This is one of the best selling book form the author Robert T. Kiyosaki. In this book, Robert explains the differences between the mindset of two different people, Rich people, and poor people. This book tells us:-
i) How the rich people are being more richer and richer?
ii) How the poor and middle-class people are being poorer and poorer?
iii) What rich people teach their children about money that poor and middle-class people don't?
The author of this book, Robert Kiyosaki had two father, one his father whom he called 'Poor Dad' and the other is his best friend's father whom he called 'Rich Dad'. His dad, the poor dad was the head of education but was still struggling for money. His Rich dad who hadn't studied much was the richest businessman. So, what made the Rich dad richer and richer and the poor dad poorer and poorer? -It is their mindset towards money. Robert got the chance to learn to form both dad and two different mindsets about money.
Important Points Form This Book:
1)You don't need a big salary to be rich.
- It is one of the common myths in poor and middle-class people about money that they should have a high level of income to be rich. You don't need a high paying salary to be rich. It doesn't matter how much money you make. What matters is how do you utilize the money. The reason why the poor and middle-class people struggles for money is because of their poor financial literacy. They sacrifice their whole life working for others.
2) Rich people use the money to buy assets, where poor buy liabilities
-Assets mean anything that puts money in your pocket, Liabilities means anything that takes money out of your pocket. When rich people get money, they use the money to buy assets like stocks, bonds, gold, silver, etc
whereas when the poor and middle class gets money, they use it to buy a luxury car, expensive houses, etc which makes them poorer and poorer.
if you want to be financially strong then you have to buy assets that put money in your pocket even while you're sleeping, not the liabilities which keep on making you poorer and poorer. Some examples of liabilities are Luxury Car - Even if you are not using your car you have to pay for tax, insurance, EMI, etc. which makes you poorer and poorer.
Another example of liabilities is the house: Many people may think as a house is the biggest assets but again, the house is a liabilities because you have to pay for insurance, taxes, etc which drives money out of your pocket.
3) Poor people work for money and Rich people have money working for them.
- If you work as an employee, you give them the power to your employer, If money works for you then you have the power. Rich people work for themselves but poor people believe that to make more money they need a higher degree and high paying jobs. Rich people don't believe that they need a higher degree to be rich. They invest in the money-making instrument and thus grow richer and richer whereas poor waste their time looking for higher-paying jobs. Working for others can never make you rich. If you want to be rich than you should learn to make money working for you so that you get your money flowing towards your pocket even if you're sleeping.
4) How the rich invent money
- The most powerful asset that we have is our mind. If we can train our mind, it can create enormous wealth for us. The great opportunities cannot be seen from your eyes, you need a brain to see the opportunities. There are two types of investor: One, who creates investment opportunities and the other who invests in them. So, How can I create investment opportunities? The answer is first you have to use your mind to see the opportunities. Secondly, you raise money for the project and lastly organize your project with smart people. In this way you can create wealth.
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