Rich dad poor dad chapter 2 summary (Lesson 2: Why teach financial literacy?)

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By Stephen

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In this Rich Dad Poor Dad chapter 2 summary, I’ll break down some of the key lessons Kiyosaki shares on the importance of financial literacy and why it should be taught in schools. 

In his financial book, especially in chapter 2, through insightful conversations and contrasting viewpoints, Kiyosaki argues that understanding assets vs. liabilities, corporate tax structures, and how money truly works are critical yet overlooked knowledge.

I’ll share key quotes, analysis, and main points from Kiyosaki’s unconventional money philosophies.

This chapter provides an eye-opening overview of the core concepts that set the stage for the transformative financial advice to come. I encourage you to read on as I summarize the key lessons from Chapter 2 in brief.

Rich dad poor dad chapter 2 summary

Rich dad poor dad chapter summary chapter 2 Lesson 2 – Why Teach Financial Literacy?

In Chapter 2 of Rich Dad Poor Dad, the author Robert Kiyosaki explains the importance of financial education through a story from his childhood. 

Robert grew up learning lessons about money from two father figures – his own father, and his best friend Mike’s father.

While his real dad struggled financially, Mike’s dad created great wealth and became known as Rich Dad. 

The chapter 2 explains why financial literacy, not just academic intelligence, is key to wealth. Kiyosaki shares how his rich dad mentored him and Mike as boys to have financial aptitude.

By 1990, Mike had taken over his dad’s empire and was even more successful than his father. Meanwhile, Kiyosaki was able to retire wealthy at age 47. Their early financial education from rich dad was invaluable.

Kiyosaki cautions that intelligence alone does not guarantee financial success. He tells the story of a 1923 meeting of the richest businessmen at the time that included big names like Charles Schwab. 25 years later, many of these titans went broke or died penniless, some committing suicide. 

This shows that with rapid economic changes, you need more than academic or professional knowledge. You must have financial aptitude to adapt and prosper. Kiyosaki defines financial aptitude as “what you do with the money once you make it.” The middle class is often well educated, but financially illiterate.

Rich dad believed in teaching through simple pictures and real world experience. He used diagrams to explain assets that put money in your pocket vs. liabilities that take money out. This visual education was the foundation of Kiyosaki’s financial literacy.

Some key lessons and quotes from rich dad

Here are some rich dad poor dad quotes and lessons from chapter 2:


“It’s not how much money you make. It’s how much money you keep.” Wealth comes from maximizing assets and minimizing liabilities. Simply earning more does not solve most money problems.

Rich dad poor dad quotes

“The rich acquire assets. The poor and middle class acquire liabilities they think are assets.” Don’t spend money on things that don’t generate income.

Rich dad poor dad quotes

“Intelligence solves problems and produces money. Money without financial intelligence is money soon gone.” Education needs balance – scholastic and financial.

Rich dad poor dad quotes

Kiyosaki shares how poor financial habits lead the middle class into the “Rat Race” treadmill. As their income rises, so do taxes and desire for material things. They buy a house with a mortgage, new cars and appliances on credit, and get further trapped in debt.

The rich buy income-producing assets first. Their assets gain value and generate cash flow. The middle class treats their home as their primary investment, failing to build a substantial asset column. Their only income is their salary. This exposes them to high risk in unstable times.

In Kiyosaki’s words, “The rich get richer because they acquire assets. The poor and middle class get poorer because they buy liabilities they think are assets.” The key is early financial education to transform earned income into passive and portfolio income from assets.

Without financial training, smart professionals end up struggling financially due to lack of asset accumulation and poor cash management. Intelligence alone cannot remedy ignorance. Academics have limitations in teaching the skills of real world investing and entrepreneurship.

Rich dad’s lessons provided the financial aptitude to give Kiyosaki control of his financial life early on. He credits rich dad’s mentoring, through diagrams and real-life experiences, as the foundation of his eventual wealth and ability to retire young.

Related Read: Rich Dad Poor Dad Chapter 1 Summary (Lesson 1: The Rich Don’t Work For Money)

Rich dad poor dad chapter 2 Story In Brief (conversations from chapter 2)

Rich dad poor dad summary chapter 2 Story:

Robert says most kids focus on school to get good grades, attend college, and land a job. 

Their parents tell them to work hard to earn money. But schools and parents often don’t provide much education on how to use money to build lasting wealth.

Robert realized his highly educated but constantly broke father had a scarcity mentality about money that limited his thinking. Poor Dad would say: 

“The reason I’m not rich is because I can’t afford it.”

Poor Dad warned Robert:

“Focus on your studies so you can get a secure job with benefits.”

Poor Dad valued job security over taking financial risks to build wealth.

In contrast, Rich Dad encouraged the boys from age 9 onward to develop financial intelligence. When Robert asked how to get rich, Rich Dad replied:

“It’s simple. Use your head, work hard, make wise choices, save and invest wisely, live below your means, and don’t be afraid to take risks.” 

Rich Dad promised: 

“I will teach you the financial secrets that wealthy families have used for generations to build their fortunes.”

Rich Dad taught concepts like investing, entrepreneurship, markets, accounting and leveraging debt. While Poor Dad said “I can’t afford it,” Rich Dad taught the boys to shift their mindset to “How can I afford it?” As Rich Dad said:

“It’s not a matter of affordability, it’s a matter of learning. Ask yourself ‘How can I learn to afford it?’ Have your money work hard and learn.”


Rich Dad also advised:

“Get busy working and making money now, while you are young. Time is more important than timing.”

He believed in taking risks early and learning from failures. Academics gain book knowledge, but entrepreneurs gain real-world experience.

Robert realized schools prepare youth to be employees. But employers are often financially struggling themselves. As Robert put it: 

“How can I learn to make money from people who are broke and in debt? It didn’t make sense.”

So employees must take personal responsibility for financial education.

Robert observed that wealthy families trained their kids early to use money to acquire assets, not liabilities. The rich put their money to work earning more.

By 13, Robert and Mike were starting little side businesses, while Poor Dad’s classmates blew money on things that added no value. 

Poor Dad insisted Robert focus on academics, not get-rich-quick schemes. But Rich Dad pushed the boys to take risks and learn from setbacks.

By high school, Robert met students from wealthy families encouraged to embrace financial intelligence. While most kids read fiction, these kids read books on business and investing. As Robert put it:

“Their conversations revolved around concepts like cash flow, return on investment, assets and liabilities – financial principles.” 

Rich Dad noted the rich focus on long-term assets and passive income rather than short-term earned income. They train money to make more money. Rich Dad would say:

“Winners make their money work hard for them. Losers cling to job security while life speeds by.”

Robert concludes that while academic knowledge has value, financial intelligence is priceless.

The poor and middle class must prioritize understanding money if they want to build sustainable wealth. 

As Rich Dad promised years earlier, his lessons shaped Robert’s financial future. He learned that with financial education, you can make money work for you rather than always working for money.

This abundance mentality became Robert’s foundation for a wealthy life.

Rich dad poor dad lesson 2 ( Chapter 2 Lessons)

Here is the Lesson 2 Rich dad poor dad summary with key notes and main points:


In Chapter 2 Lesson 2  of Rich dad poor dad titled “Why Teach Financial Literacy?,” author Robert Kiyosaki continues his story of growing up learning lessons about money from his two fathers – his educated but poor dad, and his less educated but rich dad.

The purpose of this chapter is to emphasize the importance of financial literacy and understanding the difference between assets and liabilities.

As Robert’s rich dad taught him, the key lesson 2 of Rich dad poor dad for building wealth is: “The rich acquire assets. The poor and middle class acquire liabilities.”


Main Points

Here are some main points from rich dad poor dad chapter 2:

1. Financial literacy is vital for wealth building.

Robert’s rich dad stressed the need to become “financially literate” in order to become rich and maintain wealth across generations. This involves truly understanding accounting, cash flow, and investing rather than simply making more money.

2. Mindset matters more than how much you make.

Rich dad taught Robert that “it’s not how much money you make, it’s how much money you keep.” Having a strong financial foundation and mindset will lead to making wise money decisions.

3. Assets vs. liabilities.

The “number one rule” of building wealth is knowing the difference between an asset, which puts money in your pocket, and a liability, which takes money out. Acquire assets and you’ll get rich; acquire liabilities and you’ll stay poor. 

4. Your house is not an asset.

Rich dad considered his house a liability because of all the associated expenses, while Robert’s poor dad saw it as an asset. This was a core difference in their mindsets about money and investing.

5. Financial literacy allows you to invest in income-producing assets.

The financially literate use their money to acquire assets like businesses, real estate, stocks that provide passive income. The financially illiterate acquire liabilities like bigger houses and cars that require more work to pay for.


Key Supporting Evidence

  1. provides diagrams of sample financial statements to demonstrate the cash flow differences between poor, middle class, and rich. The rich acquire assets that cover their expenses while the poor only have expenses and liabilities.
  2. He shares the story of the 9 businessmen from the 1920s who died broke to prove that simply making more money does not guarantee wealth. Financial intelligence matters more. 


– Robert concludes that financial literacy, not increased income, is the key to wealth. With a strong financial foundation, you can use money as a tool to acquire assets and gain your freedom. He believes this lesson is relevant to people across socioeconomic backgrounds.

– The chapter delivers a definitive argument for why actively developing financial intelligence should be primary to simply working harder at your job if you want to build long-term wealth.


  • The comparison between his two fathers provides a compelling framework to showcase the difference in mindset between the poor, middle class, and rich.
  • The biggest strength of this chapter is the clear-cut definitions and diagrams breaking down assets versus liabilities. This contributes immense clarity to the conversation around personal finances and investing.
  • The example financial statements are simple yet profound in demonstrating cash flow patterns. They speak clearly even 60 years later.
  • While the chapter provides tremendous insight, it is limited in only sharing the author’s perspective. Additional research or expert opinions could have enriched the argument.


Summary of rich dad poor dad chapter 2 Lesson 2:

Chapter 2 of Rich Dad Poor Dad makes a convincing case for why financial literacy is more valuable than simply seeking to make more money when it comes to building wealth.

By providing clear definitions, examples, and financial diagrams, the author highlights the need to learn accounting, invest in income-generating assets, and control expenses and liabilities.

Mastering these financial fundamentals gives people across socioeconomic backgrounds the tools to reshape their thinking and actively build wealth.

The chapter 2 of rich dad poor dad delivers an enduring, timely lesson that financial intelligence matters more than how much you earn in growing rich.


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