Rich Dad Poor Dad

Great book on financial literacy that everyone needs to read

Rich Dad Poor Dad: What the Rich Teach Their Kids About Money That the Poor and Middle Class Do Not! 

Rich Dad Poor Dad by Robert Kiyosaki is a very interesting book with very little practicality. It's not going to tell you how to invest your money or what funds to invest in or how to buy the property or anything like that, but it's more about a state of mind, the right business mind to succeed. Robert Kiyosaki, a Japanese American guy from Hawaii had two dads. One dad, who he describes in the book as his Poor Dad, was a university Professor, who's income wasn't actually that low, but it was just his State of Mind that Made Robert Kiyosaki refer to as his poor Dad. The Rich Dad he refers to is his friend's dad who was a business owner.

Image Credits: Wikipedia.org

Basically, there are two key points of this book. One is the definition he uses for the poor, by saying poor he includes people with middle incomes. He uses the word poor as more of a state of mind. 

The second principle from this book is where Robert Kiyosaki explains the different ways in which the poor and the rich pay taxes and it turns out that the poor actually pay it a lot. A larger proportion of their income as taxes than the rich do and this is because the poor tend to be employees. This list includes middle-income people.  As long as you're an employee you are in the same boat ( Irrespective of how much you earn!).

So if you are planning to read this book, stop right here( Spoiler Alert!! )

So the poor by liabilities and the rich by assets and what he means by this is when the poor get their paychecks they go out and buy things like cars big screen TV houses to live in themselves. They buy things that are liabilities. They're going to bleed money, buy a car, a house.  

But if you buy assets that could include investing in stocks that are going to pay you dividends every year so you spend you know, $100,000 to buy a stock and then it pays you $5,000 5% every Year gives you cash flow. It's making your money work for you that same goes for a property. The rich will buy properties that they're able to rent out and get more income back from which covers all of the property taxes and maintenance and gives them a profit on top of that. So that's an asset to Robert Kiyosaki. 

He actually was one of the first people to start thinking of personal property which has for a long time been thought of as an asset, but he argued that it was a liability if it's just personal property that you live in and that's it's a property with a business plan, to rent and produce income from which in that case it would be turned into an asset.

Anyways, the rich are the ones who wrote the laws so they obviously put in loopholes for themselves to be able to use lawyers and use the law to pay fewer taxes.

If you are interested in reading the criticism, praise, and support: Wikipedia

It is a very interesting book and there are a lot of tips that you can use to help your personal finances both in buying assets that are going to develop long-term income for you and structuring the way you do your business, setting up a company to reduce your tax burden Etc through legal means. 

Nothing in this book is illegal.  Robert Kiyosaki sites a court case where the judge ruled that it is perfectly legal for a person to use the law to the advantage to reduce the amount of tax that they need to pay as long as they're following the law.

Book Rating

4/5 Investor Junkie          4.1/5 Goodreads

If you are interested in buying this book:

check out  the Amazon Website: Click Here

About the Author:

Robert T. Kiyosaki

Robert Toru Kiyosaki (born April 8, 1947) is an American businessman and author. Kiyosaki is the founder of Rich Global LLC and the Rich Dad Company, a private financial education company that provides personal finance and business education to people through books and videos. The company's main revenues come from franchisees of the Rich Dad seminars that are conducted by independent individuals using Kiyosaki's brand name for a fee. He is also the creator of the Cashflow board and software games to educate adults and children about business and financial concepts. (Wikipedia.org)

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