Do you know that, regardless of your current situation, you can learn how to become rich? You can escape the rat race and become financially independent and free. This is one of the most important lessons that I have learned reading the book Rich Dad Poor Dad. So I would say that this is a book you should read!
About the book
Rich Dad Poor Dad was written by Robert Kiyosaki and Sharon Lechter. Published in 1997, the book has sold over 27 million copies and it was translated into 51 languages. Sold in more than 100 countries, Rich Dad Poor Dad became the #1 Personal finance book! So what makes this book so special? I would say that there are many factors involved.
First of all, the book is very easy to read. The language is simple and clear. I feel that the book was written for anyone who wants to learn a little bit about personal finances, investing and economics. If you have never studied these fields before (like me), they may sound like rocket science. However, this book will not give your brain a hernia. If you have never read a book on economics or personal finance and you do not know where to start, I would suggest reading this book first. It will help you understand some simple, yet crucial concepts.
What can you learn from the book?
If you look around you, you probably see that there is a big difference between the haves and the have nots. You may also realize that it seems the rich people get richer while the poor people get poorer. Robert Kiyosaki grew up under the influence of two people: his father who was the Poor Dad and who represents the have nots and the father of a friend, the Rich Dad who represents the haves. Throughout the book, Robert tells us about the differences between them: their mindset, their education, their perspective and their results.
According to Robert, “Education is the foundation of success.” “Intelligence solves problems and produces money. Money without financial intelligence is money soon gone.” Basically, you need to learn some basics about economy if you want to earn more and become rich. It is true that you could start making a lot of money without learning anything about this. However, you will probably spend or lose that money quite quickly. That is why you should learn how to invest and keep that money once you earn it.
And the most important lesson is this: “You must know the difference between an asset and a liability, and buy assets. If you want to be rich, that is all you need to know.”
To be perfectly honest, when I read this book, I had no idea what an asset or a liability was. And I bet most people have no idea what those are. Simply put:
“An asset puts money in my pocket”
“A liability takes money out of my pocket”
In order words, anything that helps you earn money is an asset. And anything that makes you spend money is a liability.
How can this piece of information help you? Here’s the secret, as told to Robert by his Rich Dad: “The rich acquire assets and the poor and middle class acquire liabilities.”
Most people struggle financially because they cannot tell an asset from a liability. They invest their money in things that spend their money without investing in things that make them money. If you want to get out of the rat race, you need to develop the ability of telling these two apart.
Here’s a really good example taken from the book: a house. Do you think this is an asset or a liability? If you said it is a liability, you are correct! Most people think that investing money in a home is a good thing. But, that is not true. If you buy your own house, you will have to pay a mortgage, you may have to pay more for utilities and so on. So this is something that makes you spend more, not that earns you money. Therefore, this is not a good investment.
What exactly are assets? They can be anything from a business, stocks to royalties. If you want to get rich, you simply have to start investing your time and money in creating assets for you. When you make more money from your assets than you spend, you are financially independent.
Of course, doing this is not necessarily easy. You may need to spend time learning more, developing your skills and working on your business. And this book or no other book or person can tell you where to start, I think. In the end, it is up to you. You can choose to start your own clothing company or you can become a coach or you can sell your photographs online. There are many choices. But only you can decide what you want to do. Once you decide what you want to focus on, keep in mind one more lesson from this book: “Failure is part of the process of success. People who avoid failure also avoid success.” So whatever difficulties you may encounter, embrace them and move past them. Ignore the critics and the inner voice that tells you to give up. I truly believe that you can become rich if you learn how to do this and actually do it!
While reading the book, I always got the feeling that it really does not matter where you start. Where you live, what you do and what you have are just your starting point, not the finish line. Throughout the book, Robert emphasis on the idea that education is very important. According to him, “it is what you know that is your greatest wealth. It is what you do not know that is your greatest risk.” He mainly refers to financial education, but not only. Another idea that transpires from this book is that self-discipline is very important. As Robert put it, “people who lack internal fortitude often become the victims of those who have self-discipline.” So being able to control your feelings and choose how you interpret the world around you can be very important, if not crucial.
What have I learned from the book?
Perhaps the most precious lesson I got from the book is that anybody can learn how to become rich. Of course, it takes time, education and work. But it is possible. This book also proves how the mindset of people can determine what happens in their lives.
Looking back on my life, I think about my parents. I grew up in a modest family in Romania. My parents are hard-working people, but they have the same mentality as Robert’s Poor Dad. They expect conditions to get better. They expect for things to change. But we fail to realize that we are the ones that should change. The opportunities and resources are there, we are just missing them because we do not know how and what to look for.
I used to think that there is such a colossal difference between the man who runs a million-dollar company and the man sleeping under a bridge. In reality, there is only one difference: their level of awareness. So this book review, much like all my articles and posts is meant to tell just one thing: YOU can have it all! YOU can live the life you dream of. You just have to learn how. And starting with the book Rich Dad Poor Dad is a really good idea. This book provided me with a few eye-opening insights and aha! moments. So make some time and invest in yourself. You will not regret it!