Today I thought of reviewing the book, Rich Dad Poor Dad, written by Robert Kiyosaki. I read this book about 14 years ago (I was at college at that time). This was my first book about finance and investment. It was really an eye-opener for me. At first, I was curious about the book title. Then, as I was reading, I understood the reason for the title. This is because, in the book, the author talks about 2 Dads. One is the poor dad (who is his real dad) and the other is the rich dad (his friend's dad).
He also talks about how the rich think about money. He says that the rich do not work for money. Instead, they allow money to work for them. This concept is what he calls by passive income. The ability to make money while you are sleeping or while you are away on a vacation really made me excited.
Then, he talks about how financial education is very important. I agree with this point. As a result, since then I have been personally educating myself about personal finance and investing. He lists down 2 major things in personal finance: Assets and Liabilities. An asset is something that generates money for you. Examples of assets are stocks, bonds and real estate that produces income. A liability is something that takes money away from you. Examples of liabilities are car loans, personal loans and credit cards. Rich people buy assets while poor people buy liabilities thinking that they are assets. I think that the most important thing is to manage your money well. Ensure that you reduce your liabilities and increase your assets.
Another part which I like about the book is the introduction to the CASHFLOW Quadrant.
Image Source: Taken from the book
E: Employee
S: Self-employed
B: Business
I: Investor
Although currently, I am in the E quadrant, I have made a few investments. I am planning to move into the I quadrant fully very soon.
In conclusion, I think that this book is very good for beginners. Those who want to know about passive income or those who want to be an entrepreneur, this book is for you. This book will serve as a foundation for your financial education. Till now, I still refer to this book in order to refresh my memory. This book really changed my life about money.
For those who have read this book, let me know your thoughts about this book. Thanks a lot.
Have a nice day! :)