Robert Kiyosaki is the Sergeant Pepper of Financial Independence. Where the Beatles revolutionized the way music is recorded with that seminal album, Kiyosaki did the same for financial independence with his Rich Dad Poor Dad book. It’s filled with unconventional and interesting advice such as “Savers are losers” and “the rich don’t work for money”. And like Sergeant Pepper, the book is still important and revolutionary today. Read the Moneyman Review and learn 4 Big Insights from this masterpiece that can help you on your Financial Independence journey.
Here’s a quick overview of what will be covered in the post. Simply click on these quick links to jump straight to different sections.
OK, let’s get started with the verdict and what MM thinks of Rich Dad Poor Dad.
Rich Dad Poor Dad Review: The Verdict
Rich Dad Poor Dad is the Grandaddy of Financial Independence Books. It is a classic. It should be read and then re-read throughout your life. It’s a must-buy.
Read on to find out why.
Is Rich Dad Poor Dad Worth Reading?
It’s a resounding yes, anyone interested in Financial Independence should read Rich Dad Poor Dad. Like most books, it will resonate more depending on what stage you are in your financial journey. If you are in control of your finances and looking to escape the rat race, Rich Dad Poor Dad will help you learn how the rich get rich. If you are in financial trouble, Rich Dad Poor Dad is still a fantastic read and can serve as financial inspiration.
What Is the Key Concept of Rich Dad Poor Dad?
Rich Dad Poor Dad tells the story of a child learning about financial independence through his two dads, one that is rich and one that is poor.
Kiyosaki’s poor dad is University Educated and believes young Kiyosaki should go to school, get a job and work for a big corporation. His rich Dad is not university educated but challenges Robert and teaches him about business and financial independence. The boy learns many valuable lessons, such as the difference in how the rich and poor manage and think about money.
Four Big Insights from Rich Dad Poor Dad
Within the 6 lessons in Rich Dad Poor Dad, Four Big Ideas emerge that touch all aspects of the book. These can be visually simplified in the image and text below.
1: Kiyosaki Recommends We Take the Road Less Travelled
Every life is unique, but most of us can tread the same road along our journey.
Kiyosaki’s Poor Dad followed this path. He was a university graduate stuck in the rat race paying his taxes with no escape. His Rich Dad followed the road less traveled. He ran his own business and thought about money and people differently. Kiyosaki had an open mind and listened to both viewpoints. But ultimately, he gravitated toward his rich dad and the financial education he received from him, such as.
“The poor and middle-class work for money. The rich have money work for them”
Robert Kiyosaki
Most people only talk about or dream of getting rich. Kiyosaki learned that the road less traveled means doing something most people won’t. For example, getting up and doing something to get rich. Finding new opportunities and letting your mind go to work while never giving up.
The road less traveled means asking the question “is there another way?”. Kiyosaki was shown this other road, and once he started on it, he could see things other people couldn’t. His mindset changed, he became more independent and he could see opportunities everywhere. This influenced the rest of his life as he discovered the rich mindset. This new road gave him purpose, and the drive to do whatever was necessary to gain financial freedom.
2: Understand Assets and Liabilities – That’s how the rich get richer
if you want to be rich, you need to be financially literate. For Kiyosaki, Rule #1 is knowing the difference between an Asset and a Liability.
Assets put money in your pocket, liabilities take money out of your pocket. Kiyosaki believes that students leave school, like his poor dad, with no financial education. They work every day and spend their lives buying liabilities and not assets. They will struggle financially because they never learned how to manage money. Financial aptitude is required to not just make money, but how to keep it and how to make that money work for you.
Ultimately, the rich get richer because their assets generate enough income to cover expenses and they re-invest into more assets. The middle class treats their home as an asset instead of investing in income-producing assets. Their only source of income is their paycheck. And their livelihood is entirely dependent on their employer. Making them a slave to their wage.
Once you understand the difference between Assets and liabilities, Kiyosaki advises concentrating your efforts on buying income-generating assets. If possible, pay yourself first and watch your assets grow. And keep your liabilities and expenses down so more money is available to pour into your assets.
3: Increase your FInancial IQ – Work to Learn (and Earn)
Financial Independence requires decisions to be made to build your asset column. Financial knowledge is required to make these decisions, and this is where financial intelligence comes into it. Also known as financial IQ, Kiyosaki categorizes it under 4 broad areas of expertise.
- Accounting (The ability to read and understand numbers/financial statements)
- Investing (The strategies and creative ability to have “money making money”)
- Understanding Markets (Understanding supply and demand when making investments)
- The Law (Understanding tax advantages can impact long-term wealth)
Financial IQ is the synergy of many skills and talents, while also including the above four fundamental areas of expertise. Kiyosaki believes that if you aspire to great wealth, a combination of these skills will greatly amplify your financial intelligence.
Also, financial genius requires an X-Factor that Kiyosaki describes as guts, balls or audacity. It’s not just the smart that get ahead, it’s the bold and courageous. If fear is too strong, genius is suppressed. That is why financial IQ is important. This intelligence builds confidence to be bold and it creates more options and in turn, more wealth.
Financial IQ can build your asset column, but most importantly, it helps develop your greatest asset.
“The single most powerful asset we have is our mind”
Robert Kiyosaki
Financial Intelligence lets your knowledge reduce the risk of losing money. Financial IQ improves the odds. The smarter you are, the better chance you have of beating the odds. That is why Kiyosaki believes that you must work to learn, which will help you earn later. Financial IQ is important and required to achieve financial independence.
4: Master the One Skill That Will Increase Your Income Exponentially
Sales and Marketing is the one skill that will provide great wealth. Kiyosaki believes that this skill should be learned and mastered for your income to jump exponentially. Financial Intelligence is a synergy of various skills and Kiyosaki believes that we are “one skill away from great wealth”. Sales and marketing is the skill that will drive wealth and can be used across various industries.
The most important specialized skills are sales and marketing. The ability to sell – to communicate to another human being, be it a customer, employee, boss or spouse. It is the base skill of personal success. Communication skills like writing, speaking and negotiating are crucial to a life of success. These are skills Kiyosaki continues to work on. Sales and marketing is the cherry on top of the Financial IQ cake.
Key Takeaways
Rich Dad Poor Dad is a fantastic book. Kiyosaki believes that learning about money is a lifetime study while on the road less traveled. Reading this book, he becomes your de-facto rich dad, encouraging you to study to be rich and understand how money works.
Any summary or cheat notes of the book don’t do it justice. It is jam-packed with fantastic quotes and ideas. Learn from the best, and build your wealth via education to get out of the rat race. And remember…
“It’s not how much money you make, it’s how much money you keep”
So true. Dear reader, do you love Kiyosaki as much as I do? Let me know in the comments.
M. Moneyman
FAQS
To wrap up, here are some quick answers to some frequently asked questions about Rich Dad Poor Dad or Robert Kiyosaki specifically
When Was Rich Dad Poor Dad Originally Published?
Rich Dad Poor Dad was first published in 1997.
What Are the Six Lessons in Rich Dad Poor Dad?
Rich Dad Poor Dad has six main lessons:
- Lesson 1: The Rich Don’t Work for Money.
- Lesson 2: Why Teach Financial Literacy?
- Lesson 3: Mind Your Own Business.
- Lesson 4: The History of Taxes and The Power of Corporations.
- Lesson 5: The Rich Invent Money.
- Lesson 6: Work to Learn—Don’t Work for Money.
What Is with the Sergeant Pepper Reference?
The 20-year anniversary edition of Rich Dad Poor Dad references Sergeant Pepper, as the song begins with the line “it was 20 years ago today, Sergeant Pepper taught the band to play.” Kiyosaki used this line to open his 20th-anniversary edition. And although Kiyosaki mentions that the Beatle’s Sergeant Pepper was a huge success from day one while his book was not. I like the idea of Kiyosaki as a revolutionary figure in personal finance, almost fictional and a big character, like Sergeant Pepper.
