ORIGINAL wisdom from the book of FAKE stuff – Robert Kiyosaki. – Big Investor Blog

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I read Robert’s book Rich Dad Poor Dad over 15 years ago, and it changed my life. Being a Chartered Accountant, I had to reclassify Assets and Liabilities not based on textbook definitions, but on appreciation and direction of Cash Flow. This has had a profound impact on the way i think, live and invest.

In this book, Robert is predicting doomsday for the US Dollar. Logically he may be right, but he may have misjudged the power of stupidity and the ones in greed. Nevertheless, this book is loaded with gems, some of which I have put down here.

  • Build new assets. Quit just moving them around.
  • Puppeteers are rarely seen. They prefer to remain behind the scenes.
  • Student loan debt in the US is 1.2 trillion dollars and is the no 1 asset of the US govt.
  • Always start with the biggest picture possible.
  • When a problem is making someone rich, that someone will not fix itself.
  • Fake teachers do not practice what they teach. Real teachers practice what they preach, every goddamn day.
  • Types of Modern Money
    • God’s Money – Gold and Silver
    • Government’s Money – Currency
    • Peoples Money – Cryptocurrency
  • When fake money enters the system, good money goes into hiding.
  • In schools fake truth is called history.
  • Gold is a hedge against your own stupidity and the stupidity of the elites.
  • Banks pay you interest because there is a risk – small, with low probability, but it exists.
  • If you borrow money and invest into an asset hoping that inflation of the asset and not the cash flow from that asset will make you money, you are playing a hyper dangerous game. 
  • Apprenticeship is one of the oldest forms of real education.
  • Real estate is nothing but monopoly in real life.
  • Don’t be average, be exceptional at something – anything.
  • Don’t put your money in faith, only put it in what you can trust.
  • Having a degree in something without having real world experience in something amounts to nothing.
  • Seminars are way better that school as they are short and specific.
  • A real teacher will always teach more about his failures than his success stories.
  • Real teachers do not need to teach to support themselves.
  • Exercise for real estate – identify a 100 investible properties in 90 days are write a one analysis of each of the properties.
  • Apprenticeship. Apprenticeship.Apprenticeship.
  • You cannot catch fish in clean water.
  • Prosperity has made most people soft, weak and lazy.
  • Corrupt money creates corrupt people.
  • Flow of cash and not the technical definition will determine whether something is an asset or a liability.
  • In real life –
    • Making mistakes makes you richer.
    • Asking for help is not cheating.
    • Making money is a team sport.
    • Advice should not be a sales pitch.
  • The tax laws are pretty much the incentives of the government. If you do what they want you to do you get tax breaks or incentives.
  • Lots of personal problems begin with the need to be right all the time.
  • Making mistakes make you less stupid than never acknowledging your mistakes.
  • The test of first rate intelligence is the ability to hold two opposing ideas in the mind at the same time and still retain the ability to function.The moment you operate from the concept of right or wrong you are at a disadvantage.
  • People who want to continue their lie for years love going to courts as they can keep the lie going for years.
  • Mistakes are gods real teachers.
  • Infinite return is the ability to make money without using any of your own.
  • A person who can turn debt into equity can solve very large financial problems. A person who can turn equity into debt can cause very large financial problems.
  • Replace thinking “I can’t afford it” with “how can I afford it ?”
  • Unlike in school, there is never the only one right answer. In real life there are many right and almost right answers to every problem.
  • To really learn life lessons you need to seek teachers outside the educational system.
  • Tomorrows poor have jobs today, but no retirement for tomorrow.
  • Invest in what you understand, not what a financial planner loves.
  • There are many doors to financial heaven, there are even more doors to financial hell.
  • The four basic asset classes
    • Business
    • Real Estate
    • Commodities
    • Paper assets
  • The best way to crush the middle class is to grind them between taxation and inflation.
  • Treat agents as partners, not brokers.
  • The four basic ways of making money
    • Employment
    • Professional Service
    • Business
    • Investments
  • The best way to financial freedom is to make money via Business or Professional Services & invest that into investments that generate Low Tax Passive Income.
  • Instead of flipping houses and paying capital gains on them, why not take debt on them so you can pretty much borrow out your appreciation as there is no tax on debt.- This is a powerful tool if it works out.
  • Communism is based on a central government and capitalism is based on a central bank.
  • Capitalism is the astounding belief that the most wickedest of men will do the most wickedest of things for the greatest good of everyone.
  • Human genius has its limits while human stupidity does not.
  • Gold ETF is pure distilled shit.
  • The game of money is a team sport.
  • Imagination is more important than knowledge.
  • If you get emotional about money, or defensive about your ignorance, no one can help you.
  • Are you spending money that increases income, or are you just spending money ?
  • Build new assets. Quit just moving them around.
Also Read on FinMedium:  HDFC Bank 2020 AGM Takeaways!

Other summaries of books i love – https://biginvestorblog.com/category/books-i-love/

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Nitin Siddamsetty
Nitin invests across various sectors - Consumer, Food Processing, Real Estate, and many others. He is a CA and manages his family office. He loves to write about Stocks, Businesses, and other Financial Concepts.
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