Just finished reading: Rich Dad, Poor Dad

“Well, if you don’t pay me more or show me more respect and teach me, I’ll quit.”

“Well put,” rich dad said. “And that’s exactly what most people do. They quit and go looking for another job, better opportunity, and higher pay, actually thinking that a new job or more pay will solve the problem. In most cases, it won’t.”

“So what will solve the problem?” I asked. “Just take this measly 10 cents an hour and smile?”

Rich dad smiled. “That’s what the other people do. Just accept a paycheck knowing that they and their familiy will struggle financially. But that’s all they do, waiting for a raise thinking that more money will solve the problem. Most just accept it, and some take a second job working harder, but again accepting a small paycheck.”

I sat staring at the floor, beginning to understand the lesson rich dad was presenting. I could sense it was a taste of life. Finally, I looked up and repeated the question. “So what will solve the problem?”

“This,” he said tapping me gently on the head. “This stuff between your ears.”

Life pushes us all around trying to teach us a basic principle:

We deal ads with a minimum pay (like my brother Tiitus did for a few months).

We work as tram drivers (like I did for two years) or store clerks (like my wife Mari did for a few years) – in boring and repetitive jobs that we hate, just to get money.

Even in jobs that we like when we get the monthly salary, it never seems big enough.

But we learn the wrong lesson.

We start saying things like “I don’t care about money” or “The rich are crooks” or “I can’t afford that”.

Or even worse. We start craving for a pay raise and think that getting a better paying job would solve our monetary problems. And when we can’t get that raise from our current employers we switch companies. But it won’t solve the problem.

In Rich Dad, Poor Dad, Robert Kiyosaki claims that the reason why poor stay poor, and rich become richer is because the rich have practiced their financial IQ. When the rest of us play safe and try to avoid thinking about money they have learned to master money and how it works. When we buy things to look rich, they invest to actually become rich.

One of the key lines in Rich Dad, Poor Dad is the following:

“The poor and the middle class work for money.” “The rich have money work for them.”

I started reading Kiyosaki’s book out of curiosity. Graham from The Young Capitalist recommended it so I thought why not, and bought the book. It turned out to be much more exciting, and more thought provoking than I would have imagined.

Sure, there is some debate going on whether the rich dad actually ever existed or not, and if any of the successes described in the book actually are true. But even if that is the case I think the story has well proved its point: to be financially successful you need to know how money works and how to master it (and not become its slave).

Invest your money to something that brings you profit instead of spending it in luxury you cannot afford.

Try to get out of debt.

Learn how taxation works so you don’t have to pay the government more than your fair share.

Start your own side business.

Make money work for you.

Teach your kids how to handle money.

To me Rich Dad, Poor Dad is a starting point. It brings together ideas that have been running in my head already for a while. The things presented in the book may not be new but nevertheless worth thinking. Things like getting passive income, spending less, investing to assets instead of just living from one paycheck to the other.

It’s not a complete guide book to the world of money and wealth. Some even say that some of its teachings can be dangerous to you.

But the basic principle is clear: Invest in your mind and learn the logic of wealth. And then using that information you can make money work for you.

Have you read Rich Dad, Poor Dad? How did you feel about it? What do you think about the debate on Mr. Kiyosaki and his two dads?