One brilliant insight I found in Kiyosaki’s Rich Dad Poor Dad is the precision with which he defines the concepts of poor, rich, and middle class. These concepts are not tied to how much money someone has or what position they hold, but to how they behave with money.
The poor spend everything they earn. The middle class turn higher earnings into long-term debt by buying things that drain their resources. The financially educated rich turn money into assets and businesses, and only later, using the fruits of their investments, allow themselves luxuries that do not put their wealth at risk.
This difference in outcomes comes from habits. Poor people develop poor habits. A common but misguided habit is withdrawing money from savings to pay bills. The rich, by contrast, not only make a habit of paying themselves first, but also know that savings should be used only to generate more money, never to cover expenses.
The central issue lies within us: our emotions of fear and greed when they are out of balance. When we let them control us, we fall into an almost inescapable trap. Fear diminishes our creativity and limits us to a single way of earning money: a salary from a job. As soon as we receive that salary, greed awakens and leads us to spend it all on new things. Soon we realize there are even more expensive things, and we need more money. This trap, which starts emotionally and ends existentially, is called the rat race.
Kiyosaki shows ways to escape it, although the process can often be long and challenging. For example, he created the game Cashflow, a practical simulation of how to get out of the rat race. The goal is to acquire small or large businesses until the income generated by assets exceeds expenses, thereby achieving the much-desired financial freedom. This vision of financial freedom resonates with figures who turned habits into lasting wealth, such as Donald Trump, Warren Buffett, Peter Lynch, George Soros, and Jim Rogers. All of them, in different ways, inspired Kiyosaki’s career.
It is important to clarify that Kiyosaki is not against having a job; he simply suggests that formal employment is the first step in a long-term problem: limited financial freedom. To achieve it, you need to make money work for you, not the other way around. In addition to having a job, it is necessary to learn other ways of generating income: working for yourself, becoming a business owner, and learning about financial investments. Each of these alternatives can work in our favor, helping us gradually leave the rat race and achieve financial independence.
As for starting your own business, Kiyosaki recommends doing so only in an area you genuinely want to pursue and know well. Otherwise, it is wiser to keep your job while building side ventures, that is, investments such as rental properties, government bonds, stocks, intellectual property royalties (from music, literature, and patents), and any other source of income that puts money in your pocket without requiring your direct labor.
He also suggests a rule of discipline: never withdraw money once it has entered your list of assets, that is, assets that generate income. That way, the money works for you like a faithful employee, available twenty-four hours a day without complaining.
For Kiyosaki, wealth includes the factors of time and longevity. He borrows Buckminster Fuller’s definition: “Wealth is a person’s ability to survive a certain number of days into the future or, if they stopped working today, how long they could survive.” Thus, wealth is measured not only by how much a person owns, but by how much income their money can generate, revealing their true level of financial survival. At the end of the day, what matters is not how much you earn, but how much you keep and for how many generations.
If, as Kiyosaki reminds us, wealth is measured by time and the ability to generate income, then achieving and maintaining it depends on developing what is called financial intelligence. This body of knowledge points toward financial freedom and is divided into four fundamental areas:
- Accounting: The goal is to develop financial proficiency, meaning the ability to read and understand financial statements in order to identify the strengths and weaknesses of any business.
- Investing: Learning how to make money work to make more money.
- Understanding markets: Understanding not only the technical aspects of a market, but also its emotional aspects, going beyond the economic fundamentals of investing.
- The law: Knowing the tax advantages and legal protections available to businesses under current law. If necessary, hire experienced consultants and lawyers: they are worth the cost and are cheaper than paying the government. Not knowing the law can be expensive.
In addition to developing financial intelligence, it is important to understand that knowing a little about each area is more valuable than being an expert in only one. It is also worth noting that wasted talent is everywhere: some people master the art of making things but ignore the science of selling them. A hamburger can be perfect, but if it never reaches the customer, it remains only a dream tucked away in the kitchen. That is why marketing and sales courses can be enormously beneficial to any professional.
This lack of broad perspective, combined with emotional and behavioral barriers, explains why so many financially literate people fail to build their cash flow. The five main reasons are: 1) fear, 2) skepticism, 3) laziness, 4) bad habits, and 5) arrogance.
I would like to highlight another point I found distinctive: the book does not offer rigid rules, like a calculation where two plus two equals four. Not at all. Kiyosaki uses an engaging narrative that draws us in until the end and makes us feel as if we are part of a mentoring relationship. The rich dad’s approach is practical: he suggests activities only when the student is ready. It is similar to Mr. Miyagi’s method in The Karate Kid, when Daniel-san had to sweep the floor or wax the car using specific movements without realizing that he was already training his muscles for defensive and offensive moves.
I couldn’t leave out an essential habit for every human being, but one that is absolutely indispensable for the rich: giving. On this point, Kiyosaki advises that whenever you feel a lack or scarcity of something, you should give first what you wish for, and you will see it return to you in abundance. Giving is not limited to money, material possessions, or blood. You can give your time as a volunteer, your attention through emotional support, your knowledge, physical space for events or meetings, your influence by giving a voice to important causes, or even prayers, group meditations, and religious practices focused on the well-being of others.
Finally, when you finish reading Rich Dad Poor Dad, you will have the responsibility of deciding who you will be: poor, if you continue spending everything you earn; middle class, if you choose to buy liabilities; or rich, if you put the book’s advice into practice by investing in assets.
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