Rich Dad Poor Dad Summary

Rich Dad Poor Dad
Summary of Rich Dad Poor Dad

This is a complete summary of Rich Dad Poor Dad: What the Rich Teach Their Kids About Money That the Poor and Middle Class Do Not by Robert T. Kiyosaki.

About Robert Kiyosaki

Robert Kiyosaki is an American tycoon who founded Rich Dad Company and Rich Global LLC. The latter focuses on personal finance education through books, video courses, and speeches. Also, he is the author of more than 26 books, Rich Dad Poor Dad included (which has sold over 41 million copies globally).

Brief Content

Rich Dad Poor Dad has been regarded as the number one personal finance book of all time. Robert Kiyosaki illustrates the mindset and beliefs that determine who gets rich. He contrasts these ways of thinking with those who are poor. In this book, Robert Kiyosaki’s father was the example of a poor man, while the rich man was Kiyosaki’s financial mentor. Robert’s dad was a genius, while his mentor didn’t even complete his eighth grade. The only significant difference was their way of thinking.


Robert Kiyosaki, the author of Rich Dad Poor Dad, had two influential fathers in his life.

The poor dad was Kiyosaki’s biological father, a very intelligent and highly educated man. The poor dad believed in studying hard, getting good grades, and then finding a good-paying job. But despite these seemingly positive qualities, the poor dad was not doing financially well.

And the Rich Dad in this book was Kiyosaki’s financial mentor and the father of his best friend. His work ethic is much the same as that of Robert Kiyosaki’s real dad, though with a twist. Rich Dad believed in financial literacy, learned how money works and made it work for him. Rich Dad eventually became a millionaire despite dropping out of high school by making the money work for him.

The book is written from Robert Kiyosaki’s point of view on how Rich Dad made money and the flaws poor dad made. Rich Dad Poor Dad’s first six sections comprise about two-thirds of the book and cover the 6 lessons Kiyosaki learned from his Rich Dad.

In this summary, I won’t focus on copy-pasting the same table of contents or rewriting the book’s content as it is. Instead, my goal is to give you a summarized version of the book’s key insights. Wherewith, when you read it, you will get to understand everything it’s to know about Rich Dad Poor Dad.

Let’s dive in now!

We All Need Financial Education

Financial skills are incredibly scarce. A vast majority of students leave school without any financial knowledge. They have learned skills that will help them do a particular job but do not know how to keep their money. They will have learned how to make money but will have no idea how to spend their money. Making money only reinforces the cash flow pattern in your head. Financial expertise will help you manage that cash flow.

The Difference Between Rich And Poor

Robert begins the book by describing the main difference between the rich and the poor. Both poor and the middle class are working for their money but as for the rich and wealthy, their money work for them.

The non-rich will always look to traditional ways to make money. They’ll study hard, get good grades, and then get a secure job with guaranteed benefits. Most people choose this route because they are afraid of running out of money. This desire for a salary is then quickly replaced by a desire to use what they have worked for. Even if these people receive a bonus or a raise at work, they will respond by spending more money. These people see the joy that comes from money, but that joy is short-lived. So, they continue to work to achieve their desires and overcome their fears.

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Robert advises you to take a step back and forget about the paychecks. Start thinking about innovation. Most people get stuck in the rat race and miss out on obvious opportunities. If you are willing to take a step back, you can seize opportunities and earn a lot more money. Robert explains that it is much safer to invest your time in creating profitable assets that generate cash.

Change Yourself

Robert stresses that it is important that we learn that it is easier to change ourselves than the people around us. So instead of blaming others for not being rich, accept that you are the problem. Then, when you realize you are the problem, you can change yourself, learn, and get smarter.

Learning requires a combination of energy, passion, and desire. Having said that, you also need to use anger in a positive way. Robert describes anger as extremely important because passion is just a combination of love and anger. Therefore, we must be guided by passion rather than fear.

Use Accounting To Keep Your Money

Most people think that making money is the most effective way to get rich. Although you need to make money, knowing how to keep your money is more important. Wealth is not net worth. Wealth is the number of days one can survive if they stop working today.

Accounting is not the most exciting subject. However, Kiyosaki thinks this is the most vital subject if you really want to get rich. The first and main lesson is that you need to understand the difference between an asset and a liability. Assets are the things you want to buy. The rich are those who acquire assets, while the poor go into acquiring liabilities.

An asset is an item own by you that often puts money in your pocket while a liability is something that you owe others that takes money out from your pocket. Many people think of buying a home as purchasing an asset. But there are many liabilities associated with home: mortgages, insurance, property taxes, and large amounts of money tied up in a home. So, we have to see a house as a liability. Identify the assets that can be purchased to pay off the liability associated with a home.

How Taxes Have Benefited The Rich

Today the rich are playing a more intelligent game. They legally avoid taxes while the middle class pays most of the public spending. Historically, taxes were chosen by the poor and the middle class to tax only the rich. Rather than punishing the rich, taxes are punishing the poor and the middle class. Once the government got a taste for money, their appetites grew. The problem was, the government was so hungry for money that it soon became necessary to tax the middle class. From there, it flowed.

An essential tax weapon for the rich and wealthy is 1031. 1031 is also called as a “like-kind” exchange. A like-kind exchange allows you to defer the payment of capital gains tax on real estate sales. You can do this by making use of the proceeds of the sale to buy another property. Plus, corporations permit you to create separate assets that generate income. The key here is that a person is taxed before expenses, but a business is taxed after expenses. This simple rule means you can legally write off vacations, car bills, health club membership, and restaurant meals. The poor pay taxes and then spend the money. The rich spend money and then pay taxes.

The rich outsmart the intellectuals. They have learned how to avoid taxes legally. This is only possible due to the fact that the rich are financially educated. Finance isn’t taught in schools, so the average intellectual does not understand how the rich avoid taxes. Instead of the state punishing them, the rich are reacting to the tax laws that have been introduced.

Listed below are the four fundamentals of financial literacy that Robert learned:

  1. Accounting – This implies the ability to read and understand financial statements.
  2. Investing – The science of making money using creativity coupled with strategy and formulas.
  3. Understanding the market – The science of supply and demand; technical (emotional-driven) and basic (economic sense) investments.
  4. Law – Understanding taxes and avoiding lawsuits.

Don’t Confuse Your Job With Your Business

Most people work for everyone except themselves. They work first for the organization’s owners, then for the government through taxes, and lastly for the bank that owns their mortgage.


The poor and middle classes spend most of their time and energy working for others. The average American works 5 or 6 months a year just to pay the taxes he pays to the government.


Don’t confuse your profession with your business, also known as the asset column. The traditional form of school and work is generally a necessary thing. The issue is, you usually become what you study. Focus on your asset column, not the asset column associated with your topic. You can keep your day job and spend your money on assets. While working, assets that you can make use of are stocks, mutual funds, bonds, rentals, notes, and intellectual property royalties. Once a dollar enters your asset column, never withdraw it. If you want to buy liability, you must first buy an asset that will generate enough money to cover it.

Your Mind Is Your Most Valuable Asset

Three hundred years ago, the land was our definition of wealth. The industrialists owned wealth during the industrial revolution. Today, wealth is information.

Poor people often complain that they don’t have enough money to take advantage of the offers they see. They only see hard work, savings, and loans as viable approaches. The rich know that their senses are their most valuable asset.

Some people buy packaged investments from real estate companies, stock brokers, etc. The rich invest by assembling their own deal.

To do this, you must have to develop three skills:

  1. How to find an opportunity that everyone missed
  2. How to raise money
  3. How to organize smart people

You have to take risks. Suppose you’re informed and understand an investment. In this case, it’s not as risky as someone just rolling the dice and praying.

Become A Generalist Rather Than A Specialist

The author calls on young people “to look for work based on what they will learn from it, more than what they will earn from the work.” Strive to learn a little more rather than looking for specialization. Specialization is for employment, not for being wealthy. Take on jobs that will teach you the crucial skills to manage systems, cash flow, and people. The author recommends that you find jobs that will develop your communication, sales, and marketing skills. Those listed skills complement other skills completely and are each essential to build wealth.

The Asset Columns Of The Financially Literate

The author outlines the 5 reasons why even financially educated people can’t develop their asset columns:

  1. Fear – Particularly the fear of losing money. People who make money aren’t scared of losing it. The rich do not regularly build their wealth by never losing money. Instead, they learn to limit their losses and turn those losses into opportunities.
  2. Cynicism – Cynicism comes from uncontrolled doubt and fear and is expensive. A cynic will always have an excuse as to why something is impossible. They criticize instead of analyzing. For example, those who don’t want to invest in real estate say, “I don’t want to fix the toilet.” A rich dad would buy a house at a price that would allow him to hire a property manager and still maintains positive cash flow.
  3. Laziness – Usually, the laziest people are always busy. People are busy avoiding problems they don’t want to face or avoiding the work required to develop the ability to get rich. Rich people have cravings that overcome their laziness.
  4. Bad Habits – Our lives shows our habits more than our education. As a general rule, the author insists that you “pay yourself first.” So take care of yourself first – physically, mentally, and financially – instead of paying your boss, tax collector, or landlord first.
  5. Arrogance – The author describes arrogance as ego plus ignorance. The solution is simple: financial literacy.

How To Begin Your Journey To Financial Literacy And Wealth

Finally, Robert explains how to begin your journey to financial literacy and wealth.

* Have a reason greater than reality: You must have a reason for wanting to get rich. Being rich for money does not protect you from the harsh realities of life. Identifying this cause starts with knowing what you don’t want (e.g., working your whole life, etc.) and what you want.

* Choose Daily: Every single day and every dollar is an option to be rich or poor. Our spending habits reflect who we are (not the other way around).

* Choose your friends thoughtfully: Never choose friends based on the money they have. However, beware of cynics or people who don’t like to talk about money. They will infect you. Do your best to learn from the people who support you, teach you, and make you a better person. Surround yourself with financially literate people.

* Master one formula, then learn a new one: Most people end up with the same basic formula “work hard, pay your bills, and save for retirement.” You also have to learn new ways of doing things. For instance, you need to know how to invest in foreclosures. Put that into practice and perfect this way of making money before you switch to another approach. There are two skills to learn here—first, the opportunity to broaden your mind to discover other income-generating formulas. Second, the discipline to put them all into practice before moving on.

* Pay yourself first: you won’t find anything to pay for yourself if you don’t. It is a significant change in mentality.

* Pay your brokers well: this includes all the professionals you trust. Only choose professionals whose services make you money (or save you money) and pay them well. Again, it’s part of growing your asset column.

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* Be an “Indian giver”: The first question for the advanced investor is always: “How long will it take to get my money back?”  Be so sure you have a considerable advantage while you try to limit your disadvantage. In addition to the ROI, think about the assets you will get for free when you get your money back.

* Assets buy luxuries: Do not buy a luxury until you have created an asset to pay for it.

* The need for heroes: Find investing heroes who make it easy for you. Imitate them and be inspired by them.

* Teach, and you will receive: the more you teach people, the more you learn. This principle also applies elsewhere in life. You will discover that giving things first will make things come to you much easier.

* Stop doing that same thing you’re doing: take a break, think about what works for you and what doesn’t.

* Find new ideas: read and learn from books on various topics.

* Find anyone good at what you want to do: Surround yourself with noteworthy people in your field.

* Willingness to learn: try the opposite of arrogance. Learn all the skills you can. Never assume that you already have sufficient knowledge of a subject.

* Make a lot of offers: you may never know which of the offers that’ll be accepted.  So the more offers you make, the more likely you are to get a great deal. But, of course, rejection is always part of the process.

* Find buyers first, then sellers: here’s a tip for starting a business. First, you want to know that there will be buyers when you decide to sell a product. Once this is established, you can start researching sellers of this product.

* Learn from history: study and imitate successful people from the past.

* Action always beats inaction: you should just do it if you don’t know what to do. Imperfect action is better than perfect passivity.

summary of Rich Dad Poor Dad
Rich Dad Poor Dad


In short, there is no easy money, and Rich Daddy Poor Dad is by no means a quick fix or an easy alternative to hard work.

On the contrary, the message of this book is that it takes hard work to make money. Maybe not in the conventional way your parents or grandparents taught you. The idea is that the real job is learning how to make your money work for you instead of spending your life working for money. This change of mind is not easy.

The actual message of Rich Dad Poor Dad is that financial freedom requires a lot of learning, adaptation to different states of mind, management of feelings about money, and education on tricky concepts like taxes and corporations.

Perhaps the most challenging part is letting go of all the mental barriers that stand in the way of financial opportunities. So let go of traditional thinking and adjust your perception of wealth and your financial future. Achieving financial freedom can be worth it.

We’re just scratching the surface here. If you don’t already have the original book, “Rich Dad Poor Dad: What the Rich Teach Their Kids About Money That the Poor and Middle Class Do Not! by Robert T. Kiyosaki,” order it here now on Amazon to learn the juicy details.

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