Tony Barson

Book Report

Rich Dad Poor Dad Book Report

By Robert Kiyosaki
Personal Finance 1050 SLCC

I was given the book Rich Dad Poor Dad by Robert T. Kiyosaki, about 3 years
ago from my wifes real estate broker for Christmas. For three years this book has sat
on our shelf and collected dust. He told me when he gave it to me that it has changed
his life. Three months ago I took it off the shelf and finished reading it last week. I could
not believe the financial information that this book gives and I have been missing out.
Robert talks about his childhood about how he wanted to make money as a
young man. His best friend Mike and he decided to ask his father on how to make
money and become rich. He told them to find a service or product to sell and make
money. They invented a way to make fake money out of lead and it ended up being a
disaster. His father continued to teach the boys, get a good education and find a good
job that pays well. Well, they went to Mikes dad for the same guidance on how to
become rich. After teaching the boys about some lessons, they started to work for him
for some money and he continued to teach the boys about money. At one time they
were working for Mikes father for free and that did not go well with the boys but ended
up teaching them a valuable lesson about money.
At this point in the book I was wondering where this book was going and came to
the realization that my own parents were on the side of Robert's father. And that was to
find a good job and work hard and to get a good education. I was never taught about
money throughout my entire life. I totally understood everything that Mikes dad was
teaching them and it all made sense, but did not reflect anything from my own life. He
teaches them about how money controls peoples lives, living paycheck to paycheck
and struggling. Robert eventually teaches them the most valuable lesson in this whole
book, Dont work for money, let money work for you. I was so excited when I read this
and wanted to read more about it and how to do it. I am on the wrong end of this deal
and had to wait until farther into the book to find out how to make money work for you.
The book continues as his rich dad (Mikes dad) teaches him about assets and
liabilities. Before this book I would say that my house, my car, my personal property
were my assets. I was wrong by a long shot. All those are basically liabilities
depending on cost and payments, but not true assets. I realized I have no assets that
are of any value to help me in my life. I have a ton of stuff and liabilities.
Robert ended up falling into the Rat Race and working for Xerox and when he
was 26 years old he finally understood what he was taught from his rich dad and started
to work long hours and hard to make money and started putting that money into real
assets. It took him a few years of working hard to finally be able to start doing
something to allow his money work for him. He started by some small notes and
developing his financial IQ to come up with ideas on making money and smart
investments. He would make deals such as this example from the book on page 132.
Houses that were once $100,000 were now $75,000. But instead of shopping
with local real estate agents, I began shopping at the bankruptcy attorneys office, or the
courthouse steps. In these shopping places, a $75,000 house could sometimes be
bought for $20,000 or less. For $2,000, which was loaned to me from a friend for 90
days for $200, I gave an attorney a cashiers check as a down payment. While the
acquisition was being processed, I ran an ad advertising a $75,000 house for only
$60,000 and no money down. The phone rang hard and heavy. Prospective buyers
were screened and once the property was legally mine, all the prospective buyers were
allowed to look at the house. It was a feeding frenzy. The house sold in a few minutes. I
asked for a $2,500 processing fee, which they gladly handed over, and the escrow and
title company took over from there. I returned the $2,000 to my friend with an additional
$200. He was happy, the home buyer was happy, the attorney was happy, and I was
happy. I had sold a house for $60,000 that cost me $20,000. The $40,000 was created
from money in my asset column in the form of a promissory note from the buyer. Total
working time: five hours.
This just boggles my mind that deals like this can be done. I have told myself my
whole life that I cant do stuff like this and I just dont have the money to do it. Well, my
problem is that I dont take risks. I tend to look at things one dimensional and has a
hard time seeing things that others tend to miss. My wife is a real estate agent and the
only thing we have benefited from that job is taking the paycheck and spending it to pay
bills and liabilities. Another example that he has in the book is on page 95,
In 1974, Ray Kroc, the founder of McDonalds, was asked to speak to the MBA
class at the University of Texas at Austin. A dear friend of mine, Keith Cunningham, was
a student in that MBA class. After a powerful and inspiring talk, the class adjourned and
the students asked Ray if he would join them at their favorite hangout to have a few
beers. Ray graciously accepted. What business am I in? Ray asked, once the group
had all their beers in hand. Everyone laughed, said Keith. Most of the MBA students
thought Ray was just fooling around. No one answered, so Ray asked the question
again. What business do you think Im in? The students laughed again, and finally
one brave soul yelled out, Ray, who in the world does not know that youre in the
hamburger business. Ray chuckled. That is what I thought you would say. He paused
and then quickly said, ladies and gentlemen, Im not in the hamburger business. My
business is real estate. Keith said that Ray spent a good amount of time explaining his
viewpoint. In their business plan, Ray knew that the primary business focus was to sell
hamburger franchises, but what he never lost sight of was the location of each
franchise. He knew that the real estate and its location was the most significant factor in
the success of each franchise. Basically, the person that bought the franchise was also
paying for, buying, the land under the franchise for Ray Krocs organization.
McDonalds today is the largest single owner of real estate in the world, owning even
more than the Catholic Church. Today, McDonalds owns some of the most valuable
intersections and street corners in America, as well as in other parts of the world.
 I was sold at the beginning of this book and could not wait for the end to help me
get on this path. What I like about Robert is that he gives me the choice. He does not
tell me to go to college; he does not tell me to invest in notes or real estate. He lays
everything on the table on how to become rich and then gives me tools to work with and
to research. Now it is my time to make a choice and decide on my new rich future. I
have spoken with my wife and we are both excited and decided to make the decision to
jump into the real estate market more and figure out a game plan to purchase some real
estate and let money start working for us. It will be very helpful that she is a real estate
agent and is constantly checking and watching for deals. This is something that we
have talked about before but this class has given us the push to go for it and take a risk
for once in our life.
The 10 topics that he ends with to help others get started are:
1. Find a reason greater than reality: the power of spirit
2. Make daily choices: the power of choice
3. Choose friends carefully: the power of association
4. Master a formula and then learn a new one: the power of learning
5. Pay yourself first: the power of self-discipline
6. Pay your brokers well: the power of good advice
7. Be a Indian giver: the power of getting something for nothing
8. Use assets to buy luxuries: the power of focus
9. Choose heroes: the power of myth
10. Teach and you shall receive: the power of giving
These 10 points end this book and how each one plays a significant role in becoming
rich. I am ready to make changes in my life by starting to get out of debt, invest, and
allow my money to work for me.