Sunday, August 10, 2008

The Rich Dad, Poor Dad Way (Book Review)

The entire book is wrapped around a story of how he learned, observed and distinguished two people making money; rich dad and the poor dad.(I wonder why this book wasn’t titled, “The tale of two dads”! )
His real dad who was highly educated, is called the "Poor Dad". The other, was his best friend Mike's dad, who was an entrepreneur with very little school education. Kiyosaki calls him the "Rich Dad".

Browsing Through Rich Dad, Poor Dad

Lesson 1: The Rich Don’t Work For Money
The book starts off by with some appealing stories about two little boys (Kiyosaki and Mike)who are trying to make money. Rich dad teaches the boys priceless lessons on money, by making them learn through experience. Kiyosaki's Poor dad also gave him advice; contradicting advice to Rich Dad. Kiyosaki talks about how he struggled as a kid to choose between the two very different ways of dealing with money.

Lesson 2: Why Teach Financial Literacy? makes his case by stating, the growing gap between rich and poor is rooted in the antiquated educational system. Later he helps the reader understand the difference between an asset and a liability.

Lesson 3: Mind Your Own Business relates his experience of selling photocopiers on commission at Xerox and how he used his earnings to buy real estate. Basically, the message Kiyosaki gives in this chapter is to keep your day job, but start minding your own business!

Lesson 4: The History of Taxes and the Power of Corporations advices you to do your own research and find out what tax laws will bring you the best advantages.

Lesson 5: The Rich Invent Money highlights that self-confidence coupled with high financial IQ can certainly earn more for you than merely saving a little bit every month. It also urges you to make good use of your time and find the best deals.

Lesson 6: Work to Learn –Don’t Work for Money Brings to light, five obstacles to financial independence; Fear, Cynicism, Laziness, Bad Habits and Arrogance. Unlike other chapters this chapter offers you some actionable suggestions to deal with it.

My favorite excerpt
Most people never study the subject [money]. They go to work, get their paycheck, balance their checkbooks, and that’s it. On top of that, they wonder why they have money problems. Few realize that it’s their lack of financial education that is the problem.

I found Rich Dad, Poor Dad to be very inspiring. Somehow, I felt that I was reading this book, a few years too late, into my life. The book doesn’t overwhelm people with technical jargon. It simply concentrates on the inner being of what it takes to be rich.

I’d recommend this book as an good way to challenge your thinking about work and money, in ways you haven't thought before. However, if you need technical "how to's" and "to do's" in personal finance, this book is not for you.

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