Rich Dad Poor Dad

Book by Robert Kiyosaki about managing your finances , which i read literally when i was living hand to mouth ,
i mean when i was a student , which i think was too early as it did not make much sense to
me then. so , later i re-read it again , after i had become an employee.

What is the difference in the world view and attitude of people
who become rich compared to other people? What things do they
do differently to have such different results in their lives?

Robert T. Kiyosaki had a unique opportunity to find out. Robert's father
was an educator and public administrator. When Robert was a young boy,
he and his friend, Mike decided they wanted to learn how to become rich.
They started by trying to make (counterfeit) money.

Robert's father explained to the boys this was illegal. He also admitted he
did not know how to become rich, but suggested the boys ask Mike's father how to go
about it. So Mike's father, an independent businessperson, became a mentor to Robert,
his "Rich Dad."

This book is the fascinating story of how the Rich Dad
taught Robert the lessons he needed to learn to make himself financially
independent. Robert has learned that our educational system is pretty good at
producing employees, but not very good at producing people who are good at managing
their finances wisely. He now teaches people how to apply the principles of becoming rich.
In addition to publishing the information in this book, he has developed a game, CASHFLOW(tm) 101 to help people develop their financial intelligence.

Some of the ideas Robert presents reinforce those in other books we have reviewed.
Like The Millionaire Next Door, Robert points out the difference between having a big salary and building wealth. Like The Richest Man In Babylon, Robert emphasizes the importance of paying yourself first. In his opinion, it's more important to systematically invest a portion of your income than to pay your bills or to pay your taxes. (A controversial concept.)

Robert also has a definition of an asset versus a liability that is different from conventional accounting. Investors generally focus on accumulating assets and avoid liabilities. Simply stated, assets generate income or cash. Liabilities consume cash. Rich people accumulate assets. People who aren't rich accumulate liabilities. Some things that look like assets are actually liabilities - for example: a residence, a car, a boat. When we accumulate these things, we are not really accumulating wealth, we are consuming it. If we haven't accumulated sufficient assets and we acquire these "toy" liabilities, we are putting the cart before the horse. Instead, we should emphasize regularly acquiring stocks, bonds, tax lien certificates, rental real estate, and other investments. We also need to learn to build value and get some tax shelter by building our own business.

Robert acknowledges that it is possible to use the principle of compound interest and regular saving to achieve financial independence. The problem with this approach is it's a long, patient one. Most people get started too late for it to work.

The rest of us must develop our financial intelligence, make risk our friend, and accelerate our financial growth. Although diversification is appropriate for preserving accumulated wealth, the investor usually must take the additional risk of focused investments in order to initially accumulate wealth. Bigger returns require accepting more risk.

Rich Dad, Poor Dad is the kind of book that opens your mind to new possibilities