4 Life-Changing Money Lessons from Rich Dad Poor Dad

There are a few books that leave an ever-lasting impact on our minds – I would even go as far as admitting, that they could alter the course of our lives.

Rich Dad Poor Dad by Robert Kiyosaki is one of those gems which I first happened to read when I was 19 years old. It opened my eyes to concepts of Wealth Creation, Personal Finance, Assets & Liabilities, and more than anything else, to innumerable possibilities, only if I learned to make my money work for me.

I recently re-read this classic and it offered a new dimension this time. After more than a decade-long relationship with money, I realized how hard it was to really practice money discipline. Admittedly, despite having some knowledge of basic money principles, I found myself stuck in the ‘Rat Race’ still.

Here is sharing 4 ideas that stayed with me from the book along with a short roadmap that helps me implement these learnings.

Money Lessons from Rich Dad Poor Dad

1) Know the difference between ASSETS and LIABILITIES

Robert simplifies these terms –  Assets are what bring money IN and liabilities are what take money OUT of your pocket. Period.
This made me reflect on the fancy bags, clothes, shoes, and cars, which were merely liabilities (in financial terms) – of course, they were much required – however, they did not count as Assets.
It also talks about buying a house purely to live in it – which again is not considered an asset – however, he maintains that it is often a highly debated subject since most people are emotional about owning their own home.

My Roadmap – I built myself a VISUAL Asset-Liability graph which  I track Monthly. It looks something like this as of now – have also added a “Desired” Visual. There is an unparalleled sense of accomplishment when I watch my assets column grow – this is helping me stay on track.

2) The Rich Invent Money

Robert mentions in the book “Why not seek to learn more than earn more”. He strongly recommends Upskilling – clearly calling out 4 key skills: accounting, understanding taxation, marketing, and negotiation. The rich often groom their children to understand various departments to get an overall understanding of business.

To make money work for us requires getting out of the emotions of fear and greed and thinking logically.

My Roadmap – I have decided to build my stocks portfolio this year through study and learning from others’ experiences. In that quest, I have created study time in my weekly calendar, am part of an investor community, and have initiated email subscriptions of top investors and personal finance experts. With a clear goal of building my own portfolio of 10-12 stocks with a target annualized return and duration in mind, I am taking baby steps in my Upskilling process.


3) Choosing your Friends wisely

No man is an island. Any drastic change requires support from those close to us, from professionals, from like-minded people. Don’t listen to the Chicken Little about the ‘Sky is Falling’ theory – there will always be cynics who will talk about all that is bad in the world. Instead communicate with the enterprising ones around you who are on the path of Wealth Creation. 

My Roadmap – Gradually, I have started communicating and aligning with those close to me about my understanding of wealth and the small changes I am making in my money life. I can also say that many of my dear ones have in fact started to have open money conversations and some are actively Upskilling with me. Embracing this change has also expanded my network of like-minded people.

4) Make DAILY choices

Our spending habits reflect who we are -our choice of what we do with our time and money and what we put in our heads. Most of us struggle financially not because of what we know, but because of what we do not know. The book talks about the basic money principle of ‘Pay yourself first and the power of ‘self-control’.

My Roadmap – I have actively started keeping a tab on where my money goes daily – yes, daily. I consolidate my expenses on the last Saturday of the month. I have tried using apps, which auto-feed this data, however, find making a note myself the most helpful. In the last few months, this is how my expenditure looks across various categories. Monthly tracking helps me keep a check on categories I am overspending on, budget better, and also how much I can really pay myself first.

So these were the Money Lessons from Rich Dad Poor Dad that I found interesting. Let me know in the comment box what  Money Lessons from Rich Dad Poor Dad have impacted you the most.

Article by –  Womoneysta