Book Review: “Rich Dad’s Conspiracy of the Rich: The 8 New Rules of Money” by Robert Kiyosaki

When Robert Kiyosaki started writing this book on line. I was invited to read the book as it evolved. This book in its physical form really summarizes and refreshes my memory. The book, except for the frequent repetition, drives home Rich Dad’s message. We’re living in a rapidly changing global-economy world. It’s not your father’s world any more, given the new financial crises, waves after waves. Time to learn while riding on the roller coaster ride.

4 main forces that keep people struggling financially: taxes, debt, inflation, and retirement.
1. Conspiracy against our education: academic, professional, and financial education (most important in the information age). New rule of money #1: Money is knowledge.

2. Conspiracy against our money: The bank never goes broke. New rule of money #2: Learn how to use debt. New rule of Money #3: Learn to control cash flow. Observe three things: jobs, people, and cash – where they are flowing to and from.

3. Conspiracy against our wealth: socialism taking control. US-type (deflation) vs. German-type (inflation) depression. New Rule of Money #4: Prepare for the bad times and you will only know good times.

4. Conspiracy against our financial intelligence: The invisible bank robbery: 1. Fractional reserve banking. 2. Deposit insurance. New Rule of Money #5: The need for speed. Those who will succeed in the future will be entrepreneurs who understand how quickly business and money are changing, and who have the ability and flexibility to quickly change and adapt.

The author’s crystal ball: 1. Old industries are dying, 2. taxes will rise, 3. US is the biggest debtor nation in the world, 4. China is threatening the reserve status of the US dollar. 5. The US consumer is loaded with debt and strapped for cash. 6. Unemployment is rising. 7. Technology is invisible and relatively inexpensive., 8. Our school systems have not prepared students for the information age., 9. Frugality is now cool.

New Rule of Money #6: Learn the language of money. Knowledge begins with words: words of a poor person, middle-class person, and a rich person. Capital gain (gambling) vs. cash flow (focuses of investments). Cash flow for average people: 1. savings, 2. stocks, 3. pensions, 4. annuities.

The secret of success: Sell, become a student of the word Sell. Financial Fairy Tale #1: Live Below Your Means. #2: Go to school so you can get a secure job. #3: Social security and the stock market.

Building for the future: Integrity #1 Mission, #2 Team, #3 Leader, #4 Product, #5, Legal, #6 System, #7 Communications, #8 Cash Flow. New Rule of Money #7: Live is a team sport. Choose your team carefully.

Financial Education: An Unfair Advantage. 1. Expanding your means rather than living below your means. 2. Printing your own money. New Rule of Money #8: Since money is becoming worthless and less, learn to print your own. Learn by: reading (10% retention), lecture, participating in group discussion increases retention, via simulation or games.

15 financial lessons: 1. The history of money, 2. Understanding your financial statement, 3. The difference between an asset and liability, 4. The differences between capital gains and cash flow, 5. The difference between fundamental and technical investing. 6. Measuring the asset’s strength. 7 Know how to choose good people. 8. Know what asset is best for you. 9. Know when to focus and when to diversify. 10. Minimize risk. 11. Know how to minimize taxes, 12. The difference between debt and credibility. 13. Know how to use derivatives. 14. Know how to your wealth is chosen. 15. Know how to make mistakes.