rich dad poor dad book review in english

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Book Review: Rich Dad Poor Dad

Last Updated 30th October 2023 | By Jon | This post may contain affiliate links: Disclaimer

Rich Dad Poor Dad by Robert Kiyosaki is one of the foundational texts on the journey to personal financial education. The book is written in a very easy to read conversational format and follows the journey of a young Robert as he compares the lives of his actual dad (the so-called “Poor Dad”) with his friend’s dad (the “Rich Dad”). Poor Dad is highly educated but is not financially literate. Rich Dad on the other hand is not highly educated but knows how to maximize his financial outcomes.

Many of us come from families where the topic of money and wealth is not freely discussed. Often it’s because even our parents were not well versed in the topic. If you were like me, then you come from the “Poor Dad” camp. The operating mantra of the family is to study hard, find a good company to work for, work hard, and save some of your income for a rainy day and for your retirement. While there is nothing wrong with that approach, the fact of the matter is that it is a painfully slow way to accumulate wealth. And most importantly, you never truly have any control or independence in your life.

Kiyosaki’s book is therefore important as it helps you get into the correct frame of mind to help you make the correct choices. It is not a book about how to get rich quickly or which stocks to buy. But it will help you get rich even if you’re from a poor background .

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Do you work for Money?

Have you ever said one of the following lines?

I need to find a job because my bills are piling up.
I hate my job, but cannot afford to quit as it pays my bills.
I work so hard but have nothing left over in savings at the end of the month.

If you are like 90% of the people in this world, then chances are very high that you have said this. What this means is that you (as do I) must work for money. We need to keep a job and have a steady income to pay our rent or mortgage, food, children’s expenses, etc. We are part of an endless rat race – always running furiously on that wheel but never really going anywhere!

Kiyosaki introduces us to some important concepts:

Assets & Liabilities
Income & Expenses

Of course I know this , you might say! Sure, it might seem basic, but here is a question: Is your car an asset or a liability? Does it go up in value over time or does it go down? Does it make you money or do you throw money after it? Is your house an asset or liability?

Some of the most important takeaways from the book, that are introduced very early on, are:

The Rich have far greater assets than they do have liabilities.
These assets generate sufficient income to cover the important life expenses, which means these assets help them escape from the rat race.
This means that the rich never have to work and they do not work for their money. It might be a cliché, but their money works for them !

Kiyosaki points out that the non-rich are always working for their money, and by extension, are working for their bosses, paying the government first, and paying the bank for their loans. Economists call what’s left as discretionary income. This is money that is yours to save and spend freely. Wouldn’t it be nice to have some left over afterwards?

rich dad poor dad book review in english

Do you work for the Government?

The rich get richer because they have lots of assets which go up with time, are well versed at controlling their expenses, and are masters at legally minimizing taxes. Many business owners know that the one big benefit of being a business owner is the ability to write off many normal expenses as business expenses. Cars, phone bills, restaurant bills, some home expenses, some travel expenses, etc. can all be legally written off as expenses! What’s left afterwards is the profit that the business generates – and usually they aim to show 0 profit. Income taxes are then paid on that profit. Any guesses what the income tax bill is on 0 profit?

Think about that – the salaried class first pay the government, then get to spend what’s left. The business class (and this includes your friendly plumber, the neighbourhood corner store, not the just big corporations) gets to spend first and then pay taxes on whatever might be left. If you are in the UK, every penny you earn over £12,600 attracts a minimum of 20% tax. That rate steps up quickly, the more you earn. Over £50,300, the government takes 40% of what you earn! A corporation however would only pay 19% on whatever is left after deducting all its expenses! In the US, running a company through an LLC can also lead to big tax benefits.

Do you work for your Boss?

There’s an old joke which I love that goes well here:

Boss: Do you see that amazing car there?

Employee: Yes, it must be very expensive! It looks great!

Boss: Well, if you work hard, I will be able to buy that car next year!

The Boss could be a salaried boss, the business owner, or upper management. The point is that those higher up in the food chain will always take a bigger share of the pie. For those not in the upper echelons, higher effort does not lead necessarily to proportionately – or God forbid, disproportionately – higher pay! Please don’t get me wrong here – there are wonderful jobs and many people thoroughly enjoy what they do. But most of us ultimately work for someone who will likely benefit way more from our efforts (if they didn’t benefit more, why would they hire you to begin with?).

Kiyosaki aims to drive the point home that even those with jobs can focus on getting their money to work for them. Investing in the stock market , in buy-to-let property , or other income producing assets, will help you get on the road to financial freedom.

To Summarize

The book is an excellent read to begin the journey of financial literacy. It opened my eyes and helped me set down a path to financial independence and breaking out of the rat race. Hopefully you will get as much value out of the book as I did.

Rich Dad Poor Dad: What the Rich Teach Their Kids About Money That the Poor and Middle Class Do Not!

Rich Dad Poor Dad … • Explodes the myth that you need to earn a high income to become rich • Challenges the belief that your house is an asset • Shows parents why they can’t rely on the school system to teach their kids about money • Defines once and for all an asset and a liability • Teaches you what to teach your kids about money for their future financial success

by Jon Craig

I am the creator of Project Financially Free and I started this journey to both educate myself and share my insights on personal finance. I’m passionate about financial literacy and I invite you to join me on this transformative path. See more .