Rich Dad Poor Dad was a book full of valuable information. It’s the number one personal finance book for a reason. The book was written by Robert Kiyosaki. It was initially published in 1997. It’s been at or near the top of the charts for best-selling books for the past 20 years.
The premise of the book is to help you improve your financial situation. Robert gives so many great learning experiences that he endured over the years. He relays the information to the readers that he accumulated at a young age.
Robert had 2 dads growing up. One of them was his real dad, while the other one was his best friends dad. The 2 of them had completely different viewpoints on how to make money. One of the dads was considered a “rich” dad while the other was considered a “poor” dad. The poor dad believed that going to school, getting good grades, and then finding a safe secure job after college was the key to success. The rich dad, on the other hand, did not believe that getting good grades and finding a safe secure job was the key to success. In fact, rich dads number one lesson in the book was “the rich don’t work for money”.
The poor dad had a well-paying job and was still struggling to make money. The reason why was because he didn’t have a good understanding of money.
Rich dad says that the rich have their money work for them. This means investing in stocks, bonds, real estate, etc. He says that the poor and middle-class save their money instead of investing. Why save when you can have your money work for you?
Throughout the course of this book, assets and liabilities were a major factor in Robert’s explanation of financial intelligence. He says if you understand the difference between assets and liabilities, making money will seem much easier.
The next 3 pictures demonstrate the cash-flow pattern of a poor person, middle class person, and rich person.
As you can see, this person earns income and then spends their income on expenses. This person does not invest in any assets as you can see. This person lives paycheck to…