6 Lessons from Rich Dad Poor Dad ( Best Animated Summary )

I had two fathers a rich one and a poor one yeah not literally one was my biological father and the other was my friend Mike's father from whom I learned all of my lessons about money one was highly educated and intelligent while the other never finished the 8th grade both men were successful in their careers working hard all their lives both earned substantial incomes yet one struggled financially all his life the other would become one of the richest men in Hawaii because I was only nine years old when I started the lessons my rich dad taught me were simple and when it was all said and done there were only six main lessons repeated over 30 years lesson number one the rich don't work for money I was nine years old by some twisted fate I attended the same public school where the rich people sent their kids I always wanted to become rich so I asked my dad dad can you tell me how to get rich I don't know son why don't you ask your friend Mike's father I asked Mike and his dad agreed to meet on next Saturday morning ready boys Mike says you want to learn to make money is that correct yes I nodded okay here's my offer I'll teach you but I won't do it classroom style you work for me I'll teach you you don't work for me I won't teach you okay we agreed good mrs. Martin will be by in 10 minutes after I'm through with her you ride with her to my super head and you can begin working I'll pay you ten cents an hour and you will work for three hours every Saturday we worked there for three weeks I'm quitting I told Mike at school more than not learning anything it's the ten cents that are bothering me it's even below the minimum wage dad said this would happen if he told to meet him when you were ready to quit was I set up you pay me just ten cents you're cheap and you're not teaching me anything wow you sound like most of my employees and is teaching mean taking a lecture but that's not how life teaches you stop blaming me for your problems actually thinking about a different job or more pain not solve the problem so what will solve the problem just take the measly ten cents and smile this stuff between your ears I'm glad you got angry with the pay I've given you a real taste of life just multiply your last month by fifty years and you will have an idea of what most people spend their life doing they are trapped in a rat race for which they blame their boss or their pay scale they are driven by fear and greed that's why they are stuck with their jobs that's the first lesson I wanted to teach you the rich don't work for money so ready to learn yes I nodded good now get back to work this time I will pay you nothing mike has already agreed and has started working you better hurry after a while working at the store we found some old comic books that mrs. Martin was throwing away we opened our comic book library with it and earned $9 per week each a lot more than rich dad paid us our money worked for us after a while a fight broke out in it and it had to be closed lesson number two why teach financial literacy most people fail to realize that in life it's not how much money you make it's how much money you keep we have all heard stories of lottery winners who are poor then suddenly rich then poor again they win millions and are soon back to where they started or stories of professional athletes - at the age of 24 are earning millions of dollars a year and are sleeping under a bridge by age 34 so when people ask where do I get started or tell me how to get rich quick they often are greatly disappointed with my answer I simply say to them what my rich dad said back to me when I was a little kid if you want to be rich you need to be financially literate rule 1 you must know the difference between an asset and a liability and buy assets it is the only rule an asset is something that puts money in my pocket a liability is something that takes money out of my pocket in a typical cash flow pattern income is from sources that include your monthly income from job or business and your asset income which can include stocks bonds real estate intellectual property which create income in the form of dividends liabilities include monthly expenses like rent groceries and any luxury spending once your asset income reaches high enough to replace your job you are not required to work anymore money works for you each dollar in my asset column was a great employee working hard to make more employees and by the boss a new Porshe that's where the rich get richer rich people buy assets whereas poor people by liabilities which they think are assets people lesson number three mind your own business in 1974 Ray Kroc the founder of McDonald's was asked to speak to the mba class at the University of Texas at Austin what business am I in everyone laughed 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 I'm in the students laughed again and finally one brave soul yelled out ray who in the world does not know that you're in the hamburger business Ray chuckled that is what I thought you would say ladies and gentlemen I'm not in the hamburger business my business is real estate Ray Kroc was clear on the difference between his profession and his business his profession was always the same he was a Salesman at one time he sold mixers for milkshakes and soon thereafter he were selling hamburger franchises but while his profession was selling hamburger franchises his business was the accumulation of income producing real estate in this way rich acquire assets that produce them real time passive income without the need for them working for it financial struggle is often the result of people working all their lives for someone else as your cash flow grows you can buy some luxuries an important distinction is that rich people buy luxuries last while the poor and middle-class tend to buy luxuries first the poor in the middle class often buy luxury items such as big houses diamonds furs jewelry or boats because they want to look rich they look rich but in reality they just get deeper in debt on credit the old money people the long term rich built their asset column first then the income generated from the asset column bought their luxuries the poor and middle class buy luxuries with their own sweat blood and children's inheritance lesson number four the history and the power of corporation Robin Hood may be long gone but his followers live on how often I still hear people say why don't the rich pay for it where the rich should pay more in taxes and give it to the poor it is this idea of Robin Hood or taking from the rich to give to the poor that has caused the most pain for the poor in the middle class the reason the middle class is so heavily taxed is because of the Robin Hood ideal the real reality is that the rich are not taxed it's the middle class that pays for the poor especially the educated upper income middle class taxes were initially levied against only the rich by the majority by telling the poor in the middle class that taxes were created only to punish the rich the problem was that the government's appetite for money was so great the taxes soon needed to be levied on the middle class and from there it kept trickling down however the rich saw an opportunity because they don't play by the same set of rules the rich knew about corporations which became popular in the days of sailing ships a corporation protects the rich but what many people who have never formed a corporation do not know is that a corporation is not really a thing a corporation is merely a file folder with some legal documents in it sitting in some attorney's office registered with a state government agency it's not a big building with the name of the corporation on it it's not a factory or a group of people a corporation is merely a legal document that creates a legal body without a soul the idea of take from the rich backfired on the very people who voted it in every time people try to punish the rich the rich don't simply comply they react average person to day work five to six months for the government before they make enough to cover their taxes in my opinion that is a long time if you work for money you give the power to your employer if money works for you you keep the power and control it lesson number five the rich invent money financial intelligence is simply having more options if the opportunities aren't coming your way what else can you do to improve your financial position if an opportunity lands in your lap and you have no money and the bank won't talk to you what else can you do to get the opportunity to work in your favor if your hunch is wrong and what you've been counting on doesn't happen how can you turn a lemon into millions that is financial intelligence most people only know one solution work hard save and borrow so why would you want to increase your financial intelligence because you want to be the kind of person who creates your own luck land was well 300 years ago so the person who owned the land owned the wealth then it was factories in production and America rose to dominance the industrialist owned the wealth today it is information and the person who has the most timely information owns the wealth the problem is information flies all around the world at the speed of light the new wealth cannot be contained by boundaries and borders as land and factories were the changes will be faster and more dramatic there will be a dramatic increase in the number of new multimillionaires there also will be those who are left behind often in the real world it's not the smart who get ahead but the bold the poor and middle class work for money the rich make money the more real you think money is the harder you will work for it if you can grasp the idea that money is not real you will grow richer faster what is it was a question Mike and I often came back with what is money if it is not real what we agree it is was all rich dad would say the single most powerful asset we all have is our mind if it is trained well it can create enormous wealth seemingly instantaneously an untrained mind can also create extreme poverty that can crush a family for generations lesson number six work to learn don't work for money in school and in the workplace the popular opinion is the idea of specialization that is in order to make more money or get promoted you need to specialize my educated dad believed in the same dogma rich dad encouraged me to do exactly the opposite you want to know a little about a lot was his suggestion I also worked as a busboy and construction worker as well as in sales reservations and marketing he was grooming Mike and me that is why he insisted we sit in on the meetings with his bankers lawyers accountants and brokers he wanted us to know a little about every aspect of his Empire job security meant everything to my educated dad learning meant everything to my rich dad when I asked the classes I teach how many of you can cook a better hamburger than McDonald's almost all the students raised their hands I then asked so if most of you can cook a better hamburger how come McDonald's makes more money than you the answer is obvious McDonald's is excellent at business systems maybe McDonald's does not make the best hamburger but they are the best at selling and delivering a basic average burger in 1977 I formed my first company Rich Dad had groomed Mike and me to take over companies rich dad thought it best to go broke before 30 you still have time to recover was his advice job is an acronym for just over broke

Channel: The Nerd Animator

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Id: TjQX_-3W3kE

Length: 11min 59sec (719 seconds)

Published: Wed May 27 2020