The Rich Dad Poor Dad Formula: How to Build Wealth and Live Financially Free
Rich Dad Poor Dad is a 1997 book by Robert Kiyosaki and Sharon Lechter. The book is a personal finance guide that challenges the traditional way of thinking about money. Kiyosaki argues that the poor and middle class work for money, while the rich have money work for them. He also argues that the key to financial success is to acquire assets, which put money in your pocket, rather than liabilities, which take money out of your pocket.
The book is divided into four parts:
- Part I: The Rich Dad Lesson
- Part II: The Cashflow Quadrant
- Part III: The Education of a Lifetime
- Part IV: The Legacy
In Part I, Kiyosaki introduces the concept of the “rich dad” and the “poor dad.” His poor dad was a highly educated college professor, but he never achieved financial success. His rich dad was a high school dropout who became a self-made millionaire. Kiyosaki learned from his rich dad the difference between assets and liabilities, and how to build wealth through investing.
In Part II, Kiyosaki introduces the “Cashflow Quadrant,” which divides people into four categories based on how they make money:
- E stands for “Employees.” Employees work for a salary or wage.
- S stands for “Self-employed.” Self-employed people work for themselves, but they are still limited by their own time and energy.
- B stands for “Business owners.” Business owners build businesses that generate income even when they are not working.
- I stands for “Investors.” Investors use their money to create passive income, which means that they do not have to work for it.
Kiyosaki argues that the best way to achieve financial freedom is to move from the E and S quadrants to the B and I quadrants.
In Part III, Kiyosaki shares his personal experiences and insights on the importance of education. He argues that the traditional education system does not teach people how to be financially successful. Instead, he recommends that people learn about money by reading books, taking courses, and investing in themselves.
In Part IV, Kiyosaki talks about the importance of leaving a legacy. He argues that the best way to leave a legacy is to teach your children about money and how to build wealth.
The Rich Dad Poor Dad Formula: The Simplest Way to Build Wealth
Rich Dad Poor Dad has been a best-seller since its publication in 1997. The book has been translated into over 51 languages and has sold over 32 million copies worldwide. It has been praised for its simple and straightforward approach to financial education. However, the book has also been criticized for its simplistic views on money and for its promotion of the get-rich-quick mentality.
Here are some of the key takeaways from Rich Dad Poor Dad:
- The rich and the poor have different mindsets about money.
- The rich acquire assets, while the poor acquire liabilities.
- The key to financial success is to have your money work for you.
- The best way to learn about money is to read books, take courses, and invest in yourself.
- The most important legacy you can leave your children is financial education.
Rich Dad Poor Dad is a controversial book, but it is also a thought-provoking one. If you are interested in learning more about personal finance, then this book is definitely worth a read.