Book Review: Rich Dad Poor Dad by Robert T. Kiyosaki
Rich Dad Poor Dad is a book about Robert Kiyosaki and his two dads (rich dad and poor dad). When he was young, he took advice from both of his dad. The book mentioned about the poor dad is his real father and the rich dad is the father of his best friend. During the young time, he always gets looking for advice from both of his dad about financial, money and investing stuff.
LESSON 1: THE RICH AND POOR MENTALITY
The poor dad said, “I can’t afford it.” The rich dad said, “How can I afford it.”.
When you said “I can’t afford it”, your brain stop working immediately. You feel sadness, helpless and depression. Then, you will not think about it anymore.
But when you said “How can I afford it?”, your brain will start working and open up your brain to think and search for the opportunities and solutions.
The poor dad said “get a job in good company”, the rich dad said “create or buy a company”.
The poor tends to more on getting a job, the rich mentality is to create sources that generate passive income for you.
Last but not least, always remember that Robert Kiyosaki said that there is a difference between being poor and being broke. Broke is temporary, poor is eternal.
LESSON 2: ASSETS AND LIABILITIES
The author clearly explain about the difference between assets and liabilities. From traditional school, we consider all property we own as an asset. But the author said, not all the assets are the assets.
For example, you own a few property but losing money every month, it doesn’t consider as an asset and it’s consider as an liabilities. Only consider your property is an asset when your property are bring you money every month.
To determine whether your assets is assets or liabilities, remember the rule “The assets brings your money every month(increase your wealth), while liabilities cost you money.”
LESSON 3: THE FOUR QUADRANT OF PEOPLE WORKING
According to the book, the CASHFLOW quadrant is divided into four types of people
- Employee – Working 9 to 5
- Self Employed – Doctors, Lawyers, accountants and etc…
- Business Owner – They don’t a job but they own a system that makes money even don’t actively involved. They have the most control to make the business works.
- Investor – Invest stock, intellectual property and etc…
The people on the left hand side of the CASHFLOW quadrant are Employee and Self-Employed. They make money by trading their times and efforts for 9 to 5 job or even more time. Most of the time, they are paying more taxes than the right hand side of the CASHFLOW quadrant. Although self-employed are also running a business, but If one day they got sick, they won’t be able to make money until they recovered. So, the author put it on left hand side because they are actively making active income.
On the right hand side of the CASHFLOW quadrant are Business Owner and Investor. They are the people who pay less taxes and making money even while they are sleeping. They will have more time and freedom because they let the money to do the job instead of actively involved in the business.
LESSON 4: THE FINANCIAL EDUCATION
The poor dad is more tends to sending their children for school, let their children study what school textbook teaches in order to get a secure job in a good company. However, the rich dad tends to teaches their children more about the financial education as much as possible because the school never taught you about financial education.
One of my favorites book! It inspired me to change my way to think like how rich think. I’ve read this book for many times. It keeps reminds me not to lost the track to be rich!