14 Lessons Everyone Should Learn from ‘Rich Dad Poor Dad’

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Rich Dad Poor Dad is the most sold personal finance book of all time. ALL-TIME. So there has to be some good stuff in there right? Well, we think so and we’re here to share some of our most important takeaways after reading this classic. The following ideas are paraphrased from “Rich Dad Poor Dad”.

#1 Your wealth is not dependent on formal education

This is something we have come to accept in the age of college-dropouts becoming tech-billionaires. But Kiyosaki goes even a step further. He describes his highly educated father who works in academia as his ‘Poor Dad.’ This is something that hasn’t been talked about. A highly educated person can be poor? It all has to do with how he defines the word which brings us to the next point.

#2 There is a difference between ‘poor’ and ‘broke’

In the book, Kiyosaki refers to his biological father as his ‘poor dad.’ Early on he explains what he means by this specific word choice.

“There is a difference between being poor and being broke. Broke is temporary. Poor is eternal”

He goes on to explain that while being broke is a temporary condition, being poor is a mindset people can get locked into. He talks about how his ‘Rich Dad’ would consider himself rich even when he was broke. In other words, he did not let his temporary situation of being broke define him permanently.

#3 You Should Invest in Education

Wait a second… didn’t you just say wealth is not dependent on education? Kiyosaki emphasizes throughout the book that you should invest in yourself through education. However, this education can be anything it does not have to be ‘formal’ like a collegiate degree. He mentions that he attends seminars to learn new skills regularly. 

Today, you don’t have to go to a hotel conference center on a Saturday morning to learn something new. Investing in yourself via education is easier than ever with resources like Youtube, Udemy, and Skillshare among countless others. 

Podcasts are becoming a great tool as well. Check out our podcast guide here to learn more about finance.

#4 Having a job does not make you financially secure

20 years and a few economic meltdowns later and this isn’t such a radical idea. However, it is still one of the most important ideas presented in this book. He explains that having a job is only a short term solution to a longer-term problem. As soon as you stop working you stop making money, meanwhile your expenses to support your life continue on and on and on.

Throughout the book, Kiyosaki shows how building assets that generate wealth is much more secure than spending 8 hours a day hoping to be paid at the end. Working for money is how you stay in the ‘rat race’ which leads into his next, and probably most cited lesson.

#5 “The poor and middle-class work for money. The rich have money work for them”

To illustrate this lesson, Kiyosaki tells a story from his childhood. His ‘Rich Dad’ was trying to teach him the importance of having money work for you instead of working for money. To show him this lesson, he hired Kiyosaki to work in his store for a small wage. 

After a few weekends, Kiyosaki decides to follow ‘Rich Dad’s’ advice and stop working for money but he still wants to make some money. So instead, he finds a business idea. The convenience store has comics that are thrown out every week. So he takes them and creates a comic book library that charges an entrance fee. 

The comic book store ended up making way more than his working wage AND he has the comic books to keep. Will you get rich renting out comic books to neighborhood kids? Probably not but it illustrates the idea.

I’m sure that you can find your own comic book business opportunity. 

#6 Being successful and educated does not make you financially literate p. 79

*mic drop*

Having money and education and knowing what to do with that money and education are two very different things. Make sure you are focusing on the latter half. 

Reading into articles like this is a good start, keep going. 

#7 Wealth is not the amount of money you have in the bank

This is a huge misconception that we want to squash. Wealth is not the money you have in your bank account. It’s not even your net worth. Your level of wealth is how long you can live on what you have built. In other words, if you couldn’t make any more money from your job, how long could you last?

This is when our stereotype of wealth falls apart. People with brand new cars and a massive house may seem wealthy, but their lifestyle expenses may outweigh their income-generating assets and savings.

#8 Not all purchases are an asset to you

If you walk away with nothing else, make sure you understand this! Many assume that something is an asset just because it is pricey. 

That is far from the truth. 

Kiyosaki says it best “assets put money into your pocket, liabilities take money out of your pocket.” Next time you are looking to buy that fancy new car, think about whether it is putting money in your pocket or taking it out.

Some of the things that Kiyosaki considers assets:

  • Businesses that do not require your presence
  • Stocks
  • Bonds
  • Income-generating Real-Estate
  • IOUs
  • Royalties

#9 You should focus on assets not income

Okay but what about paying the bills? You need income for that, right? 

If you read and mastered the previous lesson, you now that assets put money into your pocket. So, if you focus on building those income-generating assets you are building both your assets and your income. 

Whereas if you just focus on income, and that income goes away you aren’t even left with the underlying assets. 

Think back on the convenience store story. What if Kiyosaki had still chosen to work at the convenience store instead of starting his comic book business and the store shut down? He would have been left with nothing. 

Since he chose to build income-generating assets (the comic collection) the store shutting down would only affect him getting new comics. Not ideal, but much better than the first situation. 

#10 Homes are no longer the safe investment they once were

The author, Robert Kiyosaki acknowledges that this is one of the most controversial ideas in the book. However, he does provide some statistical evidence to support this idea. Most Importantly, the idea is that parking your majority net worth into your primary residence is no longer advisable.

This is not to advise against all real-estate investing. Kiyosaki goes on to detail several real-estate investments that helped him build wealth however, he was not depending on these for a roof over his head.

#11 The ‘Rich’ take advantage of corporations

We’re not experts in corporations and we won’t pretend to be. But what we do know is that you don’t have to have a large business to use a corporation to your financial advantage. 

If you want to level up and start using this to your advantage, there is a whole other book on the topic that can be found here. 

#12 “Pay yourself first”

This is an idea that has since been echoed by several other money gurus. It works like this, instead of paying all of your expenses first, you pay yourself by setting money aside for savings and investments. 

This is not to suggest you avoid paying bills. But instead, you should pay yourself first so you are guaranteed to build wealth. This may pressure you when it comes time to pay rent but Kiyosaki advises to use this pressure to rise to the challenge. He says this pressure will help you to get creative about making ends meet all while assuring that you are building some wealth. 

#13 Use assets to pay for luxuries

Once you have focused on asset building and are paying yourself first you’ll move on to this lesson. 

We want to enjoy life and its luxuries. But how can we do so in a smart and sustainable way? 

Kiyosaki suggests changing your thinking. Instead of saying “how much will it take to buy this” you should be thinking “what assets do I have to attain to pay for this.” 

Emptying your assets for luxury items is a great way to start chipping away at your wealth instead of building it. 

#14 When looking at someone successful ask them how they came to be successful

We’ve all been there… you see someone living their best life and you dismiss it as luck. They’re just lucky, they were born wealthy, etc. But Kiyosaki challenges you to speak up instead of being dismissive. Ask them how they got to where they are. You will be surprised at how open people are to share their success with others.