Thoughts On: "Rich Dad Poor Dad" by Robert T Kiyosaki

Money is vital, we can't do anything without it, and everyone knows that. But how we should manage and grow our finances is a grey area, and in this blog I will share how Kiyosaki's "Rich Dad Poor Dad" got me to start thinking differently about money.

Managing your money is a topic that is never taught in school, so how are we supposed to know what to do? Its an area that we have to go and learn about ourselves, to take initiative to research, or ask friends and family for advice. I myself learnt tips on financial health mainly through my parents. This included being introduced to the concept of saving and spending as a small child, (being told the famous line of "We'll put this money in the bank for you so you can use it when you're older"!). As I grew up, other concepts were introduced, such as putting your money in a bank, and the theory behind an interest rate etc. So I am grateful for them for teaching me what they know.

But this was the only real resource I had to understanding money, as it was never taught in Primary or Secondary School (and even now at university to be honest). I realised most people would probably be in the same boat as me, learning about money through their parents, but with no formal teaching or lessons about it. And I believe that this is an issue. It means that you only know as much as your friends and family know, capping your financial literacy to some degree. As the book discusses, "one of the reasons that the rich get richer and the poor get poorer is that the subject of money is taught at home, not at school." People will hence stick with old habits, or realise that they need to change their habits, but have no clue how to. In comes Kiyosaki's book, which bridges that gap and provides insights that are available for everyone.

Kiyosaki gave me a new perspective on money and the path to financial independence. The book contains lots of advice and ideas that I wasn't previously exposed to, providing a refreshing outlook on money. It's split into 6 lessons, which challenged the way I thought, and I will go through some of the key points below.

You should make your money work hard for you. This was a simple but effective message that stuck with me, and the book introduced me to thinking about the differences between assets, liabilities, income and expenditure. I learnt that to become financially independent, we need to start increasing our assets and reducing liabilities where possible. He also argued that owning a house is not an asset, which I found interesting. Kiyosaki made it clear that we should focus on building our assets, and that is one of the first steps to becoming 'rich'. The later lessons gave an interesting take on the history of taxes, and why using corporations can be a powerful way to protect your money, finally returning to the point that we should not work for money, we should work to learn. All this information seemed initially overwhelming, I felt there was too much to do and I had no idea where to start. But chapter 8 gives you 10 small steps you can actively take to begin your journey to financial independence. Overall the book is very well written, and easily digestible for someone like myself who only had a basic understanding of finances. It shares with you the underlying terminology and theory, giving you the tools to take action.

Financial literacy is a topic that should be taught more widely and taken more seriously. With the school curriculum not teaching the future workforce on how they can manage their money, people sometimes solely rely on information they are told to make decisions. However, this information may not always be correct, and is often limited. Books such as this one fill the gap, allowing information to be readily available. It really made me think carefully about how I should take care of my money, and what I should be doing with it to create the best opportunities for me. For anyone looking to gain an insight into personal finance, I think 'Rich Dad Poor Dad' is a great place to start. Thanks for reading!