“Rich Dad, Poor Dad” is the book that first changed the way I used to think about my goals in life and how I might achieve them.  Robert Kiyosaki’s book has been recognized by PBS and Oprah Winfrey, among others.  In fact it is the best selling finance book of all time! Kiyosaki’s ideas have gained traction even with parts of the public awareness that aren’t entirely familiar with the book.  What is the big takeaway that has influenced so many people?

Kiyosaki points out abehavior that isvery different between families that spring from generations ofwealth,the Rich Dad, and those that come from generations of middle-class wage earners, the Poor Dad – that is, how they teach their children about money. Rich Dads discuss the principals of money with their children from an early age, while Poor Dads avoid the subject of money altogether.

These ideas resonate with my own life experience and I believe they affect how individual investors approach real estate investing.  These concepts are part of your life as well, and that’s why I want you to read and absorb this book.

The children of Rich Dads and Poor Dads both grow up with deeply ingrained ideas, learned from their parents, about how much money and wealth they should achieve.  Poor Dad’s children learn to work all their lives for what money they can earn as a wage or salary paid out by the Rich Dads who own the businesses that employ them. Rich Dad’s children learn that money can work for them, rather than they for it.

Kiyosaki’s book looks at how we use our time – do we just survive life, or do we flourish and enjoy it?  He also examines how and where we invest what money we save.  His biggest distinction, and my largest takeaway from the book, was that assets put cash in your pocket in the form of cash flow…they do not take it away. He hammers the point that cash flow is king in business and your personal finances. Certain assets pay us … dividend paying stocks, oil and gas partnerships, income-producing real estate, and of course our own privately held businesses.  Other assets (which he states are not assets at all) insist that we pay it … interest on mortgage loans (your primary residence for example), taxes and expenses on various assets (cars, boats, planes, motorhomesetc), interest payments on much of what we buy and own on credit, and so on and on.

Where are the fruits of our labor going?  Are they being expended on interest payments, taxes and building a nest eggtomerely sustain life as we age? Or are they creating true wealth that we can enjoy both now and into the future through investing in cash producing assets?

“Rich Dad, Poor Dad” looks at the deep cultural origins of our attitudes about money, and how those beliefs affect the decisions we make about our lives.  Working for someone else for a lifetime to put aside something for our old age is the dominant mindset in most cultures. As an understudy to Kiyosaki I subscribe to the notion of building and investing in cash flowing assets…those that put money into my pocket every month. I urge you to read this thought-provoking book – it may change the way you see your own role in life and how you view money.

As a child, were you taught “Rich Dad” attitudes or “Poor Dad” attitudes toward money and work?

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