What’s it about?

Combining autobiography and personal advice, Rich Dad, Poor Dad (1997) outlines how you’ll become financially independent and wealthy. The author argues that what he teaches during this NY Times bestseller is never taught in society. The upper-class passes on to its children the necessary knowledge for getting (and staying) rich. As evidence to support his claims, he cites his highly successful career as an investor and his retirement at the first age of 47.

About the author:

Robert Kiyosaki is an investor and entrepreneur with an estimated net worth of over $80 million. His Rich Dad brand has published over 15 financial self-help books, which have sold over 26 million copies worldwide.


Fear of society’s disapproval prevents us from leaving the “rat race” and growing wealthy.

Most people know what the phrase modus operandi refers to, but how would we define it if asked?

One definition is “The endless routine of working for everybody but yourself.” It means you are doing all the work while others – the govt, bill collectors, and your bosses – take the bulk of the reward.

We usually speak about the modus operandi as something we’re all a component of. At the same time, we also discuss it as something we hate. So why can we keep racing?

Their fear of society’s disapproval dominates most people’s lives.

For example, consider the mantra “Go to high school, study hard, get a decent job.”

We still teach this mantra, although it’s outdated advice founded on our parent’s past ideas. Back then, you were likely to land employment right out of faculty, work for the identical company for many years, and retire with a cushy pension. Today, this is often not a guaranteed recipe for a life freed from the financial struggles of poverty.

The truth is that you can study hard, get into a decent school and graduate into a high-paying job without ever seeing financial growth because you are still stuck within the “rat race.” Your bosses – not you – are becoming rich from all of your toils.

Nevertheless, we still believe and follow the above mantra out of fear of violating the expectations that have been drilled into us since birth. The result? We are also avoiding poverty, but we’re on no account growing any wealthier.


Fear and greed can drive financially ignorant people to make irrational decisions.

Everyone – wealthy or not – experiences greed and fear regarding money. If you’ve got money, you may likely specialize in all the new things it can purchase (desire). If you do not have it, you are concerned you would possibly never have enough (fear).

People ignorant about managing their finances are especially at risk of letting these emotions drive their decision-making.

For example, for instance, you only received a promotion and a hefty pay raise.

You could invest the additional money into something like stocks or bonds, which might earn you money over time. Otherwise, you could gratify yourself with new purchases, sort of a car or house.

If you are a financially ignorant person, this is where emotion takes the wheel.

The fear of losing money is so powerful it prevents you from investing in stocks or other assets thanks to the perceived risks, while such investments would bring you wealth within the long run.

At the same time, greed inspires you to spend your increased salary on a more robust lifestyle, as an example, by buying a much bigger house, which seems a way more accurate and safer option than buying shares in the same company.

However, this upgrade also means a much bigger mortgage and better utility bills, which effectively negates your raise.

It is how fear and greed hinder the financially ignorant from becoming wealthy within the future.

So how are you able to counter these powerful emotions? By increasing your financial knowledge about things like investments, risk, and debt. It’ll place you in an exceedingly better position to create rational decisions – even within the face of greed and fear.


Despite being vital for both personal and societal prosperity, we receive no training in financial intelligence.

Most people think that to become rich, it’s enough to be talented and capable. But of course, the planet is stuffed with such people, and most of them are poor. They’re missing financial intelligence, a comprehensive aptitude for economic subjects like accounting, investing, and then forth.

Unfortunately, we’re raised without this intelligence. Our faculty systems are founded to coach people in various valuable subjects, but financial intelligence isn’t.

Children aren’t taught about subjects like saving or investing. Consequently, they’re clueless about topics like interest – as clearly evidenced by the fact that today, even high schoolers often reach their credit cards.

This lack of coaching in financial intelligence may be a problem not just for today’s youth but also for highly educated adults, many of whom make poor decisions with their money.

For example, politicians are generally considered the brightest, most well-educated people in an exceeding society. Still, there is a reason why countries find themselves in staggering national debt: most of the governing politicians have little or no financial intelligence.

Ordinary people, too, are astonishingly bad at handling their money matters, as evidenced by their lack of retirement planning. For example, within you. s., Fifty percent of the workforce are without pensions and, of the remainder, nearly 75 to 80 percent have ineffective pensions.

Society has left us poorly equipped in monetary knowledge, so it’s up to the individual to teach themselves.

When we seek wealth in times of significant economic change, it becomes even more necessary to pursue an excellent financial education independently.


Financial self-education and a practical appraisal of your finances are the building blocks of growing wealthy.

You can start the journey toward personal wealth at any point in your life, but the sooner you get going, the higher – if you start at 20, you’re way more likely to become wealthy than if you begin at 30.

Regardless of age, the most straightforward thanks to starting are by appraising your finances, setting yourself goals, and acquiring the education necessary to succeed in them.

First, take an honest study of your current financial state. With your current job, what quite an income are you able to expect now and within the future realistically, and what reasonably expenses are you able to handle sustainably? You will find, as an example, that the new Mercedes you have been drooling over isn’t affordable.

After this, you will be able to set realistic financial goals. You’ll say, as an example, that you want that Mercedes to be within your reach in five years.

The next step is to begin then building your financial intelligence. Consider this an investment into the main significant asset available to you: your mind.

You can try this in many ways, but one good approach is to shift focus: work for what you learn, not earn.

For example, if you’re frightened of rejection, try a brief spell working for a network marketing company. While you would possibly not get an excellent salary, you’ll gain plenty of sales skills and self-confidence, which can be very useful in the future.

You can also improve your financial education in your spare time. Enroll in finance classes and seminars, read books on the subject and check out to network with experts.

If you base your financial foundation on these building blocks, there is a good chance you’ll become wealthy at some point.


To become wealthy, you want to learn to take risks.

Insanity is defined as doing the identical thing over and once again and expecting different results. By this logic, if you are looking to alter your current financial state, you’ll have to start out handling your finances differently.

The most significant change you possibly must make is learning to take risks. All financially successful people have taken risks to urge their success because they manage instead of fear these risks.

Taking risks means not always being balanced and safe along with your money, which you’re doing once you put it in basic checking and savings accounts at the bank.

Instead of playing it safe, try investing your money in stocks or bonds. While these are considered riskier than typical bank accounts, they need the possibility of generating much, way more wealth – sometimes (as with stocks) in an exceedingly brief period.

Or, if you do not want to commit yourself to the exchange, there is a spread of other investments that may help grow your wealth within the future, like property or so-called lien certificates. With lien certificates, interest rates range between 8 percent and 30 percent.

Of course, the upper the potential for return, the upper the chance. With stocks, as an example, there’s always the slight chance you’ll lose your entire investment. But if you do not take the opportunity in the first place, you’re guaranteed not to make any significant returns.

So you see that taking those bigger chances and handling the more significant risks they present is critical to making a more substantial income.


The road to wealth is long, so you want to keep yourself motivated.

The journey to wealth is long and trying. It is easy to lose heart once you hit a hurdle, like seeing the value of a stock you invested in suddenly tumble. To attain your financial goals, you’ll have to search out ways to remain motivated even in the face of setbacks.

One method to spice up motivation is to make a listing of “wants” and “don’t wants” for your reference.

For example: “I don’t want to finish up like my parents” and “I want to be freed from my debts within three years.”

Pull out these lists any time you wish, a reminder of why you need to persevere on your journey to wealth.

Another great way to remain motivated is to spend money on yourself before paying your bills.

Though somewhat counterintuitive, this way, you will see what proportion more money you wish monthly to satisfy both of your objectives: fulfilling desires like buying that vintage guitar you’ve had your eye on and meeting your bill collectors’ demands.

It does not imply you must rack up plenty of MasterCard debt, but do keep “paying” yourself first; the additional pressure of paying off your bills afterward will inspire you to search out creative ways to create enough money to satisfy both.

This method also will sharpen and develop your financial self-discipline, a significant trait of all financially successful people.

For outside inspiration, research the life stories of rich people like Warren Buffett or Donald Trump. Reading about how they overcame struggles to attain triumphs will help keep you ambitious.

Put the following tips into practice, and you will take care to search out that staying motivated on the road to wealth isn’t that difficult.


Laziness and arrogance can drive even financially knowledgeable people to poverty.

Even after strengthening your financial intelligence, personality pitfalls should threaten you and your money.

Laziness and arrogance are two such pitfalls because they will work against you in less-than-obvious ways.

We often consider laziness as slouching around and doing nothing, but after all, laziness doesn’t necessarily mean inactivity; it may mean avoiding belongings you should do.

For example, imagine a businessman who works over 60 hours every week. To the surface observer, he’s not lazy in the least. However, by performing such late nights, he has alienated his family. He has already seen the signs of trouble reception, but he buries himself in work instead of addressing them. In short, he’s lazy: he’s avoiding what he should be doing and can likely suffer the implications within the variety of a costly divorce.

Similarly, arrogance will be a devastating weakness. Contrary to the standard definition, economic ruin is defined as “ignorance plus ego”; a mix of poor financial knowledge and an ego too proud to admit it.

Arrogance maybe a particularly dangerous flaw after you make investments. For instance, some stockbrokers will attempt to feed the arrogant side to sell you more shares and maximize their commission. They’re like dishonest used-car salespeople; they boost your ego with the positives of investment while keeping you ignorant about its negatives.

So whether or not you become a financial genius, keep these personality pitfalls in restraint. This way, you’re far more likely to avoid financial disaster.


Only invest in assets, which put money in your pocket, and avoid liabilities, which take money out.

Knowing the difference between an asset and a liability is critical to making vital investment decisions.

Quite simply, an asset is a few things that create your money, while a liability costs you money.

Then, it’s more likely you’ll become wealthy if you mainly invest in assets.

Assets include businesses, stocks, bonds, mutual funds, income-generating assets, IOU notes, royalties from material possession, and anything with the worth that produces income, appreciates over time, and maybe sold readily.

When you invest in assets, your dollars become employees working to form income for you. The more “employees” you commit, the better. The goal is to urge your payment as high above your expenses as possible so reinvest the surplus income into your assets, employing even more dollars to figure for you.

Unfortunately, many investors continually mistake certain liabilities for assets.

For example, a home is often considered an asset, but it’s one among the foremost significant liabilities you’ll be able to have. Buying a home usually means working your entire life to pay off a 30-year mortgage and property taxes.

It works against you in two ways: First, you’re sure to have a significant expense removed from your income monthly (a tell-tale sign of liability) for the following 360 months. Second, those 360 payments could be invested in potentially more lucrative assets, like stocks or realty you rent to tenants.

Ensuring that you know the difference between an asset and a liability means you will be ready to soundly judge what to speculate your money in and what to avoid.


Your profession pays the bills, but your business is what will cause you to be wealthy.

Most people consider their profession and their business to be similar things. When it involves personal finances, though, there is a difference:

Your profession is whatever you are doing 40 hours every week to pay the bills, go on a spree, and canopy other living costs. Usually, it gives you a selected title like “restaurant owner” or “salesman.”

On the opposite hand, your business is what you invest time and money to grow your assets.

Because a profession only covers your expenses, it’s unlikely that this alone will cause you to be wealthy. To attain wealth, you want to build a business while working in your profession.

Take, as an example, a chef who’s gone to culinary arts school and knows all the tricks of the trade. Although her profession – cooking – provides enough money to pay rent and feed her family, she’s still not growing wealthy.

So she invests in an exceedingly business: assets. Whatever more money she has monthly, she buys income-producing assets – apartments and condos to rent to tenants.

Alternatively, consider a car salesman who invests each month’s excess income into stock trading.

In both cases, the professions provided enough income to survive monthly. However, by putting their extra income into their businesses, these people also are growing their assets and making strides toward wealth.

Your profession often funds your business initially; therefore, it’s wise to keep your day job until your business starts to indicate sustainable growth.

When that starts to happen, your assets – and not your profession – become your primary source of income.

And that, indeed, is that the sign of true financial independence.


Understand the tax code to assist you in minimizing your taxes.

Everyone knows that taxes detract from personal wealth, but the general public doesn’t bother to seek out how they’ll minimize the taxes they pay. There are some ways this could be legally achieved.

One way to scale back taxation is to take a position your money through the coverage of an organization. If you invest through your corporation, the money you create is taxed far more leniently than if you invest in your name.

In us, corporations include other benefits, too. For instance, debts and liabilities are placed within the corporation’s, not the owner’s, name, which insures against limited losses on investments gone awry.

You earn, get taxed, and so try and live to tell the tale of what’s left when you’re an employee. When a company protects you, you make, invest, or spend the maximum amount possible and get taxed on what’s left.

It’s no surprise, then, that corporations can help people get rich very quickly.

There are other ways you’ll minimize your taxes, too; it’s just a matter of training yourself on the numerous loopholes and benefits of the legal system.

For example, thanks to Section 1031 of the interior Revenue Code of you. s. the legal system, if you sell your current land assets to shop for costlier ones, the govt delays taxing your new property until you liquidate the property.

It means your financial gain increases while the govt refrains from taking anything from you until later.

By becoming attentive to how the “system” works in your country, you will reduce what quantity of money the govt.