by Robert T Kiyosaki
* The book Rich dad poor dad is the 1# New York Times the Wall Street Journal seller. * The tag line of the book “what the rich teach their kids about money- that the poor and middle class do not!” says it all, what the entire book is about. * The book Rich Dad poor Dad tells us about the difference between what a rich dad teaches to his child compared to what a poor dad teaches. * It tells about a story in which the narrator has two fathers one was the original father who is referred as the poor dad and the other is his friend mike’s father who is referred to as the rich dad in the book. * Both these fathers taught the narrator to achieve success but in very different ways. * The book tells about the differences in the ideologies, principles and the financial practices of both the rich and the poor dad.
Chapter 1: Rich Dad Poor Dad:
* The story starts when both the author and mike (his friend) were in Hawaii when they were 9 years old. * Their first way to get rich was through nickel making in which they made plaster moulds of nickels and melted lead toothpaste tubes and filled the moulds to produce the nickels. * Later on this idea was seen by mike’s father and he declared it as an illegal activity. * Mike’s father was ‘the rich dad’ so when the earlier business came to an end both the author and mike decided to learn about finances from mike’s father. * In this chapter there is a mention of ‘rat race’ and the lesson learned from this is that instead of spending most of the time earning little money for your own pocket and earning more n more money for others pocket one should work hard to earn money for your own pocket. * This has been explained with an example in the book.
Chapter2: The Rich Don’t Work For Money:
* In this chapter the author makes a claim that a primary house is a liability. * This can be explained by saying that for a house one has to pay maintenance, taxes etc. * This states that house costs money, hence it can be concluded that house is a liability which is completely reverse to what accounting policies which says that house is an asset. * This chapter is about if a person is comfortable in taking risk in a situation or takes the safer way out. * It also tells the differences between the assets and the liabilities. * According to the author opportunities to earn money in life comes and goes the difference is that the rich grabs those opportunities and turns them into riches while the poor is unable to capitalize on the situation and is concentrating more on trying to earn money.
Chapter 3: Why Teach Financial Literacy:
* In this chapter the author concludes that the rich buys assets, the poor have only their expenses while middle class actually have liabilities which he thinks is assets. * It says that if you have an asset it will generate income and this income can be used to purchase more and more assets which in return produce more n more income. * The author further goes on to say that middle class people buy house, cars etc thinking that they are buying assets but actually they are buying liability because they cause ongoing expenses and do not generate any cash flows. * Thus the author thinks that it is very important to actually be financially literate.
Chapter 4: Mind Your Own Business:
* This chapter starts with a story of McDonald’s founder Ray Kroc who according to the narrator was not able to sell hamburgers and was just holding real estate. * The narrator thinks that people spend more time on generating income instead of buying assets that will generate income for them. * For the author real assets are the one which has value like stocks, bonds, mutual funds etc.
Chapter 5: The History of Taxes & the Power of Corporations:...