Book Review: Rich Dad Poor Dad

Book Review: Rich Dad Poor Dad

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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. ?

By Robert Kiyosaki, 2001, 240 pages

Note: This guest article was written by Thibaud, author of the Blog Mes Finances Mode d?Emploi. Inspired by my crazy challenge to read 52 books in 52 weeks, Thibault set himself a different crazy challenge: to read 50 of the best books on personal finance in under 18 months and to publish three reviews on his blog per month!

Book chronicle and summary of Rich Dad, Poor Dad:


?Rich Dad, Poor Dad? is the story of two fathers; one has a collection of degrees and diplomas and the other is a high school drop-out. When the overqualified father dies, he will leave next to nothing behind, and even a few unpaid bills here and there. The school drop-out father will become one of the richest men in Hawaii and will pass on an empire to his son. Throughout his life, the former would say things like ?I can?t afford to treat myself to this or that?, while the latter would say: ?How can I treat myself??

The rich father in this book teaches two small boys some invaluable lessons about money through their own experiences. The most important one is undoubtedly to understand on how to best use your mind and your time to create your own wealth through business and investments.

Get out of the rat race. Learn how to seize opportunities, find solutions, take care of your business and investments and most especially, learn how to make money work for you and not be its slave!

NB: the expressions ?poor? and ?rich? are used by Kiyosaki in order to explain what type of behavior is preferable in order to have financial freedom. It is not about judging yourself on the current state of your finances and your richness.

Some pearls of wisdom from the book Rich Dad,Poor Dad:

  • You are the image of your thoughts,
  • Being an employee is a short-term solution to a long-term problem,
  • A slave, even if he is paid a fortune, remains a slave,
  • What is the point of wanting to rise through the ranks of a company when you can own a company?

2 paths diverged in a wood, and I –

I took the one less traveled by,

And that has made all the difference.

Robert Frost, The Road Not Taken

Lesson ?1: The Rich Don?t Work For Money

How Kiyosaki created his first company at the age of 9.

At the age of 9, Robert Kiyosaki and his best friend Mike asked Mike?s father (Rich Dad) to teach them how to make money. After 3 weeks spent cleaning one of Mike?s Dad?s many stores for a poverty wage (10 cents a week!), Kiyosaki couldn?t take it anymore and increasingly began to think about quitting. This is the moment that Rich Dad chose to give him his first lesson about money: some people leave their job because they are not being paid enough. Others see it as the opportunity to learn something new.


Rich Dad went on to ask the two young boys to work for him for free. By acting this way, he wanted to force them to imagine a way to create their own source of income that was independent from their work for him. Inspiration came to them when they noticed that some comics were left lying around the shop. That?s all it took: they recovered them and opened a library for their classmates, making them pay an entrance fee: 10 cents for 2 hours of reading. They paid Mike?s sister 1 dollar a week to deal with managing their little business. Soon, they were making $9.50 per week, without having to worry about managing their library. Their first company had come into existence!

Lesson ?2: Why Teach Financial Literacy?

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You don?t learn to become rich at school.

The gap which is currently widening between the richest and the poorest is not due to chance. The educational system, such as it is built today.

It does not allow this gap to be reduced. Its primary objective is to teach you to enter the working world as it already exists, and therefore, to allow you to become a very good employee.

Not a very good employer. And that makes all the difference.

Neither does the current educational system teach about the basics of managing personal finances that have allowed the rich to build their wealth.

It is up to you to take responsibility to train yourself and to use this knowledge to acquire the assets that will allow you to generate income.

The problem is not how to know how much you are earning, but how much you are able to put aside.

The first step towards getting out of the rat race is to:


An asset is a title or contract that allows its owner to generate income. A liability, on the other hand, is to generates expenditure.

Some examples:

Poor people manage their money from day to day, the middle class buy liabilities thinking that they are acquiring assets and the rich or future rich build a solid base of assets that generate their income.

The middle classes find themselves in a permanent state of constant financial struggle. Their primary source of income is their salary. And salary increases usually lead to tax increases.


Here is why your principal residence is NOT an asset:

  1. You will work your whole life to pay back the mortgage you took out.
  2. Your maintenance costs represent a significant amount.
  3. You must pay property tax.
  4. Your principal residence may depreciate if the real estate market drops or if you buy at the top of the cycle.
  5. Rather than investing in an asset that earns you money regularly, you repay your monthly credit to the bank. In other words, the real owner of your home is the bank!

If you genuinely want to acquire your principal residence, you must first generate the income to finance your monthly repayments.

Here are a few examples of real assets:

  • An apartment that you rent out and whose rent as paid for by the tenant allows you to repay the monthly loan repayment contracted to acquire the property,
  • A business that does not require you to be present but of which you are the main shareholder.

In a nutshell, the main steps to get out of the rat race are:

  • Understand the difference between an asset and a liability,
  • Concentrate your efforts on purchasing assets that generate a steady income,
  • Keep your spending and your debts to a minimum,
  • Mind your own business!

Lesson ?3: Mind Your Own Business!

Keep your current job but begin to think about your own Business.

Kiyosaki began his professional career by selling photocopiers for Xerox. Using his revenue, he invested in real estate.

In the space of just 3 years, the revenue generated by his investments in real estate exceeded his salary.

He then decided to leave the company and to take care of his own business full-time.

He knew that it was the only solution to get out of the rat race.

Do not spend all your income. Build yourself a diversified portfolio of assets and you will spend later when these assets make you enough.

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Lesson ?4: The History of Taxes and the Power of Corporations

Income tax first came into being in England in 1874. In the United States, it was introduced in 1913. What was originally a plan to have the rich contribute to the growth and development of the Nation was later extended to the middle classes and the poor.

The rich have a secret weapon to protect themselves from particularly heavy taxes. It is quite simply their company. It offers them a number of advantages in terms of taxation.

The mechanism by which the rich minimize their taxes is the following:

Company ownersCompany employees1. Earn money1. Earn money2. Spend their money2. Pay their taxes3. Pay their taxes3. Spend their money

In other words: PAY YOURSELF FIRST!

Kiyosaki now invites us to take into consideration the main components of what he calls Financial IQ:

  1. Accounting. You don?t have a choice. If you want to invest in the stock market, you will need to have a few basic notions of accounting to read the annual reports of the companies in which you want to invest. It will be the same if you want to create your own business.
  2. Investment strategy. This faculty is honed with experience. Chat with investors and observe how they behave. Attend seminars on the subject.
  3. Market law. Master the law of supply and demand. No company owner can succeed if s/he has not mastered this basic knowledge. Understand the needs of your customers.
  4. Law. You must have a minimum amount of legal knowledge for your business to grow in the right way. Takes lessons if you have to!

Lesson ?5: The Rich Invent Money

Self-confidence associated with a high Financial IQ will no doubt be your safest allies when it comes to achieving financial freedom. Of course, you will need to save each month before investing. But this alone will not suffice.

Use your time wisely and find the best opportunities

Let?s take an example. At the beginning of the 1990s, the economy of Phoenix was at its lowest point. Houses that has been purchased for $100,000 were selling for $75,000. Kiyosaki used as his market public auctions of houses that had been repossessed and he acquired the same type of houses for $20,000. He went on to sell them for $60,000, thereby making a very comfortable profit.

After 6 months acting in this way, he had made a total net income of $190,000 for just 30 hours of actual work!

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Rich Dad explains that there are types of investors:

Two types of investor

  1. Those who buy ?investment packages?

You are in this situation when you entrust your money to a real estate developer or a fund manager. It is a simple and clear way to invest your money.

2. The professional investor

You are in this situation when you look after your own investments. You seize the opportunities that present themselves to you. This is this kind of behaviour that Rich Dad encourages. To do so, you have to work on 3 types of skills:

  • Identifying an opportunity that no-one else has spotted,
  • Raising funds,
  • Working? with intelligent people.

Identify an opportunity that no-one else has spotted

Learn how to identify what REALLY gives a business added value. Do you honestly think that hamburgers are at the heart of the McDonald?s business?

In reality, the heart of the Business of the fast food chain is real estate and the search for strategic locations in the most fashionable neighborhoods in every city in the world.

There is one last thing that you will absolutely have to master to succeed in your investments: acceptance of risk. You must learn to control your emotions and to not care about the possible failures that you will endure.

Your ability to bounce back is what will bring you success, not your desire to succeed immediately.

Lesson ?6: Work to Learn ? Don?t Work for Money

The biography of Robert Kiyosaki

After college, Robert Kiyosaki joined the Marine Corps. Among other things, he learned how to lead troops, furthermore an essential lesson when learning how to manage a business.

He went on to join Xerox, where he learned to overcome his fear of rejection by becoming one of the 5 best salespeople in the company. Having reached his objective, he left the company and began to take care of his own business.


A different education.

Schools train professionals who become so specialized in a particular field. That they no longer know how to cope in any other and they then need to unionize to protect their work.

Specialization is not necessarily the optic that we are interested in; it is more important to retain the essential lessons in every field to master the 20% that provide 80% of the added value of your future business!

This is this kind of teaching that Rich Dad passed on to Robert and Mike. Mike went on to take over the empire that his father left him. While at the same time Robert created his own empire through real estate, launching new products and educational programmes.

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3 essential skills for management

  1. The cash flow management
  2. Management of systems (including time spent with family and friends!)
  3. People management

5 obstacles that can hurt you in your quest for financial freedom

  1. Fear Do not act solely based on what you think is a ?sure? thing. If you cannot commit and you cannot think big, probably you will never succeed.
  2. Cynicism. Don?t listen to the people around you who don?t give themselves the means to succeed but, allow themselves to criticize what you are achieving.
  3. Laziness. Don?t give in to the call of the rat race. If you sit back on your laurels, you will never escape from the unsatisfactory daily grind. Be proactive and persevere!
  4. Bad habits. Your usual expenses must turn into savings and investments. This is the price of freedom!
  5. Arrogance. Don?t think that you know everything about money. Listen to what others tell you. Train yourself!

10 Steps to awaken your financial genie

  1. Find something above and beyond your reality ? your wildest dream.Imagine freedom, the lifestyle you could have if you could control time. Think about what you don?t want to be and put a line through it.
  2. Put your free will to the test, every day.You can choose to watch ?Wheel of Fortune? or ?Bloomberg?. It all depends on the way in which you want to occupy your time and your energy. It all depends on you!
  3. Choose your friends wisely.Don?t allow yourself to be polluted by the firmly held opinions of some people who have an opinion on everything and never do anything. Surround yourself with creative people who genuinely want to take control of their lives.
  4. Learn a lesson about your finances. Learn another one, in the same way learn quickly!
  5. Pay yourself first. Cultivate self-discipline by keeping your level of spending as low as possible. Your tenants must serve to finance your spending and your savings are to invest and not to settle your bills!
  6. Pay the people who work for your finances generously. If they are efficient, know how to be grateful. This will only make them more motivated!
  7. Act like venture capitalists. This is the concept behind ROI (Return On Investment). Invest and then take back your money once the investment earns you enough without your initial contribution.
  8. Treat yourself. Once you generate sufficient income via your investments, please do not hesitate to treat yourself to the New Audit. Go for it!
  9. Find yourself a mentor. And act like him or her every day. The more you feel as though you are acting in an extraordinary way is the more you will become extraordinary. It?s as simple as that.
  10. Give and you will receive. If you give freely without expecting anything in return, you will receive the equivalent a hundred times over. It is the law of attraction in action!


To conclude your plan of action and to achieve financial freedom:

  • Stop what you are doing. Assess your current situation. Give up what is not working and consider all possible options.
  • Always be on the lookout for new ideas.
  • Act! Find people who have already done what you want to achieve and meet with them, ask them questions and ask for their tips. Invite them to lunch!
  • Train yourself and buy podcasts and/or training videos.
  • Make many offers. Negotiate, explore the field and interact with your future clients if you want to create your own business. Be proactive!
  • Take a tour of your surroundings and be attentive to small ads for real estate. A great deal may be just at the corner of your street.
  • Think big. Don?t limit yourself to what you consider to be good enough.
  • Learn from history. Draw inspiration from the biographies of billionaires around the world to understand the paths they took and their way of thinking. It is a veritable gold mine of learning.


Rich Dad, Poor Dad is an extraordinary book, in the literal sense. I cannot fully express how much this book transformed my vision of money and most especially my perception of wealth.

Before I read Rich Dad,Poor Dad, part of me was convinced that all ?rich people? were born that way. That you needed to have money to get rich and that the only solution was to join the rat race, although that is not what I called it at the time.

Nowadays, I am firmly convinced that you can learn how to become rich and that financial freedom is a realistic goal if you move towards it methodically and patiently.

I have become a true investor, in Kiyosaki?s sense of the word and even if my assets do not yet make enough for me to live on. I am quite hopeful that this will be the case within 5 to 10 years. In any case, I will do it one day!

Advise and Objectives

My advice is that if you need to start your financial education with one book, begin with Rich Dad,Poor Dad and I guarantee you that you will not regret it. And you should not make a mistake.

The objective of Kiyosaki is to coach you and to motivate you to allow you to take the path that leads to financial freedom. Not to offer you any ready-made answers.

So read the book Rich Dad,Poor Dad and set yourself objectives and also take the plunge!, Most importantly, never lose sight of the fact that wealth is first and foremost an extraordinary life experience. Have a good trip!

Book review of Rich Dad, Poor Dad:

Strong Points:

  • The original idea of the book Rich Dad,Poor Dad, and also the extremely effective presentation of educational financial concepts are not as simple as they seem.
  • An incredibly motivating book inspired by the personal experience of the author, who is himself a millionaire,
  • There are countless testimonies from people across the web who say they got started in network marketing, real estate investment or opened a business after reading the book Rich Dad,Poor Dad.

Weak Points:

  • A certain lack of detail in some areas mentioned by the author is regrettable.
  • As he says himself, his books are motivational tools, not books by a financial expert.

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