Rich dad poor dad by Robert Kiyosaki

Rich dad poor dad by Robert Kiyosaki

Rich dad poor dad is the book published in 1997, written by Robert Kiyosaki. In this read, you will get a summary of rich dad poor dad book which will help you understand how to become rich and psychology behind the same.


Mock book image created for blog.

The actual book cover is different.

In this book, the story revolves around two different personalities and how that is affecting their financial goals. Robert talks about these personalities, by categorizing them into Rich Dad and Poor Dad. The author also shared how he followed a formula to become rich from one of his dads.

Robert mentions he has two dads with different personalities.


Rich Dad

  • He didn’t complete school.
  • He is successful in his career.
  • He is among one of the richest guys in town.

Poor Dad

  • He has done a PhD.
  • He is successful in his career.
  • He is struggling financially.

Poor dad thinks “Love towards money is the route cause of problems.” whereas according to rich dad “Lack of money is the route cause of problems.”

In his childhood, Robert was confused who should he follow.

Both dads hold a different opinion.​


Poor dad: “We can’t afford.
Rich dad: “How can you afford it?

Rich dad never uses this statement and he has instructed Robert too, for not using this statement ever. He rather teaches Robert one mindbending exercise. Ask yourself “How can you afford it and when you ask this question, your brain starts thinking about all possibilities.“.


When you say “I can’t afford”, you are restricting yourself and indirectly your brain not to work on the possibilities. He wasn’t conveying to purchase everything but he wants Robert to unblock all possibilities to work on it.

Check out my read “12 Brain rules that will change your life” which will help you to understand power of your brain.



Poor dad: “Never take a risk.
Rich dad: “How can you manage risk?

Due to fear of failure, poor dad was not willing to take a risk and experiment something new. However, the rich dad always encourages to work on possibilities. He knew risk will be always there but it should not block us from taking actions. Instead of focusing on risk, he believes in managing risk to get results.


Poor dad: “Focus on studies, complete your college degrees and go for a safe and secure job.”

Rich dad: “Educate yourself and learn how the money will work for you.



Poor dad wants Robert to have a good and secure life by completing his education properly so that he can have a job for bread and butter. Rich dad’s thoughts are way more beyond than poor dad. He understands the importance of education too but he wants Robert to learn financial things so that to make money do a job for him. Don’t work for money but make your money work for you.

One is Robert’s real biological father and another dad is his friend’s dad. I’m sure you might be able to guess who is a poor dad and who is a rich dad. If not, please keep reading and you will know.

At the age of 9, considering all factors, Robert decided to follow his RICH DAD and will learn lessons about money from him.

Lessons from Robert's rich dad

Lesson 1 | Know your stats

You often heard about someone rich who faced bankruptcy. Why is so? Because they were increasing liabilities and not focusing on assets.

In simple words, What are the assets? Assets put money in your pocket.
and what are the liabilities? Liabilities pull out money from your pocket.


If you want to become rich, you need to buy or invest in assets.
If you want to be middle class or poor, you need to buy liabilities.

Pick any rich person from the world, you will find whether they have degrees or not, they are well literate in finance. They know how money works. Unfortunately, education systems don’t promote or teach financial awareness in the syllabus.

Every person (doesn’t matter how much one earns) has an income statement, balance sheet and cash flow. It’s just a fact that poor thinks, these things are only applicable to the rich person or businesses. Rich people prepare and analyze these things whereas poor people don’t even know stats about their balance sheet and cash flow.

Income statement – Gives us an idea of how much you have earned and how much you have spent. If you subtract your expenses from income, you will get savings.

Balance sheet – This has two parts too. Your assets and liabilities.

Your assets make money for you. Assets could be your real estate investment, your stock market investment, bonds or intellectual property.

Liabilities are debt, for example. home loan, car loan, educational loan, personal loan or credit card etc.

Cash flow – Gives us an understanding of the path of our cash is routing through its lifecycle. It explains, how money is coming in and going out.

Let’s review these infographics. Arrows here explains cash flows for poor, middle-class and rich. 

Cashflow of poor


Since poor are depending on one source of income they find it hard to save something after all their expenses thus don’t even think of building assets. Even if they do save, they don’t think of assets because they never been taught about building assets.

All income of Robert’s poor dad was spent into expences and thus he wasn’t able to invest in assets.

Cashflow of middle-class


Middle-class has a set pattern. They spend most of their lives dreaming for luxuries and comfort. These things force them to increase liabilities and indirectly increases their expenses.

They get married and start with a rented apartment. Then they buy an owned apartment and then they spend on home interiors. As soon as their salary increases, they try to get a car. They trap themselves in many loans over some time such that their appraised salaries are not sufficient over high-interest EMI. In the end, though some of them know about assets, they won’t be able to do much for their asset column.

Cashflow of rich


Source of income for rich people is their assets. They earn recurring, passive and royalty income from their assets.

Robert’s rich dad has invested in many assets which were making money for him over the years and his asset column is bigger than liabilities.

Whether an individual is poor or middle-class, they know how to make money but they don’t know how to manage the money. They know hard work but don’t know how to make money work hard for them. They just keep working by themselves but don’t let their money work. Their income is proportionate to their expenses. As soon as they start earning better, they start spending worse. They think money can solve all problems in their lives and focus more on their salaried job to get apprised financially every year.

Lesson 2 | Pay yourself

It’s not important how much money you make, what matters is how much you keep it for yourself. Many people don’t know this rule that is why we seeing a poor person remains poor.

Though poor person won a lottery, eventually end up having no cash because they tend to spend money on their luxuries first and do not keep separate money quota to build assets.


Whatever you are earning, keep something aside for yourself.
Whatever you are saving for yourself, invest in assets to generate another income source for you.

Poor and middle-class do all expenses first and then try to keep the money for themselves if possible. Rich people pay themselves on priority and then go for expences. This gives them leverage to get more assets.

Playing yourself not an easy task as it requires a lot of financial discipline to follow. Set some threshold amount and commit yourself that no matter what you will pay yourself first.

When you follow it, consider it your 1st footstep towards becoming rich.

Lesson 3 | Luxuries

Poor and middle-class people think that rich is living a luxurious life. Well, rich do live a luxurious life but they mainly focused on assets to generate more passive income.

A luxurious life is just one of the byproduct of having valuable assets for rich. But to the poor, experiencing a luxurious life is on the priority. Therefore even if they do get money to live a luxurious life, they end up having nothing to maintain in further.


Rich people buy expensive things like penthouses, cars, diamonds or jewellery in the later stage when they are assured of earnings from their assets. They always go for more assets in the first place. If they are willing to buy expensive things, then they plan to increase their assets so that they can cover the cost and maintenance of their luxurious purchase. It’s like a regular mental exercise for the rich to think of their assets to increase income and sources of income.

Opposite to rich, poor and middle-class prefer to spend first on luxuries though they have only one income source that is the job. When they purchase any luxurious item, there whole financial plan goes on a toss.

Here is good read on rich people vs poor people, explaining their practices and mindset.

Lesson 4 | Multiple income sources

“It’s better to earn one dollar by 100 different income sources than to earn 100$ by only one source.” – Warren Buffet

You should always have multiple income sources. Poor people are bound to have only one income source that is their job. They think that this is the most secure income source and don’t want to take risks but they don’t understand, being depended only one one income source is a huge risk.

Rich is making multiple income sources by creating assets as much as they can so that to gain the benefit of passive and portfolio income.


There are three types of income sources
Ordinary – This is your salary or professional fee.
Passive – Real estate or rental income or royalty income or web estate.
Portfolio – Stocks or Bonds or investments in businesses

Lesson 4 | Grow financial intelligence

Poor people focus on EARN whereas rich people focus on LEARN.

To make a successful approach towards your passive and portfolio income, you need to study assets before making investments.


Robert loves to invest in real estate and keep studying about it so that he can determine a beneficial asset before investment. Same goes with Warren Buffet but he prefers stocks over real estate. The ultimate goal here to make assets but we need to study thoroughly to minimize risk.

Your mind plays a very vital role here and you need to train your brain on financial intelligence so that you can see financial opportunities.

According to Robert’s rich dad, financial knowledge is a lifetime learning process where mistakes tend to happen but learn from your mistakes and do better in your next move. This is called “Risk management“.

Risk management enables you to get detailed knowledge and building necessary skills about assets before investing in it.

Robert has written another book(Guide to investing) where he explains how to select assets that work for you. You can also checkout my read on “17 files of wealth blueprint” to get more idea on wealth management.

Lesson 6 | Consider money as an employee

If you want to be a businessman, you need to recruit staff or employees who can work for you. If you want to be rich, you need to consider your money as an employee to work for you.

There was a recession going in the US and many people are selling their homes at low prices. Robert purchased one home at $20,000 and sale it for $95,000 after a year when prices went up.

There was a German guy in the US who want to sell his real estate quickly so that he can move back to Germany. Robert bargain with him and purchased it for $3,00,000. After two years, he sold it for $4,95,000.

Again Robert invested in depressed real estate and sell it when he can pull out huge revenue from it.

This is how assets turn into benefits for Robert as he let his money work for it over some time. He is also making passive income by renting these properties until he decides to sale it.


By these examples, Robert is helping us understand how you can change a small amount into a big amount via assets.

Try to find out your best interest area, gain more knowledge on it and grab an opportunity to create an asset. Then your employees(money) will work for you 24/7 in offices(assets) created by you.

These were the six lessons, Robert learned from his rich dad.

Reading Monk findings | Conclusion

  • Prepare your income statement, balance sheet and analyze cash flow for you.
  • Know your numbers well so that you can focus on how to build assets and reduce liabilities.
  • Pay yourself first so that you can make investments in assets.
  • If you want to increase your expenses or want to buy something for Luxury, think of your assets first to cover it.
  • Convert your one ordinary income to multiple passive and portfolio incomes.
  • Keep yourself open to gain more knowledge of financial things.
  • Let the money do the work for you in factories/offices called ASSETS.

Any guess on who is Robert’s real dad? Well, his poor dad was his biological dad and rich dad from which he learns financial things are his friend’s dad. This read is just a summary of rich dad poor dad to help you understand what this book is about. You will be able to explore more in Robert’s book “Rich dad poor dad” and thus I recommend you to read it.

Please share your experiences on “Rich dad poor dad” in comments and make sure to share this blog in your social media circle for financial awareness.

Until next time, never stop reading…

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