Book Review: Rich Dad, Poor Dad

richdadIt only took me two days to read Rich Dad, Poor Dad by Robert Kiyosaki & Sharon Lechter, as it is relatively short and an easy read. And Kiyosaki likes to say things over and over… and over. This supposedly non-fiction book deals with the conflicting teachings of his “Poor Dad”, his real educated paycheck-to-paycheck father, and his “Rich Dad”, a middle-school drop-out who is a millionaire. There are two basic themes that I got out of the book, after wading through the hokey stories:

1) People need to learn “financial literacy” more than book learning taught at school. I can agree that money matters are not taught in school nearly enough, but I’m certainly glad I went to ninth grade.

2) You should buy assets, not liabilities. Assets, such as real estate (especially real estate), stocks, and bonds, make you money. Liabilities, such as your house, car, gadgets, take away your money. This is probably the one thing to get out of this book, perhaps minus the real estate focus.

He includes very many vague stories about buying real estate properties for cheap with little or no money down and flipping them for great profits. Or investing in start-ups with great results. Many of these stories have been investigated with little proof found to support them. Overall, I see the book is more of an inspirational book on entrepreneurialism (is that a word?). Basically, try to think outside the box, and invest your money in something that grow instead of letting it sit in a bank account or spending it on that nice car. He just makes it sound way too easy to become a millionaire, just like any infomercial you see at 2am in the morning. Also, the book plugs expensive ‘get-rich’ seminars and his Cashflow game way too much.

Still, if the book gets your off your ass and thinking about making yourself some money, it’ll be worth the ten bucks and two days of reading during football commercials.

Comments

  1. Yeah, I wasn’t too impressed with “Rich Dad Poor Dad” either. I also loose respect for a person when they come out with book after book after book,…

    If you must read it, check it out at the library. Don’t buy it.

    JLP

    http://AllThingsFinancial.blogspot.com

  2. ArcaneXor says:

    One of the worst books I’ve read. It’s poorly written, full of “plot holes”, and offers rather crappy, infomercial-quality advice.

  3. Read it a long time ago. Recall that the writing was mediocre at best. Very much a motivational, MLM sort of thing.

    However, there were nuggets of good stuff. “Buy assets, not liabilities” was one of those, and there was an assortment of interesting quotes.

    Wasn’t worth buying new, though.

  4. Robert Kiyosaki books are full of filler and really dumb down things but I learned alot of important ideas from him.

    Because of him, i now review my “wealth ratio”, cash flow and networth monthly. His idea of the rat race, that spending always rises to meet income and you still stay in the same spot is a lesson all of North America needs to learn.

    He is horrible writer though.

  5. Kiyosaki loves to tell his stories. I question whether he really got rich off the real estate investments or just running Cashflow Technologies (churning out book after book). We should all be so fortunate to write a book(s) and have people gobble it up. I admit that I have the game. It does help to understand the financial statements better. Buying his game is cheaper than an accounting class at the local college. Might be even cheaper to borrow an accounting book and read though. Bottom line of Kiyosaki’s teachings: Buy assets, not liablities (the house you live in is a liability, not an asset).

    Keep up the informative blog.

    -rpw

  6. William Frantz says:

    I disagree. My house is my best asset. It has raised in value about 20% per year for the last 4 years. I can use the equity in my home to invest in other things. If I moved to another part of the country, I could eliminate my mortgage.

    I also think that Rich/Poor Dads takes a narrow view with “only buy assets”. A car is a liability right? But if you didn’t have a car, you couldn’t keep a job. A car is an asset. You use it to earn more money. No car, no income.

    I am an engineer working in wireless technology. I buy the latest cell phones and PDAs when they become available. I buy a faster computer every year. Liabilities? No. Without using cutting edge technology on a regular basis, I would not have the successful career that I have. No toys, no knowledge, no promotion, no job, no income.

    It’s just not as simple as “buy food and rental properties.”

  7. I think it is a good book for beginners like myself.

  8. I was thinking about getting this book and now, I will get it from the library. Thank you for the great review and the 2 points. They got me thinking that a house is a liability!

  9. Some might criticize and some are supportive. As for me, if you really know what is your condition now, and want some improvement, this is surely very inspiring book. However, lack of step-by-step getting rich examples, right?

    But, you know what, if people give you a hard task how to be rich, well, you have to look for an answer. they won’t feed you up every single spoon.

    So Invest your Time & Money into what? Actually really depends on people. Looking back at Robert Kiyosaki background, you would be able to know what to invest, Real Estate? Writing Books?. However, if you don’t like the field, you would really hard to get it started. The real answer is still in your hand that is “Invest” something that you comfortable of, and make the “Money” work for you.

    In terms of the definition between the Assets and Liabilities, his definition might seems confusing. But if you read some more materials from Robert Kiyosaki, he wants us to make the “MONEY” work for us. So during the monthly installment of housing loan, making people pay at least half of your monthly installment by renting out. Saving you 50% installment as well as saving you 50% of the interest indirectly. However, if you plan to pay 100% installment until the final stage. Then decide to rent it out at later age, you are actually working for money until the loan is settled first.

    Look carefully, the value you are paying today is actually for future value. For example, a property worth USD200K now, might be worth USD500k in 20 years time, correct? But if you calculate your monthly installment now, you might be paying at least USD450k from now onwards in addition to the interest and other charges.

    In summary, if you work for “MONEY”, you are actually BUYING.
    if “MONEY” work for you, you are actually INVESTING, meaning you put a very little money inside, the rest of the time, the money is paying by itself, and pouring in while you asleep and doing nothing.

  10. I quoted William Frantz sayings:
    “I am an engineer working in wireless technology. I buy the latest cell phones and PDAs when they become available. I buy a faster computer every year. Liabilities? No. Without using cutting edge technology on a regular basis, I would not have the successful career that I have. No toys, no knowledge, no promotion, no job, no income.”

    Actually the meaning should be like this, making people pay for your upgrades, such as company that is willing to pay you all the expenses for learning new technologies. Getting a company sponsor your knowledge and appreciate your skills.

    If you want to be successful to pay every single cents on your own, it is just like buying your house from your every single hard earning money.

    Your asset = Hard earn money.
    Robert Kiyosaki’s Asset = People pay for it continuously and more.

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