rich dad poor dad book cover

Rich Dad Poor Dad by Robert T. Kiyosaki complete chapter-wise book summary.

Rich Dad Poor Dad is an excellent personal finance book from
the last 23 years. First published on Robert’s 50th birthday, 8th April 1997.
Although this book was very controversial at that time and faced a lot of
criticism and rejection. Later millions of people realized that Robert’s
principles for money management are changing their life. 


While seeing the title of this book you may wonder why Robert is talking about his two dads one rich and another poor. Did he have two fathers, biologically I think it is not possible (or maybe possible)? So let me explain, Poor dad of Robert is his real father and Rich dad is his friend Mike’s father. Why they are referred so you will come to know as you will read further.

The poor dad of Robert was highly educated and intelligent and had various degrees from prestigious universities, whereas others had never finished the eighth grade. Even though they both earned substantial income but one struggled financially whereas the other was the richest man in Hawaii.

He was offered advice from his both dads but later he chooses to follow the rich dad’s principles. Poor dad advised him like we middle-class people are advised by our parents. He used to say study hard and to get a job in a good company whereas others would say study hard so that you can find a good company to buy or create jobs for other people. Poor dad always used to justify his poor financial conditions whereas Rich dad was always curious to find another way to improve his financial conditions.

If you have thought that money doesn’t matter, love for money is evil blah-blah-blah. Let me tell you my friend such thinking is what poor dad had. I agree that greed for money is evil but money is power, money gives you the freedom to buy everything which you had dreamed of. Rich dad always referred to himself as rich even when he was flat broke.  

Robert’s mentioned a quote with deep meaning which clears the difference i.e.

“There is a difference between being poor and being broke. The broke is temporary. Poor is eternal.”

‘Money is one form of power. But what is more powerful is financial education. Money comes and goes, but if you have the education about how money works, you gain power over it and can begin building wealth. The reason positive thinking alone does not work is that most people went to school and never learned how money works, so they spend their lives working for money.’

The rich don’t work for money.

The main difference between a real rich person and a poor person is explained In this chapter. Robert says that his rich dad taught him that rich people don’t work for the money they use money instead to work for them. A person who earns enough money but still struggles financially lacks financial education. He always thinks that earning more money will solve his problem but the person himself lack knowledge of money. He doesn’t know the concept of money, or how money works.

Robert further adds that schools and colleges make students work for money. They don’t give any learnings about money and its workings and as a result, these students in future complain to their boss for raising their salary because they are not able to handle their finances and their life then get full of complaints and regrets.

Two emotions control people’s lives – fear and greed. Fear of not having money motivates them to work really really hard and when they get their paycheck their greed arises for money and then people get trapped by money. “Most people do not know that it’s their emotions that are doing the thinking”.

Why teach financial literacy?

Financial literacy teaches you to manage money. To be financial literate we should understand the difference between the two terms assets and liabilities. In simple words, anything which puts money inside your pocket is an asset whereas anything which takes out money from your pocket is a liability.

To understand more about the money we should understand the cashflow pattern:

For a poor person: A poor person always uses all the earnings for paying for his expenses.

For a middle-class person: A middle-class person first buys liabilities and then keeps on paying for them.

For a wealthy person: A wealthy person buys assets from his income. Thereby increases passive income by acquiring more and more assets first and then he uses this passive income for paying his expenses and liabilities.

So I hope you get some feel that why a rich person is rich. To be rich everyone should focus on acquiring assets and reducing their liabilities. And remember that money without financial intelligence is money soon gone. Rich people always try to acquire more and more assets. The poor and middle class acquire liabilities that they think are assets.

Mind your own business

Robert says that whether you are an attorney, banker, or any other thing by profession but you must have your own business. It doesn’t mean that you should leave your job, he says that continue your job as a great hardworking employee but you should keep building your asset column.

Now I had seen that when people earn some money they start spending on luxuries. I think this is a foolish way of management of money because people should first build their asset column and generate enough passive income to afford their luxuries.

“Start minding your own business. Keep your daytime job, but start buying real assets, not liabilities.”

Now you may ask me what kind of assets should I buy. So I would like to add that you may buy a business that doesn’t require your presence, bonds, stocks, income-generating real estate, etc. Simply you can buy anything but it should add some value and generate income for you and most importantly you should buy assets that you love because if you don’t love you won’t take care of that. So in conclusion I would like to say that “Rich focuses on their assets columns while everyone else focuses on their income statements.”.

The History of Taxes and the Power of Corporations.

“My rich dad just played the game smart, and he did it through corporations– the biggest secret of the rich.”

In this chapter, Robert explains the lesson using the story of Robin Hood who robbed money from the rich and distributed it among poor people. We often hear people saying that why don’t rich people pay more taxes and give that money to the poor. But the reality is that rich people pay negligible taxes also when the government says that they will apply more taxes to the rich they apply it to upper-educated middle-class people like lawyers, accountants, etc. But real rich people are never taxed because they play games smartly like my rich dad.

The rich people always look for legal loopholes to avoid paying taxes and put more money into their pockets. That’s why they often hire the smartest accountants and attorneys.

We also get to see different perspectives in thinking of both the rich dad and poor dad. For example

Poor dad: the rich are ‘greedy crooks’

Rich dad:  Governments are ‘lazy thieves’.

Poor dad: Climb the corporate ladder.

Rich dad: Own the corporate ladder.

Further, Robert explains that poor people first earn money, pay taxes then they spend but rich people or business owners earn money, spend, and then they pay taxes.

The Rich invent money.

 “Often in the real world, it’s not the smart who get ahead, but the bold.”

In this chapter, Robert clears many myths of people like we often hear work hard earn money and then save money to be rich but real rich people never do this. They put their money into work to earn more money.
We need to understand that when we save money, we are even taxed on our saved money, which decreases our profit.

So we all need to change these average mind strategies and start developing our financial intelligence. We should learn to identify great opportunities and work on our greatest asset – The mind.

He says

“The single most powerful asset we all have is our mind. If it is trained well, it can create enormous wealth.”

Robert Kiyosaki shares, “Most people never win because they’re more afraid of losing. That is why I found school so silly. In school, we learn that mistakes are bad, and we are punished for making them. Yet if you look at the way humans are designed to learn, we learn by making mistakes. We learn to walk by falling. If we never fell, we would never walk.”

We should remember that ‘People who avoid failures also avoid success’. Fear of losing in people never lets people become rich.

One important lesson that Robert mentions in this chapter is the qualities of a good investor.

  1. A good investor searches for opportunities that are missed by most people.
  2. He knows how to raise capital outside of the bank.
  3. He has the ability to organize smart people and hire people smarter than him.

Work to learn, don’t work for money.

“Job security meant everything to my educated dad. Learning meant everything to my rich dad.”

Robert had an interview with a journalist. While talking to her he understood that she was striving for becoming a best-selling author. She tried to be but no one was interested. He advised her that she should take a salesperson course. She took that on her ego and replied in an angry tone “I have a master’s degree in English literature. Why would I go to school to learn to be a salesperson? I hate salespeople all they want is money.”

He further explained that he is a best-selling author, not the best writing author by pointed her. You know there are many great lawyers, doctors, dentists and all these people still struggle financially.

When Robert resigned from his high-paying job he had a very emotional conversation with his poor dad. Here also I would like to draw some differences in beliefs of rich and poor dad.

Poor dad: valued job security.

Rich dad: Valued learning.

Poor dad: He assumed that Robert went to school to learn to be a ship’s officer.

Rich dad: he knew that Robert went to school to learn international trade.

“Job is an acronym for Just over Broke”

Robert also wants us to change our perspective regarding job applications he says we should take jobs where we can learn new skills instead of where we can get paid more. And when we want to earn more money we should take a second job where we can learn the second skill.

Management Skills Needed for Success:

  1. Cash flow management.
  2. System management.
  3. Ability to handle people.

“The most important specialized skills are sales and marketing.

Overcoming obstacles.

Five main reasons even you are financially literate but you may still fail in becoming financially free:


No one in this world will ever like to lose money. Robert says that he never met a single rich person who had never lost money. But he had met many poor people who never lost a single penny. So their risk is required to be rich so if you hate risk and worry you need to start building an asset column early to become rich.

There is so much difference in a person who starts investing or building asset columns at age 20 and 30. If you learn to take risks at a younger age easier it becomes for you to be rich.

“The primary difference between a rich person and poor person is how they manage fear.”

For most people, the fear of losing money is more than the joy of being rich.

Also, the fear changes the attitude of both personalities. For example, Failure inspires winners and failure defeats losers.

One another way to overcome fear is to play safe. We have to make a balanced


We often allow others to shake our decisions regarding investments. Robert
shared an example of his friend that he was about to buy a condo but at the
last minute, he dropped the idea because his neighbor told him that it was not
a great deal. Interesting thing was that the neighbor had no prior experience
in investing.

If he had stayed in that deal he would have doubled his investments. But he lost the chance.

So people from every walks of life create self-doubt in ourself and we often allow them to create and keep ourselves from grabbing great opportunities.

Doubts and cynicism keep most people poor. Rich dad likes to say ‘ cynics criticize, and winners analyze.’.


I will come directly to the answer of overcoming laziness i.e. a little Greed.

It may sound hard to believe that a little greed can be the cure for laziness. With greed, we have a desire. For example, the world progresses because someone desired a better world. This world has new inventions because we desired something better.

We need to change our wordings also, for example, saying “I can’t afford it” we should say “How can I afford it”. Because it opens your mind to seek more innovative ways to find solutions to your financial problems.

Bad habits

Whatever we are today is the reflection of our habits. We take actions today and built the same future that our actions say. People struggle financially due to their bad habits and often they blame others for their condition.

Robert says before paying bills and taxes we need to pay ourselves because if we pay ourselves at last we will have nothing left over. But if we pay ourselves first, we get financially stronger.


Robert explains that his rich dad used to say that every time he had been arrogant he had lost money because he assumed that things that he doesn’t know were not important.

“What I know makes me money and what I don’t know loses me money.”

Whenever you are ignorant about a subject or topic, you need to start educating yourself by either finding an expert in the field or reading a book on the subject.

Getting started.

Robert once asked a gold miner, how he was so confident about finding a gold mine. He said  “There is gold everywhere. Most people are not trained to see it.”

Here Robert gives 10 Steps to Develop Your God-given Powers.

Find a reason greater than reality: the power of the spirit

Whenever we ask people did they would like to be rich. They would say yes but when they came to know about works that need to be done. Everyone changes their mood because they didn’t have a strong reason to be rich.

Make daily choices: the power of choice

Financially with every dollar we receive, we choose whether we become: rich,
poor, or the middle class. Whatever amount of money we spend and where we spend reflects who we are.

 Becoming a rich person is a choice and the same applies to people also.

Choose friends carefully: the power of association

Never choose friends based on their financial statements.

Choose friends who often talk about money and are interested in the subject.

Learn for both kinds of people rich or poor. Rich enables to what to do and poor gives us lessons for what not to do.

Master a formula and then learn a new one: the power of learning quickly

Carefully choose what you need to study also. Whatever you study you become that person’s reflection.

We all learn the dumbest and basic formula for money in school that works for money.

In today’s world what matters most is how fast you learn because it is changing very fast so If you learn taking more time your lessons may turn out to be old.

 Pay yourself first: the power of self-discipline

If you want to be rich. You have to take full control of yourself.

If you buy a new car or something like that immediately when you get to raise. You lack self-discipline.

Pay your brokers well: the power of good advice

Pay professionals well and have expensive attorneys, accountants, real estate brokers, and stockbrokers. Because their services would directly make you money. If these professionals make more they will also make you more money.

Have a board of directors because it is essential for you to have people working for you who are smarter than you.

Be an Indian giver: the power of getting something for nothing

  1. “  The sophisticated investor’s first question is: ‘How fast do I get my money back?’ They also want to know what they get for free, also called a ‘piece of the action.’ That is why the ROI, or return on investment, is so important.’ 
  2. Ray Kroc, founder of Mc Donald’s sold hamburger franchises. He didn’t love hamburgers but instead, he wanted to acquire real estate under the franchise for free.
  3. Use assets to buy luxuries: the power of focus.
  4. A father wanted to teach his child how to make money. His son had been asking for a car but didn’t want him spending his college money on it. His father gave him $3,000 that the son could use to buy a vehicle indirectly. So he couldn’t use the cash to buy a car. His son started learning how to invest in stocks. He read every book, he read wall street journal, and even though he lost $2,000 in the stock market, he had found something more interesting than a car.
  5. Don’t buy luxuries with liabilities like a credit card instead you should buy them from your asset column.

Even making money principles may seem easy in theory but still, it is hard to make. For example, if 100 people are given $10,000 at the beginning of the year, by the end, 80 would have spent it all or gone further into debt, 16 would’ve increased the amount by 5-10 percent, 4 would have either doubled it or grew it to the millions.

Choose heroes wisely: the power of myth

  1. Robert Kiyosaki’s heroes are Warren Buffett, Peter Lynch, George Soros, etc. 
  2. When Robert Kiyosaki analyzes a deal, he tries to look at it the same way Warren Buffett would. This strategy helps him tap into raw genius.
  3. Teach and you shall receive: the power of giving
  4. Robert’s rich dad taught him to be charitable. His poor dad taught him to give away his time and knowledge, but not money.
  5. Rich dad says, “If you want something, you first need to give.”
  6. If you want money, give money.

Still, Want More? Here Are Some to do's

  • Stop doing what you’re doing: analyze what is working
    and what is not.
  • Look for new ideas: go and buy a book and start learning
    something new.
  • Find someone who has done what you want to do. Ask
    them for a lunch with you and talk about how to do it.
  • Take classes, read newspapers, and attend seminars:
    Robert searched on the internet and newspapers for free and inexpensive classes.
  • Make a lot of offers: offer for more deals so that chances
    for finding the right deal increase.
  • Jog, walk or drive a certain area once a month for
    10 minutes: You’ll find some of the best real estate investments by driving
    You might talk to postal workers, moving truck workers, retailers, and so
    forth to better understand a neighborhood. 
  • Shop for bargains in all markets: remember profits are
    made in buying not selling.
  • Look in the right places: Poor people buy through real
    estate agents while Robert used to buy at the foreclosure auction.
  • Look for people who want to buy first. Then look
    for someone who wants to sell.: When buying property, find a seller first then
    find a person who’s looking to sell their property and buy through them.
  • Think big: small people are small because they think
    small, act alone, or don’t act at all.
  • Learn from history: all the big companies started as
    small companies.
  • Action always beats inaction: before earning financial rewards we must
    take action.

Final thoughts

Robert’s friend once tried to save money for the education of his four college children. But for only $12,000. It was clear that it would not happen soon.

He advised his friend to buy a place in Phoenix since there was a fall in the market. Two weeks later, they found a three bedroom, two-bathroom home in a beautiful location.

The landlord was eager to sell. They ended up buying the property for $79,000, even though the owner wanted $102,000.

Her friend needed a down payment of $7,900. Each month after all the expenses had been paid, her friend put $125 in her pocket. She had planned to keep the house for 12 years.

He used his $125 to pay off the mortgage very quickly. Three years later, someone offered her a $156,000 house. Robert advised him to sell it using 1031 tax exchanges.

Next, she bought a small warehouse. Three months later, she was making $1,000 a month in a college fund. A few years later, he sold that small house for about $330,000.

His next investment made him $3,000 a month in salary, back in the college fund. The man is now confident of his ability to pay for his children’s college education. And it all started for only $7,900.

There are three types of income

1. Ordinary earned.

2. Portfolio

3. Passive

Poor Dad: ordinary earned, get a safe and secure job.

Rich Dad: portfolio and performance, make money work for you

“The key to financial freedom and great wealth is a person’s ability to convert
earned income into passive and/or portfolio income.”

Rich dad would often say, “If you want to be rich, you must know what kind of income to work hard for, how to keep it, and how to protect it from loss. That is the
key to great wealth… If you do not understand the differences in those three
incomes and do not learn the skills on how to acquire and protect those
incomes, you will probably spend your life earning less than you could and
working harder than you should.”

At last, your destiny relies on how you spend your money and your time. Your
family’s future will be determined by the choices you make today.

Financial literacy teaches you to manage money. To be financial literate we should understand the difference between the two terms assets and liabilities. In simple words, anything which puts money inside your pocket is an asset whereas anything which takes out money from your pocket is a liability.

To understand more about the money we should understand the cashflow pattern:

For a poor person: A poor person always uses all the earnings for paying for his expenses.

For a middle-class person: A middle-class person first buys liabilities and then he keeps on paying for them.

So we hope liked Rich Dad Poor Dad Summary.

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7 thoughts on “Rich Dad Poor Dad by Robert T. Kiyosaki complete chapter-wise book summary.”

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  2. I agree with your point of view, your article has given me a lot of help and benefited me a lot. Thanks. Hope you continue to write such excellent articles.

  3. Do you mind if I quote a couple of your articles as long asI provide credit and sources back to your website?My blog site is in the very same niche as yours and my users would certainly benefit from some of the information you present here.Please let me know if this okay with you. Thanks!

  4. great summary ,got to know lot of things. Will be looking forward for more of such summaries in the future 🙂

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