Finance Book

This is the third book in the Rich Dad’s series Robert Kiyosaki wrote after the hugely popular Rich Dad Poor Dad. Robert casual style of narration makes it both enjoyable and easy to digest the close to 400 pages book. I took about six weeks to complete the book.

This book focuses a great deal on the B-I side of the quadrant as well as the B-I Triangle. To become rich, we have to be both an investor and a business owner. To be a really great investor is to become an ultimate investor. A person who invests from the inside of the company, who takes the company public and sell the shares to outside investor. Robert also explained all the components of his B-I triangle, which Rich Dad taught him, to build a strong business dedicating one chapter for each component. If any of the component of the business is weak, the business will be in trouble and fail.

Although Robert gives very clear explanation to every concept, you still find his explanation open-ended, requiring you to figure out what is best for your own financial future. I have learnt many lessons from this book and summarized here below:

The various investor controls needed Different level of investor e.g. accredited, sophisticated. Increase finanancial intelligence. The need to have 3 financial plans. One to be secure, one to be comfortable, one to be rich. Understand financial statements. The 90/10 rule of money. The tax benefits enjoyed by a business owner compared to an employee and self-employed. The difference between saving and investing. See the flip side of the coin for any investment. Living in the information age versus industrail age. What it takes and how fast to be a billionaire in the information age. and much more… I like to recommend this book to those of you who wants to be a better business owner and investor. It would be better if you had read the first two books “Rich Dad Poor Dad” and “Rich Dad’s cash flow quadrant” as it builds on the fundamentals of the two earlier books.

By: Raymond Heng

This is the first book in the Rich Dad series which stayed the longest at number one on the New York Times. Robert had two dads; one was his biological dad (poor dad) and the other his best friend’s dad (rich dad). Though he loved them both but their teachings of money often contradict each other. Eventually he followed rich dad’s advice that led him to financial freedom. Robert explains what parents tell or teach their children are very important. The parents of poor and middle class always tell their children to “Work hard and get good grades so that you can get a secure job with great benefits”. The rich parents on the other hand will teach their children to increase their financial intelligence as they know that the education system does not teach them about money but instead teach them to be employees.

Robert also defined Asset as simply money put into your pocket and Liability as money taken out of your pocket. He challenged the fact that our house which many people thought of is an asset is actually a liability.

Another fact that Robert discussed was that you can never get rich even if you have a very high salary if you are going to accumulate more liabilities that generates more expenses. With higher salary people go out and get a bigger house or car and live extravagantly beyond their means sinking into greater debt.

As this book is written with an American context, I found that many of the ideas and examples narrated by Robert can be adapted and applied in other countries. Robert also said it in his free audio downloadable that the fundamental operations of the rich in different countries are the same. I have applied some of his techniques, as I am not American, and have experienced success thus far.

This book is a must read for people who wants to have some basic concepts of finance. Robert’s very casual style of writing makes this an easy and enjoyable read which prepares you to absorb more complicated concepts in his next book Rich Dad’s Cash Flow Quadrant. Get it now!

By: Raymond Heng