28/12/2022
I am once again here with an intriguing and absorbing book about financial literacy.
This book, RICH DAD, POOR DAD, is written by ROBERT T. KIYOSAKI which consists of Nine Chapters and is divided into three parts.
It has got 213 pages.
Read these quotations to get some information about it.
1. The love of money is the root of all evil.(Poor Dad/Educated Dad)
2. The lack of money is the root of all evil.(Rich Dad/Uneducated Dad)
3. Poor Dad had the habit of saying, 'I cannot afford it.'
4. Rich Dad thought, 'How can I afford it?'
5. Study hard so you can find a good company to work for.(Poor Dad)
6. Study hard so you can find a good company to buy. (Rich Dad)
7. "When it comes to money, play it safe. Do not take risks." (Poor Dad)
8. 'Learn to manage risks.' (Rich Dad)
9. The poor and middle class work for money. The rich have money work for them.
10. 'A job is really a short-term solution to a long-term problem.'
Reading Rich Dad, Poor Dad is an amazing investment of time. You get more returns than your investment the moment you start devouring page after page of this book. For the beginners who desire to achieve economic prosperity, Kiyosaki offers workable insights based on real life experiences. It teaches us ideas about applied economics that should have been taught to us in schools or at home.
The principles of financial literacy- Accounting, Investing, Understanding markets and relevant laws are explained in a way that even a layman can fully relate to them. The author emphasizes the importance of sound finances for a better meaningful life. He argues that while one may be academic genius, a topper, a gold medalist, there is every possibility of ending up as a failure without financial know-how.
The book teaches the difference between assets and liabilities in a way we never imagined. The author says that while the rich invest in assets and let money work for them, the middle class invests in liabilities naively considering them as assets and work for money.
For example, expensive house/car is a liability for rich and an asset for the poor. The rich take risk, but the poor always play safe when it comes to investment and returns. The rich create assets to pay their expenses, the poor balance income and expenses without ever pondering about it. The difference, the author says lies in thinking. "If you have to invest in something, invest in financial literacy", the author asserts. It is lack of financial literacy that middle class salaried people think mutual funds as a safe option for investment, reposing more faith in the fund manager than their own understanding of finances.
All this, the author mentions, was taught to him by his rich dad, a man whom he met in childhood. The Poor Dad tells him "I can't afford it", while as Rich Dad teaches him "How I can afford it." This difference of mindset between the two Dads emerges from an understanding of finances. He expects his experiences will help others in arriving at better financial decisions.
If you have already read it, share your views.
