Notes from “Rich Dad Poor Dad” book

The book cover

Here is the book on Amazon if you want to purchase it.

While listening to the audiobook version of this book I’ve taken some notes on my phone. These are the notes.

The book consists of 6 main principles which I’ve highlighted on bold.

1. Have money work for you. Don’t work for money. The fear is the main cause of working for money. Rich people make money work for them. Job is a short term solution to a long term problem. Emotions should not control your thinking. Money is illusion. Money is not real.
2. Learn financial literacy. It’s how much money you keep not how much you make. You need to be a financially literate. Master financial literature. Accounting is very important even though it’s boring. Account analysis is an important skill. Understanding the difference between asset and liability is crucial. Do know the difference! Keep it super simple. Buy an asset not a liability. You have to understand the numbers. Rich acquire assets. Asset is what puts money to your pocket. In financial reporting the story is important. Cash flow tells the story how the money is spending. One thing is missing in our current education is how to keep the money. Most people do what everyone does. Fear is the main reason why people play safe. Intelligent people hire more intelligent people. Keep buying income generating assets. Rich buy assets.
3. Mind your own business. Aquire assets that you love. Stocks and income generating real assets. Build and keep you asset column. Keep your daily job and make your assets grow.
4. The history of taxes. Accounting, investing, understanding the markets, the law. You should understand the tax advantages. Corporations ear, spend their expenses and then pay taxes on what is left. It’s one of the biggest tax loopholes that you can take advantage of. Owning your corporation is also a protection from the legal part. Think about personal corporations.
5. The rich invent the money. Be bold, take risks. Financial intelligence consists of these 4 skills: accounting, Investing, understanding markets, the law of awareness of accounting. Invest in your financial intelligence. Have fun! We learn by making mistakes. Main reason most people are not rich is because they are terrified of losing. People who avoid failure also avoid success. Learn to manage risk instead of avoiding it.
6. Work to learn. Don’t work for money. Most people need to learn one more skill to get rich. When it comes to money the only single skill that people know is working hard. You want to know a little about a lot. The main management skills are the management of cash flow (assets and liabilities), management of systems (basic economic theory, political landscape, etc) and management of people. Sales and marketing are one of the most important specialized skills. Communication skills such as Writing, speaking and negotiating are crucial for life of success. Specialized vs generalists. More specialized also means more trapped in that industry.

Overcoming obstacles of getting rich

• Overcoming the fear of losing money. The main difference between rich and poor is how they manage fear. Ask yourself first, how do I respond to failure?
• Overcoming the cynicism. Buyer’s rumors. Doubts are expensive, they keep most poor people poor. Doubts are cripplers.
• Overcoming the laziness. Laziness of being busy. What’s the cure of laziness? — A little greed. Rich dad thought us never say I can’t do it. Instead you should say how can I afford it? How can I afford it opens up opportunities, excitement and dreams. When I wanted to exit the rat race it was simply a question of how I can afford to never work again.
• Overcoming the bad habits. Our life is reflection more of our habits than our education. Pay yourself first then the government. When I pay myself first it gives me motivation for another income because my creditors will start yelling at me. Forcing myself to generate side income is like going to gym and doing weights. It’s habit!
• Overcoming the arrogance. When you see you are arrogant on a subject find to book or someone to educate you about that subject.

If you still haven’t found your path to rich then stop doing what you’re doing and work on new ideas. Ideas that can convert your income into passive and portfolio income.

Overall, I really liked this book. Financial independence is something I’m actively thinking as well and with this book I got new ideas and tons of inspiration!