Rich Dad Poor Dad: Summary & Review

rich dad poor dad pdf cover

Rich Dad Poor Dad is a classic book on personal finance that, through the author’s personal experience, teaches the different mindsets between people who make money, and those who stay poor.

Bullet Summary

  • Working for someone else means helping someone get rich while putting little in your pocket
  • The employed middle class pays all the taxes. They subsidized the poor while the rich avoid most taxes
  • Work to learn, not for money
  • Rid yourself of fear, laziness, and arrogance to start down the path of wealth


Robert Kiyosaki, the author, focuses more on mindsets than on pure practical advice on how to get rich.

And he shares the wisdom in parable-like stories. For this “Rich Dad Poor Dad” summary I will skip the parables and focus on the concrete advice.

#1. Stop Working for People

The first and possibly biggest lesson Rich Dad gives to Kiyosaki is to step off the rat race.

To stop working your life for someone else. Working for someone, being an employee, means putting little money in your pocket and lots of money in someone else’s pocket.

#2. The Rich Don’t Work for Money

Kiyosaki says most people have been duped into playing it safe and not taking any risks.

So we have a whole army of poor and middle-class people exchanging lots of their time for (little) money and some security.

#3. Learn to Differentiate Asset VS Liability

Kiyosaki says there is one major rule for financial literacy and growing rich. And that’s the Asset VS Liability Rule.

An asset is simply what puts money in your pocket. A liability is anything that takes money from your pocket.
And make sure that you only control assets

If you buy a house and live in it while paying mortgage and taxes, you got a liability.
If you buy a house and rent it and the rent pays the mortgage and puts something in your pocket, you got an asset.

Kiyosaki in this regard gives great simple advice: only buy a house if it makes sense from a cash-flow point of view today -not in the future-. never buy a house because of the potential for appreciation in the future.

Ask yourself:

Is the cash flow positive?

If the cash flow is positive, then you have an asset.
And it’s a good investment.

If the cash flow is negative and you believe it will appreciate soon, don’t buy it.

List of Assets

Kiyosaki says the following count as assets:

  1. Stocks
  2. Bonds
  3. Notes (IOUs)
  4. Income-generating real estate
  5. Royalties from intellectual property (software, music, scripts, patents)
  6. Anything that produces income or appreciates (and bonus if it has a liquid market)

#4. Rich & Corporations Spend, The Poors Pay Taxes

Kiyosaki shows a rather belligerent attitude towards government and taxes here, but what he says still rings damn true.

The poor people pay taxes first and keep what’s left.
Corporates and rich people who shield behind corporates know the systems and use loopholes to pay as little as possible.

Also, corporates don’t pay taxes first. They accrue income, spend and then only pay taxes later on what’s left.

Comparatively, it’s as if you received your salary in full, without taxes detractions, and then paid taxes on what you left at the end of the month.

Knowing the system, knowing accounting, loopholes, markets, investment vehicles, and the law also helps you.
The ignorant get bullied, and the knowledgeable are in with a fighting chance.

Also, read:

#5. Work to Learn, not for Money

Kiyosaki says you are one skill away from dramatically improving your life.

Many talented people are poor because they are only specialized in one skill only.

The author uses the example of a girl with a master’s degree in literature who refused to enroll in a sales and marketing course because she thought that was too beneath her.

He also uses a good example.
He asked a room of people how many people could make a better hamburger than McDonald’s, and everyone raised their hands. Everyone can do a better hamburger than McDonald’s, and yet McDonald’s is a multi-billion corporation because it can sell well.

Kiyosaki says some key skills to learn are management skills, business system knowledge, and sales and marketing skills.

The author also suggests you hire people smarter than you are, something Napoleon Hill also talks about, and the business systems which is something Michael Gerber stresses in his great The E-Myth Revisited.

You are one skill away from revolutionizing your life

#6. Rich Dad Mindsets

The author says that the 5 mindsets that most stand in the way of success and wealth are:

  1. Fear
  2. Cynicism
  3. Laziness
  4. Bad habits
  5. Arrogance

I loved the story Kiyosaki shared. When he tells people there’s money to be made in buying and fixing real estate people reply they don’t wanna fix toilets.
Kiyosaki says it’s silly that people look at the small detail instead of looking at the bigger picture and bottom line.

My Note:
To me, more than an example of looking at the detail, this is a typical example of letting your ego get in the way of what you really want. And a typical example of sacrificing long-term goal achievements for short-term pain. 

Read more on cynicism:

Positive Cynicism: Turning Poison, Into Gold

#7. Develop Financial IQ

After IQ and EQ, there is also “financial IQ”.
To increase your financial IQ you must understand the following:

  1. Accounting
  2. Investing
  3. Markets
  4. Law

#8. Cash-flow Quadrant

Rich Dad Poor Dad is famous for its cash flow quadrant.

The employee in the first square have a job, have no leverage, and exchange time for money.

The self-employed own a job and how much they work is related to what they earn.
The business owner owns a system and leverages other people’s time for income.

The investor leverages money to make money.

More Rich Dad Tips

A collection of tips I took away:

  • Pay yourself first: always put some money aside for yourself, and do it first thing
  • Pick your friends: get around people who like talking about money
  • Be generous: your professional supports are the people propelling your success, choose a good broker, pay him well
  • Find a bigger reason: find a bigger purpose in life to motivate you
  • Start as many businesses as needed: 9 out of 10 businesses fail, say Kiyosaki. Good, then it means you gotta start 10 of them

Especially the last one was an “aha” moment for me.
I was a guy with a really bad mindset toward business, thinking that it was dumb to start a business when 90% fail.

9 out of 10 businesses fail. Then start 10

Rich Dad Poor Dad Criticism

Robert Kiyosaki has drawn plenty of criticism for his Rich Dad Poor Dad series.

Rich Dad, Poor Dad is one of the dumbest financial advice books I have ever read. It contains many factual errors and numerous extremely unlikely accounts of events that supposedly occurred.
Rich Dad, Poor Dad contains much wrong advice, much bad advice, some dangerous advice, and virtually no good advice.

And he then proceeds to tear the book apart.
Kiyosaki himself replied to John T. Reed.

 I read the book a second time and concluded that the book was a waste of time.

Hamm says that he initially got very inspired by Rich Dad Poor Dad. But after reading John Reed’s criticism he went through the book a second time and concluded it was a waste of time.

A good chunk (…) is self-help boilerplate. First, there’s the mandatory declaration that it isn’t a get-rich-quick book. Second, there’s the repeated claim that “the rich” have “secrets” (…) that will herein be revealed. Third, the series of “lessons.” And fourth, the counterintuitive revelations that effectively undercut various popular “myths.”

He says, basically, that there is nothing groundbreaking here and that the advice is simplistic.

Much of the wisdom can be best described as simplistic, unsophisticated and in some cases, totally absurd. (“You’re a loser if you work at a job. Formal education is a waste of time if you want to get rich. Mutual funds are for losers,” etc.)

Norman goes on to say that Kiyosaki didn’t get rich with his own advice, but by operating what’s actually a multi-level marketing scheme (Go Pro teaches how to excel at those).
This is the same that DeMarco says in The Millionaire Fastlane Kiyosaki got rich by selling the advice instead of using the advice -and he calls it a “paradox of practice”-.

And then there is Forbes alleging that there is no proof Kiyosaki was rich before the publication of Rich Dad Poor Dad.
And Farrington at The College Investor says that his company’s bankruptcy makes him a hypocrite.

What I think of the criticism

As you can see, the criticism is plenty and abundant.

What do I think of all this criticism?
Well, I think that most of it is actually true.

However, that’s not to say that Rich Dad Poor Dad doesn’t also have qualities.
I look at my own family and cannot help but think how richer they could be if they had heeded the advice in this book.

They live in the countryside in their way too big houses with gardens.
They think of their houses as their little, invaluable nests. 
And they really think they’re richer because of their houses.

They’d never rent, and of course, they’d never rent their own house to someone else.
They think they are “well-off” because of the asset mentality, but in the meanwhile, keep paying taxes and crazy maintenance expenses.
Then I speak to them… And they’re always complaining about how short on cash they are.


I wonder how that might be…

If they had built smaller places, built in better areas, or if they didn’t act as if renting out part of them was a sin… Well, over decades they’d be much, much richer.

rich dad poor dad pdf cover

Real-Life Applications

Here are a few points I took away and I constantly try to apply:

Don’t buy liabilities

  • Do you really need a car?
  • Do you need gym memberships if you don’t go?
  • Do you need to buy a house if you don’t have cash and pay the mortgage and repairs?
  • Do you need a pet?
  • Do you need Netflix, Tinder Pro, and all other subscription services…?
  • …..

Buy assets

  • Low-priced flats for renting
  • Dividend-paying stocks
  • Bonds
  • If for living, what if you bought a multi-room house and rented out a room to pay the mortgage?
  • Storage units and sell space
  • ….

Reduce Expenses
Kiyosaki says it’s not how much money you have but how much you keep. The truth is deeper than it might seem: most people don’t have any money because they let expenses balloon when they start earning more.

Entrepreneur Neuro-Associations

Kiyosaki suggests what’s basically Tony Robbins’ method to move towards your goals: associate pleasure with what you want and disgust for the other options.

If you want to quit the rat race, escape the middle class, or be your own man, I find Rich Dad Poor Dad to provide very strong neuro-associations to support it.

Here are some you can use to grow your disgust for being an employee:

  • Middle Class is gullible to paying for everyone
  • Employees are enriching someone else while putting little in their own pockets
  • Employees are enriching the government and fat cats politicians
  • Employees are the equivalent of the nice guys who make everyone happy except themselves

Rich Dad Poor Dad Audiobook

Why on earth would you be looking for Rich Dad Poor Dad PDF??

To ruin your eyes and posture in front of a computer?

Download the full Rich Dad Poor Dad audiobook FOR FREE here instead of with an audible trial.


  • Man Eats Man Perspective

In saying people should “mind their business” and “greed is good” Kiyosaki seems to be taking an individualistic, “dog eat dog” kind of perspective.

Mind you, greed is not bad per se and sometimes you gotta mind your business, but the bigger view should tell us a different story.

I believe for example that the best businesses are built with an eye both to the bottom line and to adding value to the customers and the stakeholders.

  • Real Estate Focus

Rich Dad Poor Dad is heavily focused on real estate. It might be your thing, but if it’s not that you will glean much less value from it.

  • Caustic Towards Education

There seems to be a hidden trend where Kiyosaki is hiding some anger toward the typical white collar well-educated employee.

I understand where that is coming from as I sometimes feel the same, but you gotta move beyond that.

Education, even university education, is not the antithesis of entrepreneurship, risk, and hard work.

As a matter of fact, I would advise getting that degree which will make your risks safer: whenever you fail or whenever you need a degree make it easier for you to get a job and rebuild some wealth to start afresh.

  • Demeaning Towards Some

Rich Dad Poor Dad tends to divide the world into “smart people”, or those who follow his suggestions, and “dumb people”, those who don’t. I find it very demeaning and extremely simplistic.

  • Simplistic

Dividing the world into “those who get it and get rich” and “those who don’t and are poor” makes it easy and simpler to write an appealing book.

However, it doesn’t do any good service in explaining reality.

There are plenty of employees who got wealthy –Jack Welch, technically, is an employee-.
And there are plenty more who live happy, fulfilling, and outright awesome lives without following the tenets of Rich Dad Poor Dad.


To me, the fact that Kiyosaki presents his two dads as real but nobody found any evidence of it burned the author’s credibility and reputation.

I was tempted to down-rate the book.
But the fact Kiyosaki lied and might not be the most ethical person (he’s also a friend of Trump) does not cancel the insights from Rich Dad Poor Dad.

As a matter of fact, I wish part of my family could understand the so simple and yet so transformative power of Assets VS Liabilities in reducing expenses.

The concept of having to start 10 businesses to be successful also hit me like a brick.
I used to think startups were silly and for silly people because, well.. 9 out of 10 fail, why would anyone take that sort of risk, it just makes no sense.

So when I heard Kiyosaki saying it only means you gotta start 10 businesses, well… That was a major “aha moment”.

Overall, I can recommend Rich Dad Poor Dad.

Check here for the best books to read or Get it on Amazon.

Scroll to Top