Rich Dad Poor Dad by Robert Kiyosaki (Detailed Summary)

Three million, two hundred and seventy-six thousand, nine hundred and forty-eight. At the time of this writing, that is the number of years Elon Musk, the progenitor of SpaceX and Tesla, could sustain  himself into the future if he were to adhere to the average American annual salary of $56,516. To put it differently, even in the unlikely event that you manage to save 50% of your income and hoard it beneath your mattress each year, it would demand 6.5 million years to amass a wealth comparable to Elon's. Not all of us can aspire to be the most affluent individuals on the planet, but what about aiming for a million dollars?

Certainly, that shouldn't be overly challenging, right? Well, let's imagine you're the average engineer earning $80,000 per annum. It would necessitate sixteen years merely to acquire a million dollars. This calculation doesn't factor in expenses like rent and the cost of living. If you were to consistently save 10% of your earnings, it would take 156 years to accumulate a million dollars. For the average educator, it would demand 217 years, and for a bartender, an astounding 625 years.

For the wealthy, wealth is quantified in terms of time. If you were to lose your employment tomorrow, how long could you subsist on your savings? This epitomizes the definition of affluence. So, how long could you persist?

This book will impart the financial acumen you may have inadvertently missed while growing up. The clandestine realm of financial intelligence that affluent families pass down from one generation to the next. It is the edification system and your parents failed to convey.

The absence of this knowledge consigns numerous individuals to remain perpetually ensnared in the relentless rat race. By the end of this article, you will be well-acquainted with 95% of the content this book has to offer. You will possess an overview of the most pivotal concepts and quotations that will revolutionize your perception of wealth and shepherd you on your odyssey toward financial liberation. Let's delve into it.

"Rich Dad Poor Dad": The Tale of Two Paternal Figures. One, bedecked with a plethora of academic accolades, the other, a high school dropout. One, in the aftermath of his demise, will bequeath naught but indebtedness. The other will have departed as one of Hawaii's most opulent denizens, leaving behind an empire for his progeny.

Rich Dad mentors two boys on an expedition to optimize their cognitive faculties and their finite time to foster affluence via investments and commerce. This chronicle lays bare the disparity between "I can't afford that" and "How can I afford that?"

His Poor Dad would often utter phrases like, "I'll never be wealthy," and his prophesies proved prescient. In contrast, Rich Dad, despite facing bankruptcy and being bereft of any capital, would affirm, "I am a prosperous man." There exists a gulf between indigence and destitution.

Lesson One: The affluent don't labor for money; it is the poor and the middle class who toil for a paycheck. The prosperous have money laboring on their behalf.

At the tender age of nine, Robert Kiyosaki, the author of this tome, and his bosom friend Mike entreated Rich Dad (Mike's father) to bestow the wisdom of wealth accumulation. Ere long, they both found themselves under the tutelage of Rich Dad, engaged in his enterprises. Robert, however, bemoaned his meager compensation of a dime per week, a destitution wage. He contemplated resigning weekly, resenting the exploitation. It was at that moment that Rich Dad administered their first lesson regarding pecuniary matters.

Life is an incessant maelstrom, buffeting all of us. Some capitulate, while others resist. Those who apprehend the lesson persevere and welcome life's adversities. Most leave their vocations due to inadequate remuneration, whereas the affluent perceive them as learning opportunities. One of life's most insidious traps is toil.

This cycle ensnares people in the endless loop of work, where increasing income spurs extravagant expenditures. Want begets more material possessions, which necessitates greater toil for promotions. This routine is akin to a rodent race, where one wakes up, works, returns home, and settles bills. The surge in earnings precipitates a concomitant rise in spending, perpetuating the rat race.

To extricate oneself from the nine-to-five mindset driven by fear and avarice, Rich Dad gradually reduced the boys' remuneration to zero. They began laboring purely for knowledge, and he compelled them to contemplate avenues for self-generated income.

Lesson Two: Obtaining employment is a transitory solution to meet expenses. The enduring challenge is amassing wealth. The more one earns, the greater one tends to spend, and this is governed by the emotions of fear and greed. This ensnares one in a cycle of work, tethered to someone else for life.

Lesson Three: Rich Dad underscored the significance of distinguishing between assets and liabilities. Assets augment one's income, whereas liabilities diminish it. The affluent amass assets, whereas the less affluent erroneously perceive their liabilities as assets.

Cash flow reveals how one manages finances. A pauper's cash flow is characterized by toiling for a meager salary and residing from paycheck to paycheck. The middle class has employment but much of their income is earmarked for liabilities, like mortgage payments, car loans, and credit card debt. They misapprehend their residences as assets, only to awaken to a liability column replete with mortgage and credit card debt.

The affluent's cash flow is rooted in endeavors to bolster their asset columns.

The rich individuals acquire assets, while the less affluent and the middle class accumulate liabilities, misperceiving them as assets.

Lesson Four: The principal approach to eluding the rat race encompasses grasping the distinction between assets and liabilities, concentrating on amassing assets that generate cash flow, and constraining expenses and debts to the bare minimum.

Lesson Five: The affluent concentrate on their asset columns, while the majority focus on their income statements.

Robert Kiyosaki's first professional foray wasn't glamorous. He was a photocopier salesman for Xerox. Using his earnings, he ventured into real estate, and within three years, the returns from his investments outstripped his salary. He severed ties with Xerox to oversee his businesses full-time.

Assets worthy of attention encompass businesses that don't necessitate constant attention, stocks, bonds, income-generating real estate, notes or IOUs, royalties from intellectual properties like music, scripts, or patents, and a spectrum of other ventures that yield income or appreciate, such as cryptocurrencies, websites, YouTube channels, and more.

Lesson Six: Each dollar invested in the asset column should never be withdrawn. Consider it a diligent employee, generating more employees to enable the employer to acquire a new Porsche.

In conclusion, do not confuse your profession with your business. The middle class is engrossed in their profession, dedicating their lives to bolstering someone else's business. The wealthy focus on cultivating their ventures. Success hinges on comprehending the distinction between assets and liabilities, concentrating on asset accumulation, and curtailing expenses and debts.

This is the first part of Rich Dad Poor Dad click here to read second part