Rich Dad Poor Dad summary PDF Robert Kiyosaki
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Rich Dad Poor Dad Summary & Infographic | Robert Kiyosaki

Chapter by Chapter Summary of Rich Dad Poor Dad: What The Rich Teach Their Kids About Money That the Poor and Middle Class Do Not!

Rich Dad Poor Dad summary PDF Robert Kiyosaki

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We’re scratching the surface in this Rich Dad Poor Dad summary. If you don’t already have Robert Kiyosaki’s book, order it here or get the audiobook for free to learn the juicy details.

Editor’s Note: This article was first published in 2020. It was updated on 18/2/2022.

Disclaimer: This is an unofficial summary and analysis.

Robert Kiyosaki’s Perspective

Robert Kiyosaki is an American businessman who founded Rich Global LLC and the Rich Dad Company. The latter focuses on private financial education through the mediums of books, videos, and speeches. He is also the author of over 26 books, including the best-seller Rich Dad Poor Dad (which sold over 41 million copies worldwide).

Synopsis of Rich Dad Poor Dad

Rich Dad Poor Dad has been called the number one personal finance book of all time. Robert Kiyosaki illustrates the mindsets and beliefs that define those who become wealthy. He contrasts these mindsets with those who are poor. In this book, Robert’s example of a poor man was his dad, while the rich man was Robert’s financial mentor. Robert’s father was a genius, while his mentor didn’t even finish eighth grade. The only meaningful difference was their mindset. 

Rich Dad Poor Dad Audiobook Summary

StoryShot #1 – We All Need Financial Education

Financial literacy is extremely rare. The vast majority of students will leave school with zero financial skills. They will have developed knowledge that will help them pursue a specific profession but won’t know how to keep the money they make. They will have learned how to make some money but have no idea how to spend their money. Earning money only amplifies the cash flow pattern in your head. Financial literacy helps you control this cash flow pattern.

StoryShot #2 – The Difference Between the Rich and Poor

Robert starts the book by describing the main difference between the rich and the poor. Both poor and middle-class people work for their money. The rich have their money work for them. 

The non-rich will always seek out the conventional methods of making money. They will study hard, get good grades, and then get a safe job with safe benefits. The reason most people choose this path is they are fearful of being without money. This desire to obtain a paycheck is then swiftly replaced with a desire to spend what they have worked for. Even when these individuals gain a bonus or raise at work, they will respond by spending more money. These people see joy as coming from money, but this joy is short-lived. So, they keep working to meet their desires and to squash their fears. Robert recommends you step back and forget about paychecks. Start thinking about innovation. Most people are stuck in the rat race and miss clear opportunities. If you are willing to step back, you can take opportunities and make far more money. Robert explains that investing your time into creating assets that generate money is far safer. 

StoryShot #3 – Change Yourself

Robert highlights it is vital we learn it is easier to change ourselves than those around us. So, instead of blaming other people for not being rich, you have to accept that you are the problem. If you realize you’re the problem, you can change yourself, learn something, and grow wiser. 

Learning will take a combination of energy, passion, and desire. That said, you will also need to harness anger positively. Robert describes anger as extremely important, as passion is merely a combination of love and anger. We must be directed by passion rather than fear. 

StoryShot #4 – Use Accounting to Keep Your Money

Most people believe that making money is the most effective way of becoming rich. Although you need to earn money, it is more important to know how to keep your money. Wealth is not net worth. Wealth is the number of days you could survive if you stopped working today. 

Accounting is not the most stimulating subject. That said, Robert believes it is the most important subject if you want to be rich. The first and most important lesson is you must understand the difference between an asset and a liability. Assets are the things that you want to be buying. Rich people are those that acquire assets, while poor people are those who acquire liabilities. An asset is something that puts money in your pocket. A liability is something that takes money out of your pocket. Many people view buying a house as buying an asset. But, there are many liabilities associated with a house: mortgage payments, insurance, property taxes, and substantial amounts of money stuck in a house. So, we should view a house as a liability. Identify assets that can be bought to cover the liabilities associated with a house. 

StoryShot #5 – How Taxes Have Benefited the Rich

Today, the rich are playing a smarter game. They are legally avoiding taxes, while the middle-class is paying for most of the government’s spending. Historically, taxes were voted in by the poor and middle-class to only tax the rich. Instead of punishing the rich, taxes are punishing the poor and middle-class. Once the government got a taste of money, their appetite grew. The problem was that the government’s appetite for money was so great that taxes soon needed to be levied on the middle class. From there, it trickled down.

One crucial tax tool utilized by the rich is the 1031. The 1031 is also called the “like-kind” exchange. The like-kind exchange allows you to defer paying capital gains taxes on the sale of real estate. You can do this by using the proceeds of the sale to buy another piece of real estate. Additionally, corporations allow you to set up separate assets that generate income. The key here is that while an individual is taxed before expenses, a corporation is taxed after expenses. This simple rule means that you can legally write off vacations, car expenses, health club memberships, and restaurant meals. The poor are paying taxes and then spending. The rich are spending money and then paying taxes.

The rich have outsmarted the intellectuals. They have learned how to avoid tax legally. This is only possible because the rich are financially educated. Finance is not taught in schools, so the average intellectual doesn’t understand how the rich are avoiding tax. Rather than letting the government punish them, the rich react to tax laws that are put in place. 

Here are the four fundamentals of financial literacy provided by Robert:

1. Accounting – The ability to read and understand financial statements.

2. Investing – The science of money making money; creativity combined with strategy and formulas.

3. Understanding markets – The science of supply and demand; technical (emotion-driven) and fundamental (economic sense) investments.

4. Law – Understanding taxes and avoiding lawsuits.

StoryShot #6 – Don’t Confuse Your Profession With Your Business

Most people work for everyone else but themselves. They work first for the company owners, then for the government through taxes, and finally for the bank that owns their mortgage.

The poor and middle class spend most of their time and energy working for other people. The average American works five or six months out of the year just covering the taxes they pay to the government. 

Don’t confuse your profession with your business, in other words, your asset column. The traditional school and job path is generally a necessary thing. The problem is you usually become what you study. Focus on your asset column rather than the asset column associated with your subject. You can keep your day job and put your money into assets. The assets you can utilize while working a job are stocks, bonds, mutual funds, rental properties, notes, and intellectual property royalties. Once a dollar is in your asset column, never take it out. When you want to buy a liability, first buy an asset that generates enough cash to cover it.

StoryShot #7 – Your Mind Is Your Most Valuable Asset

Three hundred years ago, the land was how we defined wealth. During the Industrial Revolution, the industrialists owned wealth. Today, wealth is information.

Poor people often complain they don’t have enough money to take advantage of the deals they see. They only see working hard, saving, and borrowing as their viable approaches. The rich know that their mind is their most valuable asset.

Most people buy packaged investments from real estate companies, stockbrokers, etc. The rich create investments by assembling a deal themselves. To do this, you need to develop three skills:

  1. How to find an opportunity that everyone else has missed
  2. How to raise money
  3. How to organize intelligent people

You’ll have to take risks. Suppose you are informed and understand an investment. In that case, it’s not as risky as it would be to someone who is merely rolling the dice and praying.

StoryShot #8 – Become a Generalist Rather Than a Specialist

The author urges young people to “seek work for what they will learn, more than what they will earn.” Aim to learn a little about a lot instead of seeking a specialization. Specialization is for employment, not for being rich. Take the jobs that will provide you with vital skills for managing cash flow, systems, and people. The author recommends you find jobs that develop your communication, sales, and marketing skills. These skills perfectly complement other skills and are each necessary for creating wealth. 

StoryShot #9 – The Asset Columns of the Financially Literate

Robert lists the five reasons that even financially literate people may not develop their asset columns:

1. Fear – Specifically, the fear of losing money. People who make money are not afraid to lose it. The rich do not build their wealth steadily through never losing money. They learn how to limit their losses and turn those losses into opportunities.

2. Cynicism – Cynicism comes from unchecked doubt and fear, and it is expensive. A cynic will always have an excuse for why something is impossible. They criticize instead of analyzing. For example, people who don’t want to invest in real estate will say, “I don’t want to fix toilets.” Rich dad would buy a property at a price that would allow him to hire a property manager and maintain positive cash flow.

3. Laziness – Usually, the laziest people are the ones who are busy. People stay busy to avoid problems they don’t want to face or avoid the work necessary to develop the ability to become rich. Rich people have a desire that overcomes their laziness.

4. Bad habits – Our lives are more a reflection of our habits than our education. As an overriding rule, the author insists you “pay yourself first.” Take care of yourself first – physically, mentally, and financially – instead of first paying your boss, tax collector, or landlord.

5. Arrogance – The author defines arrogance as ego plus ignorance. The solution is straightforward: financial education.

Final Summary and Review

Finally, Robert describes how you can get started in your journey towards financial education and wealth.

1. Have a reason greater than reality: You need to have a reason that you want to be rich. Being rich for the sake of it will not protect you from the harsh realities of life. Identifying this reason starts by knowing what you don’t want (for example, to work your whole life, etc.) and what you do want.

2. Choose daily: Every day and every dollar is a choice to be rich or poor. Our spending habits will reflect who we are (not the other way around).

3. Choose your friends carefully: Don’t choose your friends based on how much money they have. That said, you should be careful about being around cynics or people who don’t like talking about money. They will rub off on you. Do your best to learn from people who support you, teach you, and make you a better person. Surround yourself with financially educated people.

4. Master a formula and then learn a new one: Most people stop with the basic formula of “work hard, pay your bills, and save for retirement.” You should also learn new ways of doing things. For example, you should learn how to invest in foreclosures. Put this into practice and perfect this way of making money before moving onto another approach. There are two skills to learn here. Firstly, the ability to expand your mind to learn other income-generating formulas. Secondly, the discipline to put each of them into practice before moving on.

5. Pay yourself first: If you don’t do this, you’ll find nothing left to pay yourself. This is an essential shift in mentality.

6. Pay your brokers well: This includes all professionals you rely on. Only select professionals whose services make you money (or save you money), and pay them well. This is part of growing your asset column.

7. Be an “Indian giver”: The sophisticated investor’s first question is always, “How fast do I get my money back?” Make sure that you have a significant upside while limiting your downside. Consider not only the return on investment, but also the assets you get for free when you get your money back.

8. Assets buy luxuries: Don’t buy a luxury until you have created an asset that pays for it.

9. The need for heroes: Find investment heroes that make it look effortless. Imitate and be inspired by them.

10. Teach, and you shall receive: The more you teach people, the more you will learn. This principle holds true elsewhere in life. You will find that things come to you much more easily if you give first.

11. Stop doing what you’re doing: Take a break and think about what is and isn’t working for you.

12. Look for new ideas: Read books on different subjects and learn from them.

13. Find someone who has succeeded in what you want to do: Surround yourself with people who are knowledgeable in succeeding in your field.

14. Be willing to learn: Try to be the opposite of arrogant. Learn every skill you can. Never assume you are already knowledgeable enough on a topic.

15. Make lots of offers: You never know which offer will be accepted. The more offers you make, the more likely you are to get a great deal. Rejection is always part of the process.

16. Start by searching for buyers and then sellers: This is a tip for assembling a deal. You want to know there will be buyers once you decide to sell a product. Once this is established, you can look for sellers of this product.

17. Learn from history: Study successful people from the past and emulate them.

18. Action always beats inaction: If you are not sure what to do, you should just do it. Imperfect action is better than perfect inaction.


We rate Rich Dad Poor Dad 4.3/5.

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  1. Too good.
    My fav was work for the skill, not for the money. Totally resonates with me!
    And generate assets that pay for your liabilities. Another super thought.

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