In Rich Dad Poor Dad Robert Kiyosaki, along with his co-author Sharon Lechter, points out the need for deep financial intelligence together with a commitment to the disciplines of the rich as the only way to truly escape the rat race, a term that the book uses to describe the constant state of financial struggle experienced by the middle class – an unending cycle that is perpetuated by the twin emotions of fear and greed. Since the first edition appeared in 1997, the book has been published multiple times and it has gone on to become an international bestseller.

When I first read the book many years ago as a secondary school student, I was excited at the foundational principles of financial education espoused by the author. One that particularly caught my attention – and which has remained with me ever since – is the need to develop the discipline of investing in assets rather than spending on liabilities.

“Rich people acquire assets. The poor and middle class acquire liabilities that they think are assets,”Kiyosaki says, quoting his rich dad. He goes on to explain that “An asset is something that puts money in my pocket. A liability is something that takes money out of my pocket. This is really all you need to know. If you want to be rich, simply spend your life buying assets. If you want to be poor or middle class, spend your life buying liabilities.” [Tweet this]

Key ideas and learning points

As I read the book again in November 2018 – more than fourteen years after my first encounter with it – I found it even more relevant and timely.

[mks_pullquote align=”right” width=”300″ size=”24″ bg_color=”#000000″ txt_color=”#ffffff”]Building true and lasting wealth requires grit, discipline, paying for expert advice and courage to adopt unconventional ideas.[/mks_pullquote]

I saw that my money habits already aligned with the core principles that the author teaches. This made me feel confident and excited about my financial future. I was however reminded of my partial indifference to accounting, and the need to really study and understand the basics while also retaining the services of qualified experts. The book further strengthened my resolve to be more hands-on with the management of my finances and to continue practising the disciplines of the rich deliberately while also maximising my most powerful assets – my mind and my time.

I have highlighted some specific insights that I found to be particularly helpful.

  • The difference between the rich and the poor is primarily rooted in mindsets and habits.
  • Scholastic aptitude and professional skills are good and necessary but they are inadequate for achieving financial freedom or even becoming wealthy. I need financial IQ which is made up of knowledge from accounting, investing, understanding markets and the law.
  • The rich don’t work for money; they make money work for them by investing in assets which take care of their expenses. The poor simply spend their money on expenses while the middle class lose money to liabilities that they mistake for assets.
  • To become rich, one must learn to think long term and not short-term. I must think for myself instead of allowing my emotions to do my thinking.
  • Becoming rich is about depth and long-lasting solutions, not about quick fixes and getting the next pay cheque. You cannot build a skyscraper on a shallow foundation.
  • More money does not really solve any problem; it only accentuates the existing cash flow pattern. [Tweet this]
  • Owning a corporation allows me to build wealth faster than working in my own personal capacity. The rich afford themselves significant tax advantage and layers of legal protection by setting up corporations that allow them to control everything but own nothing.

In summary, I learnt that building true and lasting wealth requires grit, discipline, getting rid of habits that don’t align with the principles of financial intelligence, recognizing and seizing opportunities, understanding the law and taking maximum advantage of relevant provisions, paying for expert advice, continuous learning/personal development and courage to adopt unconventional ideas; for instance, paying myself first before paying bills and taxes.

Practical application and action points

As much as I enjoy reading great books, I never lose sight of the fact that reading is not an end in itself; it is part of a larger strategy for actively pursuing personal growth and improving my outcomes in life.

[mks_pullquote align=”right” width=”300″ size=”24″ bg_color=”#000000″ txt_color=”#ffffff”]There’s no use accumulating knowledge that I will not apply – it will only result in information overload.[/mks_pullquote]

In other words, there’s no use accumulating knowledge that I will not apply – it will only result in information overload.

In addition to reviewing my accounting system and investing in a sales training program, here are the specific steps I am taking to consciously integrate the learning points from Rich Dad Poor Dad into my life.

  • Read more on the power of corporations and get further insights from qualified professionals.
  • Retain a fixed portion of my investments for continuous reinvestment for at least seven years instead of cashing out as soon as I make significant profit.
  • Connect with an experienced investor and take relevant trainings within the first quarter of 2019 and thereafter explore opportunities to expand my investment portfolio.
  • Defer the purchase of a brand new car until it truly represents a reward for my investments.
  • Start to truly pay myself first.
  • Review and continuously improve my passive income systems. Learn more about converting earned income to portfolio income

Instead of being seduced into working for money, I will keep developing the skills, attitude and intelligence I need to create money and make money work for me. [Click to tweet]


The author does a good job of weaving his ideas into an interesting story, with practical examples and simple illustrations. I also like the fact that he shared philosophical guideposts and action steps for getting started. I’ll recommend the book to anyone who wants to develop the right kind of mindset that will help lay a solid foundation for financial freedom.