About Robert Kiyosaki's Rich Dad Poor Dad

In today's article, I will share my notes, thoughts, and the parts I find valuable about Robert Kiyosaki's book Rich Dad Poor Dad, another celebrity name.

"You have been granted two unique values: one is intellect, the other is time. You can use both as you wish. The power to determine your destiny with every dollar bill you earn is solely in your hands. You can choose to spend wildly and become poor, or you can invest in passive assets and join the middle class. Alternatively, you can use your intellect to learn ways to acquire active assets, choosing wealth as your goal and future. The choice is yours and yours alone. With every dollar that comes into your hands, you decide each day whether to be rich, poor, or part of the middle class."

First of all, we must not forget that every choice belongs solely to us. For example, you might try to externalize the losses you have experienced by saying you listened to someone else, but this is fundamentally wrong because while someone else is not listening to that person, you are making a choice to listen. Kiyosaki's emphasis on control here is a principle that every investor should adopt. You must realize that the only person who has control over your life is you. You are the one who determines whom to listen to and whom not to listen to, which trainings to take and which books to read, and which financial instruments to invest in. Of course, many things happening in the outside world affect individuals, but how one interprets the signals coming from the outside world ultimately depends on the individual.

Another important point is the emphasis on intellect and time. In my opinion, the smartest move regarding intellect and time is for a person to start investing in both themselves and financial products at a much younger age. This way, you will have many more years ahead of you to learn and take risks. Let's consider two investors, one who starts investing at 20 and the other at 25. The investor who started at 20 will have learned a lot by the time they reach 25, while the one who started at 25 will be much more advantageous compared to someone who starts at 30.

"One of the reasons why the rich become richer, the poor become poorer, and those in the middle class struggle with debt is that they learn about money not in school but at home. The perspective of our families is the most important factor affecting our view of money. As long as we cannot break this perspective, we are doomed to think, feel, and do similar things. Money is not taught in schools; the information provided in schools consists of theories. Who knows how many people there are who live in debt despite graduating at the top of their class?"

One of the biggest mistakes made by people who start investing is turning the truths of those around them into their own truths. Many people act based on what they hear from others without doing any research or reading anything. In fact, most people tend to uphold the truths of their families. You may have heard many sayings like, "The stock market is a very dangerous place, don't get involved at all," "Buy a house, a car, or land and then enjoy your life," "You can't trust something you can't hold in your hand," "Your father's friend was also in the stock market back in the day, then he went bankrupt and lost his entire life." Based on these, you may only become a gold investor and not get beyond buying a house or land.

Understanding the Logic of Financial Markets

On the other hand, according to Kiyosaki, the expressions learned or heard from family and close surroundings determine what kind of investor people will be, and if the cycle is not broken, it leads to the continuation of similar patterns. When I first encountered cryptocurrencies, many people around me told me that I was talking nonsense, that this sector was very dangerous, and that I could lose all my money. Because I was constantly exposed to such statements, I was always doubting myself when I made a purchase. However, after I started educating myself financially, I believe I have broken the cycle in my own circle. The sector indeed has its dangers, but taking risks is part of being an investor. Charlie Munger said, "If you can't stand a 50% drop in the value of the asset you invested in, you shouldn't be in the stock market." Therefore, to differentiate yourself from those around you, you must first understand the logic of financial markets and know what and why you are investing.

Where does resorting to luxury to appear rich lead us?

"While the poor and middle class tend to buy luxuries first, the rich purchase luxuries last. Those with money, the long-term wealthy, first build their asset columns, and then use the income generated by that column to buy their own luxuries. Meanwhile, the poor and middle class turn to luxuries to appear wealthy and feel better about themselves."

In today's world, with social media, everyone has started to become more visible and "showing off" has become fashionable. Many people try to act like the wealthy in order to present themselves better. They buy the most expensive phones or accessories, pay very high rents for tiny apartments to be "residents," and drive cars that they cannot afford. On the other hand, wealthy individuals spend their money on investments that can earn them money instead of passive and expensive maintenance costs like (maintenance, insurance, etc. At this point, Peter Lynch emphasized that a person’s first investment should be a house they can live in, and later they can turn to other investments in a much healthier way. I agree with this view, so that people can set aside a large portion of their monthly earnings without the burden of rent, and even if they take risks and lose money, at least they will have a place to call home.

Making money from money

The concept of making money from money is a strategy often used by wealthy individuals. This does not imply an understanding like "I will buy five houses and live comfortably off the rents." Kiyosaki emphasized that it would not be logical for a person to own too many houses because a house itself comes with a lot of expenses. What a person should do is to diversify their investments. For instance, during a period of high interest rates, individuals can avoid risky investments and earn high income by placing their money in interest-bearing accounts. They can create a balanced portfolio with trusted investment vehicles to grow their balances. They can buy a house at a very low price and then sell it for a much higher price after making a few improvements. Being able to do all this depends on the ability to see opportunities, which is essentially financial competence, and the ability to adapt according to the conditions of the period.

This article does not contain investment advice or recommendations. Every investment and trading activity carries risk, and readers should conduct their own research when making decisions.