Title Rich Dad Poor Dad

Author Robert Kiyosaki

Year Published 1997

Kind of Book Personal Finance

How strongly I recommend it 8/10 

My Impressions This is a classic. Full of practical financial advice with a strong emphasis on educating yourself to be financially literate and to learn how to sell.

Date Read May 2019

Practical Takeaways

  • Instead of saying "I can't afford it" ask yourself "How can I afford it?"

  • Instead of saying "I can't" ask yourself "How can I..?"

  • Study hard so you can find a good company to buy

  • Learn to manage risk

  • Talk about money and business at the dinner table

  • Be financially competent

  • Be self-reliant for your own finances

  • Refer to yourself as a rich man

  • Refer to yourself as "broke" not "poor" (broke is temporary, poor is eternal)

  • Learn how money works

  • Make money work for you

  • Take the road not taken-Robert Frost

  • Be able to make quick decisions when necessary

  • Listen when life talks to you and says "wake up. There's something I want you to learn"

  • Learn life's lessons

  • Learn through action. (Not through reading or lectures)

  • Have the courage to take risks

  • Don't let life push you into submission

  • Ask rich people about understanding money (offer to take them to lunch)

  • Design a course (for yourself or others) that mirrors real life

  • Focus on what you do have control over

  • Focus on changing yourself not everyone else

  • Don't go to college

  • Don't increase your spending when your income increases

  • Don't deny the fact that you're interested in money

  • Don't treat a Job as a long-term solution

  • Master the power of money, instead of being afraid of it

  • Use fear and desire in your favor, not against you

  • Don't live your life chasing paychecks, pay rises, and job security

  • Delay your immediate emotional reactions and think

  • Don't think the things you will buy will make you happy

  • Learn to open your mind

  • Chose what you think rather than react to your emotions

  • Forget about thinking a paycheck is the only way to make money

  • Find ways to make passive income

  • Acquire assets reduce liabilities

  • Learn about accounting. Stop thinking about it as the most boring subject in the world

  • Know the difference between a liability and an asset

  • Keep it simple stupid. KISS principle for finances

  • "If you find you have dug yourself into a hole…stop digging."//Relates to being in debt-Will Rogers

  • "Never miss a good chance to shut up"-Will Rogers

  • Don't fear being different

  • Seek new ways to solve your problems

  • Be true to your inner wisdom rather than your fears

  • Hire people more intelligent than you are

  • Excel in your education

  • Don't spend more money after getting a pay raise

  • Concentrate your efforts on buying income-generating assets

  • Focus on your asset column, not just your income statement

  • Mind your own business (ie. start your own company)

  • Don't buy Real-Estate if you hate it

  • Acquire assets that you love

  • In general hold real-estate for less than 7 years

  • Don't start a company unless you really want to

  • Once you put a dollar in your asset column never take it out (you can take out profits, but not what you put in)

  • Only buy luxuries after you've bought all of your essentials and paid yourself

  • Use the income generated by your asset column to buy luxuries

  • Develop your financial IQ (knowledge of Accounting, Investing, understanding markets, the law, and tax advantages)

  • Consider starting a corporation for the Tax benefits

  • Find out more about the benefits and protection offered by a corporation as soon as possible

  • Be bold

  • Take risks

  • Let your genius convert fear into power and brilliance

  • Don't resist change

  • Teach/learn via games and simulations

  • Reinvest your gains from assets in real-estate

  • Don't avoid failure

  • View mistakes as learning opportunities

  • When you need advice chose your advisor wisely

  • Learn to manage risk instead of avoiding it

  • Create your own luck

  • If you don't understand the investment, don't do it

  • Whatever you do for money, Learn how to be better at sales. (don't think it's beneath you)

  • Take some courses in advertising, copywriting, and sales.

  • Chose a title for your book/movie etc. that is a little controversial (eg. Rich Dad Poor Dad)

  • Know a little about a lot

  • Learn how to lead people

  • Don’t quit your sales job until you are among the top five of sellers

  • Go broke before 30 (ie. take bigger financial risks when you're young)

  • Seek work for what you will learn, more than what you will earn. Look down the road at what skills you want to acquire before choosing a specific profession and before getting trapped in the Rat Race.

  • Ask yourself "where is this daily activity taking you?"//sim. To asking what your life would look like if you repeated what you did today for the next ___years?

  • Look into the future, not just to your next paycheck

  • Take a second job that will teach you a second skill

  • Join a networking company (multilevel marketing)

  • Develop skills that transfer from industry to industry (eg. sales)

  • If you specialize, unionize

  • Don't just focus on perfecting your skills at building a better hamburger. Learn how to sell, market and deliver the hamburger.(ie. don't focus all your time and energy on being the best. Also focus on marketing/selling/the product or service)

  • Take a course in sales and a course in direct marketing

  • Always be developing your skills at writing, speaking, negotiating, and communicating

  • Constantly be attending courses or buying educational resources

  • Work with people smarter than you are

  • Spend a year learning to sell

  • Be able to give as well as receive

  • Be a good student and teacher

  • Learn skills outside of your profession

  • Start early (when it comes to investing)

  • Handle failure well

  • Be unafraid to lose-Fran Tarkenton

  • Be willing to lose so that you can win

  • Take a loss and make it a win

  • "…turn every disaster into an opportunity."-John D. Rockerfeller

  • It's okay to hate losing, but don't be afraid of it

  • Follow the acronym FOCUS. follow. One. Course. Until.[you achieve] Successful

  • First go unbalanced to go somewhere

  • Put a lot of your eggs in a few baskets

  • Invest when everyone else is too afraid to act

  • Don't let buyer's remorse get the best of you

  • Don't criticize, analyze

  • Be willing to lose money

  • When managing real estate, hire a great property manager

  • Don't make yourself busy to avoid doing something you really need to do

  • Ask yourself "What would my life be like if I never had to work again?" "What would I do if I had all the money I needed?"

  • Whenever you find yourself avoiding something you know you should be doing, ask yourself "What's in it for me?"

  • "Do what you feel in your heart to be right"-Eleanor Roosevelt

  • Pay yourself first, then work harder so you can still pay your bills

  • Find experts in subjects that you are ignorant in

  • Be wary of charlatans in the area of money and finance

  • Read. Discuss. Study. Discuss again

  • Make a list of your "Wants" and "Don't wants"

  • Have a strong reason or purpose for anything in life

  • Go to seminars

  • Notice real estate signs that are up for a long time and make an offer

  • Invest first in education

  • Invest in learning investing

  • Make the choice everyday to be rich

  • Don't use being broke as an excuse not to learn

  • Listen more than you talk

  • Choose your friends carefully

  • Learn from your friends who struggle financially what not to do

  • "Don't listen to poor or frightened people"

  • Make an offer (even if you think they'll never go for it)

  • Offer half of what the owner is asking for

  • Always make offers with escape clauses

  • If you're too late to get in on an invest, wait for the next one

  • "Be careful what you learn, because your mind is so powerful that you become what you put in your head."

  • Don't buy luxury items on credit

  • Be just as cautious of putting toxic books/movies/porn in your system as toxic foods? -Me

  • Pay yourself first, even when you come up short

  • Pay yourself first, invest the money, and let the creditors yell

  • When you come up short, let the pressure build and don't dip into your savings or investments. Use the pressure to inspire your financial genius to come up with new ways of making more money, and then pay your bills.

  • Keep your expenses low. Build up assets first. Then buy the big house or nice car

  • Use your savings only to create more money, never to pay your bills

  • Find heroes who make it look easy

  • Pay your brokers well

  • Find a broker who has your best interest at heart

  • Any time you meet a paid professional (broker/financial adviser) ask them how much property or stocks they personally own and what percentage they pay in taxes.

  • Pay professionals well

  • Find someone who has done what you want to do. Take the to lunch and ask them for tips and tricks of the trade

  • Tip people based on how good their service was, not because you feel obliged

  • Only play with money you can afford to lose (play=invest in high risk)

  • Don't cave into pressure and spend your savings or liquidate stocks to pay for consumer debt.

  • Give in order to get

  • Be friendly to other people if you want them to be friendly to you

  • Teach the thing you want to learn

  • Give without expecting anything in return

  • Teach and you shall receive

  • Teach those who want to learn

  • Whenever you feel short or in need of something, give what you want first and it will come back in buckets (money, smiles, love, friendship)

  • Choose the hard road, not the easy road

  • Choose action over inaction

  • Act now!

  • Learn from history

  • Buy the pie and cut it in pieces (ie. buy a large chuck of real estate and rent some of it out to others and keep some for yourself)

  • Convert earned income to passive income or portfolio income as quickly as possible

Big Ideas

  • The thing you are not giving is likely the thing that you are not getting enough of

  • The thing you are not getting is likely the thing that you are not giving enough of

  • A job is a short-term solution for a long-term problem.

  • If you don't have financial intelligence, whatever money you have will be gone soon

  • Workers work just hard enough to not be fired

  • Owners pay just enough so that worker's won't quit

  • The hardest part is deciding to go

  • People focus too much on building the best product/service and not enough time on learning how to sell and market it

  • The primary difference between rich people and poor people is how the manage fear

  • Poor people run from fear

  • Rich people walk towards fear

  • In order to win you must be unafraid to lose

  • You become what you put in your head (ie. You are what you read)

  • In the long run the easy road is harder than the hard road

  • Sales and marketing are the most important skills a person can have

Reasons rich get richer and poor get poorer

  • Money management is taught at home not at school

  • The poor are motivated by the fear of not having money and the fear of losing money they have

  • Rich people buy assets.

  • The poor only have expenses

  • The middle class buy liabilities they think are assets

  • The poor's money is tied up in liabilities so they can't take advantage of investment opportunities

  • Poor buy luxuries first. Rich buy luxuries last.

  • Rich have more discipline and pay themselves first

 

Assets (ie. things that put money in your pocket)

  • Businesses that do not require your presence

  • Stocks

  • Bonds

  • Income-generating real estate

  • Notes (IOUs)

  • Royalties from intellectual property such as music, scripts, and patents

 

Liabilities(ie. thing that take money out of your pocket)

  • Your house

  • Your Car (a new car loses 25% of the price you paid for it as soon as you drive it off the lot)

 

Surprising Facts

  • McDonald's is the largest owner of Real Estate in the world. The Catholic Church is second

 

Unknown Terms

Asset: something that puts money in your pocket whether or not you work

Liability: Something that takes money out of your pocket

Wealth: "if I stopped working today, how long could I survive?"

Rat Race: When one's income matches their expenses and when their income increases so do their expenses

Income: The money that is received as a result of the normal business activities of an individual or business

Financial Aptitude: What you do with the money once you make it, how to keep people from taking it from you, how to keep it longer, and how to make that money work hard for you.

Cash Flow: Cash coming in (as income) and cash going out (as expenses). It is the direction of cash flow that determines whether something is income, expense, asset, or liability. Cash flow tells the story

Stop: a computer command that sells your stock automatically if the price begins to drop, helping you to minimize your losses and maximize your gains