The book is written by Robert Kiyosaki, a man who is an accomplished businessman who retired at the age of 47. Because he could. He retired a rich man.

He speaks about having two dads, one a rich man, another a poor one. But it wasn’t the money that separated them. It was their attitudes about money. The Rich Dad had a very different view about money than the Poor Dad. And the book is really just about that difference.

Robert Kiyosaki believes that most people behave like Poor Dad when it comes to money, and hence they remain poor. It is this attitude that he has wanted to change.

I certainly feel I have changed. Money doesn’t seem like an intangible that I can’t get anymore. I know if I work right and more importantly, think right, I will get it eventually.

Chapter 1

The first chapter of the book is about how the rich and the poor think differently. It is about how the college educated dad does not have a solid financial education and therefore his only advice to his kids is to go to college and get a job.

The rich dad is the one suggesting to study to buy companies, not work in them.

The chapter is essentially discussing the different take both these guys have on the same topic and how the rich dad questions about getting money…leading to money eventually. If the other dad doesn’t even think about it, well then how is he going to make any?

Some really vital lessons from this chapter are that instead of looking at money as an incomprehensible foe, we must try and understand it first. Only then can we hope to liberate ourselves from needing it.

Chapter 2

“The poor and the middle class work for money.” “The rich have money work for them.”

This is an important lesson. I too have been guilty of doing this. In fact, the realisation that money could work for me started to happen in the last few days. I asked myself, do I even know what my money can do for me? I don’t know the answer because I don’t go looking for it.

And what I don’t look for, I won’t find.

And I think that slow realisation led me to start thinking about what exactly to do with the money that I have. But if I come from a point that okay, I know exactly what to do with it, I possibly could multiply it and create something out of it.

The book speaks of operating through thoughts rather than reactions. Reactions stem from old habits, thoughts can lead us out of old habits.

To think and not to react, to act consciously and not out of any fear. That is the state to be in. Not just for this, but with everything. First off, I don’t know what most people do in a field, but then sometimes not even the people in the field.

And also, most people don’t know what they do.

Most people live in this unquestioning haze. To question is to seek an alternative.

So finally in Chapter 2the lesson is to question, to seek new things and to always try and understand where the opprtunities really are in life.

Chapter 3

“Know the difference between a liability and an asset and only buy assets.”

The author speaks about the Japanese, who value three things. The sword, the jewel and the mirror.

Swordis weapons, jewelis money, and mirroris self knowledge. Of the three, the mirror is the most valued. If you know about yourself then you can do anything.

He says that the middle and lower class don’t learn about themselves and shoot themselves in the foot in the process.

A home is a liability and not an asset. Most people think that buying a home is a huge asset in their kitty. But the home doesn’t generate any wealth. In fact it takes money to maintain it.

The chapter ends with the simple answer, the rich buy assets, the poor buy liabilities.I myself feel poor for spending money on trinkets when the money could’ve been better spent in creating assets.

Chapter 4

Right out of the bat the author says that the secret of the rich is,

“Mind your own business.”

Because if you don’t run your own business, you’re making someone else profitable.

The author goes on to suggest what kind of assets one can spend in acquiring.

“1. Businesses that do not require my presence. I own them, but they are managed or run by other people. If I have to work there, it’s not a business. It becomes my job.

2. Stocks.

3. Bonds.

4. Mutual funds.

5. Income-generating real estate.

6. Notes (lOUs).

7. Royalties from intellectual property such as music, scripts, patents.

8. And anything else that has value, produces income or appreciates and has a ready market.”

The author then further explains what he means by minding his own business. It doesn’t necessarily mean work for yourself. You may work for someone else to earn money but then you definitely make it a point to look out for your interests on the side.

“When I say mind your own business, I mean to build and keep your asset column strong.”

The author then speaks about frivolous spending, on things that we don’t need and won’t want. By continuously doing this, we rob ourselves of the choice to invest in something bigger.

“What most people do is they impulsively go out and buy a new car, or some other luxury, on credit. They may feel bored and just want a new toy. Buying a luxury on credit often causes a person to sooner or later actually resent that luxury because the debt on the luxury becomes a financial burden.”

The author advises to only buy luxuries from the profits of the assets. Basically to build up assets that allow luxuries to happen.

The author speaks about how Financial IQ is something that comprises of four broad areas.

“№1 is accounting.What I call financial literacy. A vital skill if you want to build an empire. The more money you are responsible for, the more accuracy is required, or the house comes tumbling down. This is the left brain side, or the details. Financial literacy is the ability to read and understand financial statements. This ability allows you to identify the strengths and weaknesses of any business.

№2 is investing.What I call the science of money making money. This involves strategies and formulas. This is the right brain side, or the creative side.

№3 is understanding markets.The science of supply and demand. There is a need to know the “technical” aspects of the market, which is emotion driven; the Tickle Me Elmo doll during Christmas 1996 is a case of a technical or emotion-driven market. The other market factor is the “fundamental” or the economic sense of an investment. Does an investment make sense or does it not make sense based on the current market conditions.

№4 is the law.For instance, utilizing a corporation wrapped around the technical skills of accounting, investing and markets can aid explosive growth. An individual with the knowledge of the tax advantages and protection provided by a corporation can get rich so much faster than someone who is an employee or a small-business sole proprietor. It’s like the difference between someone walking and someone flying. The difference is profound when it comes to long-term wealth.”

There is a real need to understand how money moves around, how value is generated and by focusing on these four topics it is possible to do so.

Also, the author speaks about understanding how corporations work and how it might be best to learn how they work. Setting up a corporation can have many benefits.

Chapter 6

This chapter is titled “The Rich Invent Money”and is followed by how rich people invent new industries and create opportunities for money.

It’s got pretty much nothing else apart from how one shouldn’t collect doodads but assets.

He is essentially saying that the creator is bigger than the consumer.

Chapter 7

Work to learn; don’t work for money.

The book is quite convincing for me by this point because instead of talking abotu chasing money, the author is speaking about learning to create value, which will eventually earn money.

“The main management skills needed for success are:

1. The management of cash flow

2. The management of systems (including yourself and time with family).

3. The management of people.”

These management principles are really all that’s important for progressing in life. But then mastering them in no cake walk.

The author speaks about how specialising in only one thing means that there is less security if that thing is taken away. When people are groomed for taking over a business, they are shown all aspects of the business and not just one.

“The better you are at communicating, negotiating and handling your fear of rejection, the easier life is.”

The author is really talking about giving up fears. If people walk about with the fear of making mistakes, they might not make mistakes but they might not learn either.

The author says that to be truly rich, we must be ready to give as well as receive. And so we must learn to be teachers as well as students.

One cannot be an expert in everything and it is important to recognise that. By accepting student status in one thing, we can open up to the idea of making mistakes. And that is the swiftest way to learn anything.

Chapter 8 — Overcoming Obstacles

“Once people have studied and become financially literate, they may still face roadblocks to becoming financially independent. There are five main reasons why financially literate people may still not develop abundant asset columns. Asset columns that could produce large sums of cash flow. Asset columns that could free them to live the life they dream of, instead of working full time just to pay bills. The five reasons are:

1. Fear.

2. Cynicism.

3. Laziness.

4. Bad habits.

5. Arrogance.”

The author begins by saying that only knowing how to become rich isn’t important. We have to overcome Fear, Cynicism, Laziness, Bad Habits, and Arrogance in order to really achieve our goals.

I personally feel this can be applied to anything. And I think everyone knows it as well, it’s just that we don’t consciously apply ourselves to getting what we want.

“If you hate risk and worry. . .start early.”

The author speaks about how if risk isn’t your thing, start early. Find ways that mitigate your risk and will provide benefit in the long term. That way you’re minding your own business and not being risky about it.

“Everyone wants to go to Heaven, but no one wants to die.” Most people dream of being rich, but are terrified of losing money. So they never get to Heaven.

The author says that the lack of risk taking is something that holds people back. By not playing fast and loose with their lives, they might be saving themselves shame and ignominy, but then they aren’t really doing anything. You have got to take risks and go for something big.

“It takes guts, patience and a great attitude toward failure. Losers avoid failing. “And failure turns losers into winners.’’

The author has been primarily talking about getting over fear. It is the most crippling of poisons. It weakens one from within.

“My point is that it’s those doubts and cynicism that keep most people? Poor and playing it safe. The real world is simply waiting for you to get rich. Only a person’s doubts keep them poor. As I said, getting out of the rat race is technically easy. It doesn’t take much education, but those doubts are cripplers for most people.”

The author is saying that since most people are cynical and believe the world is a tough and incomprehensible place, they don’t want to take risks. People shut their mind to analysis and open their minds to fears.By doing this they don’t always get to see that many opportunities can be made best use of, if only they could try.

“Rich dad gave me a way of looking at Chicken Little. “Just do what Colonel Sanders did.” At the age of 66, he lost his business and began to live on his Social Security check. It wasn’t enough. He went around, the country selling his recipe for fried chicken. He was turned down 1,009 times before someone said “yes.” And he went on to become a multimillionaire at an age when most people are quitting. “He was a brave and tenacious man,” rich dad said of Harlan Sanders.”

Now the author is dealing with the problem of laziness. He says that by being lazy, we become unproductive. In fact he says that staying busy is the worst form of laziness, since people always are busy doing something or the other.

“Rich dad forbade the words “I can’t afford it.”

In my real home, that’s all I heard. Instead, rich dad required his children to say, “How can I afford it?” His reasoning, the words “I can’t afford it” shut down your brain. It didn’t have to think anymore. “How can I afford it’” opened up the brain. Forced it to think and search for answers.”

SO the author suggest that we all become a little greedy, and not shun greediness all together. We all want a better life and if we say that greed isn’t good, then we dont’ push ourselves to work harder.

Greed is good, but not is large quantities. If we all became too greedy, then we will definitely suffer.

The author then speaks about bad habits.

About how paying yourself first is important, because then you have to work extra hard to pay the bill collectors.If you pay them first then you’re not really working your money muscles hard enough to learn something and put it out there.

And last, arrogance.Being arrogant is going to take you nowhere, so admit that you don’t know much about the subject and then learn about it. By being arrogant even I have squandered many great opportunities. By being arrogant I haven’t soaked what other people were telling me, wasn’t really listening.

Arrogance can lead us down paths we don’t want to go.

Chapter 9 — Getting Started

The author is talking about how to get started and awaken the financial giant within.

1. I need a reason greater than reality.

Having a reason that is greater than reality will compel me to keep moving forward towards my goals. But I need to have a reason to do so in the first place.

2. Choose Daily

Based on my reasons, I have to choose daily about what it is that I want to do.

3. Invest first in education

The only really asset we have is our mind, the most powerful tool we have dominion over.

The author is saying that learning and being humble about accepting new ideas is the biggest thing. If you’re able to do that then you can still learn how to go about things. Otherwise you won’t know.

4.Choose friends carefully

“Don’t listen to poor or frightened people. I have such friends, and I love them dearly, but they are the “Chicken Littles” of life. When it comes to money, especially investments, “The sky is always falling.” They can who controls the past controls the future, who controls the present controls the past.always tell you why something won’t work. The problem is, people listen to them, but people who blindly accept doom-and-gloom information are also “Chicken Littles.” As that old saying goes, “Chickens of a feather agree together.” “

“I would say that one of the hardest things about wealth building is to be true to yourself and be willing to not go along with the crowd. For in the market, it is usually the crowd that shows up late and is slaughtered.”

5.MASTER A FORMULA AND THEN LEARN A NEW ONE

“When it comes to money, the masses generally have one basic formula they learned in school. And that is, work for money. The formula I see that is predominant in the world is that every day millions of people get up and go to work, earn money, pay bills, balance checkbooks, buy some mutual funds and go back to work. That is the basic formula, or recipe.”

“Years ago, when I was 26,1 took a weekend class called “How to Buy Real Estate Foreclosures.” I learned a formula. The next trick was to have the discipline to actually put into action what I had learned. That is where most people stop. For three years, while working for Xerox, I spent my spare time learning to master the art of buying foreclosures. I’ve made several million dollars using that formula, but today, it’s too slow and too many other people are doing it.”

In this section the author is talking about how learning, and learning often and quickly is really important. However he also mentions that one needs discipline to put the learnings in practice. He says that most people work by a formula, work and earn money. However there are people who find other formulas for making money. And anything that you know is already old, something new is definitely out there already.

6. Pay Yourself First

“It is difficult to say which of the ten steps is the most important. But of all the steps, this step is probably the most difficult to master if it is not already a part of your makeup. I would venture to say that it is the lack of personal self-discipline that is the №1 delineating factor between the rich, the poor and the middle class.”

The author advises not to get into a large debt position. Also, if there are bills to pay one must think of ways to generate an income source for them rather than to break the savings pool. It is more prudent to do that so there are more sources of income in the household.

Poor people have poor habits. A common bad habit is innocently called “Dipping into savings.” The rich know that savings are only used to create more money, not to pay bills.

The author is talking about how indiscipline can lead to none of the above things being implemented. They do need to be implemented, and how that’ll happen is by having self discipline. Without self discipline one would not be able to do anything.

7. PAY YOUR BROKERS WELL

The author speaks about how the Rich Dad advised the author to pay professionals well.

“As I said earlier, one of the management skills is the management of people. Many people only manage people they feel smarter than and they have power over, such as subordinates in a work situation.

Many middle managers remain middle managers, failing to get promoted because they know how to work with people below them, but not with people above them.

The real skill is to manage and pay well the people who are smarter than you in some technical area. That is why companies have a board of directors. You should have one, too. And that is financial intelligence.”

In this particular section the author just speaks about how one should value people who have the right knowledge, and also people who are perhaps smarter than us. The author says that if we are not comfortable managing people above us in stature then we won’t grow. I need to learn how to manage people smarter than me so that I can learn how to get knowledge from them.

8. Be an Indian giver

“This is the power of getting something for nothing. When the first white settlers came to America, they were taken aback by a cultural practice some American Indians had. For example, if a settler was cold, the Indian would give the person a blanket. Mistaking it for a gift, the settler was often offended when the Indian asked for it back. The Indians also got upset when they realized the settlers did not want to give it back. That is where the term “Indian giver” came from. A simple cultural misunderstanding.”

The author speaks about how one should give without thinking about receiving. If one develops an ability to give, then one can also receive. There is a little more to it, though. The author says that if you do want to get something, ask what you can get for free with it.

He speaks about getting the best from every deal.

9. Assets buy luxuries.

In this section the author begins by using a vey powerful example. A 16 year old who wanted to buy a new car asked his dad for it. After talking with the author, the father decided to give 3000$ to the kid and told him that he can’t directly buy a car with this money, but will have to earn through stocks and then buy the car.

The kid found this interesting and really started to invest time in learning about money. Again, something that is definitely better than not knowing about it.

To be the master of money, you need to be smarter than it. Then money will do as it is told. It will obey you. Instead of being a slave to it, you will be the master of it. That is financial intelligence.

10. The need for heroes

“When it comes to investing, too many people make it sound hard. Instead find heroes who make it look easy.’

If you get heroes in the field, you can try and emulate them, getting their perspective on the game and thereby learning from their experiences rather than chasing ones own. One can also start making decisions like them that could make things easier.

11. Teach and you shall receive

If I could leave one single idea with you, it is that idea. Whenever you feel “short” or in “need” of something, give what you want first and it will come back in buckets. That is true for money, a smile, love, friendship.

Chapter 10 Still want more? Here’s some To-Dos

“Stop doing what you’re doing. In other words, take a break and assess what is working and what is not working. The definition of insanity is doing the same thing and expecting a different result. Stop doing what is not working and look for something new to do.”

The author is speaking about actionable steps to take. The theme is to invest in learning more, and therefore understanding more how things are working.

“Look for new ideas. For new investing ideas, I go to bookstores and look for books on different and unique subjects. I call them formulas. I buy how-to who controls the past controls the future, who controls the present controls the past.”

“Find someone who has done what you want to do. Take them to lunch. Ask them for tips, for little tricks of the trade.”

“Make offers. People who are not investors have no idea what it feels like to be trying to sell something. I have had a piece of real estate that I wanted to sell for months. I would have welcomed anything. I would not care how low the price. They could have offered me ten pigs and I would have been happy. Not at the offer, but just because someone was interested. I would have countered, maybe for a pig farm in exchange. But that’s how the game works. The game of buying and selling is fun. Keep that in mind. It’s fun and only a game. Make offers. Someone might say “yes.” “

The author ends on a poignant note.

“Small thinkers don’t get the big breaks. If you want to get richer, think bigger first.”