase on the book there are two main emotions which can prevent people from developing wealth: fear and desire; fear of not being able to pay expenses or fear of losing money keep many focus in the day-to-day work, preventing many from evaluating investments and other sources of income. The desire to keep physically good looking appearance by buying expensive clothes or even to become in with the trend by buying gadgets drives expenses so high that people have no choice but to stay focused on their jobs to maintain their lifestyle. Lesson one is all about understanding those two emotions and stopping them from hindering ones success. The Rich Dad was more focused on ways of creating his own money, money that increases even if you dont work, rather than waiting for the next job with a pay raise.

Chapter 3: Why Teach Financial Literacy?Financial literacy is simply means the study of managing ones finances. There are a few basic terms one would need to know in order to understand financial literacy. The first is Income and Expenses. Income is simply the amount of money you earn like wages, salaries, etc. Expenses are things like taxes, food, rent, clothes, fun, and transportation. The second one is the Asset and Liabilities. An asset is something that puts money into your pocket like stocks, bonds, investments. A liability is anything that takes money out of your pocket home mortgages, loans, credit card debts. The rich keep his income and used the return of their investment to cover up their expenses. While the poor uses their salaries and wages to cover up their expenses. It simply means one must invest to cover his expenses rather than waiting for the pay raise.

Chapter 4: Mind Your Own Business As mentioned on the previous chapter, focusing on your asset is the key quality that must be developed in order to gain wealth. The rich focus on improving the size of their investments rather than simply waiting or demanding pay rises in their income. This means keep your expenses low, reduce your liabilities and build a base of solid assets.

Chapter 5: The History of Taxes and the Power of CorporationsBy creating a personal corporation, the r