Rich Dad Poor Dad

Robert Kiyosaki



Aug 11, 2021

Read time

20 minutes


This book advocates the importance of financial literacy, financial independence and building wealth through investing in assets, real estate investing, starting and owning businesses, as well as increasing one's financial intelligence. Rich Dad Poor Dad is written in the style of a set of parables, based on Kiyosaki's life.


Poor Dad was Kiyosaki’s biological father, a man who was highly intelligent and very well educated. Poor Dad believed in studying hard and getting good grades, then finding a well-paying job. Yet, despite these seemingly positive attributes, Poor Dad didn’t do well financially.

Rich Dad was the father of Kiyosaki’s best friend. He had a similar work ethic to Kiyosaki’s real dad, but with a twist. Rich Dad believed in financial education, learning how money works, and understanding how to make money work for you. Although he was an eighth-grade dropout, Rich Dad eventually became a millionaire by putting the power of money to work for him.

The Rich Don’t Work for Money

The rich work (hard and a lot), but not for money.

Rich people – and people who want to become rich – work and learn every day how to put money to work for them. As Rich Dad says, “The poor and middle class work for money. The rich have money work for them.”

Having a regular job is just a short-term solution to the long-term problem (or challenge) of creating **wealth **and financial freedom:

“It’s **fear **that keeps most people working at a job: the fear of not paying their bills, the fear of being fired, the fear of not having enough money, and the fear of starting over. That’s the price of studying to learn a profession or trade, and then working for money. Most people become a **slave **to money – and then get angry at their boss.”

Why Teach Financial Literacy?

Asset vs Liability

An asset is something that **has **value, that **produces **income or appreciates, and has a market where the asset can easily be bought and sold:

  • Assets produce income
  • Assets appreciate

Liabilities **take **money out of your pocket because of the **costs **associated with them.

A personal residence is NOT an asset but a liability because it doesn’t produce any sort of income.

Mind Your Own Business

There are two key messages in this chapter.

  • First, pay off your debts and start investing in income-producing assets as soon as possible.
  • Next, stay financially healthy by spending your time (instead of your paycheck) and investing as much of your money as possible in assets.

Most people spend their entire lives working in somebody else’s business and making other people rich.

The primary reason the majority of the poor and middle class are fiscally conservative is that they have no financial foundation. They have to cling to their jobs and play it safe. They can’t afford to take risks.

The History of Taxes and the Power of Corporations

Rich Dad Poor Dad is a motivational book and not trying to provide expert financial or tax advice.

The rich understand the power of company structures and the tax code and use every legal means they can to minimize their tax burden.

Compare how business owners and investors with corporations pay taxes to how most people pay tax:

Business owners with a corporate structure:

  1. Earn
  2. Spend
  3. Pay taxes

Employees who work for corporations:

  1. Earn
  2. Pay taxes
  3. Spend

Understanding the legal and tax advantages significantly contribute to building long-term wealth:

For instance, a corporation can pay expenses before paying taxes, whereas an employee gets taxed first and must try to pay expenses on what is left. . . Corporations also offer legal protection from lawsuits. When someone sues a wealthy individual, they are often met with layers of legal protection and often find that the wealthy person actually owns nothing [in their own name]. They control everything, but [personally] own nothing.

The Rich Invent Money

Inventing money means finding opportunities or deals that other people don’t have the skill, knowledge, resources, or contacts for.

There are two types of investors:

  • Investment packages are bought by people who entrust their money to a developer or fund manager. This is the way that most people invest, such as buying shares of an ETF or putting money into a real estate crowdfunding venture.
  • **Professional investors **look after their own investments, research the market to find deals that make sense, then hire professionals to manage the daily oversight. Professional investors have three things in common:
  • **Identify opportunities **that other people have not found
  • **Raise funds **for investment
  • Work with other **intelligent **people

“Some people argue that there aren’t real estate bargains where they are, but there are prime opportunities everywhere that are overlooked. Most people aren’t trained financially to recognize the opportunities in front of them.”

Work to Learn – Don’t Work for Money

Poor Dad was intelligent and well educated and worked for money because job security meant everything to him. Rich Dad became a millionaire by working to learn.

I recommend to young people to seek work for what they will learn, more than what they will earn. Look down the road at what skills they want to acquire before choosing a specific profession and before getting trapped in the Rat Race.

The **synergy **of management skills needed for **success **in business:

  • Cash flow management
  • Systems management
  • People management

Overcoming Obstacles

The primary difference between a rich person and a poor person is how they manage fear.

The five biggest obstacles people face on the path to becoming financially independent:

  1. Fear
  2. Cynicism
  3. Laziness
  4. Bad habits
  5. Arrogance

These roadblocks – and the failure to overcome them – are why people who have studied and achieved financial literacy are still unable to develop assets that generate plentiful amounts of cash flow.


Losing money is a fact of investing life, and so is the fear that comes along with it. Kiyosaki notes that he’s never met a rich person who has never lost money, but he’s met plenty of poor people who have never lost a dime because they’ve never invested.

Real estate investors who choose to act only on a “sure thing” are paralyzed by fear in disguise. People who can’t see the big picture and think big are the ones who almost never, ever succeed in investing or in life.


Everybody has doubts that affect self-confidence, and it’s easy to fall into the trap of playing “What if?” especially when friends and family are constantly reminding you of your potential shortcomings.

Things like the economy crashing, interest rates rising, and tenants not paying their rent are common “what if” fears that all real estate investors have. While these are important items to consider, it’s important not to allow the cynicism of others to overtake your control. Otherwise, you may become immobilized as opportunities pass you by.

Don’t be affected by other people’s opinions.


In today’s interconnected world it’s easy to confuse being busy with actually accomplishing things that matter. In fact, according to Rich Dad Poor Dad, busy people are often the most lazy.

Busy people arrive at the office early and leave late. They bring work home to finish at night and on the weekends. Before they know it, the people and things that matter most to them have disappeared.

Instead of giving in to the call of the rat race and mistaking action for accomplishment, successful real estate investors are proactive and take care of themselves and their wealth first.

Bad habits

Habits control behavior. For example, most people pay their bills first before they pay themselves. The result is that there’s usually very little left over at the end of the month for investing.

Paying yourself firsteven if you don’t have enough money to pay other people - makes you financially stronger, mentally and fiscally. In a way, it’s a form of reverse psychology.

When you develop the habit of paying yourself first, you become motivated by the fear of not being able to pay creditors. In turn, you begin looking for other forms of income like investment real estate.


Investors know what makes them money. But it’s the things they don’t know – and don’t know they don’t know – that makes them lose money. When people become truly arrogant, they honestly believe that what they don’t know doesn’t matter.

Train yourself to listen to what other people have to say, especially when it comes to money and investing. If you discover you’re ignorant about a subject, educate yourself or find an expert in the field.

Overcoming these five biggest obstacles on the path to real estate success requires a blend of balance and focus. There are plenty of “Chicken Littles” in the world today -- people with a victimhood mentality who live their lives in cynicism and pessimism.

Rich Dad Poor Dad suggests filtering negative people and their fears out of your life. Instead, concentrate on the big picture and always ask, “What’s in it for me?”

Getting Started

There is gold everywhere, most people are not trained to see it.

Part of this lack of vision and clarity comes from the world we live in. We’re trained from a very young age to work hard for someone else, spend the money that we earn, and borrow more if we run short.

Unfortunately, people who choose to become one of the masses never take the time to develop their financial genius.

Investing in real estate is the perfect example. The average person can spend a week out in the field and find nothing, while the investor who has trained himself can easily find four or five deals that make sense in a single day!

Here are the ten steps to follow to develop your financial genius and discover the gold that’s already out there, just waiting to be found:

  1. Have a **deep emotional reason **or **purpose **for doing what you do, a combination of wants and don’t wants.
  2. Understand the power of choice and choose daily what to do, including choosing the right habits and educating yourself.
  3. Choose your friends carefully by leveraging the power of association, being careful not to listen to poor or frightened people.
  4. Master the power of** learning quickly** and develop a formula for making money.
  5. Pay yourself first by mastering the power of **self-discipline **to manage your cash flow, people, and personal time.
  6. Select great people for your team and compensate them generously for their advice, because the more money they make the more money you will make.
  7. Ask “How fast do I get my money back?” by focusing on return **of **investment first, followed by return **on **investment.
  8. Use money generated by assets you own to buy luxuries by focusing on self-discipline to direct money to create more.
  9. Have a role model to follow and tap into the power of their genius to put to your use.
  10. Realize that if you want something, you need to give something first.

Still Want More? Here Are Some To-Do’s

A summary of the book into a checklist of actions you can start taking today:

  1. Stop doing what you’re doing by taking a break and assessing what is and isn’t working.
  2. Look for new ideas by finding resources on different and unique subjects.
  3. Find a mentor who’s been where you're going, take them to lunch and pick their brain.
  4. Always be learning by taking classes, attending seminars, and reading.
  5. Make lots of offers (always with escape clauses) because eventually someone will say “Yes.”
  6. Spend ten minutes each month for the next 12 months walking, running, or driving a certain area and looking for changes that create bargains.
  7. Shop for real estate deals when the market corrects, because profits are made when buying, not when selling.
  8. Learn how, when, and where to buy by investing in your education.
  9. Think bigger to get richer, because small thinkers don’t get the big breaks.
  10. Most people only look for what they can afford, so buy a bigger pie and cut it into pieces by finding a buyer first, then a seller.
  11. Negotiate volume discounts by thinking big, pooling people together, and buying in bulk.
  12. Read and learn from history, because history always repeats itself.
  13. Action always beats inaction.