Rich Dad Poor Dad is a starting point for anyone looking to gain control of their financial future

The Three Incomes
In the world of accounting, there are three different types of income:
1. Ordinary earned
2. Portfolio
3. Passive

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Final Thoughts: Using Financial Intelligence
176
When my poor dad said to me, “Go to school, get good grades, 
and find a safe secure job,” he was recommending I work for earned 
income. When my rich dad said, “The rich don’t work for money. 
They have their money work for them,” he was talking about passive 
income and portfolio income. Passive income, in most cases, is income 
derived from real estate investments. Portfolio income is income 
derived from paper assets such as stocks and bonds. Portfolio income 
is the income that makes Bill Gates the richest man in the world, not 
earned income.
Rich dad used to say, “The key to becoming wealthy is the 
ability to convert earned income into passive income or portfolio 
income as quickly as possible.” He would say, “Taxes are highest on 
earned income. The least-taxed income is passive income. That is 
another reason why you want your money working hard for you. The 
government taxes the income you work hard for more than the income 
your money works hard for.”
In my second book, Rich Dad’s CASHFLOW Quadrant, I explain 
the four different types of people who make up the world of business. 
They are E (Employee), S (Self-employed), B (Business Owner), and
I (Investor). Most people go to school to learn to be an E or an S. The 
CASHFLOW Quadrant is written about the core differences of these 
four types and how people can change their quadrant. In fact, most
of our products are created for people in the B and I quadrants.
In Rich Dad’s Guide to Investing, book number three in the Rich 
Dad series, I go into more detail on the importance of converting 
earned income into passive and portfolio income. Rich dad used to
say, “All a real investor does is convert earned income into passive
and portfolio income. If you know what you’re doing, investing is not 
risky. It’s just common sense.”