This book was fundamental to how I first thought about personal finance and gave me the basic financial literacy knowledge to make smart choices in regard to money–earning it, saving it, and growing it. But why I read it, and why I think it became the best selling personal finance book of all time, is because of Kiyosaki’s ability to break down intimidating financial concepts into easy-to-understand lessons. He uses his “two fathers” as well as basic frameworks to ensure anyone, anywhere can internalize the keys to wealth and financial mastery. Actually, when I re-read it as an adult, I found some of the concepts to be too simple, which only highlighted it’s important purpose as the first finance book everyone should read. It’s one of the most important books I’ve ever read and the most common book I gift to others.
Lesson One: The Rich Don’t Work For Money – Offers anecdotes that showcase how most people work because of fear of not having money and the greed of wanting money. They’re too deep in the rat race to see how to make money work for them. “The poor and the middle class work for money. The rich have money work for them.”
Lesson Two: Why Teach Financial Literacy – The basics to financial success come down to a basic rule: buy assets, not liabilities. For most people, as their salaries increase so do there expenses. R. Buckminster Fuller “Wealth is a person’s ability to survive so many number of days forward—or, if I stopped working today, how long could I survive?”
Lesson Three: Mind Your Own Business – No matter what you’re doing, invest in your assets and when you want to by a liability, let it come from the cashflow generated by an asset. The poor and middle class buy luxuries first, whereas the rich by them last.
Lesson Four: The History of Taxes and The Power of Corporations – Taxes were first passed in 1913 with the sixteenth amendment; yet, they were only on the rich. With time, the rich started using corporations to pay less taxes and taxes were then levied on the poor and middle class as well. Corporations let you spend before taxation, where a job has you spend after taxation.
Lesson Five: The Rich Invent Money – Financial intelligence is knowing accounting, investing, understanding markets (marketing), and understanding the law. “Secure investments are sanitized” “Good opportunities are not seen with your eyes. They are seen with your mind.” You have to have the chutzpah to go out and create deals.
Lesson Six: Work to Learn—Don’t Work For Money “You want to know a little about a lot” It’s imperative to ensure you have a broad skillset, and that you know sales and communication, especially. Work at different jobs to learn different things as the more specialized you are the more at risk you are. However, if you’re highly specialize, then unionize. All be learning. You become what you study. Failure inspires winners. Failure defeats losers. FOCUS: follow one course until it’s successful
Daniel Dickey