Robert Kiyosaki’s Rich Dad Poor Dad is considered one of the best personal finance books there is, and it’s an excellent introduction to the world of investments.
For me, this book was always a must read. It was in my top 3 list for personal finance books, and every time someone asked for book recommendations, I would jump in and advise them to start with Rich Dad Poor Dad telling them “It’s life-changing.” and “they should escape the rat race”.
But I never read it; all I knew was what I heard from other people who had read it before, or assumed they had. I had the book on my kindle but never seem to start it because there was always another book to read before.
The motivation to read Rich Dad Poor Dad
My wife is an entrepreneur. She loves to start businesses and learn more about how to improve our finances and create wealth. And she told me she wanted to read the book, and of course my pretentious self was telling her to read it:
Me: Yeah, you should read it. It’s one of the best books about personal finances, you know?
My wife: So have you read it?
Me: No.. see, I’ve been reading another book, but I have it on my kindle.
She smirked, and I understood the hole I was digging.
We therefore came to an agreement and purchased the book for her (she prefers paper books), while I would begin reading on my Kindle.
I’ve got to say, the book is quite amazing. It’s still very accurate in 2022 and it’s definitely a great introduction to the world of personal finance.
After I read the book, these are the main lessons I took from it:
It’s never late to start.. but I should’ve started in my 20’s
It’s a fact that it’s never too late to start learning finances and investing in yourself in order to build a better future for you and your family.
Having better financial literacy is something we should all achieve no matter what our age. That’s a fact. But if you started in your 20’s, or even early 30s, you’ll have more time to learn from your mistakes than if you’re almost 40.
For me, one of the key lessons is the fact that I should’ve started learning and started investing my money earlier.
It’s all about having the right mindset
One of the things that took me more of a surprise was the fact that this book is more about building the right mindset than giving investment tips or secret strategies to become rich in the stock market.
In fact, I’ve learned that one of Kiyosaki’s reasons for writing this book is that they don’t teach this in schools and, therefore, the vast majority of people don’t have a rich dad mindset.
“Great opportunities are not seen with your eyes. They are seen with your mind.”
Every time I read a new passage talking about the poor dad, I could see my own father giving the same advice and I saw myself in the same rat race that he was, working from 9 to 6, barely having enough income to cover all expenses.
If you truly want to build wealth, you must first adopt the proper mindset and stop working to earn money and instead make the money work for you. With the right mindset, you’ll be seeing and creating opportunities to have more wealth that you never saw before.
I thought my house was an asset
Having the right mindset allows you to see things how they really are: your house is not an asset but a liability.
It’s common to think otherwise. My father hammered that into my brain and I took it as true to my life: having a house is a big security for my future. It’s the first, and for many, the main asset in your life. Although we’re paying the mortgage to the bank, the house is in my and my wife’s name, and our kids will inherit it in the future.
“The poor and middle class acquire liabilities that they think are assets.”
With a rich mindset, you can see that the home that you took as an asset is in fact a liability. If you are an employee, your income is connected to the work you do for your boss. And if, for any reason, you are fired, you’ll be at risk of not paying your mortgage and losing the house to the bank.
If it’s costing you every month, it’s most definitely a liability.
Real estate is still the best way to get rich
No matter what decade we are in or what country you live in, real estate is still the best way to create wealth. Most of the examples given by Kiyosaki are related to real estate that he bought and sold at a higher price.
The same principle holds in our day. If you have an income, find cheap real estate and sell it for a higher price than you paid. There are always good deals; you just have to look at them with the rich dad’s mindset.
If you don’t have the income to buy real estate for now, Robert gives us other ways to have assets:
- Stocks
- Royalties
- Bonds
- Businesses
The most powerful asset is my mind
One of the key insights is that in order to achieve financial freedom, you must have financial intelligence.
The right mindset puts you on the right path to freedom, but it’s becoming more financially intelligent that allows you to escape the rat race.
“Education is more valuable than money, in the long run.”
Working on my financial IQ means learning more, reading more books, and surrounding myself with people who are on the same path as me or have similar goals.
Learn from everyone what to do and what to avoid in order to secure your money.
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