Rich Dad vs. Poor Dad Thinking

October 2, 2009 by Tyrone
Filed under: Personal Finance, Self-Motivation

As many of you are aware of, Robert Kiyosaki’s Rich Dad Poor Dad book became one of the hottest selling books. He introduced the term “rat race” which refers to the ordinary income-spend lifestyle, living from paycheck to paycheck.

In order to get out of the rat race, we need to build passive income from assets which would generate enough income to sustain our needs and wants. One of the things that we must first do is to change and open our minds from industrial age thinking to information age thinking. We need to shift our minds from negative to positive. Instead of making excuses, think of ways to get out of the rat race. That separates the winners vs. losers.

Here are some of Rich Dad vs. Poor Dad Thinking. Notice the difference between the way both dads think:

Poor Dad says: “Go to school and make good grades.”
Rich Dad says: “Become financially literate.”

Poor Dad says: “Get a safe, secure job.”
Rich Dad says: “Build businesses.”

Poor Dad says: “Workd hard and invest.”
Rich Dad says: “Don’t save, invest.”

Poor Dad says: “Work for money.”
Rich Dad says: “Let money work for you.”

Poor Dad says: “Pay your creditors first.”
Rich Dad says: “Pay yourself first.”

Poor Dad says: “Save money by shopping for bargains.”
Rich Dad says: “Make money by shopping for investments that will go up in value.”

Poor Dad says: “Don’t buy something you can’t afford.”
Rich Dad says: “Ask yourself how you can afford it.”

Poor Dad says: “Investing is risky.”
Rich Dad says: “Not investing is risky.”

Poor Dad says: “Your house is an asset.”
Rich Dad says: “Your house is a liability.”

Poor Dad says: “The rich are greedy.”
Rich Dad says: “The rich are generous.”

Poor Dad says: “Money is a neccesary evil.”
Rich Dad says: “Money is power.”

Poor Dad says: “The love of money is the root of all evil.”
Rich Dad says: “The lack of money is the root of all evil.”

Poor Dad says: “Your pension and Social Security will protect you in retirement.”
Rich Dad says: “Your pension and Social Security will not support you in retirement.”

Poor Dad says: “Put your investments in the hands of someone else.”
Rich Dad says: “Watch your investments but seek competent advisors.”

So which path would you like to follow? Which advice would you like to take? The path of Poor Dad working harder and harder for money or the path of Rich Dad having your money work for you?

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Tags: kiyosaki, positive mindset

Comments

12 Comments on Rich Dad vs. Poor Dad Thinking

Zen Foo on Fri, 2nd Oct 2009 8:14 am

I don’t think rich dad and poor dad have mentioned all those before.. but you certainly capture the essence and value of both of them.

[Reply]

Tyrone Reply:
October 4th, 2009 at 10:30 pm

Some of the thinking here were adapted from “industrial age thinking (poor dad) vs. information age thinking (rich dad)”

[Reply]

Dias on Fri, 2nd Oct 2009 1:26 pm

Hi Tyrone,

I’ve been an avid reader of Robert Kiyosaki and his Rich Dad books. I’ve actually observed and think about his various concepts such as the Rat Race, ESBI and making money for work you and I’ve arrived to a conclusion.

Think and act in ABUNDANCE instead of scarcity.

1. Rat Race- The only reason why we are chasing more income and lifestyle is because we do not create assets to attract wealth in but we chase material possessions and sell our time for money.

2. ESBI- B and I is about creating assets, owning it and letting people running it. E is about working for others’ assets while S is about not being able to stop selling time for money.

3. Making money to work for you- Money is not an end, it is only a means. We work for what we can get out of money not work for money.

Why Rich Dad is able to become rich because he is able to think in abundance, for instance:

Poor Dad says: “Pay myself last.”
Rich Dad says: “Pay myself first.”

Poor Dad says: “I’m not interested in money.”
Rich Dad says: “Money is power.”

Rich Dad thinks that in abundance. By saying ‘pay myself first’, he will think get out of the rat race because he will have more money than others when payday comes. That is abundance.

By saying ‘money is power’, he will think of ways to become rich and slowly move himself to E and I quadrants. That is abundance.

In short, abundance= how you can, ways to do it
scarcity= how you cant, ways to fail at it

[Reply]

Tyrone Reply:
October 4th, 2009 at 10:34 pm

Nice conclusion Dias! In short, you’re saying that Poor Dad is all about scarcity thinking while Rich Dad is all about abundance thinking.

I would say, “if there’s a will, there’s a way.”

[Reply]

ark on Sat, 3rd Oct 2009 1:33 am

I have not yet read that book (would you believe it?)

But basing on how influential it become, I know its a good read.

Thanks for sharing those quotes, it feels like I ahve already read it, hehe..

[Reply]

Melvin on Sat, 3rd Oct 2009 5:50 am

Can’t I follow both path? Well I think it really depends on outside factors and on the situation maybe

[Reply]

elmot on Sun, 4th Oct 2009 8:18 pm

I really love this book of Kiyosaki. And I guess at the end of the day, the power lies on your palm…and it is all about our mental power that would steer us either to riches or poverty.

[Reply]

Extreme John on Tue, 6th Oct 2009 7:25 pm

I never heard of this book series before but Im going to have to check it out, I am constantly discussing money and the importance of it and managing it with my son and he also loves to read.