Most people in business or interested in becoming more wealthy, will have read the book, or at least be aware of it. The author, Robert T Kiyosaki, describes his childhood lessons and advice he received from his best friend’s dad to illustrate the principles and techniques in generating a significant passive income.
The ‘rich dad’ advice goes against the conventional approach of working for money in a job (‘just over broke’) which his natural ‘poor dad’ did. Although his natural father was middle class rather than poor and had a comfortable life, his son deems him poor because he worked for money all his working life. His dad was smart and educated but he didn’t use his income to work for him and go on to become independently wealthy before retirement. The author achieved this by his late forties, because he learned how to manage his money and time more effectively. Although, he was an employee with various firms until he was secure enough to concentrate full-time on his investing, books, courses, etc.
The book doesn’t explain exactly how to amass great wealth, but provides plenty food for thought and steps you can take go get yourself in the right direction. His two main vehicles for wealth creation are property and the stock market. As the author explains, it takes a lot of time and effort to learn how to be successful in those areas and you must start small on only spend money you can afford to lose.
He also stresses that you start this as a hobby and attend as many classes and seminars in your spare time. As Robert points out, we all have two main choices in life: how we spend our time (spare) and disposable income. Time is the key thing here, as learning through books, internet, networking, courses, etc doesn’t cost that much – it only takes time and commitment.
Using expertise in law, property and investing (learned in his spare time in the seventies and eighties) he was able to buy properties at foreclosure and auctions. He also eventually became a ‘sophisticated’ investor and was privy to legal insider trading.
He was fortunate to buy property when the market was depressed in the early to mid nineties and sell them on later in the decade for a massive profit. Using that income to grow his portfolio even more. However, he doesn’t go into much detail about the property or investment deals that failed, but as he explains, he always speculates with cash he can afford to lose.
Kiyosaki gives a numerous examples of how he helped friends with modest means buy second homes as investments without big mortgages. Using Kiyosaki’s expertise and advice they bought modest homes through banks and auctions with small deposits and the US equivalent of self-certification mortgages. The properties eventually increased in value, allowing the owners to buy another bigger property and do the same again. In one instance, a $7,000 deposit on a house generated a pot of $400,000 over period of about 15 years.
So rather than watch TV, I for one am going to learn more about accounting and investing as these are subjects I don’t know that much about. Overall the book is very easy to read, not at all technical, and the ideas, deals, principles described are very inspiring. I wish I had read it earlier in life!
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