Rich Dad Poor Dad, written by Robert T. Kiyosaki, is one of the best-selling books about personal finance of all times.

It was the first financial book I read, and it captivated me. Robert T. Kiyosaki explains how to improve your personal finances, regardless of your salary.

Rich Dad Poor Dad is the best book on personal finances that you can read

The book Rich Dad Poor Dad changes your view on how to use money for your own benefit.

It’s a very easy-to-read book. Robert T. Kiyosaki clarifies all the concepts with simple examples.

After reading it you will realise your view about money was completely wrong. It made me start thinking about financial freedom and how to achieve it.

The author contradicts conventional knowledge, and tells you that getting rich depends only on you.

Escaping the “rat race” and achieving early retirement is possible if you reshape your brain.

If you want to read the book you can find it on amazon here.


Introduction to Rich Dad Poor Dad

This book was written in 1997. Millions of people around the world have read it. To date, more than 40 million copies have been sold.

Robert T. Kiyosaki tells you the story of the two parents he had, one rich and one poor.

The rich dad is the father of his best friend, who accumulated wealth through entrepreneurship, creating business and investing his capital.

On the other hand we have the poor dad , who is Robert T. Kiyosaki’s father. This father was highly educated, intellectual, had several degrees and worked his whole life. Despite this, he always had debts and never managed to obtain financial security.

In this book Robert tells us the different behaviour of the two parents that led them down two totally different financial paths.


Who is Robert T. Kiyosaki?

Robert T. Kiyosaki was born in Hawaii in 1947. He is an entrepreneur and author of several books.

He studied at the U.S. Merchant Marine Academy, where he graduated in 1969. Shortly thereafter he joined the Marine Corps and served in the Vietnam War.

After this he created several companies that were not successful, since most of them ended up in bankruptcy. He was broke several times.

Robert T. Kiyosaki is the author of Rich Dad Poor Dad

Everything changed in 1997 when he published Rich Dad Poor Dad. This is one of the most famous finance books in the world, and has been translated into 51 languages.

This book is the #1 New York Times bestseller.

In 1997 he created Cashflow Technologies, a business and financial education company. This company gives seminars around the world on financial education, and it represents Robert’s main source of income.


Book Summary – Main Takeaways

Now I’m going to cover the ideas of Rich Dad Poor Dad, so you can understand the main concepts.


Make money work for you

Robert T. Kiyosaki points out the big difference between the rich and the middle class and the poor.

The middle class and the poor work for money. This means they have a job that gives them a salary, and with this salary they pay their expenses.

Instead the rich make the money work for them. The rich invest their money in assets that generate more money for them.

By delaying the payment of taxes you are saving and generating more income

So the rich get their money to work for them.

This is one of the most important ideas in the book, so it’s very important that you understand it well.


What matters is not how much money you make, but how much you keep

The author emphasizes that the important thing is not how much money you make, but how much money you manage to save.

There are many people who have high income, but their lifestyle is very expensive, so they save nothing. In fact, many of them struggle with debts.

The important thing is not how much money you make but how much you get to stay

Normally people increase their expenses as their salaries raise. Therefore they are never able to save money.

Robert T. Kiyosaki stresses that what matters is being able to keep a part of the money you generate.

If you follow this advice your capital will accumulate and you will be able to invest in assets that generate more money.

Once you have capital, you can take advantage of opportunities that come to you.


Difference between assets and liabilities

In Rich Dad Poor Dad Robert teaches us the main difference between assets and liabilities.

  • Assets: put money in your pocket -> generate money
  • Liabilities: take money out of your pocket -> cost you money

This is one of the main lessons of the book. It is crucial to understand it well in order to start investing in assets, and avoid liabilities.

Examples of assets are real estate investing, stocks and bonds.

An example of a liability is buying a car. In the next section I elaborate on this concept 🙂


Rich people buy assets and poor people buy liabilities

The author tells us of another great difference between the behaviour of the rich and the middle class and poor.

The rich invest in assets that generate them money, which in turn will invest in more assets. This creates a loop, where compound interest and years help them to accumulate wealth.

If you save and invest you can grow your money a lot

The poor buy liabilities that they think are assets, but they are not. A good example is a car.

Most people think that a car is an asset, something very valuable. If we go to the previous asset and liability definition, does the car put money in your pocket or take it out?

A car requires a big initial deposit, and then has periodic costs (car loan, insurance, maintenance, repairs, etc.).

A car is taking money out of your pocket -> So a car is a liability.


Cash flow quadrant

The author explains that cash flow shows how your money circulates.

Robert T. Kiyosaki highlights the importance of knowing how cash flow works.

The cash flow of the rich people is very different from the cash flow of the poor. Robert explains this concept very well with the following quadrant.

In rich dad poor dad Robert T. Kiyosaki teaches us the cashflow..

The image above shows the cash flow for a poor/middle-class person. He works, gets his salary and spends it on taxes, mortgage, car loans, credit cards and other expenses.

On the other hand, rich people receive money from their assets, which they use to pay their expenses and buy more assets. These new assets generate more money for them, so they accumulate wealth.

The concept of cash flow is so simple that it left me in shock for a few days.

It’s amazing how something so simple can be so powerful. At that moment I decided to change my cash flow from poor to rich.

The author talks about a cash flow game he has created that helps to better understand this concept.


Reduce your taxes

In the book Robert Kiyosaki stresses the importance of understanding the taxes we pay.

Once you know the taxes you pay, you should look for ways to reduce them. One of Robert’s favourite quotes is:

“The biggest spending of most people is taxes

If you manage to reduce your taxes you will have more money available for you, therefore you will be able to buy more assets.

In Rich Dad Poor Dad the author talks about the importance of reducing the taxes you pay

A good example in United Kingdom is to contribute to a pension plan. When you contribute to your pension plan, the government will pay you back the taxes you paid on that money (with a limit of 40,000 pounds per year).

If you are on the basic rate, the government will pay you back 20%. As a result you reduce the taxes you pay and you have more money to invest.

Robert T. Kiyosaki talks about how owning a company allows you to optimise the taxes you pay. This is because a company spends as much capital as it can, and then it pays taxes on the remaining money.

He says companies are one of the biggest legal tax loopholes that the rich use.


Importance of financial intelligence

In Rich Dad Poor Dad Robert T. Kiyosaki introduces us to the concept of financial intelligence.

You need to understand that money is just a tool. How we use this tool will determine the success of our personal finances. This is also known as financial literacy.

You have to know what you do with money once you make it, how you keep people from taking it from you, how to keep it longer, and how you make money work hard for you.

This is achieved by improving our financial education. Unfortunately financial education is not provided at school, so we have to search for it outside.

Rich dad poor dad stresses the importance of improving our financial education.

If we see money as a tool, it will be easier to modify our actions to improve our finances.

Becoming a millionaire is not difficult if you take the right steps. According to Robert, many people want to become millionaires but lack education and financial aptitude.


The most important asset is our mind

Robert Kiyosaki stresses the importance of learning and educating ourselves.

To enjoy a good economic health it is necessary to cultivate the mind. Financial education is key if we want to improve our personal finances.

Learning is a key part of the path to be financially free. The more information we learn, the easier it will be to increase the numbers of our bank account.

“Money comes and goes, but if you have the education about how money works, you gain power over it and can begin building wealth”

The author tells you to work to learn instead of working to make money.

The more you learn about economics, finances and investments, the better your bank account will look like 🙂

Robert talks a lot about what the rich teach their kids about money, that the poor and the middle class do not. According to him, wealthy parents give their children a financial education that the poor and middle class do not give.

Rich dad kids are taught by their own dads, so it is very likely that the wealth will be kept within the family.


Reviews on Rich Dad Poor Dad

In my opinion it is a must read if you want to improve your personal finances.

Rich Dad Poor Dad will help you to change your view about money, how it works and how you can use it to your benefit

Customer reviews on Amazon are very good, it has an average of 4.6 out of 5 stars in 14,500 reviews!

This book will teach you the differences in the behaviour of the rich and the poor, and how you can improve your personal finances.

Robert T. Kiyosaki’s advice radically changes the way you see the rich and the poor.

This book completely changed my life. It made me realise that generating money from investments is possible, you just have to have the right mindset and learn how to do it.

If you want to change your life and take control of your finances in 2020, I recommend you read the book.


How to Buy Rich Dad Poor Dad

If you want to buy the book, select one of the options below:

Change the way you see money today and start accumulating wealth!

If you want to learn more about personal finances and investment, I recommend the following articles from my blog:

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