Looking to gain insight into the Rich Dad Poor Dad takeaways and see if it’s worth buying? Wondering what the book could teach you regarding personal finance and wealth management, then keep reading!
This post is all about Rich Dad Poor Dad takeaways.
The book, Rich Dad Poor Dad is all about financial education and how to achieve wealth. It is a great read for anyone looking to get ahead in life and features many motivational stories and helpful tips.
Rich Dad Poor Dad Worth Reading?
If you have very little experience in personal finance and wealth management, then yes, “Rich Dad Poor Dad” is absolutely worth reading. It’s the book that I wish I had read back when I was in high school. You know, back in those days when we were learning how to find the area under a curve and all that useful information that you’ve definitely used in adulthood?
This book served as a crash course when I really started learning more about personal finance. It presents subtle mindset changes in a manner that is easily accessible to everyone.
If, however, you already have a pretty solid understanding of wealth management, then give it a skim or even a skip. The book itself is very repetitive at times and covers basic concepts that ideally you’re already familiar with.
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Rich Dad Poor Dad Summary
“Rich Dad, Poor Dad” is the story of Robert Kiyosaki’s two fathers. The “rich dad”, his best friend’s father who became wealthy by owning businesses and investing in real estate; And the “poor dad”, his own father, an educator and employee for most of his life. Both men had opposing viewpoints on money and how to acquire it, and Kiyosaki developed a passion for financial education from observing their two very different paths.
Robert’s poor dad always believed in living below your means, saving up 20 years of income before even thinking about buying a piece of real estate and never using credit cards. His rich dad on the other hand was always looking for advantages and ways to free up more of his time. He worked hard, but he also knew that if you want something in life you have to be able to give yourself an advantage.
Through this book, Robert Kiyosaki tells us about their two paths, gives insight into how Rich Dad accumulated his wealth, and shows how his own financial education has helped him to live a life of freedom, and have time for the things he truly enjoys.
It is easy to read, as Robert uses a lot of examples from topics he had discussed with his two fathers throughout his life. I feel that it is important to learn about money and how to make it work for you early in life, and this book is a great way to get started.
Here are some of the primary lessons that I took away.
7 Rich Dad Poor Dad Takeaways
1) You cannot become wealthy working for someone else, always trading time for money.
I know a lot of people who are happy with their jobs and the money that they make, but it doesn’t matter if your boss is paying you $200k or $20k per year. If you work for someone else, you will never be able to truly accumulate enough freedom to live the lifestyle that you want.
And this doesn’t even take into account the fact that you are giving up your most valuable commodity – time. Time is the one limiting factor that every single person has. There will always be more opportunities to make money (if you know where to look), but there will never be more opportunities to get back time.
2) Learning the difference between an asset and a liability.
This is one of my favourite quotes from the book: “An asset puts money in your pocket; a liability takes money out of your pocket”.
A lot of people make the mistake of thinking that their house is an asset, but it’s not. For one thing, if you have a big mortgage payment at the end of every month, then your house is definitely a liability. The only way your home can be an asset is if you are generating an income off that property, greater than your monthly payment.
It’s important to understand that a liability can become an asset if used in the right way. For instance, if you have an expensive car, for the sake of it, and just make the minimum payment every month, then that is a liability. However, if you rent that car out occasionally throughout the month, for higher than the car payment, suddenly that liability has become an asset and is now cash-flow positive! The goal is to have your assets generate enough income to cover your expenses.
3) “It’s not how much money you make. It’s how much money you keep,” Robert Kiyosaki
This is such a simple concept and yet such a life-changing one if you understand it well enough to apply it to your own life. The goal isn’t just to earn money but rather to earn money that goes into your pocket instead of someone else’s! A paycheck where the majority goes toward bills and taxes will never let you get ahead. Some earning 50K a year and saving 10K is doing much better than the person that makes 200K and spends 250K.
Instead, the goal is to hold onto the money you make for as long as possible. True wealth lives on for generations.
4) Credit cards are a great tool to build credit and get rewards, but you should never use them for purchases that you cannot afford.
This is such a crucial piece of advice, debt can be used to build wealth, but it needs to be done strategically. Given the high-interest rates of credit cards, only use them to attain the associated rewards, and never carry a balance! The money you’ll end up paying in interest is money that could have stayed in your pocket.
Compound interest can be your best friend (when you’re saving) or your worst enemy (when you’re paying), so use it wisely.
5) “The rich invent money,” Robert Kiyosaki
This quote is one of my favourite ones from the book because it really paints a picture and by that, I don’t mean that the rich print money. I mean that the rich simply think differently. It’s the ability to see opportunities, where others don’t, and truly requires a change in mindset. In order to be truly wealthy, you have to learn how to create wealth. This can mean creating a business or establishing yourself as an expert in your industry. Every single person has a skill set that can be used to their advantage.
6) “What if your job didn’t define you?” Robert Kiyosaki
I know some people might disagree with this one, but I think Robert Kiyosaki is on to something here. It was a hard pill to swallow at first because I think in society we are usually only thought of in reference to our occupation. It’s the first thing strangers ask us: “What do you do?” upon meeting. So naturally, our occupation becomes tied to our identity. A lot of people spend so much time and energy trying to get a good job and maintain it just because they want stability and security. However, what if we detached our identity from a job?
What if we just found a way to make money that wasn’t linked directly to our time or role in society?
Passive income generation is the ultimate goal.
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For those that are willing to take on the risk, starting your own business can also be very rewarding, and has the ability to provide you with true wealth. But it’s important to remember that even if you start your own business, don’t let that business turn into a just another job.
7) “Don’t work for money. Make money work for you,” Robert Kiyosaki
Accumulation of wealth is only one aspect of financial health. Using that wealth to generate even more wealth is just as important. Don’t ever settle for trading your time for money. Instead, generate wealth by using the money to invest in assets that can increase your wealth even further. These assets can include stocks, real estate or any income-generating entity.
Once you reach a point where your assets are generating enough cash flow to cover all of your expenses, that’s when true financial freedom has been reached.
If you think that these were valuable lessons, then feel free to buy a copy of Rich Dad Poor Dad here.
This post was all about Rich Dad Poor Dad takeaways.
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