Paper Example on Financial Lessons in the Book Rich Dad Poor Dad

Published: 2023-09-26
Paper Example on Financial Lessons in the Book Rich Dad Poor Dad
Essay type:  Book review
Categories:  Knowledge Finance Money Books
Pages: 4
Wordcount: 976 words
9 min read
143 views

The book Rich Dad Poor Dad by Robert Kiyosaki teaches essential financial lessons that the author learned in his childhood. In this story, the author’s narration of his path to financial freedom has shaped my mindset on creating wealth and managing money. Kiyosaki learned four financial and career-related lessons that are also relevant to my life. First, he learned that financial literacy is a foundation for creating wealth. Secondly, managing risk is essential, and one should not be afraid of losing money. Thirdly, an individual should focus on assets and investments over income. Lastly, working to acquire life skills is better than working for money.

Trust banner

Is your time best spent reading someone else’s essay? Get a 100% original essay FROM A CERTIFIED WRITER!

Financial Lessons, Their Relevance and Applications

Financial Literacy

One of the major lessons that Kiyosaki learned from his two fathers is the essence of being financially literate. His statement that “intelligence solves problems and produces money” shows the importance of the lesson on financial literacy (Kiyosaki, 2001, p. 44). Again, Kiyosaki reiterated that money without financial knowledge could not take anyone far. He understood that technical knowledge of financial management boosts one’s ability to create wealth.

This lesson is relevant to me because I always strive to gain practical knowledge of taxation, stock markets, and how to prepare budgets. I also encountered financial trouble in the past, and I believe it is because our societies and education systems do not teach about financial intelligence and financial literacy. I intend to operationalize this lesson in my career plan by reading about investments, accounting, taxation, and stock markets. Besides, I plan to engage with financial experts to gain more knowledge on financial matters.

Taking Risks

Kiyosaki noted that a mindset of managing risks rather than avoiding them is the foundation for financial success. He said many people miss big potential rewards because they are afraid of failing or losing their money (Kiyosaki, 2001). The author’s thinking that failure defeats losers suggests the importance and rewards of taking risks in business (Kiyosaki, 2001).

This lesson has direct relevance in my life because I intend to start a business after school. Kiyosaki's life experience has enabled me to develop a mindset that generating wealth at times, involves taking reasonable risks, and, at the same time, striving to address uncertainties. After completing my studies, I will apply this idea by leveraging money, while mitigating risks to maximize returns. Kiyosaki learned that a person could learn better from past failures (Kiyosaki, 2001). This idea has changed my thinking because, in the past, I used to fear failure even in utilizing small sums of money. After establishing my business, I will develop an effective risk management plan to help me mitigate risks and minimize negative impacts.

Focus on Acquiring Assets and Investments

One of Kiyosaki’s most valuable lessons is the essence of investing in assets. He learned that while wealthy people focus on growing their investments and acquiring more assets, the poor and the middle class rely on liabilities that they believe can help them become affluent (Kiyosaki, 2001). Kiyosaki believed that it is prudent to use the money to buy more assets rather than investing in items that increase liabilities (Kiyosaki, 2001).

This idea applies to me because I have not focused much on growing assets and minimizing liabilities. I have several electronic gadgets, which, of course, cannot appreciate since they require maintenance costs and even monthly subscriptions. It is for this reason that Kiyosaki's idea portrays my current situation. However, I will operationalize this the author’s idea after school by investing in bonds, stock, and real estate, among other assets that generate positive cash flows. Even after getting meaningful employment, I will be using a significant proportion of my salary to grow assets and investments as a way to increase income. By doing so, I will always have an income that exceeds expenses and liabilities.

Work to Acquire Life Skills

Kiyosaki learned that one should not work for money but rather to acquire essential life skills. He believed that a person is one skill away from great wealth (Kiyosaki, 2001). According to Kiyosaki, the mindset of working mainly to learn instead of working to make money helps build careers. In other words, education and life skills are more important than money in the long run.

This idea applies to me in that I always work during long holidays primarily to acquire skills rather than earn money. Over the past few years, I have worked in several organizations, and my goal was to know how to manage people and acquire many life skills not taught in school. I intend to put this lesson into practice by working as a volunteer to acquire more life skills, which will help me in my career path and a plan for financial freedom.

Differentiating Rich and Poor People

According to Kiyosaki, there is a significant difference between rich and poor people in terms of how they work to earn money. Specifically, wealthy people have money to work for them, unlike their poor counterparts that work for money (Kiyosaki, 2001). The non-rich also acquire liabilities, whereas the affluent ones focus on acquiring assets. The two differences distinguish the rich from the poor.

However, a broke person is not poor, and the one with a lot of money is not wealthy. According to Kiyosaki, intelligence produces wealth, and it solves problems. Illiteracy is also the cause of the financial struggle, suggesting that poor people are rich if they are intelligent and can use their knowledge to produce money.

In this book, the idea that being poor is eternal is unrealistic because needy people cannot be in a miserable situation forever. Such people can use their skills and knowledge to generate wealth and even solve problems facing the rich.

Reference

Kiyosaki, R. T. (2001). Rich dad poor dad: What the rich teach their kids about money that the poor and the middle class do not! https://b-ok.africa/dl/737533/47cce5

Cite this page

Paper Example on Financial Lessons in the Book Rich Dad Poor Dad. (2023, Sep 26). Retrieved from https://speedypaper.com/essays/financial-lessons-in-the-book-rich-dad-poor-dad

Request Removal

If you are the original author of this essay and no longer wish to have it published on the SpeedyPaper website, please click below to request its removal:

Liked this essay sample but need an original one?

Hire a professional with VAST experience!

24/7 online support

NO plagiarism