I wasn’t the biggest fan of Rich Dad, Poor Dad, but I still decided to read this book, Rich Dad’s Guide to Investing by Robert Kiyosaki, for a couple of reasons. First, I have some friends that are real Rich Dad proponents and have bought their Cashflow 101 board game and actually own investment property now. Second, it was available at the library so I didn’t have to buy it. Rich Dad’s Guide to Investing is actually the third book in the series, Cashflow Quadrant was the second. But that was checked out, so oh well, maybe next time.
The premise of this book is to show people “what the rich invest in, and what the poor and middle class do not”. Well, I suppose book does that, if barely. But it does it with exceedingly poor writing and very vague concepts. Basically, childhood stories and his patented sayings are repeated over and over for 246 painful pages. For your benefit, the first two “phases” of the book can be summed up in the following three sentences:
1. The rich can invest in tastier investments than “the rest of us”, due to many more risky investments such as most hedge funds and pre-IPOs being restricted to government-defined accredited investors, of which their are various ways of becoming one, one of which is earning at least $200,000 a year.
2. 90% of all corporate stock shares are owned by 10% of the population. You should want to become one of these people. Working as an employee of a company for a salary is not the way to do this, and overall is for schmucks.
3. The best way of becoming one of these 10% of people is starting a business. Real Estate is one of these possible businesses. I have a tape program and other books *cough* RichDad.com *cough* that can help you do this.
The final third phase actually had some interesting ideas in it. Basically using businesses to minimize your tax burden and hold your assets. For instance, having a company car and using an LLC to hold your investment real estate. Liability issues are also managed this way, separating your assets and the assets of the business. Unfortunately, only vague ideas are given and no concrete details about, for instance, if you should go with an S-Corp or an LLC is provided. Only “you should consult an attorney or a tax professional if you want to do this”. Was reading this book worth the time? I’d say it would be, if you just read the last third of the book.
Next in line: The Millionaire Next Door by Stanley & Danko.