Rich Dad, Poor Dad

Our task in Macro Economics: to make a reaction paper about Rich Dad, Poor Dad. Our professor told us not to mind the negative sides of the book and to just focus on the positive ones it has. But if she let me made a real review, this will be very different...

Rich Dad, Poor Dad starts by giving us the perspective about the title of the book itself. It contrasts the two influential male-figures in Robert Kiyosaki’s life, his biological dad, and his Rich Dad which is his best friend’s dad. Evidently, rich dad became more influential to the author’s decisions, values, and life in terms of finances. The book entails how the author was trained and guided by his rich dad at an early age. It focuses on preparing people through various forms of financial education to get out of the rat race. Mr. Robert Kiyosaki emphasized that financial education is very important in order for us to be financially intelligent. In addition to that, the author hands down principles or lessons taught to him by his rich dad that will help individuals wanting to be financially free. The six lessons are: (1) the rich don’t work for money, (2) learning financial literacy, (3) mind your own business, (4) the power of corporations, (5) the rich invent money, and, (6) work to learn vs. don’t work for money. Furthermore, the book gives tips and advices on handling one’s assets and liabilities properly and intelligently. It also presents real life situations wherein the readers can get lessons as well. Rich Dad, Poor Dad also tries to inspire and awaken the minds of its readers to start acting their dreams of becoming free from financial burdens and becoming rich. 

The first of the six lessons provided by the book is that the rich do not work for money. Although the first lesson looks a bit absurd, it does not mean that the rich does not work at all.
They do work and make money, but they do not use or make their time be eaten by money.  They have their own creative ways in working and hire people to get the money rolling. The author tells that we should not be slaves of money. Instead of us working for money, let money work for us. I absolutely agree with that statement. We humans often overlook and take for granted things in our lives because of money. We tire ourselves and make it look as if money is our master. Mr. Kiyosaki explains that even though money is powerful we should learn to be responsible in controlling this power. The chapter of the book that explains the first lesson also introduces to us the kind of person rich dad was. It describes how they lived simply. I personally admired how rich dad lived just in spite of his progressing financial life. I believed that being prudent is his one way of saving and one of his strategies that can help him in achieving his goals. Moreover, the author also advises the readers to be aware of their emotions. Taking immediate actions because of bursting feelings without even thinking and regretting everything what you have done after. Most of us are guilty of it because sometimes we let our emotions think for us. Think first before you say or do anything. It is like when rich dad offered the two kids with a higher salary, the kids had the urge to take his offer but they did not let their emotions overwhelm them.  The kids are being tested and so they were able to pass it because they used their minds to think. Above all kinds of creatures here on earth, humans are given with minds that have the utmost ability to think so we must use it properly and efficiently for the good. 

The first lesson is somewhat correlated with the next one, which is about teaching financial literacy. In this lesson, the author redefines the terms asset and liability. Assets are not only things with value but these are resources or possessions that give future benefits to the owner. It is anything that you own that generates income. On the other hand, liabilities are anything that have costs or will cause tremendous future cash outflows. The author sites that a home is not an asset but a big liability. I somewhat disagree with this, although his point makes sense as well. He treats houses as a liability because of the continuous cost like the maintenance and the taxes inherent with it that gives burden to people. However, I believe that if the benefits it provide to you outweighs the costs it produces, the said asset gives you remuneration, and in the first place, in general accounting practices, it is considered as an asset. In Mr. Kiyosaki’s point-of-view, assets are in the form of passive income that an individual controls, such as rental and intellectual property. He presents that in order to become rich, you have to acquire and acquire assets that will give you future benefits. For us to be able to do that we must be financially literate. It is being able to read, forecast, and analyze numbers. Of course, being just literate is completely different from being financially literate. You have an edge against others because you know how to deal with certain things that others do not.

Minding your own business is another lesson given by the author of the book. What is clear is that the main point of the third lesson is that a financially stable individual should be spending their spare time by investing their income in as much as possible in assets. Employees should minimize expenses and maximize their investments. The author gives situations and even his personal experiences in minding his own business. This lesson is very applicable to the younger generations like us because we are the ones who have so much time left in our hands. The book teaches us that before leaving our parents’ house and before having our own homes, we should start investing so as to increase our asset and income columns rather than our liability and expenses columns. It also says to the readers to pay off debts and start investing as soon as they can. This is so true that one way of having financial freedom is by becoming debt free and by having enormous amount of assets that can cover up one’s expenses for a long time. 

The next chapter entails the next lesson which is all about the history of taxes and the power of corporations. It presents us how the poor thinks of taxes. They feel that the rich should be charged the highest taxes because the rich people have the money. It clearly shows how the mentality of the poor tries to pull down the rich because the poor people feel that they should be given the privilege to be charged the least taxes because of their status in the society. What the poor does not know is that the rich find ways to be exempted and to minimize their taxes since they have financial literacy. This is very true in our society nowadays.  The rich becomes richer and the poor becomes even poorer. The rich knows how to play the game of taxes while the poor become slaves of the government when it comes to paying taxes. The rest part of the chapter provides the readers of how to overcome this slavery. The way presented is putting up a corporation. I am most interested in this part because someday I want to put up my own business while I am pursuing my profession. I also believe that through this, we will be able to get out of the rat race. I also commend the four key traits that an individual must have before building up a corporation. I felt that I am on the right track because three of the four traits are already familiar to me since I am taking up Accountancy which encompasses laws and practices on business. Moreover, I think that most of the readers will apply the author’s advice in here because many have that interest in building up a business and eventually an empire of their own. People should learn not to be just employees but to be the employers as well. 

The fifth lesson is all about inventing money. In order for us to accumulate more income, we should invent more creative ways in making money. After inventing those ways, I also agree with the author that self confidence is one of the biggest things that can help like being brave and being confident in taking risks to reach success. In addition, the financial intelligence being reiterated by the author will also aid everyone in thinking and in making those ways possible. Opportunities are just around us, it is in us if we are courageous enough to take the risks inherent with it. But once we find the guts deep within us, whether you fail or lose, at least you tried and you know how does it feel.

The last lesson being presented by the book is work to learn vs. don’t work for money. It discusses that the things being taught to us in regular schooling are not enough. Mr. Kiyosaki suggests the readers to enroll in seminars in sales, marketing, and advertising because we need skills that are helpful in selling what we want to sell. He also tells the readers to know more about at least little of everything. Although, I prefer to have a specialized skill and knowing at least something with the others, the author says that specialization is just the reason of unionization. Moreover, I somewhat agree with his other point that we should expand our abilities and get out of our comfort zones, but not with the way he looks at specialization. Job security is very important in our ever changing economy but like what the author said, having another job will teach us a lot of skills because experience is the best teacher. It will be better if you look for a job that can widen your horizon and skills to improve your financial intelligence.

To sum it up, the book is very practical, useful, and inspiring to the readers. It makes the readers search for more information about it. It builds our interest in gathering more knowledge to improve our financial intelligence. Although the author has sometimes bewildering way of explaining and describing things, it gives a huge impact that makes you think of what he is saying. I searched for more and found some critiques about the book because I felt that I will be able to understand the book better by reading what others who have read the book as well have to say. I know that Rich Dad, Poor Dad received a lot of negative comments because of its not-the-usual-way of teaching, but I still recommend the book to others who are seeking and willing to learn in a different way. The author has a point that there are rotten parts in our education system since not all that they teach in school are applicable to the real world especially to those who want to be rich. Change is inevitable so reading this book might awaken your minds to try different things when it comes to pursuing your financial ambitions. Lastly, being rich is not just about having the things you want or being materialistic, it is about being able to provide what you and your family needs. The book taught me that the road to becoming rich may be a very difficult one, but after all the hardships, everything will be worth it.