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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 Asset:
Fig: the cash flow pattern of a liability:
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.
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.
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