Executive Summary

The book is the story of a man who has two fathers who is the narrator and author: the first was his biological father (poor dad) and the other was the father of his childhood best friend, Mike (rich dad). Both fathers educated the author how to bring about success but with very different approaches. It became straightforward to the author which fathers passage made more financial sense. For the extent of the book, the author compares both fathers their basics, beliefs, financial routines and how his real father, the poor and struggling but highly educated man, against his rich dad in terms of asset building and business acuity. The author like to compare his dads to many different things throughout the book at one point he compares his poor dad to those people who are constantly scampering in the Rat Race, and trapped in a degenerate cycle of needing more but never able to satisfy their dreams for wealth because of one obvious lack: financial literacy. They spend so much time in school learning about the problems of the world, but have not acquired any lessons about money, because it is never taught in school. His rich dad, by difference, represents the independently wealthy core of society who intentionally takes advantage of the power of corporations and their personal knowledge of tax and accounting which they swing to their advantage. I feel the books theme condenses to two fundamental concepts: a can-do attitude and brave entrepreneurship. The author focal points these two concepts by providing multiple examples for each and focusing on the need for financial literacy, how the power of corporations contribute to making the wealthy even wealthier, minding your own business, overcoming obstacles by not fostering laziness, fear, cynicism and other negative attitudes, and recognizing the characteristics of humans and how their prejudiced beliefs and upbringing entangled their financial freedom goals. There were a couple of great examples in this book one being, I remember in school being told the story of Robin Hood and his Merry Men. My schoolteacher thought it was a wonderful story of a romantic hero, a Kevin Costner type, who robbed from the rich and gave to the poor. My rich dad did not see Robin Hood as a hero. He called Robin Hood a crook. Another example was, Last night, I took a break from writing and watched a TV program on the history of a young man named Alexander Graham Bell. Bell had just patented his telephone, and was having growing pains because the demand for his new invention was so strong. Needing a bigger company, he then went to the giant at the tem, Western Union, and asked them if they would buy his patent and his tiny company. He wanted $100,000 for the whole package. The president of Western Union scoffed at him and turned him down, saying the price was ridiculous. The rest is history. A multi-billion dollar industry emerged, and AT&T was born.

The Ten Things Managers Need to Know from Rich Dad Poor Dad
1. The Rich Dont Work For Money. The author says, By not getting paid for our work at the store, we were forced to use our imaginations to identify an opportunity to make money. By starting our own business, the comic-book library, we were in control of our own finances, not dependent on an employer. The best part was that our business generated money for us, even when we werent physically there. Our money worked for us. Instead of paying us money, rich dad had given us so much more. 2. Why Teach Financial Literacy? The definition of an asset according to Kiyosaki is something that puts money into your pocket on a monthly basis as opposed to something that takes money out of your pocket. Its a concept that seems like common sense, but after deeper analysis goes against conventional wisdom. 3. Mind Your Own Business. In the book is says, After youve taken the time and invested in and built your own business, you are now ready to add the magic touch-the biggest secret of the rich. The secret that puts the rich way ahead of the pack is the reward at the end of the road for diligently taking the time to mind your own business. 4. The History of and The Power of Corporation states that you should take your tax advantages, and protect yourself from lawsuits. This will allow you earn money, spend money, and pay taxes. It is strongly recommended to sown you own corporation wrapped around your assets. 5. The Rich Invent Money. He uses the CASHFLOW game to help them understand this lesson which was a good lesson to be taught. He states, There have been people playing CASHFLOW who gain lots of money in the game, but they dont know what to do with it. Most of them have not been financially successful in real life either. Everyone else seems to be getting ahead of them, even though they have money. And that is true in real life. There are a lot of people who have a lot of money and do not get ahead financially. 6. Work to Learn Dont Work for Money is the final lesson and the most important. The main management skills needed to succeed in not working for money are the management of cash flow, the management of systems, and the management of people. 7. Every day with every dollar, you decide to be rich, poor or middle class. Choose to share this knowledge with your children, and you choose to prepare them for the world that waits. No one else will. You and your childrens future will be determined by choices you make today, not tomorrow. We wish you great wealth and much happiness with this fabulous gift called life. 8. Money is only an idea. If you want more money simply changes your thinking. Every self-made person started small with an idea, and then turned it into something big. The same applies with investing. It takes only a few dollars to start and grow it into something

big. I meet so many people who spend their lives chasing the big deal, or trying to mass a lot of money to get into a big deal, but to me that is foolish. Too often I have seen unsophisticated investors put their large nest egg into one deal and lose most of it rapidly. They may have been good workers but they were not good investors. 9. Education and wisdom about money are important. Start early. Buy a book. Go to a seminar. Practice and Start small. I turned $5,000 cash into a $1 million dollar asset producing $5,000 a month cash flow in less than six years. But I started learning as a kid. I encourage you to learn because its not that hard. In fact, its kind of easy once you get the hang of it. 10. Many of you were given two great gifts: your mind and your time. It is up to you to do what you please with both. With each dollar bill that enters your hand, you and only you have the power to determine your destiny. Spend it foolishly, you choose to be poor. Spend it on liabilities, you join the middle class. Invest it in your mind and learn how to acquire assets and you will be choosing wealth as your goal and your future. The choice is yours and only yours. Every day with every dollar, you decide to be rich, poor or middle class.

The Summary
In this book, Rich Dad Poor Dad, the author compares his poor dad to the millions of fathers who want their sons to do well in school so they could get a good job with a great company. Poor dad believed in the conventional principles of working hard, saving money, and not buying material things that you do not need. He believed that having a good job with a solid company is what one should long for; from here he expresses disappointment when his son leaves the employ of a large corporation. Poor dad look at education as the way to succeed in life. He has a doctorate degree, went to Ivy League universities, but still has always struggled financially. He believed he would never be a rich man and the author points out that this became a self-fulfilling prophecy. Poor dad was more interested in a good education than the subject of money. The author wrote that his poor dad would always say things like, Im not interested in money or money doesnt matter. In the book the author, points out that poor dad was captivated with things like job tenure and security, Social Security, vacation and sick leaves, company insurance and salary raises and promotions. The author felt that his poor dad was more interested in these factors rather than on the job itself. This is what the author calls being trapped in the Rat Race. His poor dad worked hard endlessly but somehow never made it ahead financially. Poor dads approach to the subject of money was based on working hard to have enough money to pay the bills. When he was nine years old that he started realizing that his rich dad made much more sense than his poor dad. It was from rich dad that the author learned not to say, I cant afford it, but instead to ask, How can I afford it? He explains this principle by relating an incident when he and his best friend Mike went to work for Mikes father. Rich dad paid them very low wages so that would cause anger and a sense of discrimination in them and eventually for them to realize that in order to get ahead, one must work for himself and not for others. For example, in that part of the book when the author complains to rich dad that he can hardly afford to buy anything with the wages he is paid, rich dad tells him that he shouldnt dwell on the fact that his wages are low, but instead ask how can I make more money because this stimulates the brain to take action. His rich dad says that when someone says, I cant afford it, his brain stops working. It therefore kills initiative and promotes passivity. The author brings up that his poor dad invested time and effort in education; he did not have any knowledge on investing. His rich dad, by contrast, was very skilled in the investment game because thats all he did. The attitude of his rich dad about money was manifested in the saying the lack of money is the root of all evil. According tot the author, rich dad also had the idea that taxes punished producers and rewarded the non-producers. He was the type who encouraged money talk at the dinner

table and was portrayed by the author as someone who learned to manage risk, instead of not taking risks. The author says that he is fortunate in having had two fathers. He learned a lot lessons from both of them, but in Chapter One it becomes obvious which father had the more reasonable approach towards money. He compares and contrasts both fathers views about working hard, getting an education, saving and investing and realizing how habits of the rich and poor significantly differ. He attributes his financial acuity through the many conversations he carried out with his rich dad. The author takes a common sense method to the subject of money and gives emphasis to the need for accounting knowledge so that the reader unmistakably understands what assets and liabilities are. He makes simple diagrams that show the inflow and outflow of money and how the rich build up the asset column and the poor build up the liability column. It is clear that the author places much importance on accounting knowledge no matter how boring it is because he says it is the most important subject in your life. By using numerous examples and stories, the author drives home his messages successfully, enlightening his pro-capitalist stance. The author also shows his understanding of the mechanisms employed by the government and the tax man and concludes that it is the middle class that actually pay for the poor. The rich are the ones who are hardly taxed because they have the facts to use tax legislation to their advantage. Chapter 1 I had two fathers, a rich one and a poor one. One was highly educated and one never finished the eighth grade. Chapter one begins with the story of Robert Kiyosaki and Mike starts in 1956 Hawaii, when both boys were a nine years old. Their first money making business was a counterfeit nickel making company. They made plaster molds of the nickels and melted lead toothpaste tubes and filled the molds to produce the nickels. Their plan was foiled by Mikes father, who informed the boys of their illegal activity. After that day, the boys dedicated their free time to leaning about finance and economics from Mikes father, the rich dad. The first lesson Mikes dad made the boys experience was hatred of the Rat Race. He was able to achieve this by making the boys work in one of his grocery stores for three hours for ten cents an hour pay. Within a few weeks, Kiyosaki, tired of being exploited for labor, demanded that he receive a raise, but instead, Mikes father cut his pay and told him to work for free. Eventually, both boys tired of being unpaid and they met individually with Mikes father. In their meetings with rich dad, he apologized for lack of pay and he offered them either the moral of the lesson or a pay raise. Both boys chose to learn the moral of the lesson, while rich dad offered them pay raises. He started at twenty-five cents, a dollar, two dollars, and even five dollars, which would have been considered a large amount of money for an hourly wage, but the boys still remained strong with their decision to learn the moral of the lesson. The lesson to get out of the Rat Race and instead of spending your whole life working to put a little money in your pocket and a bunch of money in someone elses pocket, have people

work hard to put money in your pocket. Out of all the lessons that were taught to the boys, this one was the most important. Chapter 2 Dad can you tell me how to get rich. The author tells his readers to forget the notion that life teaches. He says the only thing that life does is push you around. This chapter talks about people who are more comfortable in playing it safe because they were not taught early to take risks. The author develops the ideas that the poor and the middle class work for money, fear and greed cause ignorance and poverty, and the importance of using ones emotions versus thinking with emotions. The author also stresses that opportunities in life come and go; the rich recognize them instantly and turn them into millions. Others do not see these opportunities because theyre too busy seeking money and security. As the author says, well thats all theyre going to get. Chapter 3 The author starts this chapter with a story of Kiyosaki and Mike continues later in life, 1990, and both of the now adults have made incredible leaps and bounds with regards to their finances and their socioeconomic status. Mike was able to take the lesson from his father and apply them to his life. He took control of his fathers large business and increased every aspect of the empire and he is currently raising his son to take control of the company once he retires. As for Kiyosaki, he was able to retire at the age of 47 with his wife Kim. At a business meeting at the Edgewater Beach Hotel in Chicago, Charles Schwab, Samuel Insull, Howard Hopson, Ivar Kreuger, Leon Frazier, Richard Whitney, Arthur Cotton, Jesse Livermore and Albert Fall met to talk about different investments and money schemes. Twenty-five years later, a report stated that a large majority of those extremely wealthy people that met in Chicago either ended up in jail, dead or penniless. The major idea to take from the results of these unfortunate entrepreneurs is that you need financial literacy to be and stay safe. The idea that was represented with the big 1920s entrepreneurs is still prevalent today with some of the professional athletes making poor financial decisions and ending up with next to nothing. This specific lesson is meant to teach people not to be wise with your money once you have it, but rather be smart with your money before you have it. In a way, dont try to build a skyscraper or even a house without building a strong foundation first. According to Kiyosaki, there is one rule, and only rule that can help a person to build a strong foundation; know the difference between an asset and a liability, and make sure that you only control assets. When it comes to beliefs about money buying freedom and the ability to enjoy retirement without fear of outliving ones money, this chapter catches the aspect of the authors advancement for financial independence. He says, Intelligence solves problems and produces money. Money without financial intelligence is money soon gone. The author believes that financial literacy begins with a working knowledge of accounting. It is essential to know the difference between assets and liabilities. To make these two terms understandable to readers, the author makes a rudimentary diagram of these two concepts to motivate them to purchase assets in order to solidify the asset column, while keeping the liabilities to a bare minimum. The author states that poor people remain poor

because they do the opposite. They pile up on their liabilities and have zero assets so that their balance sheets and income statements look out of kilter. People have to understand that its not how much they make, but how much they keep according to the author, and this is an indispensable principle that this chapter focuses on. Chapter 4 The author begins by introducing the concept of real estate investing and uses McDonalds as an example. He points out that McDonalds may not make the best hamburgers in the world, but owns the most valuable intersections and streets in America. The author remarks that individuals need to mind their own business if they wish to become financially self-reliant. They shouldnt mind their employers business, they should strive for ways to become their own boss and foster their own businesses. The author continues his discussion on building assets. To him, real assets are anything with value stocks, bonds, mutual funds, income-producing real estate, notes, royalties from intellectual property, etc. This chapter also reveals the authors investment preferences: real estate and stocks. For real estate, he says he starts small, and trades his properties for bigger ones and then delays paying taxes on capital gains through one IRS mechanism. Chapter 5 I remember in school being told the story of Robin Hood and his Merry Men. My schoolteacher thought it was a wonderful story of a romantic hero, a Kevin Costner type, who robbed from the rich and gave to the poor. My rich dad did not see Robin Hood as a hero. He called Robin Hood a crook. The author states that the poor let the big machinery manipulate them whereas the rich know how to use big machinery. This means that the rich own the knowledge and savoir faire to use the power of the corporation to protect and improve their assets. The advantage of a corporation versus that of the individual lies in how corporations pay taxes, according to the author. He makes this point clearly: individuals earn money, pay taxes on that money, and live with whats left. The corporation, on the other hand, earns money, spends everything it can, and is taxed on anything thats left. The author adds that individuals may not be aware of how much theyre being controlled; they work from January to mid-May to enrich the government by paying taxes on their income. In the meantime, the rich are hardly taxed. The author recommends developing ones financial IQ as one way of leaving the monotonous of daily existence. This is accomplished by gaining knowledge of accounting, investing, understanding the markets, and the law. He says being ignorant gets you bullied whereas being informed translates into you have a fighting chance. Chapter 6 Last night, I took a break from writing and watched a TV program on the history of a young man named Alexander Graham Bell. Bell had just patented his telephone, and was having growing pains because the demand for his new invention was so strong. Needing a bigger company, he then went to the giant at the tem, Western Union, and asked them if

they would buy his patent and his tiny company. He wanted $100,000 for the whole package. The president of Western Union scoffed at him and turned him down, saying the price was ridiculous. The rest is history. A multi-billion dollar industry emerged, and AT&T was born. The author develops the concept of self-doubt. He says that each person is born with talent but that talent is concealed because of self-doubt and fright. He notes that its not necessarily the educated smart people who get ahead but the brave and daring. People never get ahead financially even if they have plenty of money because they have opportunities that they fail to tap, he stresses. Most of them just sit around waiting for opportunity to happen. The authors idea is that people create luck; they should not wait around for it. He says its the same with money. It has to be created. The author also discusses the importance of an education. The author is clear by saying, a trained mind is a rich mind. In his examination, there are two types of investors, each with a different mindset: those who go for the packaged investment, and those who customize investments to suit their objectives. The author promotes people to hire people more intelligent than they because by capitalizing on the knowledge of others, an intelligent individual builds his own knowledge base and therefore has more power over those who dont know. Chapter 7 He starts by being granted a interview for a Singapore newspaper which he says he was speaking on The Secrets of the Rich. This chapter the author talks about the skills individuals need to develop for financial success. An example is given about a young woman who had a Masters Degree in English Literature and who was offended when it was suggested that she learn to sell and do direct marketing. After all the hard work for her degree, she didnt think she would have to stoop so low to learn how to be a salesperson, a profession she didnt think very highly of. The author uses this example to emphasize that there are other skills people need to develop to help them on the road towards financial freedom. Another skill the author reveals is Management skills. He says individuals need to know how to manage cash flow, systems, and people. Then he begins to toss in selling and marketing skills. He puts equivalent importance on communication skills. He says there are many people who have the scientific bent and hence have a powerhouse of knowledge, but they fail miserably in communications. These are the people who are one skill away from great wealth. The author calls consideration to one outstanding trait of great wealthy families: they give money away plenty of it unlike the poor who feel that charity begins at home. Chapter 8 The author talks about five reasons financial literate people may still not develop abundant asset columns they are: fear, cynicism, laziness, bad habits, arrogance. He explains that while its normal to have fear, what matters is how you can handle it. The author shares his reaction about his particular soft spot for Texas and Texans: When they win, they win big and when they lose, its spectacular. The author upholds that its

not just a question of balance but also focus. Theyre only uneasy about the sky falling, spending the rest of their lives in distrust. He says he continuously hears people saying they want to be rich, but when its suggested that money can be made from real estate, their initial reaction is but I dont want to fix toilets. The author believes its tongue in cheek that theyre more concerned about details like fixing toilets rather than what lies ahead in real estate. As a final point, the author states that it is healthy to be greedy, so when faced with a decision, a person must always ask, Whats in it for me? Chapter 9 I wish I could say acquiring wealth was easy for me, but it wasnt. So in response to the question How do I start? I offer the thought process I go thorough on a day by day basis. It is really easy to find great deals. This chapter is about tips to create and build personal wealth. First tip is, find a reason greater than reality to motivate you. Meaning of this is to wake up the financial genius in oneself by allowing the mind. He says that people must have a strong purpose for living. The next tip is the power of choice. That is the main reason people want to live in a free country. We want the power to choose. Financially, with every dollar we get in our hand, we hold the power to choose our future to be rich, poor or middle class. Our spending habits reflect who we are. Poor people simply have poor spending habits. Another tip is choosing friends carefully. The power of association, first of all, I do not choose my friends by their financial statements. I have friends who have actually taken the vow of poverty as well as friends who earn millions ever year. This point is I learn from all of them, and I consciously make the effort to learn from them. The next tip is to master a formula and then learn a new one: the power of learning quickly. In order to make bread, every baker follows a recipe, even if its only held in their head. The same is true for making money. Thats why money is often called dough. Also, you need to pay yourself first, you have to have self-discipline. If you cannot get control of yourself, do not try to get rich. You should always pay your brokers well. Everyone should also remember that assets buy luxuries. A friends child has been developing a nasty habit of burning a hole in his pocket. Just 16, he naturally wanted his own car. The excuse, all his friends parents gave their kids cars. The child wanted to go into his savings and use it for a down payment. That was when his father called me. And always remember the power of giving. Teach and you shall receive, and both of my dads were teachers. Chapter 10 Many people may not be satisfied with my ten steps. They see them as more philosophies than actions. I think understanding the philosophy is just as important as the action. It gives readers additional tips to help them reach for financial rewards. One tip is to stop doing what youre doing that is, if its no longer working or practical. The author encourages readers to look for new ideas, to pick the brains of individuals who have the experience and who have already done what one aspires to do. He advises on keeping the learning curve alive, taking courses, buying tapes, attending seminars. In looking for real estate investment opportunities, the author recommends looking in the right places. One way of doing this is to jog around the neighborhood one is interested

in. People can acquire real estate even if they dont have sufficient funds for the down payment. In fact, with a bit of intelligence, the author says people can even make money with no capital. He also says learn from history, all the big companies on the stock exchange started out as small companies.

Personal Insights
Why I think: The author is one of the most brilliant people around because he is a millionaire and a lot of his insights in this book are great. I agree that you should not work for money; buy instead let money work for you. The way he learns from his rich dad in the book is the way everyone should be taught because you cannot learn everything in a classroom and the rich dad teaches him with real world situations. Then, all of the following bullet-items are mandatory to write about: If I were the author of the book, I would have done these three things differently: 1. I would not change much, but at some points I did get somewhat confused. The book does jump around a lot from dad to dad and did have some problem understanding it fully. 2. I would have considered making the book longer because it was so good. I feel that the author could have given us even more insight on his life. 3. Another thing I would change in the book would be to add some pictures. I would have loved to see the kids making the money out of lead. Reading this book made me think differently about the topic in these ways: 1. The book made me think differently about money all together and how I should learn about money. Also, after reading the book I should learn how to get money to work for me. 2. Another thing I think differently about is investing and how to invest. I would love to become more familiar with the authors ways to invest and make more money. 3. This book made me think differently on owning my own business. It makes me want to be an owner even more and to never give up on that or I will just be average. Ill apply what Ive learned in this book in my career by: 1. Ill apply what Ive learned in this book in my career by striving to be my own boss. I will make every effort to get the self-reliance to take risk and buy a business.

2. Ill apply what Ive learned in this book in my career by never working for money. I will always let money work for me. 3. Ill apply what Ive learned in this book in my career by not just taking what I have learned in the classroom to my career, but going out in the real world and making mistakes that will make me a better person. This will allow me to be a rich dad and have some business expertise to pass on to my children. Here is a sampling of what others have said about the book and its author: Rich Dad Poor Dad is the #1 New York Times Bestsellers. Another statement I found match the book perfectly was written by Author Brian Lee who states, Rich Dad, Poor Dad, by Robert Kiyosaki is one of a handful of books that, after reading it, drastically changed my paradigm and also the course of my life. Before reading the book I believed, like most people, that I would find wealth when I had earned enough income to be rich. This book taught me that wealth was not a function of how much money I made, but how free I was from having to make money. I learned that I could create wealth even from a tiny salary. Overall, if you get a chance to read this book it will absolutely change you mindset on MONEY.