Rich Dad, Poor Dad: Buy or Don’t Buy?

Rich Dad, Poor DadWell, 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.

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  1. jake says:

    My experience in talking with everyone who has read this book is that its either extremely love it or extremely hate it. I am one of the latter. I agree with you Trent, that more than anything its the tone of the book and how it talks down on those that dont see what he sees.

    Again you either hate him or love him. BUT like all advise and financial decisions make sure you fully understand and research everything before you take action.

  2. Duane Gran says:

    I regard the book similarly. It reads very easily and has the ability to reach people entrenched in an emotion-driven mode, but beyond that the advice is downright dangerous. I’ve read the book twice and my favorite part is how he explains that wealthy people buy assets while the poor and middle class buy liabilities. Its a tad oversimplified but it explains so much about the outcomes of each group and makes for a strong motivation to change one’s habits.

    For that alone I’ll always regard the book with some fondness even though I’ve matured well beyond its advice.

  3. David Hutchison says:

    While I agree with your take on this book one comment left me a bit confused. Here you say about “Your Money or Your Life” that “it does it with concrete and specific examples that you can follow” yet I look at your review of “Your Money or Your Life” and there you say “the book has very little concrete information about increasing your wealth”

    I’d like to see more concrete examples…so do I get the book for them, or not?

  4. Trent says:

    Neither book tells you how to invest, but that’s not the point of either book. “Your Money or Your Life,” however, is very specific on things you can do to figure out your relationship with money, which “Rich Dad, Poor Dad” is not. Both books ostensibly are about that topic, but YMYL actually explains the process and gives you things you can work through on your own.

  5. Lisa says:

    I agree that RDPD is light on concrete examples. And, I think it is dangerous in that not everyone can successfully start and maintain a business. Yet it felt like the book was urging you to quit your job and start a business and invest in real estate (or you are a loser). He later did a book with a title something like Before You Quit Your Job! and I thought it had to be a reaction to people quitting their jobs before they could possibly be successful as business owners. YMYL and The Tightwad Gazette were life changers for me. YMYL has a great 9 step program that is very concrete. As far as investing is concerned, one of the authors, Joe D. was involved with stocks on Wall Street. He still recommended bonds. He gave some basic information and recommended you learn more about bonds and gave a source for further investigation. Or, after further research, use an investment counselor that understands bonds and the bond market (if you don’t want to do it yourself.

  6. paula says:

    Rich Dad, Poor Dad is the only book I’ve been tempted to write nasty notes about and stick them in copies for sale. If for no other reasons than his attitude towards his “poor” dad. The guy is fixated on material goods and sees no value in his real father, and doesn’t look to him for any other life lessons. Why would I want to follow a cold fish like this?? As everyone else says here, Kiyosaki is insulting. And so much for family loyalty! Watch your back, dad.

  7. Bill says:

    He doesn’t discuss risk vs, return adequately.

    For someone with no prior experience, there is a huge difference in risk between putting $10,000 in a stock index fund and $10,000 as a downpayment on a residential rental.

    Investment RE can generate big returns but the high leverage involved makes it a high-risk investment for most 9-5 workers.

  8. Peter says:

    Don’t buy it. Check it out from the library if you are interested. While reading it, keep in mind that Kiyosaki is not a financial planner, or qualified to give investment advice. He is a salesman. His “rich dad” probably doesn’t exist in real life, though the story has inspired plenty of people.

  9. rhbee says:

    I’d feel it remiss if after a 25 year career in public education, where I taught at every level from 1st grade to community college but mostly high school,I didn’t comment on the one area of Robert’s book with which I totally agree. It is one area also that I didn’t see addressed in any of the commentary. He contends that for the most part the education we receive in school enforces a competitive striving for grades at the expense of learning how to work with others to learn how to accomplish things. The grade point for the student, the student test scores for the teacher and the school. This stress and its stressfilled effect torques every conception we have of the learning process. Learning how to work with others, learning to share achievements, learning to trust the tests as guides to future learning are all secondary to the gold star, the finish line of graduation, the MY-Child-Is-An-Honor-Student mentality that for the most part wastes the energy of the qualified teacher and the dedicated student by missing the point that the learning is what is important. Robert may be arrogant, and he does make mistakes, but if his book is so useless then why are we all in such dire need of Trent’s personal finance information?

  10. Lisa says:

    I agree that schools should teach working together as a team. Many schools do. My school system certainly does. I think RDPD is completely right that schools do not adequately prepare students in dealing with real world financial issues or personal finance. They have no idea of a budget, investing and risk vs. return. They will certainly use these things more on a day to day basis than most of their high school classes. I also feel that 16-26yr olds should be required to contribute of a retirement fund IRA/401K in the neighborhood of 2-4,000 using a target fund if they do not wish to actively invest. If they never again contribute they should still have a decent amount for retirement by age 65.

  11. Mike says:

    I found RDPD to be a good wake-up call. I had never understood the difference between savings and investments. It was his diagrams that showed that showed me that investments are collections of money with the sole aim of that money working for you whereas savings are collections of money intended to be spent. I agree with the comment about education – if you’re not destined to be an academic, there’s a lot of more useful stuff they should teach – money for instance. For financial newbies, I’d recommend RDPD as a good borrow from the library to set the scene for better books. I am curious about his game but NOT at that price. I’d pay $20 maybe. Game of Life and Monopoly are limited in their educational value so it would be nice to have something that teaches the gain and pain of interest and investments.

  12. Andrew says:

    This book was worth every penny. I read it three times and I recommend to anyone I meet who is interested in learning how to manage their cash flow properly. He makes many valid points. Some of them offend the sensibilities of the closed-minded, but then you have to be willing to have an open mind to change your life in the first place.

    That said, not everyone is interested in changing their lives or financial habits. If you’re not, don’t buy this book. If you are, it’s worth buying.

  13. Kerri says:

    Like any advice you take what you want and leave the rest. I don’t expect to ever become a real estate tycoon or start a company so I can own a Porsche, but the book really opened my eyes and got my brain thinking about possibilities and gave me new ideas to think about. The whole theme of the book is to become financially intelligent which means you need to do your research. I will listen to his advice, the advise of others, their critics and what is currently happening in the financial market. No one should make major life decisions off one book, or one person’s idea. Take it all in and learn and grow. I think that is his point.

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