Rich Dad Poor Dad Book Summary | Nepal Reads

Rich Dad Poor Dad Book Summary

Namaskar readers, welcome to Nepal Reads. Today in this blog I will be writing about "Rich Dad Poor Dad" book summary. It is one of the best book written on personal development. Although reading complete book is recommended, you can just go through the Rich dad poor dad book summary if you don’t have time.

In this blog you will learn the key reason why only few people get super rich while most people live a poor or middle class life. 

There was a boy called Robert who had two dads, don’t think me wrong. One was his own dad and other was his friend’s dad or says it as his true mentor. One had done PhD while other even hadn’t finished 8^th. Both were talent and hardworking but their thinking was totally different. Both used to teach Robert different lessons.

Poor dad says money is the root of all evil while Rich dad says lack of money is the root of all evil. Poor dad used to say we can’t afford expensive things other Rich dad says find ways to get what you want, doing this will sharpen his brain and will get ideas.  First says to study hard so you will be hired in great companies. Second also says to work hard and study so that you can open your own companies so you could provide jobs to so many.

Robert had one advantage that he had grown getting lessons from both of his dads and seeing their progress. He used his brain and finally followed his second father after which he grew up to become the richest man in Miami Florida and earned a millions by selling his ideas on books. While his own dad was poor for his entire life. 

From all the lessons that Robert knew from his rich dad, the most vital one was financial literacy which is to know the difference between assets and liabilities. 

Assets vs Liabilities

Assets are that thing which makes you money or puts money towards your pocket. Liabilities are that thing which takes money away from your pocket or finishes your money. Rich are rich because they make assets while middle class just waste their income in liabilities.

Rich vs Poor Mindset

John and Dusky are good friends and are in same post with same salary. When they get their payouts Dusky waste all his income in expensive clothes, cool gadgets and on his bikes which makes him feel like rich but he didn’t know that these thing are liabilities which were taking his money not only during the time of purchase but later in their maintenance which will be devalued with time and will not make him any profit.  

But john didn’t purchase all these until it will be mandatory for him to purchase all these fancy stuffs. He saves and invest in assets like stocks, bonds, real estate and to improve his own skills or to learn something which will help him to earn. Two years later, john was millionaire while Dusky was at the same situation cursing his low salary and said meager salary was the reason behind him to be middle class.

Poor vs Middle vs Rich Person Cash Flow

A poor man earns and spends in things like foods, clothes and shelter. A middle class earns and spends in more fancy liabilities so there is no difference between poor and middle class. Most middle people think that their house is their assets which is not true. Your house won’t make you money unless you keep tenant. 

A rich people earns and invest in assets and then spend from the money made by their assets. So they grew richer.

So if you want to be rich than things like how much you earn doesn’t matter rather how or where are you spending those hard earned money is important.

You have to shift from consumer mentality to investor mentality. People complain that the reason for their pity condition is their low salary and says that if their salary grow then their condition will improve. Problem is that expenditure is directly proportional to rise in income i.e. higher income will force people to do more expenditure like a good phone, luxurious car, big home which is again the liability which will never allow you to be rich.

I have told your all these points from the book which literally changed my mentality about financial literacy called Rich Dad Poor Dad by Robert Kiyosaki.