Book: Rich Kid, Smart Kid by Robert Kiyosaki

I have been reading a lot of books on finances and real estate.  One book that has struck me enough to blog about it is a book titled “Rich Kid, Smart Kid” by Robert Kiyosaki.  I have read a bunch of Robert Kiyosaki’s books.  I have been reading this one to help give me ideas on how to educate my kids and myself on finances. 

A couple key concepts that have struck me:

  • “My banker has never asked me for my report card” (p. 116). 
  • “Your financial statements is your report card once you leave school” (p. 118)
  • Financial statements consists of two statements:  
    • Income & Expense statement
    • Assets and Liabilities statement
  • Build a financial statement for your life.
    • To build Income and Expense statement, record all your income (job, dividends, interest, etc) and expenses (everything that you spent money on) for the last 30 days
    • To build Assets and Liabilities statement, record all your assets and liabilities.
      • Assets:  Things that put more into your pocket.  Generate cashflow/income.  Examples include:  positive cashflow rental properties, savings account, dividend paying stocks

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      • Liabilities:  Things that take money out of your pockets.  Generate expenses.  Examples include:  your house (Robert classifies your house as a liability since it takes money out of your pocket to maintain), car, and any doodad.

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  • The key is to continue to acquire assets so that you can build up passive income. 
  • Need to focus upon converting earned income (e.g. from a job) into passive income (generated by my assets).
  • Review your financial statements on a quarterly (or more frequent) basis
  • Key thing to understand is the cashflow
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