Rich Dad Poor Dad
I finished reading Rich Dad Poor Dad very quickly. I’ll admit I read it at the end of 2020 because I’m hopeful. I’m hopeful that I can take all of the uncertainty and fear associated with this year and harness it for my future success. Many people have recommended this book to me. But, if I’m being honest, I wasn’t interested because I’ve been an idealist my whole life. Not idealistic in the sense that I think riches will find me. But idealistic in the sense that I’ve always felt that my calling was in service. Service to me meant that riches would never find me. So I figured why read a book about something that just isn’t in the cards for me? But again, 2020. This year has meant that a complete and total change is necessary in the way I think. I’m now ready to believe that I can simultaneously be a servant leader and procurer of riches.
Robert T. Kiyosaki is the author of Rich Dad Poor Dad. He is a man of comparisons as he uses them throughout the book to support his perspectives on why the educated aren’t necessarily rich and why the rich aren’t necessarily educated. Educated in this sense means the typical person who goes to college, graduates, looks for a job, works that job until they retire, only to die poor. Educated people to Kiyosaki aren’t necessarily financially literate. They may make a lot of money but they have no idea how to respect money. Kiyosaki shows us this by comparing his highly educated dad to his wealthy dad. Educated dad never wants to talk about money and always lives in a state of scarcity. Rich dad talks about money all the time and concerns himself with ways he can make money. Basically, we all want to be rich dad. Right?
So there are a few key points I learned from the book. Number one is understanding the difference between an asset and a liability. This to me is probably the most important lesson in the book. In the circles I frequent, it is often said that your home is an asset. Kiyosaki bursts bubbles by explaining that this isn’t true. Why? Well for a few reasons:
Your home requires maintenance and upkeep. This costs you money.
You have to pay property taxes on your home or you risk losing it.
Home appreciation is not guaranteed.
You will have to work to pay off your mortgage.
Your home is a liability. Assets on the other hand make you money. An asset could be property that you own where you make money on rents. It could be stocks or bonds. Most important is that it is a vehicle that makes you money. Kiyosaki explains that the rich focus on increasing their assets and decreasing their liabilities. The more money you bring in, the more money you can dedicate to money making assets.
The second key point I learned was to Mind My Business. This basically means that you should focus your time and energy on building your assets instead of building for others. If you are going to work for someone that’s great. But, you should also be focused on improving your own business. That could be the business of investing or real estate. Don’t spend all your income. Invest in yourself.
The third point that really stuck with me was to surround myself with people who are smarter than me., and pay them accordingly. As much as I enjoy knowing things, there is no way that I can know everything. People are experts in their fields for a reason. An accountant is better with numbers than I am. An attorney is better at practicing law than I am. That’s ok. I can harness that knowledge by paying for it. To me this means not being hung up by free trading apps or free budgeting apps. Respect your money by paying experts. It’ll respect you back by growing.
Overall, I definitely learned a lot from this book. It definitely sparked a finance genre frenzy on my Kindle. I even feel a little bit more confident about my ability to tackle investments. As a woman who has worked in the nonprofit space since I entered the workforce, I feel that getting this side of the coin has been helpful. I can know speak the language of those who believe in that old bootstrap ideology. I can’t forget to mention that Sharon L. Lechter is a coauthor of Rich Dad Poor Dad. She’s done a lot of other work too so be sure to check her out.