Rich Dad Poor Dad
Book Summary
Capital Partners Learning Session
2002
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Introduction
Author: Robert Kiyosaki, is a multi billionaire by all
standards
The book basically is about what people must learn and
practice in order to become financially independent. The
book talks about two different points of view about attaining
financial independence (Rich dad Vs. Poor dad)
His poor dad (his biological father), was a PhD holder who
worked for Government, but never really attained financial
independence, while his rich dad (his friend’s father) did not
graduate from high school, but later became a very rich man
Parents’ advice of getting good grades and jobs will not
necessarily lead to financial independence, because schools
do not equip kids with the information needed to ensure
financial independence
© Copyright. Capital Partners Limited. Do not reproduce. Strictly for private use.
Lesson 1 – The rich don’t work for
money
Don’t work for money i.e. don’t depend on your boss to make
you rich
Learn how to make money work for you by cutting your
expenses moderately, investing wisely and creating
opportunities to earn passive incomes outside of salaries
Seek to be a business owner and/or an investor, rather than an
employee
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Lesson 2 – Master Financial Literacy
Financial intelligence equips you with the what is required to
make money that will last for generations, while money without
financial intelligence is soon gone
Financial literacy teaches that it does not matter how much
money you make, but how much money you keep
It also teaches that Investments can be made at each income
level and if you invest today you will guarantee your financial
future
Differentiate between an asset and liability, and invest in
assets
Assets generate income, while liabilities generate expenses; i.e.
your GSM mobile phone could be an asset or liability depending
on what it is used for
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Lesson 3 – Mind Your Business
Mind your own business. i.e. while excelling with your
qualifications and keeping your day time job, also look for other
opportunities elsewhere to accumulate wealth
Do not depend only on a salaried job, or else you will continue
to work for your boss, the government and the banks (if you
have taken a loan), with little or nothing left to invest in yourself
Some sources of unearned income:
Dividends
Interest Payments
Rent
Royalties
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Lesson 4 – Learn to minimize the
taxes you pay
Where the cash flows make sense, you are better off managing
your finances through a corporation rather than as an
employee, because of the different tax advantages you can get
As an individual, your income is taxed, and what you have left is
your disposable income
As a corporation, you first make your money, then you take out
your expenses. The profit is what is taxed, hence you pay less tax
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Lesson 5 – The rich invent money
Learn by heart that you can use other people’s money to create
a financial empire for yourself without necessarily using yours
i.e. it takes money for you to make money, but you don’t
necessarily have to use yours
For you to be wealthy, the earnings from your assets
(investments) should be enough to fund your expenses. You
don’t qualify to incur additional liability, until you have funded
an asset which yields enough income to fund the liability
Seek to attain a point where if you resigned from your job, you
could fund your lifestyle using unearned income from your
investments
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Lesson 6 - Work to learn, don’t work
for money
Don’t grab a job for what you can earn, pick a job to learn
about business systems, about managing people and other skills
that would prepare you to run your own business, or manage
your own investment
Money can be illusion that clouds good judgment. Fear and
greed do not allow people make rational decisions
© Copyright. Capital Partners Limited. Do not reproduce. Strictly for private use.
Lesson 6 - Work to learn, don’t work
for money
Conclusion
The author concluded by stating that parents should teach
these lessons to their children early enough, in order to
guarantee their children’s financial future
It is never too late to start building your financial empire.
You could start right now, with your next pay check, or by
looking around you, to see which need you can fulfill
© Copyright. Capital Partners Limited. Do not reproduce. Strictly for private use.
