5 Key Lessons I Learnt from Rich Dad, Poor Dad as a College Student

As a college student in pursuit of financial freedom, reading self-help books is my new habit. I first started with “Atomic Habits”, and now, I have mastered “Rich Dad, Poor Dad” by Robert Kiyosaki. This book has completely changed the way I think about money and building wealth.

Beware, even though I found “Rich Dad, Poor Dad” really insightful, I admit I don’t see eye to eye with him in some aspects (you can check my “Rich Dad, Poor Dad” book review). However, in this journey, you won’t find the perfect fit for yourself. You should focus on the information that will help you overcome your struggles and disregard the rest.

Taking that into account, discover 5 powerful lessons from Rich Dad, Poor Dad that every college student should know to start building financial freedom early.

1. Understand The Difference Between Assets and Liabilities

Assets and Liabilities are the foundation of accounting. However, they reflect completely different concepts.

Examples of Assets:

  • Stocks
  • Bonds
  • Income-generating real estate
  • Businesses (that don’t require your presence)

According to Robert Kiyosaki, if you want to be rich, you need to spend your life buying assets. On the other hand, if you want to be poor, spend your life buying liabilities.

Thanks to these assets, you will build your wealth through passive income. No trading time for money. To achieve financial freedom, you need to build streams of income that don’t rely on your presence.

2. Pay Yourself First

Kiyosaki’s philosophy of “pay yourself first” completely changed how I manage my money. Up until now, I would budget my savings last. That is, I would pay myself last. Not having enough money to pay for all my expenses would eat me alive, so I would put not having debt and paying others first.

THAT MINDSET KEPT ME STUCK IN THE RAT RACE.

After reading “Rich Dad, Poor Dad”, I have learnt that my asset column is more important than the government or other businesses. If I pay myself first, I strengthen myself financially and mentally.

Moreover, after paying myself, the pressure to pay my creditors is so strong that it forces me to seek other sources of income. You could say it helps you on your asset-building journey.

If you are starting on your budgeting journey or don’t know how to start paying yourself first, check my budgeting tips for beginners.

3. Focus on Financial Education Over a High Salary

I have always believed that we should first study for pleasure and then think about the career possibilities it will give me. Well, Kiyosaki has proved me right.

According to the writer, schools teach you to work for money, but not how to make money work for you. Instead of settling for the usual graduate studies, we should always try to learn something new. Your chosen career path may not be the most “profitable.” However, with the right financial education, you can still turn your passion into a sustainable lifestyle.

Kiyosaki believes that understanding money is more important than earning a high paycheck. Try to integrate financial education into your lifestyle. Learn something new every day, level up your budgeting techniques, and dive into new financial adventures.

4. Have no fear of losing

People don’t start investing or become entrepreneurs because they fear losing. To face this, “Rich Dad, Poor Dad” advises checking your reaction to failure. Does it inspire you to win, or does it weaken you? Your actions should differ according to your reactions and play it safe in case it will turn you wimpy.

If you hate losing, invest conservatively: choose secure options and ensure small wins.

Playing safe is okay, but the key is to START EARLY. Start building your nest of eggs as soon as possible, because it will take longer.

As a student caring for personal finance, you have two options. One is to invest slowly and safely and get a steady income during your retirement. The second is to take more risks while we are young, because even if we fail, we still have time to recover and build.

5. Stop and reflect

Starting early and trying new things is okay, but sometimes we need to stop what we are doing and evaluate what’s working and what’s not.

If your current living conditions and financial situation don’t align, ask yourself, “What would I need to do to allow myself to get what I want?”.

The issue might not be poor money management; it could simply be that your income is too low to support your goals. In that case, look for new ideas and opportunities:

  • Take classes
  • Read about finance and entrepreneurship
  • Attend seminars
  • Search for new investment ideas
  • Find someone who has done what you want to do.

TIP: Don’t wait for the perfect business or the right people. Investing is like dating; you need to get out on the market, negotiate, reject, and accept.

Is Rich Dad, Poor Dad overhyped or a must-read for beginners in personal finance?

If you are serious about building wealth and breaking free from the paycheck-to-paycheck cycle, this place is a great place to start.

Though some concepts may feel extreme or outdated, focus on the things you can learn from them. In books like this, there will be life-changing concepts as well as useless ones. The value lies in the shift it creates in your mindset.

Take what helps you grow. Disregard what doesn’t. That’s how you win in self-development.

Have you read Rich Dad, Poor Dad? Drop a comment below and let me know your biggest takeaway!

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