Rich Dad, Poor Dad

Tags: #books #non-fiction #finance #money #saving

🚀 The Book in 3 Sentences

This book is about the value of investing, and building assets rather than paying others. It is about the value of thinking clearly about what you money is and what to do with it. It contains small but interresting tidbits on how to save.

🎨 Impressions

I like how the author often defers to others to do the actuall sckilled labor such as investing, the money is the asset in a way, which i thought was a good way of looking at it. I also liked that the point is to make money from you assets, not make money to pay you liabilities.

How I Discovered It

On a hacker news formum.

Who Should Read It?

I think this is a good book to start before thinking on investing, as a young man this might have been a good way for me to start.

☘️ How the Book Changed Me

Made me want to invest more and think more consciously about where I am going in my life.

✍️ My Top Quotes

Broke is temporary. Poor is eternal.”
“Most people have a price. And they have a price because of human emotions named fear and greed. First, the fear of being without money motivates us to work hard, and then once we get that paycheck, greed or desire starts us thinking about all the wonderful things money can buy. The pattern is then set.”
Rule #1: You must know the difference between an asset and a liability, and buy assets.
Higher incomes cause higher taxes, also called “bracket creep.”
There is a saying a friend of mine says over and over to people in debt: “If you find you have dug yourself into a hole… stop digging.”
Today, McDonald’s is the largest single owner of real estate in the world, owning even more than the Catholic church.
Mind your own business. Financial struggle is often directly the result of people working all their lives for someone else. Many people will simply have nothing at the end of their working days to show for their efforts.
Businesses that do not require my presence I own them, but they are managed or run by other people. If I have to work there, it’s not a business. It becomes my job.
It is this Robin Hood fantasy, or taking from the rich to give to the poor, that has caused the most pain for the poor and the middle class. The reason the middle class is so heavily taxed is because of the Robin Hood ideal. The reality is that the rich are not taxed. It’s the middle class, especially the educated upper-income middle class, who pays for the poor.
In 1913, an income tax became permanent in the United States with the adoption of the 16th Amendment to the U.S. Constitution. At one time, Americans were anti-tax.
“Once government got a taste of money, its appetite grew,” said rich dad. “Your dad and I are exactly opposite. He’s a government bureaucrat, and I am a capitalist. We get paid, and our success is measured on opposite behaviors. He gets paid to spend money and hire people. The more he spends and the more people he hires, the larger his organization becomes. In the government, a large organization is a respected organization. On the other hand, within my organization, the fewer people I hire and the less money I spend, the more I am respected by my investors.
An employee with a safe, secure job, without financial aptitude, has no escape.
Every time people try to punish the rich, the rich don’t simply comply. They react. They have the money, power, and intent to change things. They don’t just sit there and voluntarily pay more taxes. Instead, they search for ways to minimize their tax burden. They hire smart attorneys and accountants, and persuade politicians to change laws or create legal loopholes. They use their resources to effect change.
Today, I am constantly shocked at the number of people who pay more taxes, or take fewer deductions, simply because they are afraid of the government.
If you work for money, you give the power to you employer. If money works for you, you keep the power and control it.
Financial literacy is the ability to read and understand financial statements which allows you to identify the strengths and weaknesses of any business.
One is not better than the other. Yet as a teacher, I recognized that it was excessive fear and self-doubt that were the greatest detractors of personal genius. It broke my heart to see students know the answers, yet lack the courage to act on the answer. Often in the real world, it’s not the smart who get ahead, but the bold.
The problem with “secure” investments is that they are often sanitized, that is, made so safe that the gains are less.
“You want to know a little about a lot” was rich dad’s suggestion.
“Leadership is what you need to learn next,” he said. “If you’re not a good leader, you’ll get shot in the back, just like they do in business.”
Job is an acronym for “Just Over Broke.”
In the movie Jerry Maguire starring Tom Cruise, there are many great one-liners. Probably the most memorable is: “Show me the money.” But there is one line I thought most truthful. It comes from the scene where Tom Cruise is leaving the firm. He has just been fired, and he is asking the entire company, “Who wants to come with me?” And the whole place is silent and frozen. Only one woman speaks up and says, “I’d like to, but I’m due for a promotion in three months.”
In his book The Retirement Myth, Craig S. Karpel writes: “I visited the headquarters of a major national pension consulting firm and met with a managing director who specializes in designing lush retirement plans for top management. When I asked her what people who don’t have corner offices will be able to expect in the way of pension income, she said with a confident smile, ‘The Silver Bullet’. “What, I asked, is ‘The Silver Bullet?’” “She shrugged and said, ‘If baby boomers discover they don’t have enough money to live on when they’re older, they can always blow their brains out.’”
‘If you’re going to go broke, go big.’ You don’t want to admit you went broke over a duplex.”
“Everyone wants to go to heaven, but no one wants to die.”
“Texans don’t bury their failures. They get inspired by them. They take their failures and turn them into rallying cries.
“Cynics never win,” said rich dad. “Unchecked doubt and fear creates a cynic.” “Cynics criticize, and winners analyze”
While in Peru, I asked a gold miner of 45 years how he was so confident about finding a gold mine. He replied, “There is gold everywhere. Most people are not trained to see it.”
“There is always another wave.” People who hurry and catch a wave late usually are the ones who wipe out.
Types of income: 1. Ordinary earned 2. Portfolio 3. Passive
Passive income, in most cases, is income derived from real estate investments. Portfolio income is income derived from paper assets such as stocks and bonds.
“The key to becoming wealthy is the ability to convert earned income into passive income or portfolio income as quickly as possible.”