Robert Kiyosaki’s book is a financial masterpiece that offers advice on how to achieve financial independence regardless of one’s level of education. The book was published at the time when many people debated the relevance of higher education about attaining success in life. Colleges equip students with knowledge and skills that enable them to pursue careers of their choice. However, they do not equip them with knowledge on how to attain financial independence.
In the book, Kiyosaki faults the education system by comparing the levels of the financial success of his two dads who gave different advice on attaining financial independence. Kiyosaki argues that pursuing higher education does not guarantee financial independence because wealth creation requires certain skills and knowledge that are not taught in college. According to him, the most important aspect of wealth creation is the application of financial knowledge, which is rarely acquired in institutions of higher education.
To pass his message effectively, Kiyosaki uses case studies of his two dads who had different levels of education, as well as wealth. One of them was his biological father, who had attended college and was well educated, employed, and financially unstable (Kiyosaki 8). His biological dad was the poor dad.
The other dad pursued education only up to the 8th grade. However, he owned a successful business and was very rich. He was a rich dad. The book represents the reality that is evident in American society today. The poor dad was highly educated and had a well-paying government job. However, he struggled with debts and had no investments.
On the other hand, the rich dad owned a business and had several investments that generated income. In American society, many people who have higher education find jobs to support their families and own few or no investments. They live from paycheck to paycheck. In contrast, many of the people who did not go to own college businesses and other income-generating investments. Their knowledge of various investment options gives them an edge over people with little financial knowledge.
I have learned several lessons from the book that I can apply in my life for the attainment of financial independence. First, it is important to understand that higher education does not impart the necessary knowledge and skills needed for the attainment of financial independence. Therefore, every individual should be financially literate and regard it as a personal responsibility. Financial literacy can be attained through reading financial books, journals, essays, and articles to increase one’s financial IQ.
Second, the book can be applied in life by using the information it contains to make financially sound decisions. School education teaches students how they can acquire knowledge and skills to work for money for the rest of their lives. Lack of financial literacy results in poor financial decisions that lower the probability of attaining financial independence. This lesson is provided through the life of the poor dad who works for money. Third, the book provides knowledge that can be used to differentiate between assets and liabilities.
The poor dad was struggling financially because he owned many liabilities while the rich dad was financially independent because he owned numerous assets (Kiyosaki 43). The knowledge gained from the book can be used to choose investments that are worth investing in. For instance, with adequate knowledge of taxes, opportunity costs, and the dynamics of owning a house as an investment, it becomes easy to make wise financial decisions.
Fourth, Kiyosaki offers detailed information regarding investment in bonds, stocks, mutual funds, income-generating real estate, and businesses that do not require the daily presence of the owner. This knowledge can be applied in life about choosing investments that generate income and appreciate over time. Kiyosaki simplifies several financial terms that are important in finance and investment. For instance, he explains the meaning of retained earnings, net income, compound interest, mutual bonds, stocks, and royalties.
The book was relevant because it taught me how to gain financial independence through investing in assets. The author offered invaluable advice that can be applied in life. Examples of such advice include reduction of liabilities, lowering expenses, investment in assets rather than liabilities, generation income from assets rather than jobs, benefits of avoiding luxury, and how compound interest works. To make the changes that the book taught me, I would lower my expenses, save more money, and invest in income-generating investments.
Also, I would increase my knowledge regarding basic financial principles that are essential for the attainment of financial independence. I can relate the book to my life because it offered advice that is needed when investing.
For instance, I have the urge to lower my expenses, save some money, and invest in stocks. About my career, the book increased my financial knowledge by discussing financial terms such as liabilities, assets, investment, owning a business, and compound interest. The information will be helpful in the advancement of my career.
Works Cited
Kiyosaki, Robert. Rich Dad Poor dad: What the Rich Teach Their Kids about Money that the Poor and Middle Class Do Not. New York: Plata Publishers, 2011. Print.