Several months ago, I offered up a detailed and rather negative review of the well known personal finance book Rich Dad, Poor Dad. In it, the author, Robert Kiyosaki, encourages people to take on a substantial amount of risk in order to get rich and largely derides people who choose not to take on that risk.

Let’s get the facts straight: I feel that the actual advice as well as the tone of Rich Dad, Poor Dad borders on the absurd. Yet, at the same time, it is easy to understand how someone with an entrepreneurial bent and some competitive fire would find a lot to be inspired by in this book, and I’ve seen comments from lots of people that were inspired by Rich Dad, Poor Dad.

The question then becomes is there value in reading a “bad” book? Years ago, my answer would have been an automatic “no.” What’s the point in reading rubbish advice that you won’t follow? In fact, it wasn’t too long ago when I would toss aside a book or a blog as soon as I read something that I disagreed with.

As I’ve grown and thoroughly explored some subjects (like personal finance), my opinion on the idea of bad books (and blogs I disagree with) has changed quite a bit. It is incredibly valuable to get a diversity of perspectives on any subject. That’s why I actually read all the way through Rich Dad, Poor Dad - I extracted a few positive points from it and was able to really grasp the overall message that Kiyosaki was trying to sell.

In short, I try to read as much as I can on a topic and never stop growing in my understanding of it, even if that means reading things I disagree with, don’t fully understand (yet), or find incredibly challenging in some way.

Let’s take a look at Rich Dad, Poor Dad. What did I learn from it?

I learned that some personalities thrive on financial risk. “Rich Dad” thrived on taking on a huge amount of financial risk. I personally think it’s foolish to dive into businesses cash first, but I’m apparently wired differently. I’m a conservative investor who prefers to manage my money carefully - I’d rather see smaller, stable returns than to toss my cash on the roulette wheel.

I learned that even people who thrive on such risk are rewarded by frugality. “Rich Dad,” in some ways, was a rather frugal person. Of course, Kiyosaki coupled that with promises of fast cars and such for the person who followed the “Rich Dad” path, but there is value in frugality even for risk-taking entrepreneurs.

I learned that some people who thrive on this risk look at people who avoid risk with disdain. Kiyosaki looks down upon “Poor Dad” and refers to people who work for others and slowly accumulate wealth in a less-risky environment as “hamsters.” That perspective actually explains a lot about how CEOs and many business leaders operate - we’re just “hamsters” in the machine to them.

These were useful lessons, and they altered my perspectives on some issues, even if I thought much of the advice in Rich Dad, Poor Dad was rubbish.

How can you decide what’s right? If you read a bunch of books on the same topic, you’re bound to find contradictions between them. The best guidance is finding the points where lots of sources agree and trusting your own intuition after you’ve read a lot of material.

For instance, after reading Rich Dad, Poor Dad and some individual stock investing books, coupled with reading stuff like Your Money or Your Life and The Bogleheads’ Guide to Investing, you might find that the answers that make the most sense to you are entrepreneurial and have a lot of risk. If that’s the case, then by all means jump into entrepreneurship and aggressive investing - but don’t ignore lessons that come from more conservative sources. The greatest dangers are never bothering to learn more, ceasing to grow in what you know, and failing to understand what others are thinking even if you disagree.

For me (and for a lot of my readers), conservative investing, frugal living, and a debt-free lifestyle are the goals and the ideas that make the most sense - and books like Rich Dad, Poor Dad, though they provide valuable insight into other perspectives, just reinforce the idea that the debt-free road is the right road for me to follow. So, yes, I might sometimes review books or link to blogs that are way off base from this perspective, but even those books can teach us a lot.

This week, my morning roundups are going to focus exclusively on specific personal finance writers. I’ve searched around the blogosphere researching these writers and the takes that others have on them and found a number of good ones.

I’m finishing off the week with Robert Kiyosaki, perhaps the most controversial of all personal finance gurus. I find his advice to be a mixed bag, but worth reading if you go into it not planning on blindly following it. Here are a myriad of other thoughts on him.

Robert Kiyosaki: A Man For All? An overview of many of Kiyosaki’s writings, this person sees a lot of useful information in the pages. I wanted to find a positive piece about Robert to include in this roundup, and this was one of the best I found. (@ america’s mortgage broker)

If I Were A Rich Dad A brilliant analysis of the Rich Dad/Kiyosaki phenomenon. (@ slate)

Robert Kiyosaki Names Financial Predators An analysis of a piece of Kiyosaki’s writing where Robert names potential money predators that could try to take your cash. (@ guru watch)

Robert Kiyosaki Retro: Finding Your Magic Investing Formula This is almost a perfect example of Kiyosaki’s writing: a few good ideas mixed with a few questionable ones, a lot of motivation mixed in with strong disdain for anyone who disagrees. Some people like the taste of the pie; others don’t.

The Simple Dollar Retro: Review: Rich Dad, Poor Dad I found some good, some bad, and some serious ugliness in this book. The good is worthwhile, the bad is advice you shouldn’t follow, and the ugly… is almost disturbing. I also criticized his investment advice and drew a lot of blowback from his supporters.

Well, it had to happen sometime. After stirring up a hornet’s nest the last time I discussed Robert Kiyosaki, it somewhat became inevitable that I would review his very well known personal finance book, Rich Dad, Poor Dad. This book has been inspirational to many people, but the book seems to have produced as many critics as champions. What about me? As I write this review, I’m reading this book for the third time. I thought it might be insightful to immediately mention the first two times I read the book and my reactions following the reading.

The first time I read the book, I felt inspired. I wanted to run out and start following some of the ideas in the book, but what I found is that you can’t just merely run down to the “courthouse steps,” spend five hours, and come away with $60,000 in cash, I became really disillusioned. I eventually ran into John T. Reed’s lengthy negative analysis of RDPD and was almost shocked at the level of criticism of the book, and with that criticism, I read the book a second time and concluded that the book was a waste of time. It was shortly after this second reading that I was requested by a reader to write up my thoughts on the author, who has written a large number of similar books.

So what kind of book would cause such a strong shift in opinion? Rich Dad, Poor Dad is basically what I would call a personal finance perspective told in the form of a parable, much like a book I reviewed earlier, The Wealthy Barber. But while The Wealthy Barber basically related the basics of personal money management in the parable along with examples that you could directly research and work out yourself, Rich Dad, Poor Dad is about a complete rethinking of how money works. For example, rather than seeing an asset as something with value, this book defines an asset as being something that generates cash flow. This means that according to this book, your home is not an asset.

Now, I’m going to walk through this book as I read it for a third time, hopefully without the cynicism inherent in my last reading of the book. I’m also going to limit my observations to what is within the covers of the book (meaning I’m going to leave out any external perspectives on the author) and accepting the parable of the rich dad for what it is, a parable. My only interest is the following question: what useful personal finance information is contained within these covers?

Six Lessons

The title Rich Dad, Poor Dad refers to the two main male influences that Robert had as a child. His own father, the figurative “poor dad,” worked at a steady job for a living, while the “rich dad” (the father of a friend) ran a multitude of businesses. Most of this book is told from the perspective of Robert learning from his “rich dad” about how to make money - and seeing how his “poor dad” made huge money mistakes. The first two thirds of the book covers six lessons taught to Robert by his rich dad.

Lesson 1: The Rich Don’t Work For Money

This lesson has an ambiguous title that gives two separate meanings based on how you read it - actually, based on where you put the emphasis. If you read the title as the rich don’t work for money, that’s the wrong one. The rich in fact do work, and they work quite hard. The way the title should be read is that the rich don’t work for money. They work to learn things, and the things they learn can easily be applied to make money over and over again. I agree with this sentiment entirely - good ideas are always more valuable than good labor, because you can keep mining good ideas, while good labor is spent the second you do the work.

Another part of this lesson I liked is that the “rich dad” is actually quite frugal. Although he has a lot of money in the bank, he drives a cheap car and doesn’t live in a mansion. Too many people equate rich with material things, so I enjoy it when it is shown that being rich often has very little connection to material possessions. Being rich means never having to worry about paying your bills - it doesn’t mean driving a Ferrari (well, at least not until you can pay cash for it and not break a sweat).

Without a doubt, this was my favorite part of the entire book, even with the short, out of place rant about the gold standard (actually a misnomer, because the only way the book makes any sense in terms of time is if the rich dad is actually talking about the Bretton Woods system and not the true gold standard) and how the United States was doomed if they abandoned it.

Lesson 2: Why Teach Financial Literacy?

This is the section of the book that causes a lot of controversy when discussed. In a nutshell, this chapter redefines the term asset. For most, an asset is something that has value. For example, your home is an asset because it is something you own that has value.

Well, this section of the book redefines the word. To Robert Kiyosaki, an asset is something that generates income, while a liability is anything that has costs. In other words, by this definition, your primary residence is not an asset but a liability. It may have cash value, but it doesn’t generate income. Instead, assets are forms of passive income that you control, like a rental property or intellectual property.

So what’s the overall lesson here? Basically, you become rich by accumulating assets, assets as defined by this book. This basically means that, in my case for example, my truck is not an asset but The Simple Dollar is an asset (it generates revenue on its own - I write because I enjoy it). Wealth comes from having enough assets that generate enough income so that all of your expenses are covered and there is enough left over to invest in more assets.

Lesson 3: Mind Your Own Business

The point of this chapter is that a financially healthy individual should be spending their spare time not spending their paychecks, but investing as much of it as possible in assets (as defined by this book). This is another lesson I strongly agree with: pay off your debts and start investing as soon as you can into things that can generate revenue. This lesson was short and sweet.

Lesson 4: The History of Taxes and the Power of Corporations

This is the section of the book that made me start disbelieving in the overall ideas presented. First of all, after all this talk of following in the footsteps of the rather frugal “rich dad” example, Kiyosaki begins to describe a lifestyle of buying Porsches and the like. What? It doesn’t jibe at all with the earlier lessons at all.

Even worse, the chapter misrepresents several fundamental facts about taxation that I’m quite aware of, because my father held a corporation and dealt with the taxes on it. First of all, if you start claiming stuff like Porsches as part of necessary company expenses, you are going to get audited. There’s a big difference between forming a personal corporation and buying a company car for use with that corporation, but the IRS is very clear on being rational with spending just to avoid things like buying Porsches. You can justify a company jet as being needed for travel, but what necessity for business does a Porsche provide that another car does not?

Kiyosaki mentions various tax dodges in this chapter, but almost all of them aren’t tax dodges at all, but merely tax delays. With almost all of them, you either have to hold an asset until you die or you’re going to be hit with a monstrous tax bill. If you ever need to liquidate out of a need for cash, playing these games will mean that the IRS will eat you alive.

There are some advantages of keeping money in a corporate structure as an individual person, but they mostly relate to minimizing taxation on reasonable expenses related to money you earn independent of employment. It doesn’t mean that a corporation magically means you can start buying Porsches.

Lesson 5: The Rich Invent Money

Here, the disbelief continues when the author relates a tale of a ridiculously good real estate deal made on the “courthouse steps” in which Kiyosaki claims to have made $40,000 in five hours. I’ve spent some time myself seeing what kinds of deals are available from sheriff’s sales and such and the truth is that the only time you’ll find a deal like that is if every real estate business in the area is asleep at the wheel - and that’s simply not happening in this era.

That’s not to decry the overall lesson of this chapter; you can invent money. However, the easiest way to mint your own money in today’s arena is through creating your own intellectual property. With the internet, there are many ways to distribute and monetize your intellectual property: sell crafts you can make, create websites out of your own ideas, sell your music or performances.

Lesson 6: Work to Learn - Don’t Work For Money

While I agree in general with the lesson, the tone here was extremely insulting towards people who choose to be employed, referring to them as “hamsters.” Using this logic, the majority of the millionaires in the United States (as described in The Millionaire Next Door) are “hamsters.” That’s ridiculous and insulting.

Everyone should strive to learn as much as they can when they work, because it can transform your understanding of the world and perhaps build into methods of starting your own business and being self-employed. However, to look down at people who choose to be employed for a living as “hamsters” is ridiculous. Is Jack Welch a “hamster”? He was employed by General Electric for forty years.

Beginnings

The remainder of the book is a section entitled “Beginnings,” which seems from the title to indicate that it will discuss how to begin applying these lessons to your life. Instead, the section mostly is filled with some very weak personal productivity tips. Here’s what is inside.

Overcoming Obstacles One might have expected that this section would include getting yourself financially prepared to actually take action and accomplish the investments that the book discusses, but the obstacles discussed here are all psychological. That’s not to say that overcoming fear, cynicism, laziness, and arrogance aren’t worthwhile goals, but a person can be quite humble and still not be in a position to take advantage of the lessons presented earlier.

Getting Started This is another chapter heading that holds promise, but ends up going in a direction that doesn’t really lead to accumulation of assets. In essence, this is a chapter on personal productivity with a touch of the same rule of attraction nonsense found in The Secret. There are some good points in the chapter that are great for life management (take things one day at a time, for instance), but then the positive direction is ruined by statements that imply that your life has basically three choices: you either waste your money on consumer goods, you put your money in the bank and earn “nothing,” or you get rich in some vague, unspecified way. The point is to convince you that you…

Still Want More? At last, some tangible things: read books and take classes to educate yourself! Ask questions! Do something! These are all great tips, but I felt really uncomfortable realizing that the first direct, clear applicable tip found in the book came near the end - and it was to read more books.

The book ended with a very brief section that outlined another unbelievably good financial situation.

Buy or Don’t Buy?

If you’ve been following along this week, you’ve learned that Rich Dad, Poor Dad could also be called The Good, The Bad, and The Ugly. Let’s review.

The Good On an extremely fundamental level, most of the concepts in this book are sound. The fundamental point of the book is that you should try hard to save money and accumulate assets that can eventually replace the income you make from your employment, and that’s something I agree with. It’s also rather inspirational, as it paints a way of life that fulfills the dreams that many of us have of being free and independent.

The Bad The book starts to fall apart when you start trying to use it for concrete examples. If you try to follow the exact “success stories” that Kiyosaki writes about, you’re going to find that they’re few and far between, and the specific paths he talks about are not all that easy to follow.

The Ugly But where the book really collapses for me is that it’s insulting in a lot of ways. Kiyosaki insults and demeans everyone who does not share his point of view, referring to them as stupid and as “hamsters.” This is a very desperate and poor salesmanship technique - it does absolutely nothing to benefit anyone other than, in the eyes of the simple-minded, making Kiyosaki appear strong and others appear weak. It’s ridiculous and demeaning to everyone who reads it, whether they agree or not.

So, there is some good in Rich Dad, Poor Dad, but it’s surrounded by other problems. The final nail in the coffin, though, is that the “good” part of this book appears in other books without the incomprehensible examples and the insults and the salesmanship. Try reading Your Money or Your Life, for example: it teaches the same lessons of being self-reliant and being frugal and minding your own business, but it does it with concrete and specific examples that you can follow and, more importantly, it does it without resorting to blatant salesmanship and insults.

The only reason to buy this book is if you really, really need inspiration and didn’t already find it in Your Money or Your Life. If that’s not true for you, don’t buy this book and don’t waste your time on it.

I originally reviewed Rich Dad, Poor Dad in five parts, which you may view here, here, here, here, and here if you’d like to read the original comments.

Rich Dad, Poor Dad is the twenty-second of fifty-two books in The Simple Dollar’s series 52 Personal Finance Books in 52 Weeks.

Well, it had to happen sometime. After stirring up a hornet’s nest the last time I discussed Robert Kiyosaki, it somewhat became inevitable that I would review his very well known personal finance book, Rich Dad, Poor Dad. This book has been inspirational to many people, but the book seems to have produced as many critics as champions. What’s really inside those covers? Let’s dig in.

If you’ve been following along this week, you’ve learned that Rich Dad, Poor Dad could also be called The Good, The Bad, and The Ugly. Let’s review.

The Good On an extremely fundamental level, most of the concepts in this book are sound. The fundamental point of the book is that you should try hard to save money and accumulate assets that can eventually replace the income you make from your employment, and that’s something I agree with. It’s also rather inspirational, as it paints a way of life that fulfills the dreams that many of us have of being free and independent.

The Bad The book starts to fall apart when you start trying to use it for concrete examples. If you try to follow the exact “success stories” that Kiyosaki writes about, you’re going to find that they’re few and far between, and the specific paths he talks about are not all that easy to follow.

The Ugly But where the book really collapses for me is that it’s insulting in a lot of ways. Kiyosaki insults and demeans everyone who does not share his point of view, referring to them as stupid and as “hamsters.” This is a very desperate and poor salesmanship technique - it does absolutely nothing to benefit anyone other than, in the eyes of the simple-minded, making Kiyosaki appear strong and others appear weak. It’s ridiculous and demeaning to everyone who reads it, whether they agree or not.

So, there is some good in Rich Dad, Poor Dad, but it’s surrounded by other problems. The final nail in the coffin, though, is that the “good” part of this book appears in other books without the incomprehensible examples and the insults and the salesmanship. Try reading Your Money or Your Life, for example: it teaches the same lessons of being self-reliant and being frugal and minding your own business, but it does it with concrete and specific examples that you can follow and, more importantly, it does it without resorting to blatant salesmanship and insults.

The only reason to buy this book is if you really, really need inspiration and didn’t already find it in Your Money or Your Life. If that’s not true for you, don’t buy this book and don’t waste your time on it.

Rich Dad, Poor Dad is the twenty-second of fifty-two books in The Simple Dollar’s series 52 Personal Finance Books in 52 Weeks.

Well, it had to happen sometime. After stirring up a hornet’s nest the last time I discussed Robert Kiyosaki, it somewhat became inevitable that I would review his very well known personal finance book, Rich Dad, Poor Dad. This book has been inspirational to many people, but the book seems to have produced as many critics as champions. What’s really inside those covers? Let’s dig in.

The remainder of the book is a section entitled “Beginnings,” which seems from the title to indicate that it will discuss how to begin applying these lessons to your life. Instead, the section mostly is filled with some very weak personal productivity tips. Here’s what is inside.

Overcoming Obstacles One might have expected that this section would include getting yourself financially prepared to actually take action and accomplish the investments that the book discusses, but the obstacles discussed here are all psychological. That’s not to say that overcoming fear, cynicism, laziness, and arrogance aren’t worthwhile goals, but a person can be quite humble and still not be in a position to take advantage of the lessons presented earlier.

Getting Started This is another chapter heading that holds promise, but ends up going in a direction that doesn’t really lead to accumulation of assets. In essence, this is a chapter on personal productivity with a touch of the same rule of attraction nonsense found in The Secret. There are some good points in the chapter that are great for life management (take things one day at a time, for instance), but then the positive direction is ruined by statements that imply that your life has basically three choices: you either waste your money on consumer goods, you put your money in the bank and earn “nothing,” or you get rich in some vague, unspecified way. The point is to convince you that you…

Still Want More? At last, some tangible things: read books and take classes to educate yourself! Ask questions! Do something! These are all great tips, but I felt really uncomfortable realizing that the first direct, clear applicable tip found in the book came near the end - and it was to read more books.

The book ended with a very brief section that outlined another unbelievably good financial situation. Tomorrow, I’m going to give a buy or don’t buy recommendation for Rich Dad, Poor Dad.

Rich Dad, Poor Dad is the twenty-second of fifty-two books in The Simple Dollar’s series 52 Personal Finance Books in 52 Weeks.

Well, it had to happen sometime. After stirring up a hornet’s nest the last time I discussed Robert Kiyosaki, it somewhat became inevitable that I would review his very well known personal finance book, Rich Dad, Poor Dad. This book has been inspirational to many people, but the book seems to have produced as many critics as champions. What’s really inside those covers? Let’s dig in.

As I mentioned yesterday, the book continues on with three lessons I don’t agree with nearly as much as the first three.

Lesson 4: The History of Taxes and the Power of Corporations

This is the section of the book that made me start disbelieving in the overall ideas presented. First of all, after all this talk of following in the footsteps of the rather frugal “rich dad” example, Kiyosaki begins to describe a lifestyle of buying Porsches and the like. What? It doesn’t jibe at all with the earlier lessons at all.

Even worse, the chapter misrepresents several fundamental facts about taxation that I’m quite aware of, because my father held a corporation and dealt with the taxes on it. First of all, if you start claiming stuff like Porsches as part of necessary company expenses, you are going to get audited. There’s a big difference between forming a personal corporation and buying a company car for use with that corporation, but the IRS is very clear on being rational with spending just to avoid things like buying Porsches. You can justify a company jet as being needed for travel, but what necessity for business does a Porsche provide that another car does not?

Kiyosaki mentions various tax dodges in this chapter, but almost all of them aren’t tax dodges at all, but merely tax delays. With almost all of them, you either have to hold an asset until you die or you’re going to be hit with a monstrous tax bill. If you ever need to liquidate out of a need for cash, playing these games will mean that the IRS will eat you alive.

There are some advantages of keeping money in a corporate structure as an individual person, but they mostly relate to minimizing taxation on reasonable expenses related to money you earn independent of employment. It doesn’t mean that a corporation magically means you can start buying Porsches.

Lesson 5: The Rich Invent Money

Here, the disbelief continues when the author relates a tale of a ridiculously good real estate deal made on the “courthouse steps” in which Kiyosaki claims to have made $40,000 in five hours. I’ve spent some time myself seeing what kinds of deals are available from sheriff’s sales and such and the truth is that the only time you’ll find a deal like that is if every real estate business in the area is asleep at the wheel - and that’s simply not happening in this era.

That’s not to decry the overall lesson of this chapter; you can invent money. However, the easiest way to mint your own money in today’s arena is through creating your own intellectual property. With the internet, there are many ways to distribute and monetize your intellectual property: sell crafts you can make, create websites out of your own ideas, sell your music or performances.

Lesson 6: Work to Learn - Don’t Work For Money

While I agree in general with the lesson, the tone here was extremely insulting towards people who choose to be employed, referring to them as “hamsters.” Using this logic, the majority of the millionaires in the United States (as described in The Millionaire Next Door) are “hamsters.” That’s ridiculous and insulting.

Everyone should strive to learn as much as they can when they work, because it can transform your understanding of the world and perhaps build into methods of starting your own business and being self-employed. However, to look down at people who choose to be employed for a living as “hamsters” is ridiculous. Is Jack Welch a “hamster”? He was employed by General Electric for forty years.

Rich Dad, Poor Dad is the twenty-second of fifty-two books in The Simple Dollar’s series 52 Personal Finance Books in 52 Weeks.

Well, it had to happen sometime. After stirring up a hornet’s nest the last time I discussed Robert Kiyosaki, it somewhat became inevitable that I would review his very well known personal finance book, Rich Dad, Poor Dad. This book has been inspirational to many people, but the book seems to have produced as many critics as champions. What’s really inside those covers? Let’s dig in.

The title Rich Dad, Poor Dad refers to the two main male influences that Robert had as a child. His own father, the figurative “poor dad,” worked at a steady job for a living, while the “rich dad” (the father of a friend) ran a multitude of businesses. Most of this book is told from the perspective of Robert learning from his “rich dad” about how to make money - and seeing how his “poor dad” made huge money mistakes.

The first two thirds of the book covers six lessons taught to Robert by his rich dad. Today and tomorrow, I’ll cover these six lessons, then on Thursday I’ll examine the remainder of the book.

Lesson 1: The Rich Don’t Work For Money

This lesson has an ambiguous title that gives two separate meanings based on how you read it - actually, based on where you put the emphasis. If you read the title as the rich don’t work for money, that’s the wrong one. The rich in fact do work, and they work quite hard. The way the title should be read is that the rich don’t work for money. They work to learn things, and the things they learn can easily be applied to make money over and over again. I agree with this sentiment entirely - good ideas are always more valuable than good labor, because you can keep mining good ideas, while good labor is spent the second you do the work.

Another part of this lesson I liked is that the “rich dad” is actually quite frugal. Although he has a lot of money in the bank, he drives a cheap car and doesn’t live in a mansion. Too many people equate rich with material things, so I enjoy it when it is shown that being rich often has very little connection to material possessions. Being rich means never having to worry about paying your bills - it doesn’t mean driving a Ferrari (well, at least not until you can pay cash for it and not break a sweat).

Without a doubt, this was my favorite part of the entire book, even with the short, out of place rant about the gold standard (actually a misnomer, because the only way the book makes any sense in terms of time is if the rich dad is actually talking about the Bretton Woods system and not the true gold standard) and how the United States was doomed if they abandoned it.

Lesson 2: Why Teach Financial Literacy?

This is the section of the book that causes a lot of controversy when discussed. In a nutshell, this chapter redefines the term asset. For most, an asset is something that has value. For example, your home is an asset because it is something you own that has value.

Well, this section of the book redefines the word. To Robert Kiyosaki, an asset is something that generates income, while a liability is anything that has costs. In other words, by this definition, your primary residence is not an asset but a liability. It may have cash value, but it doesn’t generate income. Instead, assets are forms of passive income that you control, like a rental property or intellectual property.

So what’s the overall lesson here? Basically, you become rich by accumulating assets, assets as defined by this book. This basically means that, in my case for example, my truck is not an asset but The Simple Dollar is an asset (it generates revenue on its own - I write because I enjoy it). Wealth comes from having enough assets that generate enough income so that all of your expenses are covered and there is enough left over to invest in more assets.

Lesson 3: Mind Your Own Business

The point of this chapter is that a financially healthy individual should be spending their spare time not spending their paychecks, but investing as much of it as possible in assets (as defined by this book). This is another lesson I strongly agree with: pay off your debts and start investing as soon as you can into things that can generate revenue. This lesson was short and sweet.

However, tomorrow I’m going to look at some lessons that are a bit more difficult to swallow.

Rich Dad, Poor Dad is the twenty-second of fifty-two books in The Simple Dollar’s series 52 Personal Finance Books in 52 Weeks.

Well, it had to happen sometime. After stirring up a hornet’s nest the last time I discussed Robert Kiyosaki, it somewhat became inevitable that I would review his very well known personal finance book, Rich Dad, Poor Dad. This book has been inspirational to many people, but the book seems to have produced as many critics as champions. What’s really inside those covers? Let’s dig in.

As I write this review, I’m reading this book for the third time. I thought it might be insightful to immediately mention the first two times I read the book and my reactions following the reading.

The first time I read the book, I felt inspired. I wanted to run out and start following some of the ideas in the book, but what I found is that you can’t just merely run down to the “courthouse steps,” spend five hours, and come away with $60,000 in cash, I became really disillusioned. I eventually ran into John T. Reed’s lengthy negative analysis of RDPD and was almost shocked at the level of criticism of the book, and with that criticism, I read the book a second time and concluded that the book was a waste of time. It was shortly after this second reading that I was requested by a reader to write up my thoughts on the author, who has written a large number of similar books.

So what kind of book would cause such a strong shift in opinion? Rich Dad, Poor Dad is basically what I would call a personal finance perspective told in the form of a parable, much like a book I reviewed earlier, The Wealthy Barber. But while The Wealthy Barber basically related the basics of personal money management in the parable along with examples that you could directly research and work out yourself, Rich Dad, Poor Dad is about a complete rethinking of how money works. For example, rather than seeing an asset as something with value, this book defines an asset as being something that generates cash flow. This means that according to this book, your home is not an asset.

Over the next three days, I’m going to walk through this book as I read it for a third time, hopefully without the cynicism inherent in my last reading of the book. I’m also going to limit my observations to what is within the covers of the book (meaning I’m going to leave out any external perspectives on the author) and accepting the parable of the rich dad for what it is, a parable. My only interest is the following question: what useful personal finance information is contained within these covers?

Rich Dad, Poor Dad is the twenty-second of fifty-two books in The Simple Dollar’s series 52 Personal Finance Books in 52 Weeks.