Rich Dad, Poor Dad (Review)

I believe that most of us here have heard or even read this bestselling personal finance book by Robert Kiyosaki titled ‘Rich Dad, Poor Dad’. I first heard about this book in 2012; however, my first encounter with this book was rather hilarious because I thought this book was about how to become a better dad! Therefore, I did not really bother reading this book until mid-2014 after finding out that this book was about personal finance. Rich Dad, Poor Dad was the Robert Kiyosaki’s (bestselling author, entrepreneur and speaker) first book. In this post, I will share with you my 3 main takeaways and also my thoughts on this book.

---

The Rich Don’t Work For Money

This is the first point Robert emphasized in the book. Many people thought that working a.k.a. trading time for money is the only way to become financially successful. If you read my previous post (link here), you would find out that we all have only 24 hours a day and it is very difficult to become financially successful, let alone become financially free by trading time for money. The reason why the rich aren’t working for money is because they focus on accumulating assets to generate passive cashflow to make them money even when they are not working, while the middle focus on getting high paying jobs clinging to job security and living paycheck to paycheck.

---

Your House Is Not An Asset

Many people have this misconception that their house is an asset. Robert presented a rather different way of thinking with regards to assets and liabilities. The way Robert defined asssets and liability is, assets give you positive cashflow (passive income), and liabilities give you negative cashflow. In other words, assets put money into your pocket, and liabilities takes money out of your pocket. Therefore, a house is not an asset because it takes money out of our pockets in the form of mortgage, maintenance fees and other miscellaneous fees. A house would only be an asset if it is rented out in such a way that the rental fees are in excess of the mortgage and other payments. Other examples of assets are businesses, paper assets (stocks, bonds, unit trusts/mutual funds), commodities (gold, silver, oil) and real estate.

---

Savers Are Losers

Savers are often losers because oftentimes their hard earned money diminish in value over time, due to inflation. Most people invest their money into 401(k) (the EPF equivalent for retirement funds) and mutual funds (unit trusts) which usually don’t give returns high enough to beat the rate of inflation. Also, because their portfolio consisted of only one type of asset class (paper asset), there is very less capital protection in case of a financial crisis wiping out the stock market. In order to protect our capital, we first need to educate ourselves in the area of personal finance and learn to invest not just for capital growth, but also for capital protection.

---

Final Thoughts

In my opinion, Robert has presented a lot of new ideas worth reading in this book. He used a lot of storytelling to illustrate his points and ideas, and I find it very easy to understand and entertaining to read. However, he did not specifically mention how to become rich; therefore, do not expect to become rich just by reading this book. If you haven’t read this book yet, I highly recommend that you to read it as it will be a very good introduction on how to be financially free and rich.

---

Here are some of my previous posts which you could read:

1. My First (Introduction) Post in Steemit
2. Why Haven't You Achieved Your Goals (And How You Could Achieve Them
3. 5 Simple Steps to Increase Your Cashflow
4. The Book That Changed My Life

---

Thanks for taking your time to read my post. If you liked this post, be sure to hit the 'Upvote' button and follow me at @tzeyl to receive more updates. If you have anything to share, feel free to let me know in the comments section below.