Rich Dad, Poor Dad
Robert Kiyosaki and Sharon Lechter
This book was written about a man who had “two fathers” ' one who had a Ph.D and the other who barely finished 8th grade. One of the fathers was actually his friend’s father, but someone who the author looked up to and appreciated very much. The other father was his own ' who he also looked up to and appreciated, but who did not teach him much about money or finance.
The first lesson of this book is: the rich don’t work for money. It starts with two young boys (the author and a friend) who decide to go into a partnership together to make money. After their first try at making lead nickels was unsuccessful, they decided to get advice from “the rich dad”. When they met with him, the rich dad told them he would pay them 10 cents an hour to work for him. So, instead of going to play baseball, the two boys decided to stay and work. After working for that low wage for a few weeks, the author was ready to quit. However, after a talk with “rich dad” the author learned this ' the poor and middle class work for money; the rich have money work for them”. It is easy to fall into the idea of “job security”, but it should be more exciting to search for something with a little more risk that offers more chances for financial growth.
The next lesson of the book is about teaching financial literacy. It is now about how much money you make, but how much money you keep. Rule one of this chapter is: you must know the difference between an asset and a liability. If you want to be rich, you must invest in assets. The chapter says that rich people acquire assets while the poor and middle class acquire liabilities that they think are assets. In the book, there is a diagram of cash flow that is very simple, but important. Assets = Income and Liabilities = Expense
Basically, an asset is something that puts money in your pocket and a liability is just the opposite. The chapter goes on to explain that...
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