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Rich Dad Poor Dad Summary

Updated: Jul 12, 2020

Becoming rich and becoming financially educated is very different. A study was done where 10 poor people were given 10 lakhs rupees to improve their life and they all were tracked for 6 months. After 6 months researchers found that all the people who had received money were back to their old life and some of them became even worse like falling into bad addiction or debt.'

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So what this study shows us??

That money is not the solution, becoming financially educated is the only solution if you want to get out of the problem of poverty and money related issues. Money is just a tool that will help you in that nothing else.

And another thing is if you will get more money without the right education, believe me, it's one the worse things which can ever happen to you

Unfortunately, our education system hardly teaches us that. They teach us how to be a good employee, not how to be a good employer or self-independent ( aatm nirbhar ).

So if you want to learn financial education which I think you don't have any other option to then let's make this simple with this amazing book.

To become rich you need to collect Assets and remove all the liabilities.

Now what's this 1) Assets = Something which will add money to your bank account

2) Liability= Something which removes money from your account

Now, why do this?

And how will it help us?

The poor work for money. The rich have money work for them

Let's see

If you want to buy a car or phone or house without having an asset you will soon realize that the value of a car decreases every year and a house instead of making money takes all your money with new furniture and most importantly with property tax and rent.

Houses do not always go up in value, remember it.

So, at last, it will cost you in three things

1) Loss of time = Which you would have used in growing your asset

2) Loss of additional capital = Which you would have used in investing in stocks

3) Loss of education = Fail to see these things as money taker or liability

So before buying anything first buy more assets like before buying a house buy some good dividends or stock which have the capacity to pay your housing expense.

Without doing this no one can save you.

Now understand this if you start doing this also the main problem is yet to come. And that is the problem of tax. And don't take this at all lightly it can take your thousand and thousand of rupees. So don't resort to black marketing or some illegal ways to save money from tax but look for some loopholes in the whole tax system

It has been said that Amazon has paid zero tax in the U.S with the help of such loopholes. A company that earned a revenue of 316 billion paid no tax sounds crazy but it's true.

Remember the harder you work the more money the government will make

And one way to do this on an individual level is by creating cooperation. A corporation protects the rich and it's just a legal body without a soul.

Now, what benefit it will give is that the rate of cooperation is less than individual tax.

With that, you will pay for expenses before it pays tax. It's one of the biggest tax loopholes that the rich use.

So guys becoming financially successful can and should be one of your top goals in your 20s. Because without it the rest of life will be quite worse.

And for that, you need to master some skills like

1) Accounting = Basic knowledge of assets and liabilities and proper math of up to class 4.

2) Investing = An idea about stock-market and various mutual funds.

Check out this = Fundamentals of investing

3) Law = Understanding of various tax law, business law, and property law of your country and state.

4) Tax advantage = Skill to reduce as much tax as possible

5) Protection from lawsuit = As you will start earning there will be many who want a piece of share from it. So you need good lawyers and connections to protect yourself. So no one dares to threaten you or take advantage of you.

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