The Book That Got Me Into Reading
#3 Book Club #1: "Rich Dad Poor Dad" by Robert T. Kiyosaki
I’m not much of a reader. Recently, I found a few books which piqued my interest and “Rich Dad Poor Dad” was one of them. I became so engrossed in it that I finished the book in 2 days. This book generated a newfound interest in Personal Finance/Development genre, so much so that I ordered four similar books. This article marks the first edition of the Book club series which I am planning to start where I talk about the books that have influenced me. If you are planning to read this book or are in the middle of it, I suggest that you finish it first and then come back here.
The book talks about the contrasting views of the author’s two fathers. One was his actual father who was highly educated and intelligent. He had a Ph. D. and went to several prestigious universities on full financial scholarships. He had a good job with the government and held a respectable position. The other was his best friend Mike’s father who was a school dropout. However, he was a successful businessman. The author refers to his highly educated father as the poor dad and his friend’s father, a high school dropout, as the Rich Dad! This seems like an oxymoron but read along to understand why.
Contrasting Views
Poor dad believes that the love of money is the root of all evil. Rich dad believes the lack of money is the root of all evil.
Poor dad laments, “I can't afford it”. Rich dad questions himself, “How can I afford it?” and starts working towards realising his dream.
Poor dad says studying hard and finding a good company to secure a job is the key to success. Rich dad also recommends studying hard but to find a good company to buy.
Poor dad blames his kids for the reason he is not rich. Rich dad is determined to become rich because of his kids.
Poor dad suggests playing it safe and not taking any risks, while rich dad recommends learning to manage risk.
Poor dad treats his home as his largest investment and greatest asset. Rich dad thinks his house is a liability.
There were several contrasting views of the two dads mentioned throughout the book that confused the author as he was a young 9-year-old boy. He finally decides to take the Rich Dad’s advice which transforms the way he looked at money. He starts working for the Rich Dad to learn everything he has to offer and the rich dad starts teaching him through practical experiences. The author even starts his first business as a kid, a library with comic books for the neighbourhood kids, along with his friend.
There is a difference between being poor and being broke. Broke is temporary. Poor is eternal.
- Rich Dad
The Lessons of Rich Dad
The Rich don’t work for the money. They make it work for them. I found a similar concept in the book “The Richest Man in Babylon” which I’m currently reading. Stay subscribed as more on this is coming soon.
Rich dad feels that financial literacy is of utmost importance. Understanding the differences between asset and liability and buy assets. The assets generate the cash flow which can be re-invested into more assets. This cycle grows your money tree.
Rich dad advises focusing on the asset column instead of the Income statements. It doesn’t matter if you have a business or a day-time job, focus on buying real assets and not liabilities. For example, Real estate, Stocks, Bonds, Royalties etc.
The rich use Taxes to their advantage through corporations and minimize their tax burden legally. Rich dad treats each dollar in the asset column as an employee who works for him to make more employees. This ultimately makes him realise his financial dreams. Understanding the Taxes and the law is the key to playing the game.
The brain is the most powerful asset. Rich dad recommends taking the time to develop your Financial IQ which in turn helps you identify the best money-making opportunities.
The single most powerful asset we all have is our mind. If trained well, it can create enormus wealth.
Rich dad recommends taking courses, if required, to learn what you are not aware of. Work to learn instead of simply working for the money. Choose the people you surround yourself with carefully. Learn from your failures and learn to overcome them.
The Controversies
There are several controversies surrounding the identity of the Rich dad. Some say that he is “Richard Kimi” while others say that Rich dad is a fictional character. In my opinion, identity doesn’t matter as the values of the Rich dad, fictional or not, made the author extremely successful. There were also other controversies surrounding the exorbitant real estate profits the author revealed in this book, which many find too good to be true.
I strongly recommend this book. There’s a reason why this book is the #1 Personal Finance book of all time. If you have read the book before or have some feedback, share your thoughts in the comments below.
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I am a Technical Lead with an IT firm who is passionate about everything related to technology, productivity and writing. I post every week on Sundays. If you love my content, please consider supporting me by sharing this with your loved ones. Have a great week!