Second Chance (2015), Robert T.Kiyosaki - Book Summary

Second Chance (2015) offers an explanation of the significant wealth gap in America and tips for growing your economy. It also helps you leverage assets and liabilities as leverage for future financial success.

Who should read this book:

  • Employees who work hard but seem to have no chance for advancement;
  • Anyone who enjoys working less but enjoying more;
  • People who want to win the financial system.

About the author:

Robert T. Kiyosaki is the author of the best-selling book Rich Dad, Poor Dad . He is also an investor, an entrepreneur.

What does this book have for you? Find out why the gap between rich and poor is so big.

When the financial crisis broke out in 2007-2008, the whole society was extremely confused and struggled to cope with what had just happened. This is no doubt an extreme case, but when it comes to economics in general and getting rich in particular, many of us are working blindly.

For example, many people still believe that the way to get rich is to have a degree, have a good job and work hard. As this book will show you, nothing but the truth. A well-paid job won't make you rich. Our current financial system is not set up that way.

There is only one way to become truly rich: owning and utilizing assets. But how to do that? This book will show you.

In this book you will learn:

  • How banks make money;
  • Why having a high paying job won't make you rich;
  • Why aren't you taught finance in school?

The American financial system works on inflation and stealing people's wealth.

The term "The poor get poorer and the rich get richer" sounds like something from a cowboy movie but in America it couldn't be more true.

Ordinary people are robbed of the possibility of wealth because the system is based on inflation. Inflation is really bad for the average person – it means that their money will suddenly lose its value. To make matters worse, inflation encourages people to save more money, which is also a cause of inflation. This is the reason.

When you deposit your savings in a bank, the bank lends that money to someone else. However, banks lend more than they receive.

Before the 2007 crisis, banks had a loan limit of $34, meaning they could only lend $34 for every dollar they actually had. But an increase in the money supply causes inflation, making your dollar less valuable.

This type of "wild" lending periodically led to financial bubbles, to which the monetary system subsequently responded with bailouts. The bailouts are taken from the taxpayers, which means that the bailouts actually contribute to the construction of the system. That's another way the monetary system causes poverty.

However, bailout money and an inflationary system only hurt wage earners: wage earners, freelancers, small companies. This is the group of people who bear the highest taxes and tend to save money in banks.

This is why the middle class is collapsing so quickly. In 1970, 50.3% of Americans had a decent income, but in 2010 it fell to just 42.2%.

Most people are not sufficiently educated about financial matters.

There are many different views on wealth, but one thing is for sure: everyone wants to be rich. Unfortunately, schools teach people to be poor instead.

Modern education directs people to become employees, taxpayers and consumers. People often think that education is the key to getting out of poverty: if you study hard, you will get a good job and more.

Unfortunately it's not that simple. You can have up to three bachelor's degrees and still be unemployed and poor. There's certainly nothing wrong with working hard, but that alone won't make you rich. Schools do not equip students with the necessary skills to make money, or in other words do not provide any formal training in finance.

This leaves a lot of room for error before financial crises. For example, a lot of people think that the 2007 crisis was a stock market crash when it was actually a derivatives crash. Derivatives such as risky and complex insurance policies accounted for a large portion of the market at the time.

If the public had a better grasp of finance, they might find that the rise in derivatives during the period 2000-2007 contained great dangers and would eventually collapse, and they would be armed good to deal with similar problems in the future.

Defects in education also lead to confusion between money and wealth. A lot of people mistakenly believe that rich people are cruel and deliberately make others poor. In some cases that is true, but not always. Some people become rich because they are generous.

John D. Rockefeller is a prime example. He made his fortune selling gas at a lower price than all his competitors, making the lives of millions of workers so much easier.

You cannot become rich without adequate financial education.  

When people say you need to be educated to be rich, they usually mean that you need to go to college and get a degree. What you really need, however, is financial education.

Schools don't teach finance because it's too powerful. Financial education means looking beyond traditional explanations and acquiring the knowledge needed to create more wealth – and it has the power to make you rich. In the past, slaves were not allowed to learn to read and write, because that would give them the power to surpass their masters. Today, a lot of people don't study finance for the same reasons.

Wealth is about getting a good salary – that is another misunderstanding. Wealth is having money in your pocket without having to work with it. You really need education to be able to do these things.

If you buy an old house, fix it up, and then rent it out, you've made a fortune. You will get rent from your tenants without having to work. Moreover, this government collects a very small tax, so it will help your profits increase.

People who are not financially educated consider only income and expenditure. That's why they often confuse assets with liabilities.

Today, a lot of people see their home as an asset. It's actually a liability because you're still likely to have to pay your taxes or mortgage.

Assess your finances and start building your own fortune.

You may think that judging someone rich or poor is very easy, although in reality it is not so simple. You can still be a poor person whether you live in a nice house or drive a luxury and expensive car.

If you want to change your financial situation, the first thing you need to know is where you stand. You need an income statement, where you write your income and expenses, and a balance sheet where you keep track of your assets and liabilities.

For example, imagine you have a job that gives you $10,000 per month and an apartment you rent out for $1,000 per month. You also pay a $2,000 mortgage and “raise” a Ferrari for $1,000 per month.

Most people would think of all of the above as assets, but in reality, the only asset is your apartment. Everything else costs you money or requires you to work for them.

The best way to plan for the future is to choose between four asset classes. Once you've assessed your finances, it's time to focus on creating another wealth – even if you don't know how yet!

These four asset classes are business, real estate, papers, and merchandise. Choose what interests you the most – only when you focus on doing what you enjoy most will you make a difference.

As an author, for example, he is most interested in real estate and commodities because he really likes gold, silver, oil and historical buildings. His hobby also prompted him to research his properties and hold them instead of selling them when prices were high.

Creating assets is the first step towards a more prosperous future.

Choose the future you want – then focus on it.

As we've seen, having a degree isn't really essential in making you richer. Being financially educated is the key to success, but when do you actually start learning?

First, you need to determine what future you want for yourself. Remember: being rich is not the most important thing in life. Many people work boring office jobs but feel happier than taking risks to have a brighter career.

If you really want to be rich, boring routine office jobs won't get you there. So think about a future that suits you best, and strive for it. If you want to be rich and financially self-sufficient, you need to commit to intensive investment or big business.

And of course, you cannot succeed immediately, you need to have the skills and qualities of a businessman.

One key difference between entrepreneurs and employees is that entrepreneurs may know very little about their business, but they know how to hire professionals who are the best at working for them. . That's because business people start up, they are responsible for every part: from developing the product to leading the entire team.

So don't focus too much on one area if you want to be an entrepreneur. Learn a little about all the things needed to run a business, like team building, leadership skills, or company missions.

You should try to cooperate instead of compete. The qualities of employees lead people to believe that they need to compete with all their peers to get ahead, but that's not going to be the mindset you want on your team. A great manager will guide his team to success.

Learn thinking skills through experience and practice.  

One of the biggest differences between the rich and the poor is intelligence, but not the kind of intelligence found in school. You will be considered a smart person if you have a good memory and absorb lectures quickly, but in the real world, it is other skills that are key to helping you stay ahead.

For traders, intelligence is all about the ability to handle risk and financial loss, learn from failures, and stay on top. Businessmen build their empires from scratch, using skills more essential than remembering who the 36th president is.

So how can you get those skills? You can learn from your leaders or friends, or take courses from experts. Then sharpen those skills with practice.

Because above all, we learn as we practice – the experience is in our memory, not the information we get when we take a test. Working also means that sometimes you can make mistakes, calculate errors, make mistakes – mistakes that you won't make again thanks to past experiences. In school we are punished for our mistakes; which leads us to believe that only fools make mistakes. But the reality is quite the opposite.

However, you can't learn by doing if you don't have enough money to start a business right away, so you need to elicit experience through practice. Before the author could create his fortune, he spent time studying advertising, visiting homes, and conversing with realtors. It's the best way to learn the business skills needed to succeed.

Don't be afraid of debt – jump straight into it and make your fortune.

Most people follow simple rules regarding debt: work hard, stay out of debt and you'll be fine. But as a trader, debt can be a good friend.

Debts can be a leveraged tool. Most people assume that if they work harder, they will learn more and become rich. In fact, the opposite often happens: they pay higher taxes and earn less.

If you want to become rich, find ways to “do more with fewer resources”. Think of a musician who's gone from playing the live piano to selling CDs: They're becoming more popular with the public despite doing less.

Debts can also help you stay in a similar way. In the financial world, debt can be very powerful because it allows you to get work done without the savings.  

For example, the author started his career in real estate in the 1980s by buying an apartment for $50,000. He pays a $5,000 deposit, and takes out a loan at 10% interest on the remaining $45,000. He only has to pay $450 a month (interest included) while it would be $750 if he rented the apartment.  

So use debt to build your assets. Traditional thinking says you should work hard, save money, and buy properties without a loan, but getting rich doesn't work this way, because most people can't save enough money. to buy valuable assets.

A friend of the author has had a lot of success using this strategy. He took out a loan so he could buy a 150-year-old church in Scotland, which he turned into an apartment complex. Before that, this church was like a ruin and people walked past it every day without a care. But he saw the potential and turned it into a new home for many people.


The main contents of this book are:

The current monetary system robs the working class of their ability to get rich, and financial education can help stop this problem. If you want to become rich, find out what type of property you are best suited for, then do your research and maybe take out a loan to own it. Choose a future for yourself – the future you want to be strong in.

Helpful advice:

Expand your financial vocabulary.

Start reading financial articles like The Wall Street Journal and pay attention to words you don't know. If you learn 2 words a day, a month you will learn 60 words!