This is one of the most quoted financial literacy books in modern history. Written by Robert Kiyosaki and published in 1997; this is one of those books you will hear about in seminars and self-help conventions. It is quite the masterpiece. I personally really liked the book solely because of one purpose: It changed my perception of money as well as financial literacy.
In the book, the author talks about his two dads; one is the poor dad who is his biological father, and the other is the rich dad who is the father of his friend Mike. Robert’s father has a 9-5 job and is actually quite learned as he holds a Ph.D. degree. In Robert’s eyes, he sees his father as the perfect definition of the ‘Poor Dad’ since has a single source of income which he spends his entire life dependent on.
On the other hand, Mike’s father is a college dropout. However, he has multiple sources of income, he is always open to opportunities, and makes the money work for him and not the other way around. This makes Robert conclude that he is the ‘rich dad’.
It is vital to note that Kiyosaki does not dismiss the importance of college education and is in no way suggesting you drop out; the point he seeks to make is that formal education only teaches us how to make money but leaves us clueless on how to manage and grow it.
In simple terms, the Rich Dad Poor Dad book draws out from the financial wisdom that Robert received from his “Rich Dad” in comparison to his “Poor Dad”. That being said, let us have a look at 3 of the greatest lessons Robert Kiyosaki teaches us in this great book that have personally impacted me as an individual.
Money works for the rich; not the other way around
In this lesson, Rich dad explains to Robert how rich people recognize opportunities in life and hurriedly take them while the poor ignore them as they are too preoccupied running after little money for security and sustenance. The poor and middle-class always work under fear and greed since they are taught that risks are dangerous and they, therefore, prefer the comfort of salaried jobs. This allows the rich to have money working for them while the poor work all their lives for money.
Teach yourself financial literacy
The Rich Dad also emphasized on the importance of financial literacy because, without it, the rich as well could lose all their fortune. Bad financial decisions and poor financial habits often come from a place of not knowing. That is why the rich continue to get richer by investing in assets and keeping their liabilities to a bare minimum. On the other hand, the poor remain poor because they pile up their liabilities and do not purchase assets.
Mind your own business
A very key lesson in this book that Robert learns from Rich Dad is that you should not mind your employer’s business because it is not yours. If you ever want to be financially free, you should strive for ways to build your own business and become your own boss. When your employer gets a better replacement, they will often desert you without thinking twice. It is therefore very vital to spend time, effort, money, and emotions building your own business. Also, the author reminds us that instead of just focusing on a job from a temporary employer; build assets, for example, stocks, bonds, real estate, royalties, mutual funds, etc. Anything that generates a cash flow will give you the independence to quit your job and start your business.
Well, there you have it: if you ever want to achieve financial independence, start by reading this wonderful book.