Rich Dad Poor Dad: Financial Literacy, Cash Flow, and Assets

This report analyzes the financial concepts presented in Robert Kiyosaki's "Rich Dad Poor Dad." The report differentiates between assets and liabilities, highlighting how the rich own assets while the poor own income derived from work. It emphasizes that the rich do not work for money but to learn and grow, and the importance of cash flow management. The report also discusses the significance of financial literacy, which is not just about what one earns but what one keeps. The cash flow patterns of the rich and the poor are compared, showing how the rich make money to fulfill luxuries, while the poor earn to make a living. The conclusion emphasizes the flow of money from the assets of the rich towards the income of the poor, and the importance of understanding these differences to improve financial literacy.

Running Head: RICH DAD POOR DAD
RICH DAD POOR DAD
Name of the Student
Name of the University
Author’s Note:

1RICH DAD POOR DAD
The book has differentiated the meaning of asset as the asset for the rich and the same is
inferred as the liability for the poor. In other words, the rich own assets whereas the poor owns
income which cannot be the same because while the former is permanent and a source of income
whereas the latter is itself an income which is derived from the work. The work done is the asset
to the owner and the income is owned by the poor.
The two lessons that can be learned from the book is that the rich people do not work for
earning money. Rather, they are the ones who have invented money. They work to learn and
grow. The cash flow pattern of the rich and the poor explains the difference between the asset of
the rich and income of the poor. However, the second major lesson I learned from the book is
that the financial literacy cannot be taught. This is so because the finances can only be taught
when a person knows money. in other words, the pattern determining the riches and the poor is
not what one makes but the money one keeps. In case of poor, the money earned and the money
spent is almost the same and hence, the money kept is low to nil. Whereas, in case of rich, the
money made and the money spent is not same, the disparity between the money made and spent
creates the money that the person keeps.
Fig: Cash flow of an Asset1:
1 Kiyosaki, Robert T., and Sharon L. Lechter. Rich Dad Poor Dad: What the Rich Teach Their Kids About Money-
That the Poor and the Middle Class Do Not!. Business Plus, 2001.

2RICH DAD POOR DAD
Fig: the cash flow pattern of a liability2:
2 Kiyosaki, Robert T., and Sharon L. Lechter. Rich Dad Poor Dad: What the Rich Teach Their Kids About Money-
That the Poor and the Middle Class Do Not!. Business Plus, 2001.

3RICH DAD POOR DAD
It can be concluded that the rich makes money to fulfill the luxury while the poor earns
income to make a living. In other words, the rich becomes richer and poor becomes poorer so
that the money is flowed from the asset of the rich towards the income of the poor.

4RICH DAD POOR DAD
Bibliography:
Journals and Articles:
Kiyosaki, Robert T., and Sharon L. Lechter. Rich Dad Poor Dad: What the Rich Teach Their
Kids About Money-That the Poor and the Middle Class Do Not!. Business Plus, 2001.