Our Review of “Rich Dad, Poor Dad” by Robert Kiyosaki

By WebMarketKings

June 14, 2019


The purpose of this article will be to give you a summary of Robert KIYOSAKI’s book “Père Riche, Père Pauvre”.

The aim will also be to give as objective an opinion as possible and what I have learned from it.

>> Click here to Learn More or Order “Rich dad Poor dad” on Amazon

Who is Robert Kiyosaki?

Born on April 4, 1947 in Hawaii, Robert KIYOSAKI is an American entrepreneur, investor and writer.

After spending his childhood on his native island, Robert KIYOSAKI quickly became passionate about the world of entrepreneurship.

He then founded various companies and made parallel real estate investments. On the strength of his business successes, Robert KIYOSAKI decided to write several books on the subject.

In 1997, he became known for his work “Père riche, père pauvre”, which sold more than 26 million copies.

Through this book and those that follow, the Hawaii native explains how it is possible to become rich through investment and business creation.

Although Robert KIYOSAKI announced his retirement at the age of 47, he continues to manage the marketing of his books through Cashflow Technologies, which he launched himself.

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Introduction of Rich dad, Poor dad

Robert KIYOSAKI, founder of the financial education company The Rich Dad Company, had two “mentors”: his real dad and the dad of his best friend Mike.

On the one hand, an educated dad with post-doctoral studies who left behind debts to repay, and on the other hand, a dad who stopped attending college and left tens of millions of dollars to his heirs.

The two men had totally different opinions about money: one wanted his son to find a well-paying job and the other wanted him to learn that money was working for him.

R. KIYOSAKI finally chose the second option.

Indeed, his biological dad wanted the little KIYOSAKI to work for a company and become ultra competent in his profession.

On the other hand, his best friend’s dad told him to own the company and hire highly skilled people.

Of course, it took a whole learning process to be able to educate oneself financially through 6 lessons repeated over a period of 30 years.

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Lesson #1: The rich do not work for money

From the age of 9 Robert KIYOSAKI decides to start learning from his rich dad.

Rich dad accepts on condition that he works for him in one of these grocery stores. Robert KIYOSAKI will therefore work 3 hours every Saturday for 10 cents an hour.

However, after three weeks he wants to give up. His poor dad (biological dad) advises him to ask for a 25 cent per hour increase or he will leave the grocery store.

So that’s what Robert KIYOSAKI does.

It was at this point that his rich dad told him that he was behaving like all the other employees to ask for a raise.

None of its employees asked them how to make money but rather to ask for an increase in exchange for their working time.

The fundamental principle is that the rich have the money that works for them and not the other way around.

The main problem when you work for money and if you can no longer work, the money will fall in proportion.

On the other hand, if money works for us and is dissociated from our time, then there will be almost no impact if we stop working.

After this interview, when he asked for a salary increase, rich dad forced him to work for free.

To top it off, while little KIYOSAKI has come to ask for a raise, he leaves empty-handed.

Thus, rich dad invites KIYOSAKI to think about finding another source of income than his work at the grocery store.

The beginning of a financial reflection

After a few weeks, Robert KIYOSAKI decided to use some comic strips that were available at the grocery store and that were destined for disposal.

Mike (his best friend) and Robert decide to use one of the rooms in his house as a library with the comics collected.

They hired Mike’s sister to coordinate and run the activity. The goal is to charge 10 cents for each 2-hour visit to the library. The customers were the children from the neighbourhood.

In a period of 3 months Mike and Robert managed to make an average of $9.50 per week. They gave Mike’s sister $1 a week with the right to read all the comics for free.

What Robert learns from this experience is that he had a monopoly on making decisions to improve his small business.

But what he found extraordinary was that he was able to generate money without being physically present in his library.

Lesson #2: Why provide “financial education”?

Financial education cannot be learned in school. For Robert KIYOSAKI, it is not enough to count the present moment to see what you earn to become rich. But rather what we leave to our future generations.

The fundamental rule of financial education

The fundamental rule is knowledge between assets and liabilities. To earn money you have to acquire assets and reduce these liabilities as much as possible.

According to Robert KIYOSAKI: “An asset is all the assets and receivables that put money in my pocket. A liability is all the assets and receivables that come out of my pocket.

For most middle-class people, having a home is their best investment. However, although this provides them with serenity and financial security.

Their house is a liability that causes them to lose money since it does not bring in anything strictly financial but costs money in taxes and energy bills.

On the other hand, if the same house is intended for rental, it would have generated money through the rental of the property.

The objective is to invest in assets in order to generate income that is not linked to salary. This will help you realize that it is possible to generate income outside the workforce.

It is not mandatory to invest thousands of euros overnight to build an asset base.

The main thing is to start at your own pace and with your own resources to build an asset base that will grow day by day.

Don’t do what most people do

Most people think that the wage increase will allow them to live more comfortably.

However, the salary increase will increase your taxes. You will lose some of the rights of the state and you will go deeper into debt with financial institutions to buy a bigger house, for example.

The ultimate goal of creating your asset base is to be able to generate a cash flow that covers all your expenses.

If this step is reached, then you no longer depend on your salary as such. This will make you feel more confident and allow you to invest even more in assets.

Lesson #3: Mind your own business!

According to Robert KIYOSAKI is more precisely his rich dad.

The goal is to keep your current job to keep it safe but to start thinking about a business idea next door so that you are not entirely dependent on your work.

KIYOSAKI started his professional career selling photocopiers at Xerox. Thanks to his income, he invested in real estate.

In only 3 years, the income generated by his real estate investments exceeded his salary.

He then decided to leave the company to run his own business full-time. He knew that it was the only way out of the “rat race”.

Don’t spend all your income. Build a diversified portfolio of assets and spend later when you earn enough from these assets.

Lesson 4: The History of Taxes and Corporate Power

In this lesson the little KIYOSAKI learns the system of government collecting money from individuals. Indeed, the more money the individual earns, the more he will have to pay for the government.

The vast majority of people do not react and let themselves be carried away.

Rich people, on the other hand, are constantly trying to find ways to legally circumvent the laws or use them to pay as little tax as possible.

Indeed, by paying less taxes you will have more cash flow.

Entrepreneurs have understood this system and that is why they have created their own company. Indeed, thanks to their companies they generate money just like the company’s employees.

On the other hand, the difference is that entrepreneurs spend their money on investments before paying their taxes (corporate taxes).

While employees have no choice but to pay their social security contributions and income taxes before spending their money personally.

robert kiyosaki

Develop your financial IQ

The goal for KIYOSAKI is to have a basis in financial IQ terms. This means that at least 4 factors must be understood in the development of an asset.

  • Accounting. Indeed, it is necessary to know how to read a balance sheet and an income statement in order to be able to analyse the behaviour of a company. You don’t necessarily have to be a chartered accountant to do this. Knowing the difference between profitability and cash flow is also an essential point in accounting.
  • Knowing how to invest. Indeed, it is not enough to put money in a circuit and wait. It is necessary to think about strategies beforehand. The aim is to monitor the evolution of the investment by ratios. The accounting aspect is therefore required.
  • The market. The contractor must know the needs of the request and propose through the request. It is the law of supply and demand. Supply is an increasing function of price. Demand is a decreasing function of price.
  • The law. You need a minimum of legal knowledge to grow your business with the right rules of the game.

Lesson #5: The rich create their own wealth

The vast majority of people know the labour system to earn money and borrow.

By using the first 4 lessons, some individuals are able to invest and create their own wealth.

They already have money from their work but want to discover another way to earn money using their financial IQ.

A small investment can be very profitable if you are familiar with the financial structure, laws and strategies to adopt.

For Robert KIYOSAKI, there are two types of investors:

  • Those who do not like risk too much and who buy investments through professionals.
  • Those who take full care of their investments by identifying the best deals and adopting the right strategies to make the initial investment grow.

To accept risk is to accept to succeed for Robert KIYOSAKI. Indeed, the more risk is present, the more profitable the investment will be.

Indeed, it is possible to fail and lose. The objective is therefore to take risks on its own scale. If we lose, we can learn from our mistakes and start again.

This is the real key to building an asset. Don’t be afraid to fail, but invest on your own scale.

The stronger the asset column, the more you can invest and move up the ladder.

Lesson 6: Work to learn, not work for money

Not having money is not an excuse not to learn. Learning is an everyday choice. Some people will want to go sports or shopping.

Others may prefer to learn how to invest and get started while continuing to learn.

The most powerful tool is our mind. Indeed, once you have learned you have the information to make the best choices.

This learning and experiential learning will be anchored throughout your life in your brain.

After his studies, Robert KIYOSAKI joined the Marine Corps. In particular, he has learned to lead troops, an essential lesson to learn to manage in a company.

Later, he joined Xerox where he learned to overcome his fear of rejection by becoming one of the company’s top 5 sales representatives.

Having achieved his goal, he left the company and began to run his own business.

Indeed, the goal is not to specialize in a particular field but to have the 20% of knowledge that brings 80% value.

pere riche

Robert KIYOSAKI’s ultimate goal

Robert KIYOSAKI did not like being an employee and did not want to work all his life and have a house in the suburbs.

KIYOSAKI also didn’t like that his dad couldn’t attend his son’s match because he was too absorbed in his career.

Robert KIYOSAKI’s life objective was to work hard but for him and develop assets to leave them to his children.

Robert KIYOSAKI wanted to travel the world and enjoy the lifestyle he wanted. Control your life and schedule.

Robert KIYOSAKI wanted to be financially independent at the age of 40. He achieved this goal but at 47 years of age.

After several failures but by persevering all his life he managed to find the key to success that allowed him to fully control his life long before his retirement.

Conclusion and opinion concerning Rich dad, Poor dad

Rich dad, poor dad is a book to read if you are interested in entrepreneurship and investment.

It gives you a vision and perception of enrichment that is really different from what we all think most people think.

The real enrichment is not in the salary increase you can ask your boss to give you.

But to become your own boss and manage your personal finances in order to develop assets that will bring money without necessarily requiring your presence.

This book does not provide a miracle method. It encourages reflection and gives a new dimension to your vision of money.

Unfortunately, the examples shown in this book do not have enough depth in my opinion. Robert KIYOSAKI uses them in a very simplistic way. However, we know that investing is anything but simple.

That being said, I highly recommend reading this book!

>> Click here to Learn More or Order “Rich dad Poor dad” on Amazon

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