Rich Dad’s Guide to Investing summary

“Get an education, work hard, save money. Then you’ll be fine.” Sound familiar? This sentence sums up the standard middle-class approach to financial security and, more likely than not, you were probably told something similar by your parents.  

But here’s the thing: this advice will never make you rich. Rather, it will keep you in the 90 percent that only has 10 percent of the money.

Can you explain the difference between assets and liabilities? Or calculate a company’s price-to-equity and debt-to-equity ratios?

Many people shy away from investing because the terminology sounds like a foreign language. If you want to get into that 10 percent, however, it’s time to invest in your financial education.

When we think of investors, we often imagine besuited Wall Street bankers, or bustling men shouting on a trading floor. But the word “investor” can be applied to a range of people, from bond traders to business founders.

The taxonomy of investors begins with accredited and qualified investors. These two are outsiders.

Many people think, “I could never start my own business.” But just 120 years ago, 85 percent of Americans were independent farmers or small shopkeepers. In other words, the vast majority of Americans were businesspeople – and you can be one, too.

Anyone can start a business and become rich. If you want to become an accredited or qualified investor, you already need to be wealthy. But starting a business only requires a bit of creativity.  

Did you know that Bill Gates didn’t invent the software that made him the world’s richest man? He merely bought it from a group of programmers. He built a great business, not a great product – and that was the key to his success.

Building a business is a matter of mastering three things.  

Raising capital, advertising, negotiating, motivating your team and making sales – what do all these aspects of business life have in common?

All are crucial for success, and all require top-notch communication skills. So how can you become a better communicator?

So you’ve started a business, and it’s going well. Now it’s time to use the income and the experience you’ve accumulated and take things to the next level. It’s time to become a sophisticated investor.  

As a sophisticated investor, you’ll take more control over management, corporate structure, investment decision making and taxes. The result? Maximized returns.