SSS #37: Rich Dad Poor Dad


I started reading Rich Dad Poor Dad by Robert Kiyosaki to Luna last week.

I was hoping we'd be done by now, but Luna had other plans: mainly crying, requiring diaper changes, and falling asleep as I'm reading to her.

Rich Dad Poor Dad happens to be one of my favorite books of all time. I've read it at least 5x.

Now that I'm reading it to my kid, it's hitting me differently. I want to be able to teach her the principles from this book instead of just learning them for my own benefit.

So I've started taking Notes...

We're only 25% through the book so the notes are incomplete. I'll be sure to include the link again in a future email once they're done.

For now, please accept what I have so far as my creative output for the week.




Rich Dad Poor Dad

Rich Dad Poor Dad isn’t a personal finance book. It doesn’t teach you to cut back on expenses or invest in the stock market.

It’s a book about the difference in how rich people view money vs. how the poor and middle class view money. It’s told from the perspective of Robert Kiyosaki as a young man.

Despite earning a high income, Robert’s biological father, a well-educated professor, is his “Poor Dad”.

Robert’s best friend, Mike, has a dad who is in the early stages of building his empire. Mike’s dad is Robert’s “Rich Dad”.

Mike and Robert look to Mike’s dad to learn how to become rich. Instead of giving them a playbook to follow, Rich Dad teaches them lessons the hard way: through life-experience.

Differences in Opinion:

Throughout the book, Robert points out how his Rich Dad and Poor Dad differ in viewpoints. They are listed below.

Poor Dad: Work for a corporation.

Rich Dad: Own the corporation.

Poor Dad: Be a smart person.

Rich Dad: Hire smart people.

Poor Dad: Kids learn mostly at school.

Rich Dad: Kids learn mostly at the dinner table.

Poor Dad: The love of money is the root of all evil.

Rich Dad: The lack of money is the root of all evil.

Poor Dad: I can’t afford it.

Rich Dad: How can I afford it?

Poor Dad: The rich should pay more in taxes to take care of those less fortunate.

Rich Dad: Taxes punish those who produce and reward those that don’t produce.

Poor Dad: When it comes to money, play it safe and don’t take risks.

Rich Dad: Learn to manage risk.

Poor Dad: Our home is our largest investment and our greatest asset.

Rich Dad: Our home is a liability. If it were our largest investment, we’d be in trouble.

Poor Dad: Work long and hard so you can one day rely on company and government sponsored benefits.

Rich Dad: Work long and hard to become self-reliant.

Poor Dad: Become a master at writing the perfect resume.

Rich Dad: Become a master at writing business and financial plans in order to create jobs.

Poor Dad: I have kids, so I’ll never be rich.

Rich Dad: I have kids, so I must be rich.

Poor Dad: I’m not interested in money because money doesn’t matter.

Rich Dad: Money is power.

Lesson #1: The Rich Don’t Work for Money

Robert’s father, Poor Dad, suggested Mike and Robert seek guidance from Rich Dad on how to make money. Rich Dad owned a chain of convenience stores on the island of Hawaii. Think of them as 7-11s.

After a brief meeting on a Saturday morning, Rich Dad offered a job to his son, Mike, and his friend, Robert. They were instructed to dust and restock shelves for 3 hours every Saturday for 10 cents an hour.

10 cents an hour, even by 1950’s standards, was not too exciting. Working on Saturdays meant no sleeping in and giving up their little league baseball team.

This was understandably a huge sacrifice for a pair of 10 year old kids. However, they agreed because Mike’s dad promised to teach them how to become rich!

Three weeks pass by and Mike’s dad has yet to speak to them outside their initial meeting. Robert felt as if he hadn’t learned anything about becoming rich.

Robert grew frustrated and told Mike he was on the verge of quitting. Anticipating this moment, Mike said it’s time to meet with his father, Rich Dad, again.

Before the meeting, Robert’s biological father, Poor Dad, advised Robert to demand a raise to at least 25 cents an hour. If Rich Dad didn’t comply, Robert should quit!

The meeting with Rich Dad began and Robert was almost in tears and ready to quit. Robert fought hard for himself and accused Rich Dad of not holding up his end of the bargain. He hadn’t taught Robert anything about becoming rich.

Rich Dad was proud of Robert for fighting for himself, but laughed at Robert because he “sounded like most of his employees that no longer work for him”.

Rich Dad explained entitlement to the two kids and urged them to take responsibility. He also encouraged them to get creative. When the chips are seemingly stacked against you, take ownership of your problems and come up with a solution.

Lesson #1: The Rich Don’t Work For Money

To drive the point home, he changed the kids’ wages to $0 per hour.

Rich Dad wanted to help these kids avoid falling into the rat race, or the money trap. The money trap is the never ending pattern of fear and greed.

The fear of not having money drives us to wake up to a blaring alarm, go to work with people we don’t like, and slave away at a job we’d rather not do.

Greed kicks in the day the paycheck hits our account. It allows us to acquire the things we do not need to impress the people we do not like to satisfy a void in ourselves. The cycle repeats itself for 50 years.

Three more weeks passed by before their next meeting. This time, Rich Dad offered the pair of boys a raise to 25 cents an hour. They suspected it was a trick, so they declined. He raised his offer all the way up to $5.00 an hour, more than most adults were making at the time. They were able to resist.

The kids understood if they took the offer, it meant they had a price. It meant they could be bought. It would be the beginning of an endless pattern driven by fear and greed.

“But people need jobs that pay money to pay their bills!” the kids relented. That’s true. However, a job is often a short term solution to a long term problem.

The long term problem: becoming a master of your emotions.

A little bit more money is the carrot at the end of the stick. The person holding the stick is getting where he wants to go. What does the donkey get? A carrot at the end of a long day. Another carrot will be there tomorrow, as long as the person riding the donkey has somewhere to go.

The Rich Know How To Make Money.

“The sooner you forget about needing a paycheck, the easier your adult life will be. Keep using your brain, work for free, and soon your mind will show you ways of making money far beyond what I could ever pay you”.

Mike’s dad encouraged the kids to look for opportunities. He was sure their lack of pay would force them to be more creative.

It wasn’t long before Robert noticed the manager of the convenience store was tossing out several unsold comic books every Saturday.

Robert and Mike gathered all of the unsold comic books and organized them in Mike’s basement. They built a comic book library and charged a 10 cent admission from the hours of 2:30 - 4:30pm everyday after school. They paid Mike’s sister to be the receptionist and bookkeeper.

This shtick didn’t last long, but the kids were finally in business!


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