Rich Dad Poor Dad is a well known book that shares a dichotomy of views in the area of financial education for their child. And If I were to summarise the entire book into a single sentence, it would be….
True Wealth stems from the absence of Fear and Greed.
ME
Rich Dad is distinctly different from Poor Dad not in terms of doing their best as a dad but in terms of how they perceive how life should be. The main difference between their perspectives stems from the fact that one of them trying to make sense and outplay the system whereas the other struggles to survive.
I will be referencing one of the pages of the book to explain further
Some summarised points to note
1. Poor Dads mistaken Liabilities as Assets
People usually invests in homes and cars and treats them as assets however to a people with a rich mindset, they will actually treat those as liabilities instead. This is because assets should work for the owner and not lose value or charges debt to the person.
2. Poor Dad works for money while Rich Dad makes money work for him
Working for money will lead to an endless cycle. The rich mindset sees money as a tool rather than an end to labour.
3. Poor Dad Avoids Risk instead of managing it like Rich Dad
Risk to a person with a “rich mindset” is a manageable quality however to others, it should be avoided as much as possible
4. Poor Dad earns more to spend more, Rich Dad earns more to spend less
Spending within your means is a “poor mindset”, as you will only want to earn more to spend more. Whereas the rich does not seek to spend more in the first place. It is fallacious to think all rich people want to live a life of luxury, in fact, most “rich” people are not truly rich but riddled in debt.
5. Rich Dad believes that being rich is a state of mind and not about how much one has
Money and possessions does not make one rich, it is the motivation they have in them which determines if they are rich or to frightened to be poor.
6. Work to Learn, not for money
When we work, we should look forward to learn and not earn. Rich Dad emphasised that earning money should not be the goal we have in our minds, less we be trapped in the cycle of endless financial struggles.
Closing Thoughts
I do understand that many of us are guided by conservative principles. To be honest, a conservative approach is a working formula for simple happiness. However if you know you want more in life, do something about it. This is because a mediocre mindset can only give you a mediocre life.
At the end of the day, do what you feel you want to do and own your decisions. I strongly disagree that the book teaches us to want to be rich; contrary to that, I think it just merely tells us to sway away from the norm so that we can make decisions that are truly our own.
Is there any Hypocrisy in the book?
For one to be rich, many must be Poor, its true that those of us who are resourceful will more likely emerge as a victor in the game of life and finance. I know that the author might be painting to us an ideal picture but I guess we can still distil that which is useful for ourselves and make the best of it.
