Professional Documents
Culture Documents
Summary of Rich Dad Poor Dad
Summary of Rich Dad Poor Dad
Robert Kiyosaki had two fathers: a rich one and a poor one. One was highly educated with a
Ph.D. and so intelligent he completed his undergraduate degree in only two years. The other
father didn’t even finish the eighth grade. While both men worked hard, were successful, and
earned a lot of money, there was always one who struggled with money. And the other dad, well,
he became one of the richest people in Hawaii.
By having two dads, with entirely different mindsets, Kiyosaki found himself comparing the two
dads a lot. It was hard to figure out which dad he should listen to. Neither had found success yet.
And both were experiencing financial struggles as they were still early in their careers.
Schools don’t provide financial education. Thus, causing the poor and middle class to be in debt.
If millions of people need financial or medical assistance, Medicare and Social Security may run
out.
Transitioning from the mindset of “I can’t afford it” to “How can I afford it?” forces you to think
instead of letting yourself off the hook.
Poor Dad: Study hard so you can find a good company to work for
Rich Dad: Study hard so you can find a good company to buy
Rich Dad: teaches how to write a strong business and financial plan
Rich Dad: “I’m a rich man, and rich people don’t do this.”
Growing up, Robert Kiyosaki went to the same school as the rich kids, simply because he lived
on a different side of the street. Being poor, in a school filled with affluent students, made him
seek an answer to the question, “how do I make money?”
His best friend Mike was also poor, and so a friendship was struck between the two. The two
spent an entire morning one Saturday brainstorming all the ways they could make money. Their
first project wasn’t a success, nor was it legal. They decided to cast nickels out of lead to make
money– literally. With a quick explanation of the laws of counterfeiting from Robert Kiyosaki’s
poor dad, the pair went back to the drawing board.
Robert Kiyosaki’s poor dad suggested that the two learn how to make money from Mike’s dad
(Robert Kiyosaki’s rich dad). Poor dad had heard from his banker how good the rich dad is at
making money. Mike arranged a meeting time, and the two began their lessons.
Robert Kiyosaki arrived at 8 o’clock sharp for his meeting with Mike’s dad. When the meeting
began, the rich dad told the two that he’d be happy to teach them but won’t be doing it in a
classroom style. He proposed that the two boys work for him so that he can teach them faster.
The two weren’t allowed to ask questions about the deal. And so the first lesson was
learned: opportunities are fleeting, so you need to jump on them when they arrive. He offered to
pay Robert and Mike 10 cents an hour, for three hours, every Saturday.
After a couple of weeks doing excruciatingly boring work, Robert told Mike that he wanted to
quit. This response is what Mike’s dad was hoping for.
Before his meeting with his rich dad, Robert Kiyosaki’s poor dad told him to demand what he
deserves at least 25 cents an hour and to quit his job immediately if he didn’t get a raise. Robert
went to meet with his rich dad but was forced to wait 60 minutes longer than expected, which
infuriated him. Robert felt that his rich dad hadn’t kept his end of the bargain of teaching him
and that he was just trying to exploit him by making him work for him.
His rich dad noticed that Robert had sounded like his employees after only one month. Rich dad
insisted that he was teaching Robert, but in a way that life teaches, not in the way that school
does. The most effective way to learn is by doing, though most people consume education from
books, which is the least effective way.
The main lesson he taught in the office that day was that Robert could either end up like his
employees who blame others for his problems, or he could take another path and become a
wealthy man.
Rich dad had suggested that the two boys find a new way to make money outside of working for
someone else.
Lesson 1: “The poor and middle-class work for money. The rich
have money work for them.”
Rich dad also shared how happy he was that Robert Kiyosaki got angry. He said, “anger is a big
part of the formula, for passion is anger and love combined.” Fear is what controls employees
that causes them to exploit themselves.
Rich dad continued, “…it’s fear that keeps most people working at a job: the fear of not paying
their bills, the fear of being fired, the fear of not having enough money, and the fear of starting
over.”
Employees often feel disappointed looking at their paychecks– especially after tax and
deductions. This was nine-year-old Robert’s first introduction to taxes. It’s also how he learned
that the rich don’t let the government do that to them, even though they earn more.
In a new deal, rich dad negotiated that Robert continues working for him, but for free. For the
next three weeks, Robert and Mike worked for their rich dad for free. Then, on the third
Saturday, he took them out to a park for some ice cream. He decided to introduce him to the trap
of the rat race. He did this by offering to pay them twenty-five cents an hour. They said no. Rich
dad then offered a dollar an hour. They said no. Then, two dollars an hour. They said no. Then,
five dollars an hour. And they once again said no. The boys knew that they couldn’t be bought.
They were committed to becoming wealthy.
Rich dad later pointed out that poor people often say they’re not interested in money. Robert
Kiyosaki thought back to the times his dad would say, “I’m not interested in money. I work
because I love my job.” This is how poor people often cover themselves up.
It’s essential to not give in to your emotions, such as fear, so that you can prevent any quick
reactions and think objectively about a situation. The reality is a job is merely a short-term
solution to a long-term problem. Rich dad’s focus is on teaching the boys how to have a choice
of thoughts instead of a knee-jerk reaction to things.
One of the most empowering lessons rich dad taught in this section of Rich Dad Poor Dad was to
“keep using your brain, work for free, soon your mind will show you ways of making money far
beyond what I could ever pay you. You will see things that other people never see. Most people
never see these opportunities because they’re looking for money and security, so that’s all they
get.”
This lesson inspired the two boys to find a new way to make money. On one Saturday, they
noticed Mrs. Martin cutting off the cover of the comic books and throwing them into a cardboard
box. Since they weren’t allowed to resell the comic books, they decided to create a library for a
fee where other kids could come over to read as many comic books as they like between 2:30
p.m. and 4:30 p.m. every day after school for only 10 cents. This deal was a bargain for the other
kids who might’ve spent 10 cents buying a comic book. Each week, they averaged around $9.50,
while paying Mike’s sister one dollar a week to manage the library. After three months, a fight
broke out in the library, and Mike’s dad advised them to shut down the business. But they did
manage to learn how to make money work for them instead of working for money.
Robert Kiyosaki retired at the age of 47. He still works, but for him and his wife, Kim, working
is an option as their wealth will continue to grow automatically.
In this section of Rich Dad, Poor Dad, Robert Kiyosaki shares a simple story. In 1923, the
greatest leaders and richest businessmen joined together for a meeting in Chicago. Twenty-five
years later, nine of them had their life end in the following ways:
This unfortunate turn was likely due to their lives being drastically affected by the 1929 stock
market crash and the Great Depression.
The biggest financial lesson to learn is that it’s all about how much money you keep, not how
much you make. And without financial literacy, you’ll lose your money soon.
Growing up, poor dad recommended that Robert read books while rich dad recommended that
Robert master financial literacy. Robert shares, “If you are going to build the Empire State
Building, the first thing you need to do is dig a deep hole and pour a strong foundation. If you are
going to build a home in the suburbs, all you need to do is pour a six-inch slab of concrete. Most
people, in their drive to get rich, are trying to build an Empire State Building on a six-inch slab.”
It’s vital to learn the subject of accounting if your long-term goal is to be rich – no matter how
boring you think the topic is.
Rule #1: You must know the difference between an asset and a liability– and buy assets.
“Rich people acquire assets. The poor and middle class acquire liabilities they think are assets,”
rich dad says.
The biggest challenge poor people have is knowing the difference between an asset and a
liability. Knowing the difference between the two can help you become rich.
An asset puts money into your pocket. A liability takes money out of your pocket.
Assets add to your income. Liabilities add to your expenses. And the job of a poor person pays
you an income that then covers your expenses. The job of a middle-class person pays you an
income then pays down liabilities then pays expenses. However, for a rich person, their assets
pay them an income. For example, their assets may give them rental income, dividends, interest,
or royalties.
Here are a few examples of liabilities that the middle class own:
Mortgage
Car loans
Credit card debt
School loans
Real estate
Stocks
Bonds
Notes
Intellectual property
Many people who are poor or in the middle class often say, “I’m in debt, so I need to make more
money.” However, getting money isn’t a problem. It’s the lack of financial literacy that’s the
problem. So if they simply had more money, the problem might become worse. That’s why when
people win the lottery or get a pay raise, they usually end up back in the same financial situation
as they did before. If a person spends all they have, the pattern will continue every time they
make money.
Professional success isn’t directly tied to academic success anymore. Most students leave their
schools with limited financial literacy. Later in life, they find themselves struggling financially.
What they need to know more than how to make money is how to manage their money. This
skill is called financial aptitude. Most people learned how to work hard instead of how to make
money work hard for them.
Taxes end up costing the poor and middle class in the long run. People often buy bigger homes
to grow a family, and property tax rises. People’s salaries increase over time, and so social
security tax also sees a rise. And before long, their liabilities column is filled up with a mortgage
and credit-card debt. Thus, trapping them in the rat race.
The secret to knowing how to make money is simply about creating assets instead of liabilities.
Golden Rule: “He who has the gold makes the rules.”
“Most financial problems are caused by trying to keep up with the Joneses.” You might choose
to buy a bigger house, work harder, or get a promotion or pay raise.
As teenagers, Mike and Robert would work with their rich dad. They studied how he held
meetings with his bankers, attorneys, accountants, investors, so forth. Even though his rich dad
had left school at 13, he was now directing some very educated people.
Rich dad regularly told the two teens, “An intelligent person hires people who are more
intelligent than he is.”
As a teenager, Robert realized he had more financial literacy than his poor dad as he was able to
keep books and spent a lot of time listening to bankers, tax accountants, real estate brokers, and
others like them.
In this section of Rich Dad Poor Dad, Robert Kiyosaki shares that many people view their home
as an asset. However, in many cases, the value of a home doesn’t always go up. Sometimes
people buy million-dollar houses that would sell for far less. Retirees such as Kim’s parents had
a strain on their budget when their property taxes increased to $1,000 a month.
When Robert plans on buying a bigger house, he “first buys assets that will generate the cash
flow to pay for the house.” He shares that as you continue to grow your asset column, over time,
you’ll also see the growth of your income. And that’s why the rich keep getting richer– however,
the reason why the middle-class struggles are because taxes increase as their salaries increase.
“Wealth is a person’s ability to survive so many number of days forward– or, if I stopped
working today, how long could I survive?”
For example, if a person has $1,000 a month in cash flow from their asset column and they have
monthly expenses of $2,000 a month, they will only be wealthy once they have $2,000 a month
of cash flow to their asset column.
The average American only has less than $400 in savings, with an astounding 34% with none at
all.
So to sum up:
While most people assume that Ray Kroc, the founder of McDonald’s, is in the hamburger
business, Kroc once told an MBA class that he’s actually in the real estate business. That’s why
he carefully chose every location for his franchises. Today, McDonald’s owns more real estate
than any other organization in the world – even the Catholic church.
When someone asks the average person, “What is your business?” they typically respond with
their profession. However, they are not owners of the company they work for. They still need
their own business. Otherwise, they’ll spend their life working for everyone but themselves.
That’s the importance of minding your own business.
Financial hardship comes from spending your life putting money into someone else’s pocket
instead of your own. But by working for others, they’ll be dependent on pay raises, getting
second jobs, or working overtime.
Without a financial foundation, you’ll be stuck to your job and its security for the rest of your
life.
However, it’s important to note that entrepreneurship can be a tricky path. In one instance,
Robert Kiyosaki tried to get a loan. The loan committee saw that he owned a lot of real estate
properties. However, they struggled to understand why he didn’t have a salary or a 9 to 5 job.
Even though, at the time, he did own many assets such as Armani suits, art, golf clubs, and of
course, property.
It’s also good to note that as you sell your assets, the government taxes you on the gains. Robert
recommends to “keep your expenses low, reduce liabilities, and diligently build a base of solid
assets.” If you have children, advise them to build assets before they move out or fall into the
trap of the rat race.
Here are a few more assets that Robert recommends that you or your children acquire:
“Businesses that do not require my presence. I own them, but they are not managed or run by
other people. If I have to work there, it’s not a business. It becomes my job.
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”
Rich dad used to say, “If you don’t love it, you won’t take care of it.”
You can keep your day job, but you should also start buying assets like those listed above.
Since 90% of companies fail, Robert Kiyosaki’s goal is to sell the entire stock of a company
within a year of going public.
To become rich, you’ll need to buy luxuries last. People who buy luxuries first are often in much
debt. The aim is to build income-generating assets that can buy luxuries.
The poor often say, “‘Why don’t the rich pay for it?’ or ‘The rich should pay more in taxes and
give it to the poor.’” However, the real rich never pay taxes. The people who pay taxes are the
educated, middle class.
While poor dad knew the history of education, rich dad knew the history of taxes. Taxes
originated in England and America temporarily to pay for wars. It wasn’t until 1874 when
England permanently added income taxes as a requirement of its citizens. It started in 1913 for
Americans. An interesting tidbit about taxes is that it was initially only for the rich to pay. That’s
what governments told the poor and middle class to help get them on board with the idea. That
was how it got voted into law in the first place.
Poor dad: paid to spend money and hire people; government gains respect the bigger it gets
The rich don’t get taxed as tax laws help them to create jobs and provide housing. Thus, the
government is dependent on the middle class for their tax revenue.
The rich put their money into a corporation. Their asset puts income into their corporation, and
then corporate income can be used as income for their personal income statement. And the
expenses from their personal income statement can go into the expenses for the corporation.
Even though the masses continuously try to find ways to tax the rich, the rich consistently
outsmart them.
Something to remember about the government is that if they don’t spend their allotted funds,
they’ll risk losing money when the next budget is announced. They aren’t rewarded for being
efficient spenders. Yet, entrepreneurs are rewarded for financial efficiency. The mindsets
between the two are polar opposite.
The rich look for legal loopholes to avoid paying taxes. That’s why they often hire the smartest
accountants and attorneys.
In real estate, Robert Kiyosaki uses one of these legal loopholes as well. There’s a section called
1031 in the Internal Revenue Code that allows a seller to delay the payment of taxes in w when
they sell real estate provided that they buy a more expensive piece of real estate. Thus, by
consistently trading up, he delays getting taxed until the time comes to liquidate. This strategy
also allows him to continue building his asset column.
Knowing the law can help save you money (while also making sure you follow it).
When Robert was in his mid-twenties working for Xerox, he realized how disappointing it was to
look at his paycheck. His bosses would talk to him about promotions and pay raises. However,
that only made him see his deductions rise too. He could see himself becoming his poor dad.
This realization is what made him realize he needed to follow his rich dad’s path. So Robert
turned to minding his business by building out his asset column so he could invest in Hawaii’s
real estate market. This newfound motivation made him work harder at selling Xerox machines
at work. He knew he was building something bigger than himself.
After three years of hard work, his real estate business was making more than he was at Xerox.
His company bought him his first Porsche. His coworkers had no idea that he wasn’t spending
his commissions on the Porsche but assets.
Earn
Spend
Pay Taxes
Employees Who Work for Corporations
Earn
Pay Taxes
Spend
When companies downsize, employees often blame the owners for being unfair. In a news story
he saw, Robert Kiyosaki shares, “A terminated manager of about 45 years of age had his wife
and two babies at the plant and was begging the guards to let him talk to the owners to ask if they
would reconsider his termination. He had just bought a house and was afraid of losing it.” Inside
of us is both someone brave and someone who will get on their knees and beg.
However, when we’re so afraid that we start doubting ourselves, we fail to push forward.
Instead, it’s the bold who get ahead.
The result of gaining financial literacy and taking risks is “having more options.”
In the future, we’ll be seeing a rise in successful companies being created but also a surge in
companies failing– downsizing and laying off employees. It’s better to be making millions from
the assets you build than aiming to get a raise. This period is a great era to be building assets.
“The players who get out of the Rat Race the quickest are the people who understand numbers
and have creative financial minds.”
It is possible to have the money yet still struggle to move ahead financially.
Some people have a great opportunity present itself only to fail to have enough money to take
advantage of it. Others have a fantastic opportunity present itself only to lack the ability to
recognize that it’s a great opportunity (and they may even have the money to take advantage).
The strategy of the average person is: “Work hard, save, and borrow.” But instead of working
hard, they should aim to improve their financial intelligence so that they can make more money.
The people who get rich the fastest are those who realize that money isn’t real.
“The single most powerful asset we all have is our mind. If it is trained well, it can create
enormous wealth.”
Today, savers are considered losers. The reason for this is because interest rates have never been
lower. Plus, banks now charge you for holding your money.
During the stock market crash, Robert Kiyosaki was short of cash as he had his money in the
stock market and apartment houses. However, he knew this was the time to buy. He and his wife
had about a million dollars to invest in some amazing deals. He decided to shop for houses at the
bankruptcy attorney’s office. He asked a friend for a $2,000 loan with a return of $200, so he
could buy a $20,000 home that was worth about $75,000. He then ran an ad promoting the house
for $60,000. It sold within minutes. He asked for a $2,500 processing fee. Thus, giving his friend
his money back without using any of his own money. Thus, earning him a profit of $40,000 with
a promissory note. The whole process took him five hours.
At the time Rich Dad Poor Dad was published, there had been three stock market crashes in 30
years.
1. “Work hard. Pay 50% in taxes. Save what is left. Your savings earn 5%, which is also
taxed. OR
2. Take the time to develop your financial intelligence. Harness the power of your brain and
asset column.”
Most of Robert Kiyosaki’s financial growth comes from real estate and small-cap stocks.
“The problem with ‘secure’ investments is that they are often sanitized, that is, made so safe that
the gains are less.”
In one example, Robert Kiyosaki paid $45,000 on the house worth $65,000 that the owner was
struggling to sell. The first year he rented it out to a local professor. And after expenses, he nets
$40 a month. However, a year later, when the market picked back up, he sold it for $95,000.
Since he had used the money to buy a bigger property, a 12-unit apartment, he was able to defer
the payment of capital gains. He spent $300,000 on the apartment. And only two short years later
sold it for $495,000 and bought a 30-unit apartment building with a cash flow of $5,000 a month.
A few years later, he sold it for $1.2 million.
The best deals aren’t usually offered to newcomers. They’re often reserved for the rich. But the
more sophisticated you get at the game, the more opportunities you’ll be presented with. Most of
Robert Kiyosaki’s millions started with as little as $5,000 or $10,000 investments.
In the past, Robert has bought 100,000 shares at 25 cents a share before a company goes public.
Then, the company goes public, and whether it’s $2 each or if it flies to $20, you can sometimes
make a million dollars in less than a year.
“It’s not gambling if you know what you’re doing. It’s gambling if you’re just throwing money
into a deal and praying.”
Robert Kiyosaki shares, “Most people never win because they’re more afraid of losing. That is
why I found school so silly. In school, we learn that mistakes are bad, and we are punished for
making them. Yet if you look at the way humans are designed to learn, we learn by making
mistakes. We learn to walk by falling down. If we never fell down, we would never walk.”
People’s fear of losing causes them to not be rich. “People who avoid failure also avoid success.”
1. Find an opportunity that everyone else missed: see with your mind instead of your eyes
2. Raise money: know how to raise capital outside of a bank
3. Organize smart people: hire people more intelligent than you
During an interview with a journalist, Robert Kiyosaki learned that the journalist strived to
become a best-selling author. He realized she was a great writer and that she should pursue that.
She told him that she had tried, but no one was interested. He accidentally offended her when he
told her to take a sales course so she could promote herself. She became defensive.
She replied, “I have a master’s degree in English literature. Why would I go to school to learn to
be a salesperson? I am a professional. I went to school to be trained in a profession, so I would
not have to be a salesperson. I hate salespeople. All they want is money.” She packed her things.
Robert Kiyosaki gently pointed out that he was the best-selling author, not the best-writing
author. This statement only infuriated her more, and the interview ended.
The world has many successful and talented people: doctors, lawyers, dentists. And still, they
struggle financially. But as a wise business consultant once said, “They are one skill away from
great wealth.” If you took your skillset and paired it with financial intelligence, accounting,
investing, marketing, or law, you could achieve great wealth.
If that journalist had instead picked up a job at an ad agency to learn how to sell, she could go on
to create great wealth with her writing.
Rich dad says, “You want to know a little bit about a lot.” In school and at work, you’re expected
to specialize. Those who earn promotions tend to be specialists. However, Robert Kiyosaki’s rich
dad always recommended the opposite. That’s why, throughout the years, Robert would work in
different areas of his rich dad’s company. He was expected to attend meetings with lawyers,
bankers, accountants. It was essential to the rich dad for Robert to know every aspect of creating
an empire.
When Robert Kiyosaki had quit his high-paying job, his poor dad had a heart to heart talk with
him, failing to understand his mindset for quitting.
Poor dad: assumed Robert went to school to learn how to be a ship’s officer
The reason Robert had quit his job was so that he could learn how to lead people as his rich dad
said, “If you’re not a good leader, you’ll get shot in the back, just like they do in business.”
Robert Kiyosaki recommends taking on jobs where you can learn new skills instead of jobs that
pay the most.
The biggest fear for aging Americans is running out of money before they die. When you add up
health costs and long-term nursing home care, it’s quite likely that the average American will run
out of money during their retirement.
“Are workers looking into the future or just until their next paycheck, never questioning where
they are headed?”
The best advice Robert Kiyosaki has for those looking to earn more money is to pick up a second
job that’ll teach them a second skill.
It’s normal to feel a bit of resistance to that idea; you might not be excited to do something you
aren’t passionate about. But remember, you go to the gym not because you want to but because
you want to be healthy and live a long life.
Robert shares the story of an artist in Hawaii who inherited $35,000. He used the money to run
ads in an expensive magazine that targeted the rich. However, not a single person reached out.
He lost his entire savings. The artist is now trying to sue the magazine for misrepresentation.
However, the reality is that he didn’t have any advertising experience. When Robert asked this
artist if he’d be interested in taking a course, he said, “I don’t have the time, and I don’t want to
waste my money.” Most people focus on improving their product rather than learning how to sell
it.
Robert Kiyosaki’s friend Blair Singer shares, “Sales = Income. Your ability to sell– to
communicate and position your strengths– directly impacts your success.”
Most people fear rejection, which is why they’re often intimidated by sales and marketing.
Robert shares, “In conclusion, I became both dads. One part of me is a hard-core capitalist who
loves the game of making money. The other part is a socially responsible teacher who is deeply
concerned with this ever-widening gap between the haves and the have-nots. I personally hold
the archaic education system primarily responsible for this growing gap.”
There are five core reasons why even the financially literate don’t become financially
independent:
Fear
Cynicism
Laziness
Bad habits
Arrogance
Not even the rich, like losing money. No one does really. Rich dad says, “Some people are
terrified of snakes. Some people are terrified of losing money. Both are phobias.” That’s why it
was so crucial for Robert’s rich dad to teach his two sons how to take risks at a young age. The
younger you are, the easier it is to become rich.
Approach risk like a Texan. Texans both win big and lose big. Their attitude is what’s game-
changing. They feel a sense of pride when they win, but they still brag even if they lose. They
lack a fear of loss. Their loss inspires them.
Before you win, you lose. Like all those times you fell off a bicycle before you learned how to
ride it. Before people became rich, they lost money. Most people are more afraid of the pain of
losing money than the happiness of becoming rich.
“Rich dad knew that failure would only make him stronger and smarter.”
Losers are defeated by loss. Winners are inspired by loss. You can still hate losing without being
afraid of it.
Most people invest in low-yield mutual funds because it’s the safe thing to do. But that’s not the
portfolio of a winner.
Don’t let doubt cause you not to act. Avoid remarks from friends and family, such as, “‘What
makes you think you can do that?’ ‘If it’s such a good idea, how come someone else hasn’t done
it?’ ‘That will never work. You don’t know what you’re talking about.’”
Investors know that when it’s a period of doom and gloom, that’s the best time to make money.
Robert’s friend Richard recently asked him for advice on buying property. The two of them
identified a two-bedroom townhouse for only $42,000. Others at the time were selling for
$65,000. He bought it. But after talking to a neighbor, he backed out, thinking he got a bad deal.
A short few years later, the property was worth $95,000. And Richard’s small investment of
$5,000 could’ve helped him get out of the Rat Race. Doubt can be a deal killer.
When it comes to financial education, you need to know the difference between good debt and
bad debt. Analyze instead of criticizing.
Most people say they’re too busy to focus on their wealth and health, but really they’re avoiding
it.
“Rich dad believed the words ‘I can’t afford it’ shut down your brain. ‘How can I afford it?’
opens up possibilities, excitement, and dreams.” Instead of buying his kids everything they
wanted, rich dad asked them to think about how they can afford it. Rich dad never gave Robert
or Mike anything. The boys had to pay for college on their own.
The financial struggle often comes from bad habits. You need to pay yourself first. Otherwise,
you likely won’t be left with anything after paying your bills. That’s because if you pay yourself
first and fail to have enough money left over for bills, you’ll need to find new ways to earn more
money. It becomes a motivator – especially when debt collectors start calling.
Robert said this was also true for him in real estate. He said he could find about four to five
excellent properties a day, whereas others may look and find none.
Read how-to books with formulas on topics you want to learn more about.
Read: The 16 Percent Solution by Joel Moskowitz
Find the expert who has done something you want to do and pick their brain so you can
learn from them.
Many classes are free or low cost, search the internet for them so you can absorb more
knowledge.
Make lots of offers.
Robert submits offers on multiple real estate properties that he wants. He leaves the deal
up to the real estate agent, who is the expert, whereas he isn’t.
Most sellers ask for too much money, and until there’s a second offer, it’s hard to know
what the right price is.
You’d be surprised at how many people would say yes to an offer.
Jog, walk, or drive a certain area once a month for ten minutes.
You’ll find some of the best real estate investments by driving around. He might talk to
postal workers, moving truck workers, retailers, and so forth to better understand a
neighborhood.
Most people buy with real estate agents. Robert Kiyosaki buys at the foreclosure auction.
Look for people who want to buy first. Then look for someone who wants to sell.
When buying property, find a seller first then find a person who’s looking to sell their
property and buy through them.
Think big.
If your business is buying something in bulk, call some friends up to see if they’re
looking for that as well. Then, you can negotiate deals for having a large bulk purchase,
so you get the best deal on what you’re buying.
“All the big companies on the stock exchange started out as small companies.”
Act now!
Final Thoughts
Robert’s friend was once trying to save up for his four children’s college educations. But with
only $12,000. It was clear it wasn’t going to happen any time soon. He advised his friend to buy
a property in Phoenix since there was a slump in the market. After two weeks, they found a
three-bedroom, two bathroom home in a good area. The homeowner was desperate to sell. They
ended up buying the property for $79,000, even though the owner wanted $102,000. His friend
needed a down payment of $7,900. Each month after all expenses were paid, his friend pocketed
$125. He planned to keep the house for 12 years. He used his $125 to pay down the mortgage
even faster. Three years later, someone offered him $156,000 for the house. Robert advised him
to sell it using a 1031 tax-deferred exchange. Next, he bought a mini-storage facility. After three
months, he was making $1,000 a month that he put into the college fund. A couple of years later,
he sold that mini-warehouse for close to $330,000. His next investment made him $3,000 a
month in income, going back to the college fund. The man now feels confident in his ability to
pay for his children’s college education. And it all started with only $7,900.
Ordinary earned
Portfolio
Passive
Rich dad: portfolio and passive, make money work for you
“The key to financial freedom and great wealth is a person’s ability to convert earned income
into passive and/or portfolio income.”
Warren Buffett advises that “Risk comes from not knowing what you’re doing.”
Rich dad would often say, “If you want to be rich, you must know what kind of income to work
hard for, how to keep it, and how to protect it from loss. That is the key to great wealth… If you
do not understand the differences in those three incomes and do not learn the skills on how to
acquire and protect those incomes, you will probably spend your life earning less than you could
and working harder than you should.”
Your destiny relies on how you spend your money and your time. Your family’s future will be
determined by your choices today.