Rich Dad Poor Dad Book Review

Rich Dad Poor Dad is the book that will put you on the path of investing more and learning personal finance literacy. In fact, it is a classic in terms of a personal finance book!

Reading books, blog posts and listening to podcasts have been a huge part of our lifestyle and mindset shift. It allowed us to discover the possibility of a better, freer and more exciting life. Rich Dad Poor Dad is no exception!

What is the book about?

Finance management

The book is about personal finance. It explains how the rich and wealthy manage their own finance in comparison to how the poor and the middle class does. 

Through lessons and by contrasting his dad (Poor Dad) who is a teacher and his friend’s dad (Rich Dad) who owns multiple businesses, Robert Kiyosaki explains that the rich don’t work for money but have their money working for them and that its is the only way to escape the rat race.

“Don’t work for money, make money work for you”

There are many lessons and teachings in this book. One that I find very interesting and enlightening is the difference between Assets and Liabilities.

Robert Kiyosiaki outlines how the poor get poorer because they spend money on liabilities while the rich get richer by buying assets. He also demonstrates how income statements relate to the balance sheet for each class:

One of his key points is that owning a primary residence is not owning an asset. This is not a common line of thoughts but he makes the following points:

  • People are usually paying their house for their entire life without never really owning it
  • It doesn’t necessarily go up in value
  • Tax deduction is limited to mortgage interest and every other expenses are paid with after-tax money
  • There is a high opportunity cost as a lot of money is tied up in the house leaving not much to invest on the side

Finance literacy

Another important point is that financial literacy is not taught in school. This is likely why so many people struggle with money. Robert Kiyosaki promotes financial literacy and consistent learning on personal finance, how money works, how it can be invested… 

Money mindset

He also explains that people need the right money mindset to exit the rat race, “become rich” or reach financial freedom. Taking fear of not having enough money or not being able to pay the bills needs to be out of the equation. You also need to be very careful with greed. The right balance between the two comes from the right mindset and education while talking about money.

Robert Kiyosaki encourages people to create a business on the side. The key is investing money so it would grow until the income generated is surpassing your day job income. If your day job income is enough to sustain your lifestyle, financial independence is achieved!

Why did I choose this book?

In 2018, I started to listen to podcasts and particularly to the real estate related one called “biggerpockets”. In the show, hosts are interviewing investors and business men and women who have been successful in the real estate world. At the end of the show, they ask the guest their favourite real estate and business book. “Rich Dad Poor Dad” is probably the most cited book and often referenced as an eye-opening book.

What was my favourite quote of the book?

“Rich people acquire assets. The poor and the middle class acquire liabilities that they think are assets”

Robert Kiyosaki

What did I learn from the book?

One of the main points that I retain from the book is the importance of financial literacy. After reading this book, we realized that our financial literacy was not what it should be if we wanted to reach financial freedom. It made us realize that we need to learn more about investing and improve our money mindset.

Who do I recommend the book to?

Everyone! It is a must-read in terms of personal finance.

Fun fact

After reading the book and because it was eye-opening for us, we were planning to offer this book to our parents. They had a hard time understanding the changes we were making in our life, especially after we sold our biggest “investment”: our house. Just before buying the book, we asked ourselves if this was a good idea. We were both raised in middle class families proning the hard work at school and getting a good high paying job so you could buy a house, go on your annual vacation and answer your kid’s needs, which is what Robert Kiyosaki is painting as his “Poor Dad”. Now you start to understand our hesitation.

We ended up discussing it with them upfront just to make sure this would not be misunderstood and they would see it more as opening our horizon.

Let us know in the comment below your thoughts about this book and if you would be hesitant to offer it to your parents!

Rich Dad Poor Dad Book Review

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