One of my clients in Finance Planning suggested me to read the book “Rich Dad Poor Dad by Robert Kiyosaki” during our very first meeting. And, during our every subsequent meeting he would ask me the same question – “Have you read the book?”.
And, my answer was always NO. I invest most of my time in reading online articles, case studies, watching videos and attending online courses related to Digital Marketing, and more importantly Marketing. Because of this, I couldn’t give enough time to read this book.
Finally, I decided to keep everything aside and start reading this book which my client has been recommending since last one year. I received the book on 27th January 2020 and today on 31 January 2020 I finished reading this book. So today, I am giving you my overall feedback.
Book Review: Rich Dad, Poor Dad by Robert T. Kiyosaki
The book’s tagline says “What the rich teach their kids about Money – that the Poor and Middle Class do not!“
The author has explained how money-making works using different examples. The examples are experienced by the author, most of which were guided by his Poor Dad and his Rich Dad. The author doesn’t have a stepfather, he is calling his friend’s – Mike’s dad as a Rich Dad. Mike’s father gave him some important lessons related to money which helped him in achieving financial freedom in his life and hence, maybe he calls him as “Rich Dad”. The teachings of both dads had a big impact on him and because of this, he is able to understand the difference between the two.
The book doesn’t explain how the share market works or any other technical details of money-making. The book explains the basic fundamental principles related to money which you can use while earning money in your own way.
Our thought process
The author has given examples of how money works, most of which I have also experienced in my personal and business life. These examples change our perspective related to earning money. While the poor say “I can’t afford it”, the rich say “How can I afford it?”. This open-ended question makes us think about the different possibilities of making money. A simple change in our thought process can make a big difference in our lives.
I see many entrepreneurs not taking their accounting activities seriously. Many of them don’t even file Income Tax Return(ITR) yearly. They don’t have a proper balance sheet that can tell whether they have earned any profit or not. Many of them don’t know that their client has cut some TDS amount from their earning, and ITR is the only way through which they can claim the TDS or use it for paying their taxes. Unknowingly we lose a lot of money. Like this, there are many things that we must learn to save our money. The book explains how small things in financial literacy can make a big difference in our lives.
The problem in the education system
Our education system teaches us to be skilled enough to get a job. The lessons related to financial literacy are not covered in our school system. With the examples, the author has explained why the school is largely responsible for not having a generation of job creators but the job seekers. The school system makes the students afraid of taking risks in their lives. And, this behaviour reflects in the way they handle the money when they start earning. They always try to play safe and hence never achieve what rich people can achieve.
Difference between asset and liability
Students should be taught the difference between Assets and Liabilities. We see many young couples buying new homes on loan, mistaking it as their asset but it is their liability which, in many cases, takes money out of their pockets for so many years, that restricts them from creating new assets in their life.
Focus on learning instead of earning
In the early stage of our life, we must put our efforts into learning rather than earning. You must keep learning. How money works, what are the different ways to generate passive income, how can you save money going on taxes and use it for creating more and more assets, are the important things that everyone should learn apart from their own set of skills. And, if needed, hire consultants who can give you expert advice.
Choose your network wisely
The author explains why it is important to keep our network limited and choose our network wisely, and I agree with that. The more you are connected with like-minded people, the more knowledge you get from them and they get from you. This helps in mutual growth.
How to manage your balance sheet
The author explains why poor people, even after having a high paying job, are still not poor by showing simple sketches of their balance sheet which shows how the money flows from their account. The author explains how to master the art of making money, so “You don’t work for the money, Make money work for you“.
There are many things that the author has explained in this book using his learnings from his Rich Dad and Poor Dad. Anyone with zero knowledge about finance or investing can understand the content of this book.
My overall experience with this book is very positive, and I highly recommend this book to everyone.
Drop your comments below if you have any questions.