Review: Rich Dad, Poor Dad

Rich Dad, Poor DadWell, it had to happen sometime. After stirring up a hornet’s nest in my previous post, Deconstructing 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.

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  1. Ron says:

    Hi Trent. I would say, you wrote a great review. I like that you pointed out the good, the bad, and the ugly. I agree with everything you said.

    Sometimes one person might be the holiest person in the world, but if he does one wrong thing, he gets all the crap in the world. The thing is, I did find “the good” in Kiyosaki’s Rich Dad Poor Dad (and in his other books and even games), but I would like to think there is no perfect book or any other product. Rich Dad Poor Dad has its many flaws, and considering that not everyone can see them as flaws (some may see them as inspiration), I guess that’s the really ugly thing about it. To me, I just take the good lessons, and leave out the bad.

    Now if I may add something… The first time I read Rich Dad Poor Dad, I also got inspired. But at the same time, I felt like I was in an MLM (multi-level marketing) seminar all over again, where some guys who only held high school diplomas told us college and master’s degree holders, “You don’t need a college degree to get rich. Look at us!”, almost implying we’re stupid to even study in college. And in that same MLM group, there was also this one guy with a Lamborghini saying “I got this car after just a year working for this MLM company!”, implying that we’re stupid to be working for some other company, and not their MLM company. And did I mention, we were “fooled” by a friend who told us that seminar was just going to take an hour, and it took three hours?

    Anyway, I guess that part of the book that made me feel like that, is that part you refer to as “the ugly” part.

    And then in this book, Kiyosaki also suggests to go into MLM. Overall, while I was inspired by this book to do something, I had some questions that lingered in my mind. I did think I was definitely still not going into MLM, after all that insult I got from them.

    If I may say something about MLM, it is also flawed in a way. It’s about selling, and expanding the network, the larger your network, the better your sales and commissions. But what if everyone became part of that MLM network, who will buy and who will sell? And who will become rich? The answer to that last question might be, the one who produces the product. So again, there’s the lesson that you also pointed out. Create a product or profit from your intellectual property.

    But fine, I forgot if it’s in Rich Dad Poor Dad or in his other books, Kiyosaki somehow says that if there’s one good thing about MLMs is that, they could teach you how to sell. And I agree with him that business is all about selling, whether it’s your product, your service, your self, the business itself, and so on. And if there’s one thing that I am not good at, it’s at selling.

    And fine, I might consider entering into an MLM just so I could learn how to sell (as opposed to, say, working for a company like Xerox). So I guess that’s his main selling point for joining these MLM companies.

    In Kiyosaki’s last part, as you mentioned, he suggests to do some further reading and education. And then he somewhat recommends his other books, and his Cashflow games. His other books cost twice as much as Rich Dad Poor Dad (back when I first read it), and his Cashflow 101 game costs US$200 (US$300 here in my country)! Back then I thought, “This is a scam!” But I also admired the fact that it was such a great marketing tactic for his company, for himself, and for his other products. Rich Dad Poor Dad was written somewhat to appeal to many (who were not one of them “hamsters”), and it was also written to sell his other more expensive products. He indeed was a “bestselling” author, not a “best-writing” author.

    Now I re-read Rich Dad Poor Dad just recently, and only because I’ve met actual people who are now earning significant passive income, courtesy of them getting inspiration from Kiyosaki’s book. But it was not without problems or risks, and without help from experienced friends and lawyer- and accountant-friends.

    In fact, these guys are now doing something with practically no-money-down deals on real estate via this one technique that Kiyosaki himself has never mentioned (as far as I know). One of these people is someone who is a famous spiritual/Christian leader, and together they’re professing that God wants to bless us abundantly, that God wants us to be rich and to be able to handle being rich, and that God wants us to be rich so that we could have more to give away to those who need it more. This spiritual leader I’m talking about has goals of giving away up to 90% of what he’s earning to the poor.

    So anyway, that’s them. The thing is, there are some people who are now earning more in passive income thanks to inspiration from Kiyosaki’s book. And they’re teaching and inspiring others also, they’re expanding their own network also. They have dreams of helping make 1 million millionaires in our country by 2020.

    They took the good from Kiyosaki’s book, and made it even better. They did not anymore look at the bad or the ugly side; they must have just tossed it aside.

    And that’s how I look at Kiyosaki’s book. And I guess thanks to this review of yours – and again I think it’s a great review – I don’t have to re-read Kiyosaki’s book all over again (except if I want to re-read his “parable”), plus I could easily see which is the good, the bad, and the ugly. Because for me, I just take the good, and leave out the bad, and the ugly.

    Again, thanks to this review of yours!

  2. Rob in Madrid says:

    the real money in MLM (or network marketing) isn’t in the selling the products but in books and seminars, you only have attend one or two and that quickly becomes very clear, your told the only way to succed to to spend loads of cash on books seminmars etc.

    I have met a few people (can count them on less than one hand) who’ve made good money Network Marketing but they are far and few between, most of the recuirts (say 90%) never make a penny and a few just break even. Most give up after a few months, and let you say they quit too soon my Mother in law has been trying for years to make it work.

    As to his book, well I think there are much better books out there.

  3. Diomede says:

    Great review, actually.

    This book is very inspirating. Maybe because is designed for Amway washed-brain people.

    The sells of this book arose when included in AW-Tools.

    I think is full of stereotips on money. I like the part of “working to build competencies”, but this is not a new idea.

    I like the review of the accountancy for the balance sheet.

  4. Stone says:

    in my understanding, RK doesnot say which of the 4 E/S/B/I is better or best. They are just 4 types of living or working style. But for individuals, there might be one of more appropriate, just Michael Jordan is a very successful employer, so does Jack Welch; Many famous lawyers and dentists are successful self-employed people. IMHO, any published living or fiancing advices both has right and wrong, since life is much more complicated, esp. current and future living environment, we should not boast all our success on our own efforts and failure on others’ recommemdation or influences.

  5. Tim says:

    Your articles weren’t bad… though I wasn’t crazy about them and retain an open mind to RK and others he and others recommend. (Not to say that you don’t… just my own viewpoint.) By the way… I read the Reed review and that was one of the nastiest hatchet jobs I’ve ever seen. As far as I’m concerned, the review DESTROYED his credibility with me. If he’s like that about other people in his website… why would I WANT to buy books from him?! He turns me off COMPLETELY.

  6. David says:

    A reasonable review I think (better than the earlier one, which had a few factors completely wrong!) but I think it probably misses one key aspect of Kioysaki’s “success” compared to other books in the field – they are very readable for the average person. It seems to me most of the “criticism” of Kiyosaki comes from folk coming from a far more sophisticated position than his books are targeted.

  7. hank says:

    RDPD was very motivating the first read – it was one of the first I read, but after reading it later and/or reading other books, I’ve realized he started out far ahead of where a normal person does. I recall at one point he mentions he won’t take an investment at less than 16%. Well, criminy, it’d be nice to choose, but that is just missing soooooo much data behind the scenes on it… I dunno, I give it a 5 of 10.

  8. Moneymonk says:

    With any book, you have to take the good with the bad. I enjoyed the book, I saw his point. Mainly he is saying change your mentality. However it does not mean I will go out and buy Real Estate.

    He chose Real Estate, most can choose other ways.

    Just invest in assets

  9. Wendy says:

    I think Kiyosaki’s is inspirational. He gives people an alternative for the life we think we have to live (work in a job for a paycheck till you retire) …….and what’s wrong in that?

    He also says it’s not the life for everyone, some peolpl elike finacial security, others want financial freedom…..so determine which lifestyle /quadrant (e/s/b/i) you are best suited for.

    A smart person would read his book for the bigger message it has to offer (develop assets, aim to be finacially free) and realize that doing so, requires knowledge and education so you know what you’re doing, hard work, perserverance, failure coupled with success and educated risks.

    The smart reader would take what they want….hopefully the good out of his book and apply it to their own life.

    Every opinion can be counteracted with another opinion….whose to say one is better than the other? You can’t…it’s just an opinion.So read many other financial guru’s opinion, but ultiamtely pick what you want to take from it..

    RDPD is merely Kiyosaki’s mindframe/viewpoint/stance on life.

  10. Dan says:

    If you read the other books he lays down the foundation to what it takes to be finacially literate and succesful. All this book does is lay down the foundations for being rich. Its a book about taking your own responsiblily in getting out of debt and investing. It isn’t a book about what to do. Its a book that tells you to about the importance of having a finacial education. If you have a finacial education then you have the means to become successful finacially.

  11. I agree with Wendy’s comments. Everyone obviously has a different lifestyle goal. I think Kiyosaki is just at the “extreme freedom” end of the spectrum. To some this may sound offensive because it seems to contradict a mindset that may have more of a financial security focus. I believe his books really are written more for those who want no strings attached way of living and are willing to take the “risks” to have it.

    -Alan

  12. Orlando says:

    The book isn’t for everyone, just like sky diving isn’t for everyone.

    I could spend all day talking about why it’s awesome to jump off a plane…and someone else could spend the whole day talking about why it’s stupid to jump of a plane.

    Different mindsets.

    If you tell the sky diver ‘but…you could die!’
    the sky diver will tell you ‘well…there is risk, yes, but it’s calculated. Plus, there’s safety messures, a lot of people have donne it, and it just feels sooooo damn good’.

    Different mindsets. These two people just wont understand each other. Neither of them is right nor wrong. It’s just different mindsets.

    If you didn’t like Kiyosaki’s book, there’s a lot of books out there that talk about ‘Keep your job, spend low, and save a little bit on every pay check for 20 years’. Some people wont like it, some people will.

    Is not right nor wrong…it’s just different mentalities. Different tastes. Different views.
    Different paths…different results.

    – Orlando.

  13. Jerry says:

    Hi Trent,
    Great review. I do agree with your comments about the examples. However, the ideas are good. RDPD is more an inspirational book than a how to book, and we must forgive him for that.
    The guy created a publishing empire doing what he preaches and I respect him for that. The other important aspect of the book, that I think you only gloss about, is that is trying to teach people that the old way of thinking (I go to work, I am middle class, I have a nice pension, I leave a house for my kids, I die) will not cut it anymore in the next 20 years.
    1. Most unskilled jobs will put you not even close to middle class anymore. You need to learn new skills or be outsourced. I am not saying it is fair, but it is the way the American society is going, so warning people about it, seems to me a good thing to do.
    2. Most companies do not provide pensions any longer. Instead, you have 401Ks, in which your employer tells you “I am going to match your contribution if you invest in my company, or some other company”. So having people who never thought about these issues to start thinking is a good thing as well.
    If you can take two valuable lessons from a 20 dollar book, I think you made a good deal. A better deal yet is to get the book from your library. That way you keep the asset (what you learned) and the cash.
    Thanks again for a great article!

  14. Gerry King says:

    hi,
    I found this review fascinting, possibly the best book review I’ve ever read. I’ve just returned this evening fom a seminar with Rich dad in the UK. having read 2 of the books which i found motivational in as much as they present many sound theories about the futility of chasing happiness in the universal manner of consumerism and choosing to invest instead. The books were worth buying for this if nothing else.

    The seminar tonite focused on real estate and took things a step further than the books with specific theories on tax advantages of building a property portfolio. However I had resolved before attending not to sign up for anything on offer, what was on offer was a £600 3 day course, you had to sign up on the night so I declined. The course could well pay for itself if you go on to build a portfolio but on searching the net I seem to have found similar courses for a lot less money. my advice would be read the books and others and make your own mind up.

    gerry

  15. Jassal S S says:

    I’ve read the book , it helped me to understand lot of things , mainly i loved the description about increase your assets instead of your liabilities, thanks a lot , I appreaciate your work.

  16. Dimitri says:

    Thank you for the overview and your prospective. I found the book revolutionary and started to implement the overall strategy and I am successful at that. Good point about taxes though…again thanks.

  17. frugalchoice says:

    I actually could not stand the book Rich Dad Poor Dad. I read it this past weekend and then did a search for review of it to see if anyone felt the way I did. What was disheartening was his assertion that you have to take giant risks to get anywhere financially, and admitted near the end that he has more debt than 99% of Americans. I am not going to take advice from someone who is risking his net worth chasing deals that involve finder’s fees and amassing personal debt. I liked his initial premise to find ways to make money, but felt that the way he went about it was wrong.

  18. Denise says:

    Thanks for this insigtful review. The first time I read the book, I found it very, very motivating … and a few months later saw it on my bookshelf, remembered the ‘good motivating feeling,’ and read it again.

    I got the feeling again, but didn’t find very much concrete info in there that I didn’t already know. (I also found the material wealth ‘flaunts,’ like the Porsche, incongruous with the Rich Dad philosophy … if it’s a compelling philosophy, Kiyosaki doesn’t need to sprinkle in mentions of Porsches to sell it!)

    All that said, I did take some good things from his book – one, that I have to control how I generate my assets, instead of waiting on an employer to give me wages … and he made me think seriously about starting a business and all that entails.

    I also think his discussion of ERISA and pensions vs. 401(k)s is useful … altho he uses it as a bit of a scare tactic (some of my opinion on how he treats that is from watching one of his seminars, as well as from the actual book). What he says about this is just a starting point – a Frontline documentary gave a really good analysis on how ERISA has changed things.

    I also agree that “Your Money or Your Life” is an excellent book – IMO if you’re going to get anything at all our of RDPD (besides good feelings), read it with or right after “Your Money or Your Life.”

  19. Sara says:

    I think the “good” that I took from the book, was an increased awareness of the cash flow implications of my purchases. Although like you said… many better books out there that deal with the same topic. But, this was the first one that got me thinking about different options. Like, if I bought a house, how could i potential end up with a cash flow from it while still living there? Buy a multifamily? Have extra rooms I can rent? And it also shifted me from thinking about buying the cheapest possibly thing… to thinking about the lasting value of an object.
    Although I do definitely hate the salesman tone of the book. I can’t stand being SOLD to. Ugh. I much preferred Your Money or Your Life, and also the Four Hour Work Week by Tim Ferris.

  20. Sheila says:

    I read this book twice, and I have to say that it seemed like one giant sales pitch for other products by this company. Everyone has a story and everyone has a different method that works for them. I just don’t have the personality it takes to go knocking door to door ripping off some poor sap who can’t make his next mortgage payment. I guess I just don’t have what it takes to be the Kizosaki-type real estate investor. I’ll stick with my 2 rentals, and even though I can’t quit my day job, at least I’ll be able to sleep at night.

  21. John James says:

    I read the book twice. And i do find it motivating, and i have applied several of the principles. I think some people already have their mind made up that these things/ life stye cant be achieved. Thus, it wont be. I am a Financial planner, and have taken alot of courses on Trusts, wills, Corporate tax structure,…etc There are so many legal ways to move huge amounts of money without being taxed on it.
    I started a business in the evening and am on track to make 24k this year, start up cost were about 1500. I started doing much of the work myself but now have 2 people to help me out. I take the money(mostly passive Income) and have started to invest it into growing the business and looking to start other businesses. I think when he refers to most people as hamsters, he means basically the heard mentality. We work, we incur expenses and assume debt, and never get out. Our lifestyle thus means we have to get promoted/ work harder if we want to buy anything else. But instead of working harder, seek to expand your means (intellectually). As i say work smart, not hard….actually i try to do both. As far as Jack welch being a hamster, no. But the odds of anyone making it to that level are so uncommon. Instead of playing the odds that you can become the CEO of GE, try for wealth other ways. My brother has spent years trying to climb the corporate ladder. And now he is in the housing industry, not sure for how much longer, but he has 2 kids, mortgage, and a bundle of debt. All Robert K is trying to do is help people implement a system of self reliance.(and make some money for himself.)
    Owning Real estate is the ultimate goal, but in my opinion its tough to buy when you dont have a chunk of change in the bank to hold you over for possible repairs, or when its not being rented.

  22. Donzel says:

    One of the fairest reviews of the book that I’ve come across, though I’m far less forgiving, and see many of the principles and methods Kiyosaki advocates as having fostered the subprime meltdown and numerous other financial catastrophes.

    In practice, the advice to “accumulate assets” should work out somewhat like more traditional advice to “invest in retirement” – the problem is that Kiyosaki offers get-rich-quick thinking (focus on real estate over equities or other investments) – which can work during a real estate bubble, but is hardly prudent.

    As for the other lessons – concur: they’re a wash. Either he’s offering trite, well-tread advice better rendered elsewhere, or he’s offering misleading/mistaken advice. Best to pass.

  23. Ren says:

    I read several of his books. I have to say he was quite repetitive in his books. However I think “Rich Dad Poor Dad” is still great book, at least for me, to open up idea about why you should work for yourself (own business) and what does it really mean to be “wealthy”.
    Each person has a different background. It’s a matter of how do you get there. I think you really need to read his book with an intelligent mind instead of blindly follow.
    Also I believe he also mentioned a lot about the tax advantage on owning business in his books, which can be quite insightful.
    Great post and a lot of good discussions.

  24. Jerry says:

    Trent,

    Thank you for your review of RDPD. I just finished it, am half way through The Cashflow Quadrant and have his Guide to Investing (I bought all three for US$15.00).

    As a “hamster” for many many years, I’ve recently decided to look into starting my own business or investing in rental properties as a way of increasing my wealth. I’ve looked into several MLM businesses and found their sales pitch to be a bit high pressure. As hard as they work to sell me on their system they sure make it sound like I could just sit back and the money will roll in. RK’s books give me the same feeling without the substance of HOW to actually do it.

    While I found RDPD inspiring it also set off alarm bells when he talked about writing off his Porsche and vacations as “business trips.” I still have an open mind on how useful the books as a whole are, but I wont be quitting my day job anytime soon to jump head first into the make money fast and easy hype that the books portray.

  25. Bob Barker says:

    you guys are all gay men that like to touch eachother virgourisly

  26. anonimous says:

    I think that if you look at it with an open mind you may be able to get some fianacial knowledge.

  27. Alex says:

    This is kind of nitpicking to me. So some are blaming RK for not pointing out a specific step-by-step instructions to get rich? You know what, rich men dont do the same thing to become a rich. But they do share the same mindset. The book is to help people re-evaluate our education system today and setup a new way of thinking. He didn’t say it’s not worth it to go to college but the educational methods should be revised. He didn’t say rich people should not have a luxury lifestyle or something, but you should solidify your financial basis before doing that, and continue to evolve in the market. A luxury of life is the reward of finiance liberty, and that liberty is the aim of being rich, not the money.

    re-read the book and think why the author particularly mentioned rich people cant be lazy. What that lady means?

  28. azmil says:

    Thanks a great review. As with all self help books read it with an open mind. Some parts can be followed some to avoid. I’ve found RK books to be helpful.Like I said in my own review, its not a get rich quick book. Nowdays most people want everything instant there’s instant noodles, coffee and so on. So everyone is looking for instant richness. So trent thanks again for the review.

  29. Chris says:

    Thanks for the review. I’ve been consuming a ton of books lately including “Escape From Cubicle Nation”, “4 Hour Work-Week”, trying to figure out a way to break out in my own. RK’s book was the latest on my list and I enjoyed the attempt at changing the mindset the most. I’ve heard it all before, but for some reason, it hits me harder in this book. In fact, I’m actually more worried about my children working themselves to death for someone like I’m doing. I’m going to try the RK game for kids as a primer. You’ve also given me a few other book ideas. This is the first time I’ve stumbled onto your site and I’m hooked. Thank you!

  30. benjamin bbaale says:

    i read this book and it inspired me to have great interest in financial literacy. i have read cash flowquadrant, guide to investment and retire rich and retire young. these have made me a consultant in my country uganda.i have established a school, built comercial houses for rent. i have a secretarial beural and i am madly investing because i want to retier young

  31. Joe says:

    i wish that i never read those books. cos now i want the freedom that robert enjoys. that most extremely rich ppl enjoy. i want to enjoy time with my family, my kids. I hate being a slave, a dog to some boss who is really only worried about their bottom line. what bout my bottom line?? so i’m goin to reach that goal whether i like it or not. The coaching program is truly a waste of time.they should lower their fees and just allow you access to the site if you want the coaching then you pay the extra bit. I’m goin to be financially free, yes RDPD does have a hand in my inspiration but he talks of due diligence – we hold the key to our success as cleche as that sounds but its true. No one to blame but us no one to thank but ourselves. its a 50/50 thing.

  32. “One day your life will flash before your eyes. Make sure its worth watching.”
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  33. Kyle says:

    Maybe I’m brainwashed. I liked RDPD. I found it very motivational. I agree with your cons though in that it lacks detail, uses unrealistic examples, and glosses over risk, particularly that getting into debt to finance a property can backfire if the cash flows stop for any reason. It could be a dangerous book for people who aren’t aware of those considerations.

    I’m a CPA. Land/building are assets in accounting. Your house is not a liability. The mortgage on your house is a liability. Maintenance and taxes are expenses. I understood that Kiyosaki meant buy income-producing assets. He shouldn’t have tried to re-define “asset” and “liability”.

  34. Mike says:

    Good review. I do not agree with some of your views, but that is merely my opinion.

    First point: You do not need to be frugal to be rich. In fact it is often quite the opposite. It is the desire for the finer things in life that drive many people to push themselves to the next level. There is nothing wrong with wanting a Porsche or a Ferrari or my personal favorite; a Gumpert Appollo. You simply must figure out how to generate the kind of income it takes to own such a thing. I love Robert’s message that tells you never to say you can’t afford it, but rather ask yourself how you can afford it. The first statement cuts off all possibilities of owning the finer things in life while the second begins the creative process that will open the doors to owning such things. I believe you should never want for anything in this world because you can have it all if you are creative enough and willing to work hard to achieve it. It is not to say you should be a spendthrift, not paying attention to your financial situation and drive yourself into the ground out of careless spending habits. I am saying that anything is possible if you put your mind to it, so why cut yourself off at the knees thinking that “frugality” is some kind of virtue.

    The second thing I must strongly disagree with is what you said in bold letters early in your article, “…the book is a waste of time.

    It might have been a waste of time for you because you previously understood the basic concepts presented. For those who have never done a cash flow statement in their lives this book is the pot of gold at the end of the rainbow. Whether you agree with RK’s definition of an asset or not, if you follow his advice and work diligently to acquire what he calls assets you will become rich. It doesn’t take a rocket scientist to understnad this. The information is brilliantly simple but i believe that it has alluded the masses for a very long time. Other people have tried to teach the same message but it never resonated with me the way this book did, and for that I believe the book is priceless. It might not speak to someone else the same way, and for them it is worthless.

    When a financial “guru” comes out who is unconventional everybody tries to cut him down. I watched the same thing happen to Wade B. Cook, author of “The Wall Street Money Machine”. They hung that guy out to dry, but his concept of the “meter drop” and explanation of stock options made the book worth every penney and then some, even if everything the critics said about him is true. He, like Robert, has a way of teaching mind-boggling subjects in their most simplest terms. That is the true miracle of their books.

    If you already understood the concepts before reading these books I can see how you might feel it to be an oversimplified pile of crap. All you would see is the flaws. If you are new to the information or even if your understanding is vague then these books are brilliant.

  35. russell says:

    I believe the books to be inspirational to the parents of children that are not yet exposed to the realities of the new corporate culture that panders to Wall Street. The earlier we can educate our children on how the cycle of money flows and the power of compound interest and positive cash flow the better off they will be. While some of the examples are far fetched the basic principles are sound. These are not new ideas and should not be treated as such. The readers of this book should the lesons to help explain the accumulation of wealth to children before they get caught in the trap of “degree” and “jobs”. As an employee of a large corporation that has recently downsized I now understand thet the earlier you learn financial discipline and sound financial advice the more control you will have as an adult. Loyalty is a one way street in today’s enviroment. The books basic premise to create wealth early and to be able to take advantage of opportunities is absolutely correct.

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