BOOK SUMMARY

NAME: M HAMZA JAWAD

REG: FA19 BBA 032

SUBMITTED TO: Sir Sikandar wali

Book Name: RICH DAD POOR DAD

Author: Robert Kiyosaki

The Five Big Ideas

1. The poor and the middle-class work for money. The rich have money work for
them.
2. It’s not how much money you make that matters. It’s how much money you keep.
3. Rich people acquire assets. The poor and middle class acquire liabilities that they
think are assets.
4. Financial aptitude is what you do with money once you make it, how you keep
people from taking it from you, how to keep it longer, and how you make money
work hard for you.
5. The single most powerful asset we all have is our mind.

SUMMARY

Rich Dad Poor Dad is about Robert Kiyosaki and his two dads his real father
(poor dad) and the father of his best friend (rich dad) and the ways in which both
men shaped his thoughts about money and investing. He says that his poor dad
went to Stanford and earned a Ph.D., and his rich dad never finished the eighth
grade. The book consists of 8 chapters, lessons that everyone must learn. The
central message conveyed by Kiyosaki is that you don’t need to earn a high
income to be rich.
He says that many are too afraid of being branded as a weirdo, in order to exit
the rat race. People let the two main emotions everyone has around money
dominate our decisions which are fear and greed. He says this is the reason
people should not just look for a job as no job is safe anymore. Example- If you
get a raise in a job you should invest the extra money in stocks or fund that
increases your income but because of the fear that we may lose some money by
investing in these assets, many people resist investing.

The other opinion is when greed takes you over, a person might take the extra
money that he/she receives from a raise and spend it on stuff that he doesn’t
need like buying a fancy car and the payments for that car will eat up your
money. These lessons tell us how important it is for us to be educated financially,
the burden of this lies on the person itself as no school teaches us this.

The Book also mentions that we should start now to avoid falling into a debt trap
and develop responsible financial habits. We should take a careful look at what
we can and cannot afford so that we are able to set realistic financial goals for
ourselves. The author recommends that we keep our job and build our asset
column, meaning we keep investing and building assets and think of our dollars
as employees who work for us. Rich people acquire assets. The poor and middle
class acquire liabilities that they think are assets.

The author emphasizes the fact that knowledge is power and we should work to
learn, not to earn. Money should work for you, not the other way around and do
jobs that we do not know much about to learn different skills. “Money comes and
goes, but if you have the education about how money works, you gain power
over it and can begin building wealth”

He emphasizes that fear often suppresses genius in people and that the first step
to building wealth is to manage risks, instead of avoiding them and learning
about investments will teach you that it’s better to not play it safe because that
always means missing out on big potential rewards. Don’t start big, just set aside
a small amount every month or so to invest in asset building like stocks, bonds,
etc.

He emphasizes that we should use our money to acquire assets instead of

liabilities. Assets are stocks, bonds, real estate that you rent out, royalties and
anything that generates money and increases in value over time. Liabilities can
be cars or electronics with maintenance costs and monthly payments, a house
with a mortgage, debt, anything that takes money out of your pocket each month
The author wants us to be patient and keep our job and to build our business
over time and use it to invest in assets until your assets eventually become the
main source of your income

The most important thing is that you start today. You are your own biggest asset,
so the first thing you should do is put some money into yourself to develop your
own financial knowledge. As the author says in the book, “Financial aptitude is
what you do with the money once you make it, how you keep people from taking
it from you, how to keep it longer, and how you make money work hard for you”

One Sentence Summary of Rich Dad Poor Dad

 The main reason why people struggle with financial problems is because they spend
several years in school but learn nothing about money and investments. The result is
that people learn to work at the service of money but never learn to put money to
work for them.