How to become rich: Ten powerful money lessons from ‘Rich Dad Poor Dad’ (2024)

FAQs

How to become rich according to Rich Dad Poor Dad? ›

'Rich Dad, Poor Dad' by Robert Kiyosaki offers powerful money lessons on financial education, passive income, risk-taking, leveraging resources, controlling spending, handling debt, and personal growth.

Rule 1: The poor work for money. The rich put their money to work. Do you 'live to work, or work to live? ' This is one of the basic concepts 'Rich Dad, Poor Dad' sheds light on.

Kiyosaki puts a clear emphasis on buying assets, not liabilities. Good debt can help generate passive income, and it includes things such as stocks, bonds, real estate and intellectual property. In Kiyosaki's view, understanding the difference between an asset and a liability is the key to getting rich.

- Rich Dad: Rich Dad, in contrast, had a more entrepreneurial mindset. He believed in acquiring assets, creating passive income streams, and constantly learning about money and investments. He saw opportunities where others saw obstacles.

He emphasizes that your connection with money isn't rooted in science or math but in emotions like fear and greed, pride and envy, and the social comparisons that shape your psychological relationship with money. Getting carried away by such emotions may make you less wealthy and keep you unsatisfied for life.

As you learn more about money, you'll discover the 90/10 rule: 90 percent of people earn 10 percent of the money in the world. How do they do this? By positioning themselves to have low income and high expenses. If you do not understand money or how it works, this will seem like a strange statement to you.

What are the 4 quadrants of Rich Dad Poor Dad? ›

It categorizes people into four quadrants - Employee (E), Self-Employed (S), Business Owner (B), and Investor (I). Traditional financial practices often focus on the E and S quadrants, encouraging people to seek employment or self-employment for income.

Rule 2: Financial literacy is necessary

By this time, Mike had taken over his dad's business and grown it exponentially. Both of us were able to reach where we were, thanks to Mike's dad (my Rich Dad) lessons in financial literacy.

For Kiyosaki, silver and other precious metals are better to hold on to because they are scarce, real, usable assets that don't get devalued due to inflation as the dollar does.

Kiyosaki's recommended asset allocation model, often referred to as his "prophetic portfolio," suggests allocating 75% of one's investment capital to a combination of gold, silver, and Bitcoin, while allocating the remaining 25% to real estate and other income-generating assets like oil stocks or businesses.

“Often, in the real world, it's not the smart who get ahead but the bold.” “The richest people in the world look for and build networks; everyone else looks for work.” “When times are bad is when the real entrepreneurs emerge.” “If you avoid failure, you also avoid success.”

Rich Dad Poor Dad is a good book for beginners. It introduces a lot of concepts, views and rules that most people have never encountered before. And packages this into a story which makes it easy to understand.