Summary of Book - Rich Dad Poor Dad

We all wish to be kings but little do we realize that the crown will come to us on its own, the day we are ready for it. We all want luxurious life which will give a tremendous material as well as intellectual growth. The big question here is - Have we understood the very basic things that will take us there? Have the vary basic things which is needed to complete our dream. In today’s knowledge economy, one thing which is very important is that to access your knowledge, you love to seek out knowledge, to absorb knowledge and then produce it at the right time with the right format to the right kind of people. This is why knowledge is the key to success because we are living in the knowledge economy.

Now another big question is that how can we increase our knowledge? The answer is “A god reading habit”.

In today’s knowledge economy, good reading habit is the most basic pre requisite for any successful career in any field. Some of may feel that whether we can make a successful career with good reading habit? After all what is the direct connection? Let’s see what exactly a good reading habit intends and offers. Believe me; if you will develop this habit then you may hit a jackpot here.

I say this with no exaggeration; I say this with personal experience. I am fortunate enough to have fallen in love with reading books. I started buying books and over the past few years, I have built up my own library, and every time I pick up a new book, I realize, it widens my horizons a little bit more and at time some books are so revolutionary in content, they give you all to gather new perspective which you are missing till that time and then you will realize that how you are living now without this perspective. Let’s me share one fantastic book with you, “Rich Dad Poor Dad”. 

Really, a fantastic book which everyone should read, especially during college life or during their first job. Let’s see the summary of the book.

There was a boy, his name was Robert. He had two fathers. Plz don’t get me wrong. One is his own father and another is his friend’s father and he was also fond of him and considered him as his father. His father had done Ph.D. and his friend’s father was 8^th failed. Both are smart and hardworking but their thoughts were different. Both were teaching different lessons and concepts to Robert. Now let’s see what Robert received in the lessons. We will see both dad's thought process as Rich dad (Friend’s Dad) and Poor Dad (Robert’s Dad).

Poor Dad: Money is the root of evil.

Rich DaD: Lack of money is the root of evil.

Poor Dad: We can’t afford expensive things.

Rich Dad:  Find ways to get what you want. Because of this thought, your brain will become sharper and you will find new ideas.

Poor Dad: study well, so you will get a good job in a good company.

Rich Dad: Study well, as you are going to start company and will become a Job Creator

Robert had an advantage that he had seen both his father’s progress with their thought process. He had listened to both advices and finally decided to go with his Rich dad’s advice. The main lesson which Robert has learnt was “Financial Literacy”, means the difference of “Assets” and “Liabilities”.  Here definition is different. “Assets” means, the thing from which you earn money and Liabilities means the thing which reduces money from your pocket. 

You can find any rich person; they are investing on assets, so that money can earn more money where middle class people are very much interested for liabilities. Let’s see the example.

E.g., there are 2 friends. Ramesh and Suresh. Both are working in a same company, same designation with same salary. When salary was credited in their account at that time Ramesh was very much interested in Movies, new clothes, Parties, new gadgets and etc., which would make him feel rich. He was not able to understand that these all things are his liabilities which were not generating any income and their value will be depreciated also. Whereas, Suresh was a different person. He would buy only necessary things and rest of the amount was invested to develop his skills  than in stock, bond real estate etc.,

After Some years, Suresh became a millionaire whereas Ramesh was blaming his salary and it was the reason for his being in middle class.

Now, let’s see the cash flow.

For, Poor people, after receiving salary, he receives messages on his cell like, credit card amount has been deducted, light bill, gas bill, telephone bill and other miscellaneous expenditures.

For middle class people, cash flow is slightly different. They receive the salary and all amounts are spent for their expenditures and liabilities. They are thinking that their house is their asset but it is not asset until it generates the revenue.

If we talk about rich people then they are investing their amount in assets and generating the income. This excess amount they are using for their day to day expenses. That is the main reason behind their richness.

Remember one thing, it’s not important that how much you earn. How you use that amount is more important. Main problem is our thought process. It is like that of a consumer, we have to change that and think like an Investor. Everyone is complaining that reason for being in worst situation is “Low Salary” and if salary increases then their life will be smooth. But the fact is as your salary increases, expenses will also increase simultaneously because higher salary will motivate you to spend more like on , cell phone, car, and Bungalow etc., which are all liabilities.

This is my learning from Robert Kiyoski’s book, “Rich Dad Poor Dad”.