6 life lessons from Rich Dad Poor Dad|Review and Analysis

Rich Dad Poor Dad is written mainly to teach people the things that they don’t learn in school like Financial intelligence. Robert Kiyosaki tells us what makes rich people rich and poor people more vulnerable to poverty. The writer focuses on the importance of making money work for you rather than working for money. Rich Dad Poor Dad is divided into nine chapters and consists of 235 pages.

Introduction of Rich Dad Poor Dad:

Rich Dad Poor Dad got its name from the Robert Kiyosaki’s two fathers a rich one that is his godfather and a poor one that is his birth father. The writer’s approach to life is mainly influenced by his two fathers, who had two different approaches to life.

The rich dad was a school drop-out while his poor dad was highly qualified. Despite his qualification, the poor dad always faced a shortage of money while rich dad was good at making money. His poor dad had the thinking that the love for money is the root of all evil while his rich dad used to say that the lack of money is the root of all evil. His poor dad recommended him to study hard to find a job at a good company while his rich dad recommended him to study hard to buy a good company.

Robert Kiyosaki used to listen to both of them and then decided what he needed to do with his life. At the age of nine, he decided to listen to his rich dad.

Lessons by Rich dad:

Lesson 1: The Rich don’t Work for Money

How the journey of Robert T.Kiyosaki becoming Rich started?

Robert and his best friend Mike started their first business at the age of nine when they got humiliated by their class fellows of being poor. They did the experiment that the learned in their science class. They succeeded in making lead nickel with things like used toothpaste tubes, empty milk cartons, and plaster of Paris.

Robert’s dad and his friend were closely watching them and they told them that its an illegal practice. His first business failed but his dad told him to ask Mike’s dad how to become Rich. Robert and Mike started to work for Mike’s dad for 10 cents an hour. Later Mike’s dad made them work for him without paying them money, he let them think about the ways to make money.

Robert and Mike invented a way by lending the old comic books to other kids and by charging them per hour. Soon they work making 9.5 dollars per week. In this way, Robert and Mike learned their first lesson, The Rich don’t work for money.

Lesson 2: Why Teach Financial Literacy?

If people want to be rich, they should be financially literate. Kids who are graduated from school do not know financial literacy.

If you want to be rich, the 1st rule is:

You must know the difference between an asset and a liability. Rich dad said that rich people buy assets and poor people buy liabilities thinking of them as assets.

What is the difference between an asset and a liability?

Robert defined asset as something that puts money into your pocket, while liability takes money out of your pocket.

Robert challenged the people viewing their house as an asset.

  • People who buy a new house also must pay property tax.
  • They then buy a new car, new furniture and new appliances to match their new house.
  • Their liabilities column filled with mortgage and credit card debt.
  • When it comes to the house, most people work all their lives paying for a home they never own.
  • Most people buy a new house every few years, each time inducing a new 30year loan to pay off the previous one.
  • Houses do not always go up in value. You buy a house at a high price and you have to sell it for less.
  • A house only serves as a vehicle for incurring a home-equity loan to pay for mounting expenses.
  • An expensive house result in loss of time, loss of additional capital and loss of education according to Robert.

The writer urged the people to buy assets that will generate the cash flow to pay for the house.

The writer categorized people based on their financial literacy.

  • The rich people buy assets
  • The poor people only have expenses
  • The middle-class people buy liabilities that they think are assets

Lesson 3: Mind your own business

To become financially independent ,a person needs to mind his own business.

Your business revolves around your asset column. Keep your job but start buying real assets, not liabilities. Robert himself worked for many years for Xerox and Marine corps.

Real assets are the following:

  • A business that doesn’t require the owner’s presence
  • Stocks
  • Bonds
  • Income-generating real estate
  • Notes(IOUs)
  • Royalties from intellectual property such as music, scripts, and patents
  • Anything else that has value, produces income or appreciates, and has a ready market.

One should buy assets that he really loves. Robert loved to buy real estate and stock of small companies.

Financial literacy is very important because the better a person understand accounting and cash management, the better he can analyze investment and on the way of building his own company.

Robert focused on building asset column strong which means that once a dollar goes into your asset column never let it out. Rich people buy luxuries last while poor and middle class buys luxuries like a big house, jewellery, furs, etc to look rich but Robert said that true luxury is a reward for investing in and developing a real asset.

Lesson 4: The History of Taxes and the Power of corporations

Income taxes became permanent in England in 1874 and in united states in 1913. At first,the purpose of the tax was to punish rich but once government got the taste of money,the tax implemented on poor and middle class.

Corporation gives the rich an advantage over the poor. It helps rich to escape from taxes.

The rich Hire smart attorneys and accountants and persuade politicians to change laws or create legal loopholes because they are financially intelligent.

Financial IQ or intelligence comes from expertise in the following areas:

  • Accounting
  • Investing
  • Understanding markets
  • The law
  • Tax advantages
  • Protection from lawsuits

Lesson 5: The Rich invent money

To be a financial genius it requires technical knowledge and courage. People prefer to play safe when it comes to money. they don’t dare to take risks. Timely information is true wealth and people who cling to old ideas often struggle financially. Our mind is the most precious asset means that developing financial wisdom can create a lot of money.

Robert shared his personal experiences to teach his readers. In 1989, he bought a house worth of 65000 dollars in 45000 dollars. He rented that house and put 40 dollars in his pocket every month. When the real estate market rose up, he sold that house for 95000 dollars.

Robert presented two types of investors one who buys a packaged investment and other he called as professional investors those who create the investment.

Skills that are possessed by a professional investors are the following:

  • Find an opportunity that everyone else missed
  • Raise money
  • Organize smart people

Lesson 6: Work to learn- don’t work for money

There are many talented people who earn less because they work for money. Robert challenged the people’ minds who think that working hard is a key to success. He urged the importance of playing smart by using your financial intelligence.

Schools teach people to specialize if they want to succeed but Rich dad told Robert to know a little about a lot and he did the same. He worked for different companies and learnt about different things. As schools don’t pay attention to financial intelligence most people spent their life doing a job and struggle to pay their bills. The writer recommended young people to work to learn than to earn.

If people want to be rich they should develop a second skill apart from their job. but if you don’t want to learn a new skill and only stick to your job, make sure that the company you are working is unionized. Some times people are talented they also possessed skills but they don’t know about how to sell their skill and they failed themselves.

The main focus of Robert in this chapter is learning, learn about business, learn about money. Don’t specialize in only one field rather know little about everything.

Skills that are needed for success are the following:

  • Management of cash flow
  • Management of systems
  • Management of people
  • Sales
  • Marketing
  • Communication skills such as writing, speaking and negotiating

Fear, cynicism, Laziness, Bad habits and arrogance are the main hurdles in the way of a person who wants to become rich. No one wants to lose money but how you manage your loss is the key to success. Most people are too afraid of losing that they don’t take risks and always played safe when it comes to money. These people can never be financially strong.

Cynicism or self-doubt is another reason why people remain trapped in a rat race. thinking about the bad consequences of your actions leads to despair so one should always be positive. Most people are lazy when it comes to thinking about somethings. The difference between the rich and poor is that the poor think that he can’t afford it while the rich forced his mind to think about the possibilities of how he can afford it.

Most people pay themselves last and pay government first. If you pay government first this will make you relax and you will happily be satisfied on what left. But if you pay yourself first, you will find ways to make more money to pay the government

Acquiring wealth is not an easy process but if one is financially genius, the road to success becomes easier. Why people want to be rich is the combination of wants and don’t wants. The reason we do work is that we want something and do not want something. There should be a strong reason behind your actions.its your choice to become rich.

Being rich is a tiring journey, so most people avoided it by saying that I am not interested in money or I will never be rich and many more things. Robert called time and learning as more powerful assets. Invest in education, train your mind, make your time fruitful, and learn about things.

You become like the people around you so choose your friends carefully. choose people who have the same interest as yours. Learn different things and make a new one. Self-discipline is most important if you want to be rich. People with low self-esteem and a low tolerance for financial pressure can never be rich.

Here are some to do’s by Robert in Rich Dad Poor Dad:

In the last chapter of the Rich Dad Poor Dad, Robert urges people to do action by stating the following steps.

  • Stop doing what is not working and looking for new ideas
  • Finding someone who has done what you want to do
  • Take classes, read and attend seminars
  • Make lots of offers
  • Visit a certain area once a month for 10 minutes
  • Shop for bargains in all markets.
  • Look in the right places
  • Look for people who want to buy first
  • Think big
  • Learn from history
  • Action always beats inaction.

Also Read : Materialism of Modern Age and Materialistic Cold World


Rich Dad Poor Dad can be the starting point of a different life that you are living in. This book changed my perception of being rich. I used to think that getting a higher education and securing a job can make a person rich but what Rich Dad Poor Dad tells us is the opposite.

By giving us the examples from the personal life of the writer, Rich Dad Poor Dad proves that the writer is not building castles in the air but the things that he has taught us can be implemented in real life and leads you to success. If you are willing to change your life and want to be financially independent, this book is recommended because it motivated you and can be the first step in the ladder leading to success.

Weak points of Rich Dad Poor Dad:

  • The writer at some points in Rich Dad Poor Dad seems preachy.
  • Everybody cannot be the employer, Employer needs employees and this is how the world works.
  • The book gives excellent advice like learn from failure, let money make work for you however, it doesn’t give you the system or method to make money.

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Iqra Khaliq

Published by
Iqra Khaliq

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