Analysis of Rich Dad, Poor Dad Essay

Analysis of Rich Dad, Poor Dad Essay

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Introduction
Rich Dad, Poor Dad is a book that educates readers about financial literacy. Robert Kiyosaki, the author, has two dads – one rich and one poor, although the rich dad is not his, but his friend’s dad. Both dads have different views about earning money, and Robert had the choice of contrasting both views while growing up. His rich dad’s views were more powerful and useful to Robert. The author guides the reader through six main lessons his rich dad taught him on how to let money work for you, instead of working for money.

Lessons

Lesson 1 – The Rich don’t Work for Money
“The poor and the middle class work for money. The rich have money work for them.”
The first lesson focuses on the two reasons behind poverty and unhappiness in the middle and lower class.
1. Fear
• of being without money
• people react emotionally instead of using their brain and thinking about their fears
2. Desire
• to have materialistic riches
• drives people and makes decisions for them
• once achieved, people fear losing the riches
These two are the reasons why people in the middle and lower class get stuck in the “Rat Race”, which is the continuous cycle of earning money and spending it on expenses. You should ignore these emotions of fear and desire, which control you and your thoughts.

Lesson 2 – Why teach Financial Literacy?
“In order to understand financial literacy, you need to know the difference between an asset and a liability.”
The second lesson concentrates on the importance of financial literacy. There is one rule to follow so as to understand financial literacy – “Know the difference between an asset and a liability, and buy more assets.” In order to do this, you need to be able to understand and comprehend numbers instead of jus...


... middle of paper ...


...job to earn, you should be able to manage the following through your management skills:
1. Cash flow
2. Systems
3. Employees

Beginnings

Overcoming Obstacles
This chapter shows the readers five reasons why financially literate people may still have trouble increasing their assets.
1. Fear – of losing money
2. Cynicism – overcoming pessimism
3. Laziness – by staying “busy”
4. Habits – of paying others first
5. Arrogance – ego + ignorance

Getting Started
This chapter teaches ten steps to develop powers and have control over yourself:
1. Have a reason greater than reality.
2. Choose daily.
3. Choose friends carefully.
4. Master a formula and then learn a new one.
5. Pay yourself first.
6. Pay your brokers well.
7. Be an “Indian Giver”.
8. Assets buy luxuries.
9. The need for heroes.
10. Teach and you shall receive.



Works Cited

Rich Dad, Poor Dad by Robert Kiyosaki

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