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Book Review: Rich Dad, Poor Dad – What the Rich Teach Their Kids about Money – That the Poor and the Middle Class Do Not!

Gain the financial literacy required for wealth and independence.

People spend their lives believing that hard work and a good education are the keys to success, but most of these people end up struggling all of their lives, only to reach retirement with nothing to show for it. This book review tells the story of two dads and their wildly different strategies for life and success. Poor Dad says follow the status quo and work for others, while Rich Dad offers tools for independence, wealth, and freedom through financial literacy.


  • Are tired of depending on others for income
  • Want to choose when to work without sacrificing your bottom line
  • Wish you had the financial education to grow your wealth


The rich stay rich and the poor stay poor because finances are taught at home. A talented, brilliant individual can still struggle financially if they are raised with a poor mindset.

Book Review: Rich Dad, Poor Dad - What the Rich Teach Their Kids about Money – That the Poor and the Middle Class Do Not!

Once there were two dads. They both excelled in their perspective careers, but one always struggled financially while the other prospered.

These dads had very different opinions: One focused on getting an education, finding a great job, benefits, and security. The other focused on creating companies and wealth, rather than working for them.

One was a rich dad and the other was a poor dad.

A financial education is far more powerful than money, because money is fickle: It comes and goes. But if you understand how it works, you know how to get it back when it goes. You don’t work for money — you make money work for you.

Lesson 1: Rich people don’t work for money

Poor Dad was a teacher. He made decent money but usually struggled to pay his bills. He claimed not to care about money, saying that he enjoyed teaching and that was enough. Poor Dad was insistent that a good education and a great job are the keys to success.

Rich Dad did not have an education, but he ran several successful companies around town. He believed that rich people make money work for them, while every- one else works for money.

Rich Dad explained that most people are motivated by fear and desire. They fear not having enough or running out of money, and that fear motivates them to get a job and keep going back. When they get their paycheck, their desire kicks in as they imagine all of the things money can buy. Once they have spent their money, they feel the fear once again.

And the cycle continues while people become wage slaves, always dependent on a boss in a never-ending rat race.

Fear and desire are emotions that can rule our lives. We can react to these emotions, or we can pause and think about our options.

When you live your life according to emotional reactions to fear and desire, all you look for is a paycheck. Since that is all you look for, that’s all you will ever see.

Rich Dad wanted to see other opportunities — opportunities to let money work for him, not the other way around.

Lesson 2: Why Teach Financial Literacy?

Wealth is not about how much money you make. It’s about how much of that money you get to keep, and you can’t understand how to keep your money without financial literacy. Poor Dad focused on a typical education, while Rich Dad prioritized a financial education.

The foundation of your financial literacy is learning the difference between an asset and a liability, something most poor or middle-class individuals do not understand. The rich accumulate assets, which put money in their pockets. Every- one else acquires liabilities, which take money out of their pockets.

Many people fall into a cycle of building liabilities without even realizing it.

Homeownership is a great example. Many young couples assume that a home is a great asset, so they buy one and then fill it with things, increasing their expenses. If they get more money through a promotion or an inheritance, they immediately buy a bigger home and begin the cycle all over again. Their home isn’t providing money, it’s costing money. Thus, it’s a liability.

This doesn’t mean that buying a home is bad, it simply illustrates a major mis- understanding about financial literacy. The poor and middle-class rely on an in- come solely through their salaries, and their expenses generally rise in proportion to their income. This creates the never-ending rat race of struggle and dependence.

When a financially literate person wants to buy a home, they first buy assets that can pay for that home. Their salary isn’t a factor.

Once you increase your financial literacy by understanding the difference be- tween a liability and an asset you will start to focus on acquiring assets instead of chasing a bigger salary. The money you make from your assets can buy all that you need, and anything left over can be reinvested into even more assets.

Lesson 3: Mind your own business

Most people spend their lives working to make someone else rich. When your job is your only source of income, you are dependent on others and risk losing every- thing should things go south. Downsizing and recession are terrifying to most of the population because they work for someone else’s business.

Poor Dad thought the road to success was working hard for someone else, but Rich Dad believed in minding his own business.

Becoming wealthy requires that you mind your own business, instead of some- one else’s. Your “business” is your assets, not your salary.

This doesn’t mean you should rush out and quit your job, but it does mean that you should begin buying real assets and continually growing them. If you want to become financially secure, reduce your expenses and liabilities while building your assets. In short, do the exact opposite of what most middle-class citizens do.

For example, you could begin gathering real estate assets and receive passive in- come from rent payments. This way, you aren’t dependent on a boss or a company for your income.

Assets come in many different forms, from real estate to stocks to company ownership (but only if said company can operate without you, otherwise it’s just work). Not every asset is right for every person. You will take better care of some- thing you truly enjoy, so figure out which assets fit your personality and focus on those.

You can keep being a great employee, but mind your own business as well.

Lesson 4: The History of Taxes and the Power of Corporation

Poor Dad knew a lot about history, but Rich Dad knew the history of taxes.

Americans were originally anti-tax, but they eventually changed their tune. The idea was similar to Robin Hood: The rich would be taxed to support the poor.

But the government soon needed more and more money, so the tax laws trickled down to the people who would suffer the most. Now, taxes are a burden on the middle class but not on the rich, because they have found their way around taxes.

When individual employees work, they have taxes taken out of their paychecks and then receive whatever is left over. Corporations, on the other hand, spend what they want on their pre-tax earnings, and then are taxed on whatever they did not spend.

The rich discovered this loophole and began forming corporations to hold their money. What many people don’t realize is that corporations aren’t necessarily big companies with employees in giant buildings — they are simply folders with a few legal documents.

Having financial knowledge allowed the rich to find this loophole in the system, making them even more rich. Meanwhile, the financially illiterate middle class are forced to get by with whatever is left over after the government takes their portion.

There are plenty of other loopholes that increase the wealth of whomever has the financial education to take advantage of them.

Rich Dad believed that the longer and harder you work as an employee, the more you are losing to the government. As a young man, he used his corporate salary to buy more and more assets, and he created a corporation to hold those assets.

Soon, Rich Dad was paying for the things he needed and wanted with his pre-tax corporation earnings, while his taxed salary was re-invested into more assets.

Meanwhile, Poor Dad struggled to make ends meet on the little he had left over after taxes.

Lesson 5: The Rich Invest Money

Throughout our lives we are told to work hard and save some of our money. This is certainly what Poor Dad advised. But Rich Dad had other ideas.

Rich Dad knew that simply working your whole life and setting aside a bit of money was missing out. In a fast-changing world, new opportunities to make money are popping up every single day. And, unlike in the past, we can now make money simply by our intellect and ideas.

Rich Dad advises financial literacy in order to notice, understand, and take advantage of all these opportunities. Instead of simply making money, financial intelligence allows us to invent money.

The pillars of financial intelligence are accounting, investing, marketing, and the law. Knowledge of these pillars is what allows the rich to take advantage of tax loopholes like forming corporations. It is also what allowed Rich Dad to increase his wealth through unique opportunities that most miss out on because they are so focused on working hard and saving a little bit.

For example, while most people are focused on saving money during depressed housing markets, the financially literate notice the opportunity and buy real estate at bargain prices.

Accomplishing something like this requires knowledge, and many people would simply rather plug away at their jobs than expand their minds and grab new opportunities.

Knowledge is power, and it is through financial knowledge that the rich invent money.

Lesson 6: Work to Learn — Don’t Work for Money

Lesson 6: Work to Learn – Don’t Work for Money

Poor Dad spent his life specializing in a single field, but Rich Dad knew that specializing limits options. It may earn more money in the short-term, but often it leaves you vulnerable when the market changes or the world evolves.

Poor Dad spent his life getting more degrees in the same expertise, always chasing promotions that inevitably weren’t enough. Eventually his career went south, and he was forced to scramble for something else. His options were limited because he had spent so much time focusing on one single skill.

Rich Dad’s sought new roles every time he mastered his previous one. His goal was to learn to manage a few key areas that are vital for financial success: cash flow, systems, and people. Some of the roles didn’t offer a lot of money, but the knowledge he gained provided the long-term success he wanted.

Rich Dad valued jobs for what you learn, not what you earn. There are countless brilliant and talented people in the world who will continue to struggle because they don’t know anything outside their specialty. Often, all these people need is some knowledge of marketing or communications, but most of them view these “extraneous” subjects as a waste of time.

Instead of learning a lot about one subject, learn a little about a lot of subjects.

Work to learn and you will have the skills for financial success.

Overcoming Obstacles

If you gain the necessary knowledge to be financially literate, there are still some roadblocks you may face. These obstacles often keep educated people from ever becoming wealthy.

The first is fear. Most people fear losing their money, rich people included. The difference between the rich and poor is not fear but what they choose to do with that fear. You can play it safe or you can take big risks. You can let failures defeat you or let them teach and inspire you. Financial winners use their failures to inspire more wins, and this makes them unafraid of losing.

The next is cynicism. There will always be doubts, both in our minds and from the people around us. Those who are too afraid to take their own risks are more than happy to tell you not to take yours. But the wealthy overcome that cynicism.

When everyone else is talking doom and gloom, they are taking advantage of de- pressed markets through excellent deals. Don’t criticize; analyze.

Another obstacle is laziness. This doesn’t necessarily look like sitting on the couch all day and refusing to get a job. Often, the laziest people are very busy because they know this excuses them from making the effort in other areas. Poor people often claim, “I can’t afford it,” which gives their minds an excuse to shut off. Instead of shutting down, they could ask, “How can I afford this?” and get their minds working on a solution.

The last obstacle is arrogance. According to Rich Dad, what we don’t know loses us money, and arrogance is the assumption that what we don’t know isn’t important. This means that when you are arrogant, you will lose. Fight ignorance and arrogance by actively seeking to educate yourself on the topics you don’t under- stand.

Getting Started

If you want to learn how to free yourself of the rat race, there are some steps you can take on the road to wealth and independence.

First, find a motivation bigger than yourself. The road to wealth isn’t always easy, but if you have a personal, emotional reason for wanting to succeed, you will stay strong during the hard times.

Next, reinforce your goals every day by remembering your motivation and speaking positively to yourself. Affirm your ability to find financial freedom.

Choose your friends wisely. Cynical and fearful friends will start to drain your courage and motivation, but brave, financially intelligent friends will inspire you.

You’ll also have the opportunity to exchange ideas, and they will motivate you to al- ways keep learning, an essential aspect of remaining successful.

Most people pay all of their bills and creditors, leaving themselves with whatever is measly amount is left. But Rich Dad paid himself first. If there wasn’t enough to go around, the pressure from his obligations inspired him to work harder or find creative ways to increase his income. Adopting this policy also forces you to think long and hard about the liabilities you’re willing to take on.

Use assets, rather than debt, to fund luxuries. Most people go out and get a loan when they want a bigger house or a new car, but this increases their liabilities and makes them desperately dependent on the rat race. Build up your assets and re- ward yourself with luxuries paid for by those assets.

Finally, seek out a financial hero, or several. You may know them personally or simply read their books and watch their speeches. Financial heros can educate and motivate you to accomplish your goals.


Poor Dad thought a college degree, a good job, and hard work were the keys to success. Rich Dad valued education, but he believed that a good education included a financial education.

Poor Dad spent his life working for earned income and encouraged others to do the same. Rich Dad understood that earned income is only one avenue, and that passive income and investment portfolios are the real keys to financial independence.

Having your money work for you means building passive income.

Most people believe that it takes money to make money, but the truth is that money is just a concept. To make it, you only need your mind. One small idea can turn into something life-changing.

Today, financial literacy is vital not just for success but for survival. Do every- thing you can to educate yourself through books, classes, conferences, and men- tors. Your greatest gifts are your mind and your time. Use them wisely.

Educate yourself, acquire assets, and build a wealthy future.


Money, Investments, Business, Economics, Finance, Self Help, Personal Finance, Currency, Personal Development, Entrepreneurship

About Robert Kiyosaki

Robert Kiyosaki is an author, educator, and successful entrepreneur. His books Rich Dad Poor Dad and Conspiracy of the Rich are New York Times bestsellers and have helped countless people achieve financial freedom. Kiyosaki founded Rich Dad Co., an organization focused on financial education for both adults and children.

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