Rich Dad, Poor Dad: What the Rich Teach Their Kids About Money–That the Poor and Middle Class Do Not! A video explains it all

Robert Kiyosaki – Secrets of the Rich (video)

Every publisher in the world first told Robert Kiyosaki, author of “Rich Dad Poor Dad,” that his book wouldn’t sell. Since he sold today more than 23,000,000 (yes this is 23 millions), it tells more about the publishers than about the writer.

Rich Dad, Poor Dad

Robert Kiyosaki is an investor, entrepreneur, and educator whose perspectives on money and investing fly in the face of conventional wisdom.

In arguing that “old” advice — get a good job, work hard, save money, get out of debt, and invest for the long term — is obsolete and flawed, Kiyosaki has earned a reputation for straight talk, irreverence, and courage. He is so successfull because he kept working on his book success giving lecture after lecture and by keeping promoting and selling his book himself. but let us hear Robert :

I had two dads – a rich one and a poor one.

One dad was highly educated and intelligent; he had a Ph.D. and had completed four years of undergraduate work in less than two years. He then went to Stanford University, the University of Chicago, and Northwestern University to do his advanced studies, all on full, financial scholarships. My other dad never finished the eighth grade. Both men were successful in their careers, working hard all their lives. Both earned substantial incomes. Yet one dad struggled financially all his life and the other dad would become one of the richest men in Hawaii. One died leaving tens of millions of dollars to his family, charities, and his church. The other left a legacy of unpaid bills. Both men were strong, charismatic, and influential. Both men offered me advice, but they did not advise the same things.

Contrasting points of view

(…) One dad would say, “The love of money is the root of all evil.” The other, “The lack of money is the root of all evil.” Having two dads – and loving them both – forced me to think about, and ultimately choose, a way of thinking for myself. I had to think about each dad’s advice and, in doing so, gained valuable insights into the power and effect of one’s thoughts on one’s life. For example: My poor dad had a habit of saying, “I can’t afford it.” My rich dad forbade those words to be used. He insisted that I say, “How can I afford it?” One is a statement, the other a question. One lets you off the hook; the other forces you to think. My rich dad would explain that by automatically saying the words “I can’t afford it” your brain stops working. By asking the question “How can I afford it?” your brain is put to work.

Exercise your mind

My rich dad did not mean ‘buy everything you wanted.’ He was, though, fanatical about exercising your mind – the most powerful computer in the world. My rich dad said: “My brain gets stronger every day because I exercise it. The stronger it gets, the more money I can make.” He believed that automatically saying “I can’t afford it” was a sign of mental laziness. Although both dads worked hard, I noticed that my poor dad had a habit of putting his brain to sleep when it came to money matters. My rich dad, on the other hand, made a habit of exercising his brain. The long-term result was that one dad grew stronger financially and the other grew weaker.

Our thoughts shape our lives

Being a product of two strong dads allowed me the luxury of observing the effects that different thoughts have on one’s life. I noticed that people really do shape their lives through their thoughts. The power of our thoughts may never be measured or appreciated, but it became obvious to me as a young boy that there was value and power in being aware of my thoughts and how I expressed myself. I noticed that my poor dad was poor not because of the amount of money he earned – which was significant – but because of his thoughts and actions. As a young boy, having two fathers, I became acutely aware of being careful in deciding which thoughts I chose to adopt as my own and to whom should I listen – my rich dad or my poor dad? At the age of nine I decided to listen to and learn from my rich dad about money. In doing so, I chose not to listen to my poor dad – my real dad – even though he was the one with all the college degrees.

Dad differences

One of my dads was a multimillionaire. The other was a poor man. Why? Very simply, it comes down to their respective attitudes toward money and life. Take a look at the differences and think about where you fit…

	My Poor Dad Said		My Rich Dad Said
	“My house is an asset.”		“My house is a liability.”
	Rich dad says, “If you stop working today, an asset puts money in your pocket and a liability takes money from your pocket. Too often people call liabilities assets. It’s important to know the difference between the two.
	“I can’t afford it.”		“How can I afford it?”
	The statement “I can’t afford it” shuts down your thinking. By asking the right question, you mind opens up and looks for answers.
	“The reason I’m not rich is because I have you kids.”		“The reason I must be rich is because I have you kids.”
	“I’m not interested in money.”		“Money is power.”
	“When it comes to money, play it safe – don’t take risks.”		“Learn how to manage risk.”
	“Pay myself last.”		“Pay myself first.”
	Rich Dad always took a percentage off the top of any income he earned. He put that money into an investment account that went toward purchasing his assets. Poor Dad spent all his money first and never had any remaining for investments.
	Believed that the company you worked for or the government should take care of your financial needs.		Believed in financial self-reliance and financial responsibility.
	Focused only on academic literacy.		Focused on financial literacy as well as academic literacy.
	Learned only the vocabulary of academia.		Learned the vocabulary of finance – “Your words are the most valuable tools you have.”
	“I work for my money.”		“My money works for me.”
	Thought that making more money would solve his financial problem.		Knew that financial education was the answer to his financial problems: “It’s not how much money you make that’s important – it’s how much money you keep and how long you keep it.”

Understanding the difference in attitudes between Rich Dad and Poor Dad is essential to taking the first steps to financial freedom.

Poor Dad vs. Rich Dad

“Rich Dad, Poor Dad” is the longest-running best-seller on the New York Times, Wall Street Journal, USA Today, and BusinessWeek best-seller lists. It held a top spot on the New York Times list for nearly five years and was USA Today’s No. 1 money book for 2004. Prior to writing “Rich Dad Poor Dad,” Kiyosaki created the educational board game Cashflow 101 to teach individuals the financial and investment strategies that his rich dad spent years teaching him. Born and raised in Hawaii, Kiyosaki is a fourth-generation Japanese-American. After graduating from college in New York, he joined the Marine Corps and served in Vietnam as an officer and helicopter gunship pilot. Following the war he went to work in sales for the Xerox Corporation and, in 1977, started a company that brought the first nylon and Velcro “surfer wallets” to market. He founded an international education company in 1985 that taught business and investing to tens of thousands of students throughout the world. He sold his business in 1994 and, through his investments, was able to retire at the age of 47. For more information about Robert Kiyosaki, visit his web site or buy his books:

Cashflow Quadrant

Repetition is the source of mastery, and The Cash Flow Quadrant takes the excellent thinking in Rich Dad, Poor Dad and builds to another level of detail. This information will increase what you learned in Rich Dad, Poor Dad and help you begin the transformation from a salaried or self-employed person into a business owner and investor.

The definitions of these four quadrants are important. As an employee, you have a job. As a self-employed person, you own a job. As a business owner you have a system (such as a franchise like McDonald’s) that produces cash flow for you and others work for you. As an investor, your money works for you. Rich people are getting more than 70 percent of their cash flow and income by having money work for them.

One of the strengths of the book is that it deals with the subtle psychological differences among people in the four different quadrants, especially on subjects like security and freedom. Kiyosaki and Lechter then do a nice job of helping you understand the difference between risky and taking risk. The latter is a good idea, when you know what you are doing, and the former is always to be avoided.

The book is not dogmatic, pointing out that good results can be reached in a variety of ways. You have to decide which ones are right for you. In general, you are encouraged to move from the employee and self-employed side for your income to the business owner and investor side. Then, take your cash flow and expand it into investments.

Another of the strengths of the book is to make it clearer what the advantages of income property are. In these Internet stock-crazed days, many are looking only to stocks and missing good commercial property opportunities.

There are lots of good questions you can use to help frame your road through the cash flow quadant. At a minimum, you will become much more financially literate. With the help of the 7 steps here for making the necessary changes, you should begin to make the transition.

The book has a nice conversational tone that turns personal economics into common sense examples and principles.

The downside of any book about changing your life is that you can read it much faster than you can master the lessons and apply them. I suggest that you schedule time to reread this book over the next 10 years. That’s the best way to check up on yourself and how you are doing.

I do recommend that you read Rich Dad, Poor Dad first. You’ll get much more out of this book if you do that. Then you’ll begin to see opportunities where others see difficulties. Good luck with fulfilling your goals!

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