Summary of Rich Dad Poor Dad

Author: Robert T. Kiyosaki

Published: 1997

Genre: Personal Finance, Self-help

Introduction: Two Dads, Two Views on Money

Robert Kiyosaki grew up with two father figures:

His biological father ("Poor Dad") – a well-educated, hardworking man with a PhD who believed in traditional routes to success like schooling, job security, and pensions.

His best friend’s father ("Rich Dad") – a self-made millionaire who dropped out of school early but built a fortune through business and investments.

Both men were successful in their own ways, but their perspectives on money, education, and life were completely different. The entire book is a comparison of the lessons Robert learned from each "dad"—and how following Rich Dad's philosophy helped him achieve financial independence.

Lesson 1: The Rich Don’t Work for Money – They Make Money Work for Them

Poor Dad believed in working hard for a paycheck, valuing job security above all. He thought the path to success was:

→ Study hard → Get a good job → Work for promotions → Retire with a pension.

Rich Dad, however, taught Robert a different mindset:

→ Don’t work for money → Learn how money works → Let money work for you.

Rich Dad explained that most people are stuck in the “Rat Race”: earn money → spend money → earn more money to pay off debt. Instead of seeking a high-paying job, Rich Dad encouraged learning how to create assets that generate passive income, like real estate, stocks, and businesses.

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

Lesson 2: Why Financial Education Is Vital

Rich Dad emphasized something schools don't teach: financial literacy.

According to Kiyosaki, it doesn’t matter how much money you make. What matters is how much you keep and how well you use it.

The foundation of financial literacy starts with understanding the difference between:

Assets: Things that put money in your pocket (e.g., rental properties, dividends, royalties).

Liabilities: Things that take money out of your pocket (e.g., mortgages, car loans, credit card debt).

Rich people buy assets. Poor people buy liabilities, thinking they’re assets. For example, many people think their house is an asset, but if it doesn’t generate income and costs money to maintain, it’s a liability.

Kiyosaki’s advice: Build a strong asset column. Let those assets generate income that eventually surpasses your expenses.

Lesson 3: Mind Your Own Business

Rich Dad taught Robert to build his own business, even while working for others. This doesn’t always mean owning a company, but rather managing your personal finances like a business.

Most people focus only on their income (salary) and not on their net worth or cash flow.

Kiyosaki urges readers to:

Track income and expenses carefully.

Grow your assets deliberately.

Learn how businesses operate—taxes, accounting, marketing—even if you're an employee.

"The rich focus on their asset columns while everyone else focuses on their income statements."

In short, even if you work for someone, don’t forget to invest in yourself, in your assets, and in your own financial future.

Lesson 4: The History of Taxes and the Power of Corporations

Most people don’t realize that the tax system rewards the financially literate.

Poor Dad believed in paying his “fair share” of taxes. He worked as an employee and paid taxes before getting to spend his income.

Rich Dad taught that the rich use corporations and tax laws legally to:

Spend first through their companies,

Then pay taxes on the remaining income.

This is possible due to the difference between:

Earn → Tax → Spend (Employee)

Earn → Spend → Tax (Corporation)

The rich hire smart accountants, lawyers, and use corporate structures to reduce tax burdens, protect assets, and maximize profits.

Kiyosaki emphasizes financial education as the key to understanding these systems.

Lesson 5: The Rich Invent Money

In today’s world, opportunities abound—but only for those with the right mindset.

Rich Dad taught that money is made not just through hard work, but through creativity, vision, and risk-taking.

Rich people:

See opportunities where others see problems.

Take calculated risks (not reckless gambles).

Use leverage—money, knowledge, people—to create wealth.

Robert shares examples from his own life—like buying undervalued properties using borrowed money and flipping them for profit.

"It's not the smart who get ahead, but the bold."

You don’t need to be a genius—you need to be brave, informed, and proactive.

Lesson 6: Work to Learn, Don’t Work for Money

Kiyosaki explains that early in life, it’s better to work for experience, not just salary.

His Poor Dad advised him to specialize and stick to one career. But Rich Dad said, “Learn a little about a lot.”

Kiyosaki worked in sales, marketing, and accounting—not for the paycheck, but to build a wide range of skills.

In the real world, skills like communication, negotiation, leadership, and problem-solving are more valuable than a degree.

“The more specialized you become, the more you are trapped in a job you can’t leave.”

This lesson encourages people to step out of their comfort zones, try new roles, and embrace lifelong learning.

Overcoming Obstacles to Financial Success

Kiyosaki identifies five key obstacles people face on the path to wealth:

Fear – especially the fear of losing money.

Cynicism – self-doubt and listening to others’ negativity.

Laziness – often disguised as being busy.

Bad Habits – like paying others before yourself.

Arrogance – thinking you already know everything.

He encourages readers to:

Face failure as a learning experience.

Take small steps, but take action.

Seek mentors, read books, and invest time before money.

The Power of Giving

One of the final lessons from Rich Dad is spiritual:

“If you want something, first give it.”

The rich understand the law of reciprocity. Generosity—whether in money, knowledge, or time—creates abundance. Kiyosaki encourages giving not just for karma, but because giving activates wealth-building energy.

Conclusion: Action is Everything

Kiyosaki ends the book with a call to action:

Don’t wait for perfect conditions. Start now.

Even with little money, start building your financial education, creating small assets, and building momentum.

Key Actions to Take:

Read financial books, not just self-help.

Attend workshops or take online courses.

Buy small investments (stocks, real estate, collectibles).

Track your income, expenses, assets, and liabilities monthly.

Surround yourself with people who think like entrepreneurs.

Final Thoughts

Rich Dad Poor Dad is not about quick riches. It’s about shifting your mindset from employee to investor, from consumer to creator. The book isn’t heavy on formulas or technical advice—it’s about changing how you think about money.

“The single most powerful asset we all have is our mind. If it is trained well, it can create enormous wealth.”