Project in Finance: Rich dad poor dad summary, evaluation ang learning

1. Dad
Rich Dad Poor
Robert T. Kiyosaki
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“What the rich teach their kids about
Robert Kiyosaki has challenged and changed the way tens of millions of people around the world think
about money. With perspectives that often contradict conventional wisdom, Robert has earned a
reputation for straight talk, irreverence and courage. He is regarded worldwide as passionate advocate for
financial education.
“The main reason people struggle financially is because they have spent years in school but learned nothing
about money… but never learns to have money work for them”.
Rich Dad Poor Dad -The# 1 personal Finance book for all time!
- Robert T. Kiyosaki
“Rich Dad Poor Dad is a starting point for anyone looking to gain control of their financial future.”USA TODAY
www.richdad.com

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Finance
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Rich Dad Poor Dad
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Robert T. Kiyosaki
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Prepared by:
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Mary Grace V. Mancao
III-BSHM
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Submitted to:
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Mary Grace Arzaga
October 12, 2012
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Richdad Poordad – Robert T. Kiyosaki
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3. Summary
Robert T. Kiyosaki is a simple 9 year old boy living a simple life with his father, the
educated one (poor dad). Robert regard his biological father as the poor one because he is
educated person but not financially intelligent. Together with Mike, his best friend they
want to become rich because other kids do not want to play with them, they said they were
“poor kids”. That’s the time they ask help from Mike’s dad, the less educated one (rich
dad). He considers his best friend’s dad as his rich dad because he became his first mentor
on financial literacy. The rich dad agreed when the two boys said they want to learn how to
become rich. The first lesson that mike’s dad teaches them is how to get out into a “rat-race
“. The rich dad said “Most people are afraid of not having any money. That's why they
take a low paying job. ” He said to them that they must “not work for money and let the
money work for them”. The rich dad wants the two boys to overcome the fear of working for
nothing. Those teaching give them the lessons that they had adopt it in life. Years after,
Mike inherits his father’s business and grows this into an empire. And like his father he
raises his son to control the business when he gets older. On the other hand, Robert
became successful in life together with his wife Kim and at the age of 47 he retired. People
around keep asking him how to become rich and he always say that “if you want to become
rich, you must need to be financially literate.” He also said that “Intelligence solves
problems and produces money. Money without financial intelligence is money soon gone.”
This teaches the lesson of teaching people not to be wise with your money once you have
it, but rather be smart with your money before you have it. He also said that in financial
literacy a person must know the difference between an asset and liabilities. An asset can
put money on your pocket and a liability can take your money out of your pocket. Robert
also point out the idea of “minding your own business”. In other words, “one should not mind
their employer’s business but rather strive to be their own boss and have their own
business”. Rich people owned a business while poor people work for business but anybody
can have business as long as they have determination and these skills cannot be learned
from school. Kiyosaki remember what his rich dad told him about the history of taxes and
how important owning a business can make a person rich and avoid taxes. He explains that
corporations are just a legal body created by a legal document. The rich used the power of
corporation against taxation because it offers a lot of tax advantages and protection from
lawsuits. He also emphasize in the story about a woman who is a news paper reporter. She
Richdad Poordad – Robert T. Kiyosaki

4. has a Master’s Degree in English Literature. This woman wants someday to be a
bestselling author like Robert but her novels not seem to go anywhere that’s why she stick
into that paper job. She asks for any suggestion from Robert and he suggested that she
must study sales, but the woman get offended, why would she study sale if she want to be a
bestselling author. Kiyoski’s point is to study sales in order to know some strategies of
advertising products especially her novels but schooling is not enough, a person must gain
knowledge through experience. The rich people create money; it is not necessarily that
you need to be educated to become rich and successful because in business it is a matter
of using mind and talent. Although schooling is important but there are some lessons in life
that cannot be learned from school and sometimes it is by a person’s own experience. In
learning’s Robert said “it is important to find employment where you will learn a lot of
different skills even if it means earning less in you take home pay” meaning, working not for
money instead work to learn.
Evaluation
The book does a fantastic job teaching how to think about work and money. I like
the way it is explained at a level that anyone can understand, specifically the concept
around how the rich buy assets, and the poor buy liabilities. This book has valuable lessons
for people of all ages. It was written because the author believes that traditional schooling
is also very important but no longer enough in regards to financing. Let me say right away
that I am very glad it was written and I found the book very valuable. The thoughts and
ideas I obtained from the book have made me realize that I can control of my financial future.
Most people are not rich, wealthy and not even literate when it comes to the world of
money. Rich Dad Poor Dad simply helps guide the average person to start thinking
differently when it comes to money. It is the best starting point that one can take on the
road to financial literacy. For all of those who have always believed there is more to life than
our everyday routine and for those who know there has to be a better way, but just don't
know what it is. You have to read Rich Dad Poor Dad, I guaranty it will open your eyes
and mind, explode the myth that you need to earn a high income to become rich, challenge
the belief that your house is an asset, show parents why they can’t rely on school system to
teach their kids about money, define once and for all an asset and a liability and teach you
what to teach your kids about money for their future financial success. In case you believe
Richdad Poordad – Robert T. Kiyosaki

5. working on a company can make you out of struggle, think again, you will never be rich
working for someone else instead, look for someone that can work for you. Rich Dad Poor
Dad will relate to you in so many ways, and if you’re open minded, it may just help you to
change your life.
Learning
Chapter 1: Rich Dad, Poor Dad
You can learn some valuable lessons from the two dads but when you compare them you
can see the contrasts between their views about working hard, getting an education, saving
and investing and realizing how habits of the rich and poor significantly differ. One would
say “go to school, and after you finish your studies find a high paying job”. The other would
say “there are some skills you cannot learn from school”. There are many different views
and ideas that can influence a lot of mind.
Chapter 2: The Rich Don’t Work for Money
Base on the book there are two main emotions which can prevent people from
developing wealth: fear and desire; fear of not being able to pay expenses or fear of losing
money keep many focus in the day-to-day work, preventing many from evaluating
investments and other sources of income. The desire to keep physically good looking
appearance by buying expensive clothes or even to become “in with the trend” by buying
gadgets drives expenses so high that people have no choice but to stay focused on their
jobs to maintain their lifestyle. Lesson one is all about understanding those two emotions
and stopping them from hindering one’s success. The Rich Dad was more focused on ways
of creating his own money, money that increases even if you don’t work, rather than waiting
for the next job with a pay raise.
Chapter 3: Why Teach Financial Literacy?
Financial literacy is simply means the study of managing one’s finances. There are a
few basic terms one would need to know in order to understand financial literacy. The first
is Income and Expenses. “Income” is simply the amount of money you earn like wages,
Richdad Poordad – Robert T. Kiyosaki

6. salaries, etc. “Expenses” are things like taxes, food, rent, clothes, fun, and transportation.
The second one is the Asset and Liabilities. An “asset” is something that puts money into
your pocket like stocks, bonds, investments. A “liability” is anything that takes money out
of your pocket home mortgages, loans, credit card debts. The rich keep his income and
used the return of their investment to cover up their expenses. While the poor uses their
salaries and wages to cover up their expenses. It simply means one must invest to cover his
expenses rather than waiting for the pay raise.
Chapter 4: Mind Your Own Business
As mentioned on the previous chapter, focusing on your asset is the
key quality that must be developed in order to gain wealth. The rich
focus on improving the size of their investments rather than simply
waiting or demanding pay rises in their income. This means keep your
expenses low, reduce your liabilities and build a base of solid assets.
Chapter 5: The History of Taxes and the Power of Corporations
By creating a personal corporation, the rich are able to avoid many of the personal
taxes because it offers a lot of protection from them and there is a corporate exemption.
But take note that not paying taxes is called tax evasion and it is illegal! By filing as a
corporation, the rich are able to mitigate their losses to only the amount they invested in the
corporation. They are able to pay taxes after they pay for expenses. For people who have
jobs, it’s the opposite case where taxes are taken out of pay checks before one is able to
cover expenses. In Comparison the rich people with corporations earn, spend and pay
taxes while the people who work for corporations earn, pay and spend taxes.
Chapter 6: The Rich Invent Money
Behind the wealth, a combination of financial intelligence and a little
bit of guts is what behind in this chapter. Self-doubt holds back a lot
of people. In order to gain wealth, self-confidence is really needed.
While saving at the bank seems secure, it is not worthwhile because
savings rates are often below the rate of inflation. “Scared money
doesn’t make money.” Kiyosaki follows the same logic, if you truly
Richdad Poordad – Robert T. Kiyosaki

7. want to see your investments grow exponentially you must be willing to
put in the money in places that show relative risk.
“Find the game where you can win, and then commit your life to playing it; and play to win.”
― Robert Kiyosaki
Richdad Poordad – Robert T. Kiyosaki