Rich Dad Poor Dad: The Difference Between Money Slaves and Money Masters

A summary and review of Rich Dad Poor Dad by Robert Kiyosaki

It goes without saying that there's a real difference between real wealth that works for you and slaving away with the hopes that you'll get to enjoy life when you're almost ready to die. Robert gives a few tips on getting out of the rat race for good.

The story starts with the author's childhood experience. He told a story of his two dads, one that was his own and his friend's dad who mentored him (At first I thought he had gay dad's and the way he writes it can easily draw you to that conclusion. It was almost like he was messing with the reader...) Robert and his friend Mike went to rich dad and asked how to be rich. Rich dad barely graduated from high school, had no college degree, yet he was one of the biggest business owners in the whole of Hawaii. What's Rich dad's secret sauce? Simply put, you must acquire more assets than liabilities and the surplus must cover all your expenses. Below is a small diagram. The left side is the common situation while the right side is the proposed situation by rich dad.

As you can see, the chart on the right only has asset income and no job. This means that you could get a job if you wanted to, but you don't have to and you won't starve to death if you don't. The typical person has no income producing assets besides their jobs and most of that income is taken away through expenses and liabilities and thus keeping you trapped in the rat race.

Defining our terms here (for the accounting impaired) Rich Dad labels anything that puts money in your pocket each month as an asset and anything that takes money out of your pocket each month as a liability. For example, if you wanted to quit your job, but have about $1,000 in expenses a month, you need to find and quire assets that will produce and cover that $1,000 a month, more if you have liabilities. Additionally Rich dad has a rather controversial opinion that goes in the face of conventional wisdom. Using this framework he claims that your house, considered an asset by many, is a liability. It takes away money in the form of property taxes and other maintenance fees. outside the book and considering the latest advancements in the sharing economy, your house could be converted into an asset with the use of Airbnb or finding people to rent rooms to.

That's the basic jist of what Rich dad had to say. You should acquire more assets, whether it's buying/making a business, investing in dividend stocks, or investing in real estate, and reduce your liabilities so that you can be financially free forever.

Review: It's a fantastic read! It's relatively short and the language/message is charming. A must read for everyone looking to live a full life not having to ever worry about money.

As always here's a link to pick up the book if you're interested:

https://www.amazon.com/dp/B0175P82RA/ref=dp-kindle-redirect?_encoding=UTF8&btkr=1

Join me next time for my summary and review of Tim Ferris's 4-hour Workweek