7 Minutes to Financial Success: The ‘Rich Dad Poor Dad’ Recap

Rich Dad Poor Dad Summary

Occasionally I get so much information that comes across my desk that finding material to write about is a cinch.

On the other hand, I sometimes need help coming up with topics that would benefit you so I reach out to other bloggers for help.

So recently I did just that. I contacted blogging master Brandon Gaille who originally helped me get this blog going and he recommended that I take some of my best books and summarize them for a quick read.

Some of his recommendations that have become quite popular are:

OK, that settled it. I set out to find a good book that would benefit you and found one that I had actually read several years ago.

My good friend over at ESI Money inspired me to dust off the cover of a book that author Robert Kiyosaki wrote called Rich Dad Poor Dad. His article, “Rich Dad’s Ten Steps to Getting Started on the Path to Wealth” motivated me to reread it and summarize it for you.

If you want to learn what the book is about even quicker (in three sentences) here’s Sam Davie’s summary:

You don’t need to earn a high income to be rich. (You make a high-income so no excuses!)
Rich people make money work for them. Poor people don’t know how.
Robert Kiyosaki’s book is about his two dads—his biological father (poor dad) caught up in the rat race and the father of his best friend (rich dad)—and the ways in which both men shaped his thoughts about money and investing. Speaking of rat race, check out my take on it….

Rich Dad Poor Dad Summary

Where do we learn about money?

You’ve probably heard the phrase, “the rich get richer and the poor get poorer.” Why is that? Partly it’s because of how the system is set up.

Did you learn about money in school? Me neither. I didn’t even learn anything about it in college or dental school.

I added up the amount of education I’ve received starting from kindergarten through completing a residency and it came out to be a whopping 25 years!

During that time I received zero education on money. Now that I think about it, it’s really troubling and a wonder why so many of us get out in student loan debt that cripples us.

Because we learn nothing about financial literacy in schools, most of the time we get it from our parents. Maybe that’s one of the reasons the above statement is true?

In his book, Kiyosaki also heard about the richer getting richer and poor losing money growing up and wanted to share his story about what he learned about wealth.

Interestingly, he learned it from two people, his “rich dad” who was actually his best friend’s dad and his “poor dad” who was his real father.

Rich Dad vs Poor Dad

My story and Kiyosaki’s are similar in that we both learned financial advice from our real dad and a friend’s dad.

His “poor dad” held a Ph.D in education, and like many educated people working jobs to pay the bills, still struggled with debt and money his entire career.

Kiyosaki’s “rich dad” was a successful business owner (one of the wealthiest in Hawaii) with only an eighth grade education.

Growing up, he began noticing fundamental differences in both of his father figures.

He stated, “I noticed that my poor dad was poor, not because of the amount of money he earned, which was significant, but because of his thoughts and actions.

I also think that too many of us doctors are poor, not because of our income, which is also substantial, but because of our scarcity vs abundant mindset.

In the book, Kiyosaki shares six important lessons that he learned about building wealth over a thirty year period from his rich dad.

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6 Lessons From Rich Dad

Lesson #1: It’s not how much money you make, it’s how much you keep.

This lesson reminded me of doctors and other high-income earners such as pro athletes. Both groups work hard to get enough money and then some but never learn how to manage their money.

One of the most important statements in the book pertained to this lesson, “You must know the difference between an asset and a liability, and buy assets. If you want to be rich, this is all you need to know. It is rule number one. It is the only rule.”

He states that the rich buy assets whereas the poor and middle class buy liabilities that they THINK are assets. This is why the rich have financial success and the poor continue to have money problems.

I’ve been discussing this with my kids since they were old enough to know what money is. Whenever they ask to buy something I’ll ask them if it’s an asset or liability.

My oldest is getting ready to drive and I wanted him to think about purchasing a car. Now, I understand that you NEED a car for transportation.

The point I’m trying to make with them is that a car is a LIABILITY and too many people are broke and stay broke because they don’t understand the difference.

Assets put money in our pockets and liabilities take money out.

We want to make sure we invest to grow our wealth. We can do this by investing in things that produce income, appreciate or do both.

He’s big into real estate investing which both provides cash flow and appreciates the longer you hold it.

As a side note, Kiyosaki states that acquiring more money won’t solve your financial problems if you don’t know how to manage it. It actually makes things worse.

He writes, “Money often makes obvious our tragic human flaws, putting a spotlight on what we don’t know. That is why, all too often, a person who comes into a sudden windfall of cash — let’s say an inheritance, a pay raise, or lottery winnings — soon returns to the same financial mess, if not worse, than the mess they were in before.”

Lesson #2: The poor and the middle class work for money. The rich have money work for them.

Most reading this have a high-income paying job which means two things:

  1. We must work to get paid
  2. Taxes will continue to increase as income increases

Kiyosaki states in the book that he learned to put his money to work for him and enjoy tax benefits of generating income that does NOT come from a paycheck.

If you work for money, you give the power to your employer,” Kiyosaki writes. “If money works for you, you keep the power and control it.”

Man, if I could have learned that early on in my career, I’d have reached financial independence in my 30’s.

In school, we’re taught to take the path of least resistance which is to work for money. This concept has taken a toll on me by limiting the amount of travel I can do with my family. I have a solo-practice and have never been in the position to take off weeks/months at a time and if I do, money is not coming in.

On the other hand, if I’d started investing in cash flowing investments, such as the syndications I’m in now, I’d have been able to take more time off as other streams of income would have been flowing.

Lesson #3: It’s not the smart who get ahead, but the bold.

The key quote regarding this lesson was, “Once we leave school, most of us know that it is not so much a matter of college degrees or good grades that count. In the real world outside of academics, something more than just grades is required. I have heard it called many things; guts, chutzpah, balls, audacity, bravado, cunning, daring, tenacity, and brilliance. This factor, whatever it is labeled, ultimately decides one’s future much more than school grades do.”

Too bad I didn’t hear this before staying in school over 20 years!

Kiyosaki emphasizes the need to take risks while accumulating wealth but also just as important is managing that risk in which education plays a role.

The key to intelligent risk is developing financial intelligence, Kiyosaki writes: “There is always risk. It is financial intelligence that improves the odds.”

He recommends reading up on accounting, investing, and the stock market as the first step to becoming more financially intelligent.

I work out at the local college and constantly encourage students to do this as most are wasting their time on social media or watching YouTube videos.

Before you make any investment, make sure you’re completely educated on the entire process as well as the risks involved. Lack of financial education teamed with the desire for quick riches leads to disaster.

I loved this quote in the book about this subject: “Most people, in their drive to get rich, are trying to build an Empire State Building on a 6-inch slab.”

This sounds like what happened to me years ago when I jumped into real estate investing (and lost $50K) BEFORE I knew what I was doing.

I encourage anybody that completes their training to continue self-educating themselves by reading books on the topics they’re interested in.

Lesson #4: Corporations are the biggest secret of the rich.

In a nutshell, this lesson has to do with the rich person’s knowledge of setting up corporations to lower their overall tax rate vs the individual (employee) that works for a corporation.

One of the main differences between the two entities is how corporations pay taxes.


1.   Earn

2.   Spend

3.   Pay Taxes

Many of the corporation’s expenses can be written off which in turn lowers taxes.

Employees who work for Corporations

1.   Earn

2.   Pay Taxes

3.   Spend

As you can see from the above example, employees typically will pay more in taxes based on not being able to expense items they purchase.

Again, the author recommends people continue to boost their financial IQ particularly in these four areas:

  1. Accounting – understanding the story behind the numbers
  2. Investing – money that creates more money
  3. Market forces – understanding supply and demand
  4. The law – know when something will give you a tax advantage

Lesson #5: The rich focus on their asset columns while everyone else focuses on their income statements.

The key quote in this lesson was: “Keep your daytime job, but start buying real assets, not liabilities or personal effects that have no real value once you get them home. Keep expenses low, reduce liabilities, and diligently build a base of solid assets.”

I recently saw the video below from Grant Cardone recommending this EXACT advice.

Both Cardone and Kiyosaki recommend that we use money from our careers to invest in wealth building assets and then let the passive income from the assets buy our liabilities.

Unfortunately, most people do the opposite.

The long-term rich build their asset column first,” Kiyosaki writes. “Then the income generated from the asset column buys their luxuries. The poor and middle class buy luxuries with their own sweat, blood, and children’s inheritance.”

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Just like we’ve talked about in a previous article, the author recommends living a life of frugality and using money that would have been spent on expenses to invest instead.

This is one of the keys to wealth. 

Speaking of wealth, he defines it as a person’s ability to survive so many days forward – or, if I stopped working today, how long could I survive?

Basically, his definition of wealth tells how close anyone is to reaching FI.

Lesson #6: People who avoid failure also avoid success.

Most successful people I know get to where they are in life because of their mistakes and failures they’ve made along the way.

Kiyosaki states, “Most people never win because they’re afraid of losing, or failing.”

Yet if you look at the way humans are designed to learn, we learn by making mistakes,” he writes. “We learn to walk by falling down. If we never fell down, we would never walk. The same is true for learning to ride a bike … The same is true for getting rich … Failure is part of the process of success.”

The way that I think about money is similar to how I play tennis. I play hard and do the best someone over 40 can, make mistakes, correct mistakes and typically get better during the process.


If I lose, again, I learn from the mistakes I made (whether they were a technique issue such as a topspin forehand) and continue to work to get better.

If I never played the game due to fear of losing/failing, then I’d NEVER get better.

Rich Dad Poor Dad Quotes

Here’s a few quotes from the book that I thought was worth mentioning:

Most people have a price. And they have a price because of human emotions named fear and greed. First, the fear of being without money motivates us to work hard, and then once we get that paycheck, greed or desire starts us thinking about all the wonderful things money can buy. A pattern is then set: get up, go to work, pay bills, get up, go to work, pay bills… Their lives are then run forever by two emotions, fear and greed. Offer them more money, and they continue the cycle by also increasing their spending. This is what I call the Rat Race.”

“You’re only poor if you give up. The most important thing is that you did something. Most people only talk and dream of getting rich. You’ve done something.”

“I’d rather welcome change than cling to the past.”

“The love of money is the root of all evil.”

The lack of money is the root of all evil.”

“The single most powerful asset we all have is our mind. If it is trained well, it can create enormous wealth in what seems to be an instant.”

“Workers work hard enough to not be fired, and owners pay just enough so that workers won’t quit.”

“If you realize that you’re the problem, then you can change yourself, learn something and grow wiser. Don’t blame other people for your problems.”

“As I said, I wish I could say it was easy. It wasn’t, but it wasn’t hard either. But without a strong reason or purpose, anything in life is hard.”

Final Take

One of the most PROFOUND things I learned about was something he called the Cashflow Quadrant. This had to do with HOW we make money.

I’m sure you’re like me and never THINK about how you’re making money. I was taught to go find patients, treat them (well), then rinse and repeat (no pun intended 🙂 ).

Never once did I realize until some 15 years into private practice that if daddy ain’t working, momma ain’t getting paid.

Kiyosaki’s explanation of the Cashflow Quadrant is what made me realize that it was time to take action and focus on earning other streams of income (passive) instead of solely relying on active (earned) income.

Related article: The Cashflow Quadrant – How You Earn Money Matters

If this Rich Dad Poor Dad summary has inspired you to take the next step to financial freedom, consider joining the Passive Investors Circle where you’ll beginning to learn the steps to begin building multiple streams of passive income.

“Wealth is a person’s ability to survive so many number of days forward… or if I stopped working today, how long could I survive?”

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