Rich Dad’s Guide to Investing Book Summary

Rich Dad’s Guide to Investing Book Summary Preview

Key Insights

Drawing heavily from the influence of his “rich dad”, a family friend who was highly successful in amassing wealth, author Robert Kiyosaki explains how the decisions made by people who are monetarily prosperous are significantly different from the choices of the poor and middle-class communities. He provides a detailed account of how the ways in which an individual approaches financial decision making directly impact the final result.

The Richest 10 Percent

We all know that there’s inequality in the world, but some of us may be less aware of how much of an economic disparity actually exists. The facts are startling: ten percent of the world’s population holds ninety percent of its wealth. This principle remains true even when you separate out various industries, such as athletes, musicians, actors, and investors. In each of these sub-groups, the numbers hold: ten percent holds ninety percent of the capital overall.

So, how does this happen?

For starters, investing is not even an option when you are poor.

Sure, there are legitimate reasons for not letting people who lack funds to make investments that could end up putting them in an even worse position later on. However, these rules also prevent the poor from the possibility of investing successfully and coming out on top.

In order to illustrate some investment ‘rules’, let’s take a look at an example. You may want to invest in a fund that has huge payout potential. However, the opportunity requires an initial investment of 100k. If you are unable to meet this minimum requirement, you lose your chance to reap the possible benefits of this high risk/high reward investment.

Similarly, in order to qualify for certain investment opportunities, you may need your total household earnings to be above a certain threshold.

If you are not wealthy, you are automatically excluded from these opportunities. However, you still have the ability to participate in less risky--but also less profitable--investment opportunities, because there is not likely to be a significant cost upfront.

You may have heard the saying, “the rich get richer.” It is because wealth is a cycle. If you are not rich, you inherently have less ability to access the avenues that could provide additional wealth.

Think Like the Rich

We know that the rich dress differently and act differently, but it is perhaps less obvious to the casual observer that the rich think differently than the rest of us as well.

The rich tend to make assertions like this:

“Get an education, work hard, save money. Then you’ll be fine.”

While this advice is well-intended, it fails to account for the privilege. People in middle to upper-class families are told this sort of thing, while folks in lower-income households are more likely to be told they just need to get a job, whatever it is. Less emphasis is placed on the rest of it.

People who come from lower-income households are less likely to own their businesses at any point in life. And this impacts their capacity for wealth.

Why?

Because business investors face less risk than individual employees. While people rely on savings,...

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