I’m sure most of you have heard of the book called Rich Dad, Poor Dad (Kiyosaki, 1998). This has been on my list for a while as it was usually recommended while searching for finance books. I like to read non-fiction more than fiction, and I do like to read a lot on finances, entrepreneurship, and stocks. I do have a background in Finance and Accounting for over 10 years and the book does have a few tips such as the difference between an asset and liability on a very high level to help the common consumer. The overall object of the book seems to be to think about work in your career in a different way, essentially he starts off telling the difference between the rich dad who had no college education and the Poor Dad, who was his biological father, that had a masters degree and worked for the government. The Rich Dad owned a number of his own businesses and he taught his son and the author of this book when they were very young that in order to be rich it would be better not to work for someone else. Here are a few highlights of the book that I found interesting and useful:

• Buy assets not liabilities
• Make your money work for you, not work for the money
• Assets would be stocks, bonds, real estate, rentals, IOU’s, intellectual property, royalties
• Liabilities are credit cards and a mortgage
• Don’t buy luxuries unless your assets are to the point of bringing in enough money to cover it, that includes cars, homes, etc
• Work to build enough assets that produce a consistent income so you are independent of working for others and not working for money
• Those that work for someone else pay taxes first and then can use the money left over to pay for expenses
• Those that own their own business can use the pre-tax money to pay expenses, and after they subtract their business expenses including rent, utilities, meals, travel, car expenses then they pay taxes
• The rich protect their money from lawsuits through trusts and incorporating
• Work on your fear of rejection and failure
• The current school system doesn’t teach enough about the basics of finances and money
• Use your mind and creativity to find and build opportunities
• Let money work for you through buying assets that give you a return or having a business where others do the work
• Those that work for someone else usually are too fearful to go out on their own, they look for security under someone else, and may never become rich as they will pay more in taxes and not invest in assets that generate an income, instead they plunge money into money pits such as mortgages and credit cards. They buy their luxuries before their assets are paying for them.
• Continue to learn and develop your knowledge, take courses even after college
• Keep a good network of intelligent people that know more than you do, lawyers, CPAs and other intellectuals
• He makes other points as well but hopefully that is a good reminder to those that already read the book and a glimpse for those that may be interested in reading it

I should also note from a large picture perspective, and he does mention this in the book, that if you are a fearful, highly fiscially conservative person that is not willing to put in the work to get over rejection and fears of failure then working for yourself is not for you. Being successful in my own business over the past 7 years I wouldn’t say that I’m taking the large amount of risks that he is implying in some of these examples, but I’m open to continuing to work on myself and better myself over the years, and who knows, we’ll see how far that takes me. He talks about the advantages of working for yourself versus working for someone else and while he worked for someone else for a while to build his initial money he ended up launching on his own and he talks about the benefits of that. If you do end up continuing to work for someone else for a living I would say what you can get from this book is to continue to invest your money into assets such as stocks, bonds, and other income generating assets listed below so that you can build up a foundation that will give you returns rather than more expenses that will throw money out the door. I think if you take anything from this book he certainly tries to drive that information home, however much of the book is to try to convince you that working for yourself has many more advantages than being the person working hard to make your boss rich.

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References

Kiyosaki, R. T., & Lechter, S. L. (1998). Rich dad, poor dad: What the rich teach their kids about money that the poor and middle class do not!. Paradise Valley, Ariz: TechPress.