Rich Dad Poor Dad Chapter 4-5 Review

Questions and Answers

At first why did tax become popular?

to punish the poor

Who did tax hurt the most?

middle class

What did the rich dad call Robin Hood?

a crook

The rich created the ___________________ as a vehicle to limit their risk to the assets of each voyage.

corporation Signup and view all the answers

The rich dad was a and the poor dad was a ___.

capitalist; socialist Signup and view all the answers

Who loses according to the statement 'the people who lose are the uninformed'?

the ones who get up every day and diligently go to work and pay taxes Signup and view all the answers

Why did the idea of 'take-from-the-rich' backfire on the very people who voted it in?

because the harder you work, the more you pay the government Signup and view all the answers

What was the biggest secret of the rich?

corporations Signup and view all the answers

Corporations enjoy most of the rights and responsibilities that individuals possess. What are they referred to as?

a legal person Signup and view all the answers

Knowledge is _____________

power Signup and view all the answers

If you work for money, you give the power to your . If money works for you, you _____________

employer; keep the power and control it Signup and view all the answers

'______________ and you won't be pushed around as much.'

Be smart Signup and view all the answers

Financial IQ is made up of knowledge from four broad areas of expertise. What are they?

accounting, investing, understanding markets, and the law Signup and view all the answers

What is accounting?

financial literacy or the ability to read numbers (left side of brain) Signup and view all the answers

What is Financial Literacy?

ability to read and understand financial statements which allow you to identify the strengths and weaknesses of any business Signup and view all the answers

What does investing refer to?

the science of 'money making money' (right side of brain) Signup and view all the answers

What does understanding markets refer to?

the science of supply and demand Signup and view all the answers

Match the following groups with their actions:

Business Owners with Corporations = 1. Earn, 2. Spend, 3. Pay Taxes Employees Who Work for Corporations = 1. Earn, 2. Pay Taxes, 3. Spend Signup and view all the answers

Often in the real world, it's not the smart who get ahead, but the ________.

bold Signup and view all the answers

What is the road to wealth?

striving to increase your monthly cash flow from the asset column to the point that it exceeds your monthly expenses Signup and view all the answers

If you think money is not real then...

you will grow richer faster Signup and view all the answers

The single most powerful asset we all have is our...

mind Signup and view all the answers

What are the two main vehicles to achieve financial growth?

real estate and small-cap stocks Signup and view all the answers

What are the three things you need to be a better investor?

1.) Find an opportunity that everyone else missed, 2.) Raise money, 3.) Organize smart people Signup and view all the answers

Study Notes

Taxation and Its Impact

Taxation became popular as a means to punish the poor.
The middle class suffers the most from taxation policies.
The concept of "Robin Hood" is labeled a crook by the rich dad.

Wealth Creation Strategies

The wealthy established corporations to limit financial risks associated with their ventures.
Rich dad identified as a capitalist, while poor dad is categorized as a socialist.

Economic Insight

The uninformed lose in the financial game, working diligently to pay taxes without awareness.
The "take-from-the-rich" ideology backfires, as increased work leads to higher taxes.

The Rich's Advantage

The most significant secret of the wealthy lies in corporations, serving as powerful financial tools.
Corporations function as "legal persons," possessing rights and responsibilities akin to individuals.

Financial Literacy

Knowledge is equated to power in achieving financial success.
Working for money gives power to your employer; allowing money to work for you maintains control.
Being smart in financial matters helps avoid being exploited by others.

Components of Financial IQ

Financial IQ comprises knowledge in four areas: accounting, investing, understanding markets, and law.
Accounting entails financial literacy, enabling understanding of numerical data.
Financial literacy aids in interpreting financial statements to scrutinize business health.
Investing revolves around the principle of making money grow.
Understanding markets involves grasping the dynamics of supply and demand.

Financial Frameworks

Business owners in corporations follow a cycle of earning, spending, and paying taxes.
Employees work in a sequence of earning, paying taxes, and then spending.

Traits of Success

Success does not always favor the smartest; often, it is the bold who advance.
The path to wealth focuses on increasing cash flow from assets to surpass monthly expenses.
Believing money is unreal can accelerate wealth accumulation.

Key Assets

The mind is recognized as the most potent asset in achieving success.
Real estate and small-cap stocks are identified as primary vehicles for financial growth.

Investor Traits

To excel as an investor, seek overlooked opportunities, raise funds, and collaborate with intelligent individuals.

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Description

Test your knowledge on Chapters 4 and 5 of 'Rich Dad Poor Dad'. This quiz covers key concepts such as taxes, class impact, and the role of corporations in wealth creation. Challenge yourself to recall important definitions and insights from these chapters.