Robert Kiyosaki had two fathers: a rich father (Rich Dad) and a poor father (Poor Dad). Both gave him quite different views about money. What were their views and what were the differences?
A person can be very educated, highly successful professionally, and yet illiterate in terms of finances.
This is the experience of Robert Kiyosaki, who had two very different fathers who gave him very different insights about money.
One father said:
“The love of money is the root of all evil.“
The other said:
“The lack of money is the root of all evil.”
Furthermore, his rich father always said that he did not work for money, but that money worked for him.
His poor father, on the other hand, gave him the money:
“Go to school, write good grades and find a safe job.“
The view on how to make money couldn’t be more different:
Rich people acquire assets, while the poor and middle class acquire liabilities that they regard as assets, such as owner-occupied property.
The difference: an asset fills your pocket with money, while a liability takes money out of your pocket.
What rich people do differently
While the poor and the middle class work for wages and salaries, the rich build an income from a securities account and from passive income, such as income from rented real estate.
So the trick to wealth is to convert earned income (wages and salaries) into passive income and income from securities accounts.
The following knowledge, among others, is helpful for this purpose:
- Accounting knowledge (good numerical comprehension)
- investment strategies
- Market understanding (The law of supply and demand: for example, buying real estate cheaply in a crisis and selling it dearly later in a boom)
- knowledge of the law (tax knowledge and knowledge of different types of companies with their respective advantages and disadvantages)
The main reason why many people are struggling financially is that they do not train financial intelligence at school or university.
They learn to work for money, but not to let the money work for them.
So this book is all about what the rich teach their children about handling money, what financial intelligence is, and how to acquire it.