What The Rich Know About The Money That Most People Don’t

What The Rich Know About The Money That Most People Don't

The overarching theme of “RICH DAD POOR DAD” is how to use money as a tool for wealth development and it also destroys the myth that the rich are born rich, which explains why your residence may not be an asset.

“There is a difference between being poor and being broke. Broke is temporary, poor is eternal.”


If you haven’t read the book, I am going to break down the basic things that the book talks about. The concept of money, the mindset and our attitude.

The book, “Rich Dad, Poor Dad” has been an ultimate source of inspiration for many. It has all the reasons why one would follow it. It’s authentic and straightforward, with powerful words that can simply transform the way you think about so many aspects of life and money.

Money Matters

1. The Rich don’t work for money.

” The poor and the middle-class work for money. The rich have money to work for them”.

In the first chapter, the author wants to convey that majority of rich people do work very hard, but they go about it differently than most people do. Rich people and people who want to become rich work and learn every day how to put money work for them.

Oftentimes people misunderstand the title of this chapter and think rich don’t work but the truth is mirror figure.

Let’s just be honest here, if we are not making money when we are sleeping, we are never becoming rich. It sounds harsh but that’s the reality. We are losing 8-9 hours of the day, and of course, we can sacrifice our sleep and work during those hours and make the extra buck. However, that’s not sustainable.

So many people say, “oh, I am not interested in money”. Yet they will work at a job for eight hours a day.

2. Why teach financial literacy?

“It’s not how much money you make. It’s how much money you keep”.

Let’s face it. We are not taught anything about the money, neither by our schools or our parents. Let alone financial literacy, we have no clue how the basic concepts of money.

In this chapter, the author distinguished between “Assets and Liability”.

An asset is something that has value, that produces income, and has a market where it bought and sold. Assets produce income, Assets appreciate, and Assets do both.

Whereas, Liabilities take money out of your pocket because of the costs associated with them.

Robert T.kiyosaki also gave a controversial statement in his book.

According to him, the personal residence is not an asset unless it appreciates enough to offset the cost of the ownership but the rental property is an asset because it can generate enough passive income to exceed the expense of operating and financing the real estate.

If you want to grow rich concentrate your effort on buying income-producing assets and keep your liabilities and expenses low.

“Rich people acquire assets. Poor and middle class acquire liabilities that they think are assets”.

“An asset put money in my pocket. A liability takes money out of your pocket”. ” A person can be highly educated, professionally successful, and financially illiterate.

3. Mind your own business

“The rich focus on their assets column while everyone else focuses on their income statement”.

Most of the people spend their entire life working in somebody else’s business and making other people rich. The author says, first of all, pay all your debt and start investing in income-producing assets and start minding your own business. keep your daytime job, but start buying real assets, not liabilities.

So, stay financially healthy by spending your time and investing as much of your money as possible in assets.

4. The history of taxes and the power of corporations.

“My rich dad just played the game smart, and he did it through corporations – the biggest secret of rich”.

In this chapter of this book the author says, The rich outsmarted the intellectuals solely because they understood the power of money, a subject not taught in schools.

He also says real estate investment vehicle has a great tax advantage. As long as you keep trading up in value, you will not be taxed on the gains until you liquidate.

So, when you work for money you give power to your employer. if money works for you, you keep the power and control it.

Business owners with corporations.
Pay taxes.

Employees who work for corporations.
Pay taxes

This book also covers the four main components of what Kiyosaki calls “Financial IQ”: Accounting, Investment Strategy, Market Law, and Law.

Garret Sutton’s books on corporations provides wonderful insight into the power of personal corporations.

5. The Rich Invest Money

” Often in the real world, it’s not the smart who get ahead, but the bold.

The author says it is not so much the lack of technical information that holds us back but more the lack of self-confidence. The single most powerful assets we all have is our mind. if it is trained well, it can create enormous wealth.

Investing money means finding opportunities or deals that other people don’t have skill, knowledge, resource, or contact for.

6. Work to learn – Don’t Work For Money.

Job security meant everything to my educated dad. Learning meant everything to my rich dad.

As Kiyosaki writes, “I recommend to young people to seek work for what they will learn, more than what they will earn. Look down the road at what skills they want to acquire before choosing a specific profession and before getting trapped in the Rat Race.”

The money we make while working, in most cases, isn’t good enough to help us do anything wondrous. It can help you to pay off your debts, make small investments that can teach you basic concepts of investment. The time you spent at a workplace has many learnings that can’t be ignored.

The main management skill needed for success are management of Cash Flow, Systems, and People. These are the skills that one can learn when they are working for someone else.

Financial intelligence is made up of four main technical skills.

  • Accounting
  • Investing
  • Understanding market
  • The law

Accounting: Accounting is financial literacy, or the ability to read numbers. This is a vital skill if you want to build a business or investment.

Investing: Investing in the science of making money. Savings can help you build up funds for short-term projects. You can’t earn any real money with that. Most savings schemes offer interest rates that can’t even keep up with the yearly inflation rate.

Understanding Market: Understanding the market is the science of supply and demand. The Markets have a lot to offer, but it’s ruthless and brutal if you go unprepared.

The Law: The law is the awareness of accounting, corporate, state, and federal regulations. Just read this article and see how Amazon avoids paying federal taxes by setting up its bases in countries that have the lowest tax rates.

The more you about these factors, you are able to do everything possible to increase your cash bucket while you don’t violate any laws in doing so.

Final Thoughts

Most rich people are who are rich right now have not always born with money. There have been example of people that won a million dollar lottery and still lost the money. It’s one thing to have or earn money, but another to keep it and double it.

We need to rewire our brains to think to differently, have a success mindset and the ability to take risks when we are young.

There is gold everywhere. Most people are not trained to see it

5 1 vote
Article Rating
Notify of
Oldest Most Voted
Inline Feedbacks
View all comments
Pallavi kumari
Pallavi kumari
7 months ago

In a brief way u have given such a strong content and that’s too good

Piyush Priyadarshi
Piyush Priyadarshi
7 months ago


Would love your thoughts, please comment.x