SUMMARY ON

SUBMITTED TO SUBMITTED BY

Dr.KUNAL GAURAV T.KRUSHI KUMAR

(MKTG DEPT) ROLL NO-109

SECTION -C

DetailsRICH DAD , POOR DADAuthor : Robert T. Kiyosaki Publisher : Plata Publishing , LLCPrinted in USAFirst Edition : 1997 Category : Economics

About the Authors-Robert T. Kiyosaki "The main reason people struggle financially is because they spent years in

school but learned nothing about money. The result is, people learn to work for money... but never learn to have money work for them." says Robert.

Born and raised in Hawaii, Robert is fourth-generation Japanese American. He comes from a prominent family of educators. His father was the head of education for the State of Hawaii. "After high school, Robert was educated in New York and upon graduation, he joined the U. S. Marine Corps and went to Vietnam as an officer and a helicopter gunship pilot.

Returning from the war, Robert's business career began. In 1977 he founded a company that brought to the market the first nylon and Velcro "surfer" wallets, which grew into a multi-million dollar worldwide product. He and his products were featured in Runner's World, Gentleman's Quarterly, Success Magazine, Newsweek, and even Playboy.

Leaving the business world, he co-founded in 1985, an international education company that operated in seven countries, teaching business and investing to tens of thousands of graduates.

Retiring at age 47, Robert does what he enjoys most... investing. Concerned about the growing gap between the haves and have nots, Robert created the board game CASHFLOW, which teaches the game of money, here before only known by the rich. Although Robert's business is real estate and developing small cap companies, his true love and passion is teaching. He has shared the speaking stage with such greats as Og Mandino, Zig Ziglar, and Anthony Robbins.

Robert Kiyosaki's message is clear. "Take responsibility for your finances or take orders all your life. You're either a master of money or a slave to it." Robert holds classes that last from 1 hour to 3 days teaching people about the secrets of the rich. Although his subjects run from investing for high returns and low risk; to teaching your children to be rich; to starting companies and selling them; he has one solid earth shaking message. And that message is, Awaken The Financial Genius that lies within you. Your genius is waiting to come out.

This is what world famous speaker and author Anthony Robbins says about Robert's work.

"Robert Kiyosaki's work in education is powerful, profound, and life changing. I salute his efforts and recommend him highly."

During this time of great economic change, Robert's message is priceless.

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 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 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, 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 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.”

KEY LESSONS

We are aware of the fundamental problems of working for money, I will sum up a few of the key lessons from the book which can help you achieve a life where you are no longer dependent on your paycheck and social security.

1. For most people, their profession is their income. For rich people, their assets are their income.

2. If I want to buy something, I must first generate enough cash flow from my assets to cover these expenses. Buy luxuries last, not first.

3. Excess cash flow generated by my assets should be reinvested into other assets.

4. Do not simply aim for more income, aim for more assets.

5. Keep your expenses low and reduce your liabilities.

6. Create a corporation to protect your assets and reduce tax expenses. An employee earns, gets taxed, and then spends what is left. A corporation earns, spends everything it can, and then gets taxed on what is left. This is the biggest legal loophole that the rich use!

7. Know a little about a lot. Learn something about accounting, investing, markets, the law, sales, marketing, leadership, writing, speaking, and negotiating. An investment in knowledge pays the best interest.

8. Work to learn, don't work to earn. Find a job where you can learn one or more of the above mentioned skills.

9. Do not simply buy investments. First invest in learning about investing.

10.You will become what you study, so choose your study materials carefully. Find people who are the best in their field. Then study and emulate them.

11.Every rich person has lost money at some point, but many poor people have never lost a dime. Playing not to lose money means you will never make money. "Winning means being unafraid to lose."

12.Failure inspires winners and defeats losers. When something does not work out the way you planned, let it inspire you to try a different approach. Learn and move on.

13.Be in control over your emotions. Do not let fear or opinions of the general public dictate your actions. When stock prices decline, people run away. However, when the local supermarket has a sale, people buy as much as they can.

14.Most sellers ask too much. It is rare that the asking price is lower than something is worth.

15.Surround yourself with people who are smarter than you, and pay them well!

16.Saying "I can't afford it" shuts down your brain. Asking "How can I afford it?" opens up your brain and triggers your financial genius to come up with a creative solution.

17.Pay yourself first. Each month, first invest a certain amount of money into income generating assets before you pay your bills. You come up short? Use this pressure to pay to inspire you to come up with innovative ways to get enough money to pay the bills before the bill collector comes knocking at your door. This is a difficult, but very important principle. However, it does not mean you should be irresponsible. Always pay your bills. Just pay yourself first, not last. If you pay yourself last, you would feel no pressure, but you would probably not come up with new sources of income either.

18.Have a clear purpose in mind. Why do you want to earn more passive income? For me, because I do not want to work all my life. I want to have control over how I decide to spend my time. Also, I want to support my parents financially, because they have been working hard all their life and they deserve an amazing retirement. Write down yours, because it will keep you motivated.

19.Listening is more important than talking. Do not constantly argue and think with your mouth, but instead ask questions and absorb new ideas.

20.On the market: do not follow the crowd, and do not try to time the market. Profits are made when you buy, not when you sell.

CONCLUSION

Not everyone seems pleased with the rather blunt way Robert Kiyosaki explains these money making principles in his book, and I partially agree. However, there is much knowledge to be gained if you are able to look past that layer. If you found these lessons useful, please share this article with people that you care about, because I truly believe that applying these principles consistently can lead to tremendous results!