SUMMARY OF RICH DAD POOR DAD

SUMMARY OF

RICH DAD POOR DAD

BY MUHAMMAD ANJUM

SUMMARY OF ROBERT KIYOSAKI BOOK RICH DAD POOR DAD

Contents RICH DAD POOR DAD BOOK SUMMARY ........................................................................................ 2 Introduction .......................................................................................................................................... 2 1. The Rich Don't Work for Money................................................................................................... 2 2. Why Teach Financial Literacy? ..................................................................................................... 3 3. Mind Your Own Business ................................................................................................................ 3 4. The History of Taxes and the Power of Corporations ......................................................... 4 5. The Rich Invent Money ................................................................................................................... 4 6. Work to Learn - Don't Work for Money .................................................................................... 5 Final Thoughts: ....................................................................................................................................... 6 THE SUMMARY OF RICH DAD POOR DAD BY KEY SENTENCES ..................................................................... 7 Chapter 1: The Rich Don’t Work for Money ................................................................................................. 7 Chapter 2: Why Teach Financial Literacy? .................................................................................................... 8 Chapter 3: Mind Your Own Business ............................................................................................................ 9 Chapter 4: The History of Taxes and the power of Corporations ............................................................... 10 Chapter 5: Rich People Make Money ......................................................................................................... 11 Chapter 6: Don't work for money ............................................................................................................... 13

RICH DAD POOR DAD BOOK SUMMARY Introduction

In this book, Robert Kiyosaki talks about his life and shows that the things we might think are the keys to success (like working hard, going to school, getting a Ph.D., etc.) are not the real keys to getting rich. Robert's father was a very successful person who won many academic awards and was ranked number one in the educational system of the state of Hawaii.

However, he left some debts unpaid when he died. On the other hand, Robert's mentor, his best friend's father, never finished the eighth grade and was the wealthiest man in the state. This sounds like a real-life story about money. This is because schools don't teach us how to handle money. Even in "finance" classes at the university, you only learn general, academic, and theoretical things. If you don't know how to handle money, it doesn't matter if you have a college degree and good grades.

This book is about how we think and focuses on our thoughts about money and the actions we take. These things make the most significant difference in whether we get rich.

These are the six lessons from Rich Dad, Poor Dad: 1. The Rich Don't Work for Money.

2. Why Teach Financial Literacy?

3. Mind Your Own Business 4. The History of Taxes and the Power of Corporations 5. The Rich Invent Money 6. Work to Learn - Don't Work for Money.

1. The Rich Don't Work for Money Early in his book, Robert writes: "The poor and middle-class work to make money. The money of the rich works for them." People from poor and middle-class backgrounds usually try to do well in school to get a safe job with good benefits in the future. This is a good plan, but it won't make you rich. That's because there are many ways to get rich, and most people don't take the time to learn about them. This is because of the circle of fear and greed. When you're afraid of not having money, you work harder, and when you get it, you spend it on greedy things, which raises your expenses and debts and makes you afraid again. Most people want to feel safe with their money, so their fear takes over and keeps them from following their passion.

They choose to work for money because it's easier than putting in the time to build assets that bring in money. This is the whole study plan for getting

rich. People who say "Tm doesn't care about money" are also answered by the author. Or, "Money isn't all that matters." "If that's how you feel, why are you working eight hours a day, five days a week for it?"

2. Why Teach Financial Literacy?

Students don't learn how to handle money in college finance classes. The most important thing to know about money is the difference between an asset and a liability and buying assets. Everything that brings in money is an asset, and everything that costs money is a liability. For example, you may have always thought that your house is an asset. It is, but only from an accounting point of view. Your home could be one of your biggest problems.

You must pay taxes, keep up with repairs, or even pay a mortgage. Your house costs you money and makes you miss out on chances to put that money to work for you. So, from now on, think of your house as an expense, and if you want a bigger one, you need first to build up real assets that bring in enough money to pay for it.

Another important thing the author says is that most people think of their wealth in terms of their net worth or assets without considering their debts.

Wealth is not just how much money you have in the bank. It is also how many days you could live without working, starting today. People stay poor because they don't spend time or money to buy assets. They spend almost all of the money they make on debts.

3. Mind Your Own Business Most poor and middle-class people have jobs where they work for someone else. They only get money from that job, and the worst part is that they give half of it to banks and taxes. Sadly, everyone has to work five or six months of the year to pay taxes (that happens in America, but many countries are even worse). People who do nothing else will never be wealthy. Besides our job, we must also care for our own business. Don't mix up profession and business, which are listed in the asset column. Of course, this doesn't mean quitting your traditional job; don't lose yourself to it. You can make money at your job, but you should use that money to buy assets that can make money without you. Some assets are stocks, bonds, mutual funds, rental properties, notes, and intellectual property royalties. Don't take out the money you put into assets. It will make you more money to buy liabilities, as long as it can pay for itself. Please don't buy a liability until you have an asset that can cover it.

4. The History of Taxes and the Power of Corporations Robert looks into how the income tax came to be and the age-old fight between the rich and the poor and the middle class, who want to make money from the rich as much as possible. Rich people don't break the law.

They know better ways to play the game. They avoid paying taxes legally, and the middle class pays for almost all of the government's spending. The "like-kind" exchange in section 1031 of the IRC Code is one of the essential tools. In short, it lets you put off paying capital gains taxes on the sale of real estate if you use the money from the sale to buy another piece of real estate, which is probably more expensive. The corporation is another essential tool. It lets you set up separate assets that bring in money. A corporation has a significant advantage over an individual because it is taxed after paying its bills. An individual is taxed before he has paid their bills. If that is done right, you can legally write off many costs (vacations, car expenses, health club memberships, restaurant meals, etc.). The truth is that the poor earn money, pay taxes immediately, and then spend what's left. On the other hand, the rich earn money, spend/invest it however they want, and then pay taxes. Robert gives a 4-part summary of the idea of financial literacy: 1. Accounting: Being able to read and understand financial statements.

Investing is the science of putting money to work to make more money.

1. They know how markets work: the science behind supply and demand.

Find out what the majority of people want and give it to them.

2. Understand taxes to stay out of court.

5. The Rich Invent Money Not all kinds of wealth were the same. The land was riches three hundred years ago. During the Industrial Revolution, people who worked in factories got rich. Today, information is all that makes someone wealthy. Most people do the same thing: work hard, save money, and borrow money when needed. Usually, they say they don't have enough money to take advantage of some chances. Some are so blind that they can't see their changes.

Money and good fortune are both made. Rich people know that their mind is their best asset. People who are meant to be poor and people who are meant to be rich take two different paths.

Poor path: Work hard, pay taxes, save extra money, and pay taxes on the savings.

Rich path: Spend time learning about money and using the power of your mind to make assets.

To make investments, you need to master these three skills: Look for a chance that no one else has taken.

Look for ways to get money.

Learn how to put competent people in charge.

Most people are afraid of the risks that come with every investment. But if you know about the investment and how it works, it's not as risky as it would be for someone who doesn't know much about it or sits and waits for his luck to change.

6. Work to Learn - Don't Work for Money Robert says young people should "seek work more for what it can teach them than for what it can pay them." Instead of becoming an expert in one thing, the best way to get rich is to learn a little about many things.

Specialization is for getting a good job, not for getting rich. Use your job to learn how to deal with money, systems, and people. Learn how to communicate, sell, and market, and combine those skills with other skills that are often needed to make money. The author says that some things stop people from building their asset columns.

1. Fear: The worry that you will lose money. Rich people always make money, so they don't worry that they might lose it. They sometimes lose money, but they learn to keep the losses to a minimum and turn them into chances.

2. Cynicism: This problem is often caused by fear and doubt. A person who is always negative sees the end of everything. It's good to have doubts, but that doesn't mean you should run away in fear. Instead, you should think about the problem and try to solve it. Always, there is a way out.

3. Laziness: Sometimes, people stay busy to avoid their problems and their goals to get rich. To get rich, you must put in the time and effort to learn some skills. Staying "busy" on purpose with other things is a way to hide your laziness. Rich people want something more than that.

4. Pride: The author says pride is a mix of ego and ignorance. A simple way to fix this is to learn about money.

Final Thoughts: School teaches you to work for money Our education system is built on the premise of producing a workforce for companies or institutions People learn it without questioning because they are afraid If you want to take control, you need to be brave Make money work for you If you work for money, you will run out of time to make enough money. Buy real assets (stocks, real-estate, business) to hedge your bets and build a portfolio of safe, long-term investments. Teach yourself financial literacy Money without financial literacy is no money If you have enough financial intelligence, you will realize half of your expense is just useless and liabilities Making money and keeping money are different Don’t confuse the two With financial literacy comes great responsibility Mind your own business Focus on your assets column instead of income statements alone. Never reward yourself with luxuries with your hard-earned money. Instead, buy assets with it and use the generated income to buy the luxuries.

Real estate Royalties Power of Corporations The harder your work, the more you pay the government.

A corporation is merely a file folder with some legal documents in it. It was popular because the income-tax rate of a corporation is less than the individual income tax rate. Certain expenses could be paid by a corporation with pre-tax dollars. Your mind is your best asset Teach your mind to learn things and embrace change Your wealth is proportional to your ability to take risks Don't let fear suppress your genius Invest in the single best asset that you can control anytime Old ideas are just liabilities Be a generalist You want to know a little about a lot Job security means nothing when you work to learn Learning every aspect of a business is important to build long-term wealth Don't stick to a skill that is valuable in only one industry Skills for Success Everyone should learn these three main management skills to succeed: Management of cashflow, Management of systems, and Management of people Work with people smarter than you and unite them as a team Writing

Speaking Negotiating Be a great learner Overcome your obstacles Five main reasons why people stay broke are: Fear, Cynicism, Laziness, Bad habits, Arrogance Broke people are afraid of risk, but rich people are willing to take more risks because they know all the opportunities lie across the risk.

THE SUMMARY OF RICH DAD POOR DAD BY KEY SENTENCES Chapter 1: The Rich Don’t Work for Money The poor and middle class have to work for their money, but the rich can let their money work for them.

1. You need energy, passion, and a burning desire to learn well.

2. Most people stay at their jobs out of fear.

3. Most people let money control them.

4. Find ways to put your money to work for you.

5. Too many people care too much about money and not enough about their most valuable asset, which is their education.

6. First pay yourself.

7. A lot of people say, "Oh, I don't care about money." Still, they will work eight hours a day.

8. Being smart helps solve problems and makes money. Money that isn't managed well will soon be gone.

Taxes: You pay taxes when you make money, when you spend money, when you save money, and when you die.

Chapter 2: Why Teach Financial Literacy?

It doesn't matter how much money you make; what matters is how much you keep.

1. If you want to be wealthy, you need to know about money.

2. You need to know the difference between an asset and a liability and buy assets.

3. Rich people acquire assets. People in the poor and middle classes make mistakes that hurt them, but they think they are helping them.

4. The rich get assets, while the poor and middle class get problems.

5. Having assets makes you money.

6. Something that makes me money is an asset. Something that costs me money is called a liability.

7. Taxes are the most important cost for most people.

8. Someone can have a lot of education and do well in their job, but not know much about money.

9. A fool with money is a lot of fun.

10. They need more money because of how much they spend.

11. More money seldom solves someone's money problems.

Intelligence solves problems.

12. If you find yourself in a hole, don't keep digging.

13. Always follow the golden rule. Whoever has the gold decides what the rules are.

14. Schooling actually makes people less creative.

15. Schools were made so that good employees, not bosses, would come out of them.

16. When it comes to money, strong emotions tend to make people less smart about money.

17. Money tends to make every choice an emotional one.

18. They don't invest because they don't have any money to invest.

19. Putting money into assets that bring in money.

20.

The rich buy assets, while the poor only have expenses.

People in the middle class buy liabilities that they think are assets.

Chapter 3: Mind Your Own Business The rich look at their asset columns, while everyone else looks at their income statements.

People often have trouble with money because they spend their whole lives working for someone else. The mistake people make when they become what they study is that they forget to mind their own business.

1. Instead of your income column, your business is based on your asset column.

2. The wealthy look at their asset columns, while the rest of us look at our income statements.

3. Don't let go of their jobs.

4. Sometimes life is hard if you don't fit the typical mould.

5. Keep your day job, but start buying real assets instead of things that aren't worth much once you get them home, like debts or personal items.

6. Keep your costs low, cut down on your debts, and work hard to build a solid base of assets.

7. A worker with a safe, secure job and no financial skills has nowhere to go.

8. The first thing I've learned about having money work for me instead of working for it is that it's all about power. When you work for money, you give your boss control. If your money works for you, you keep the power and keep it in your hands.

9. Start taking care of yourself. You should keep your day job, but you should start buying real assets instead of liabilities.

Chapter 4: The History of Taxes and the power of Corporations 1. You have to know the law and how the system works.

2. Each dollar in my asset column was a great worker who worked hard to bring in more workers and buy a new Porsche for the boss.

3. If you are smart, people won't push you around as much.

4. You're not afraid to fight back if you know you're right.

5. Thought of owning my own business.

6. The knowledge that makes up your financial IQ comes from four main areas of knowledge.

No.1 Accounting No. 2 is making money.

No. 3 is understanding markets.

No. 4.

Business Owners with Corporations 1. Earn 2. Spend 3. Pay Taxes Employees Who Work for Corporations

1. Earn 2. Pay Taxes 3. Spend

Chapter 5: Rich People Make Money In the real world, it's not always the smart people who get ahead.

1. Self-doubt is the only thing that keeps us from moving forward.

2. It's not so much that we don't know enough about how things work, but that we don't believe in ourselves.

3. I realized that too much fear and self-doubt were the biggest things that kept me from being a genius. • Those who are brave get ahead, not those who are smart.

4. If fear is too strong, it shuts down genius.

5. Take chances, be brave, and let their genius turn their fear into strength and brilliance.

6. Most people know only one way out: work hard, save money, and borrow money.

7. If you think money is real, you will work harder to get it. If you can understand that money is not real, you will get rich more quickly.

8. Our minds are the most important thing we have. If it is taught well, it can make a lot of money in what seems like a split second.

9. A person with no education can also teach their families how to live in extreme poverty for the rest of their lives. • No money changed hands. Agreements did.

10. There is a lot to learn, and the more I learn, the more money I make. This is because as time goes on, I gain experience and wisdom.

11. You can't see great chances with your eyes. You see them in your mind.

12. In general, I try to plant seeds in my asset column.

13. Spend more money on teaching them about money than on stocks, real estate, or other markets. The better chance you have of beating the odds, the smarter you are.

14. We learn from the things we do wrong. We fall down to learn how to walk. If we never fell down, we would never walk.

15. Most people are not rich because they are afraid of losing, which is a shame. Winners, on the other hand, are not afraid of losing. Losers, though, are. Failure is a part of getting where you want to go. People who try not to fail also try not to succeed.

16. More important than what you buy is what you know. Investing is not buying. It's more about what you know.

17. The most valuable thing you have is what you know. The most dangerous thing is what you don't know.

18. They only need one more skill to make a lot of money.

19. Most people would make a lot more money if they learned and mastered just one more skill.

20.

The four main technical skills that make up financial intelligence are listed below.

1. Financial literacy. Knowing how to read numbers 2. Investment strategies. The study of how to make money.

3. The economy. Demand and supply 4. Rules.

The knowledge of accounting, business, state, and federal laws and rules. I think you should follow the rules.

Chapter 6: Don't work for money work to learn. My college-educated dad valued job security above all else.

Learning was very important to my wealthy father.

1.

2.

3.

4.

5.

You want to know some things about a lot of things.

Taking care of people is the hardest part of running a business.

"J.O.B." stands for "Just Over Broke."

Most workers don't spend more than they can afford.

Workers work hard enough to keep their jobs, and owners pay just enough so that workers don't quit.

6. In the long run, education is more valuable than money.

7. The world is full of smart, poor people with skills.

8. Sales and knowing how to market are two of the most important specialised skills.

9. Communication skills, like being able to write, speak, and negotiate, are important for a successful life.

10. We need to be good teachers as well as good students. We also need to be good at learning, selling, and marketing. To be truly wealthy, we need to be able to both give and get.

11. The most important management skills for success are: 1. Knowing how to handle cash flow 2. Managing systems (including yourself and family time) 3. How to run a group of people.