I read Rich Dad Poor Dad written by Robert T. Kiyosaki on my Kindle and despite all the negative reviews really enjoyed it. I think the criticism comes from an expectation that this book would be some kind of how to get rich guide. Instead Rich Dad Poor Dad is more about principles. His rich dad is not actually his father, but the father of a friend and someone he worked for when he was very young. His poor dad was his actual father a college professor. Much of the book is about stories he told about both of his Dad’s and the lessons he learned from these encounters. The book is about principles, not a step by step guide to obtaining wealth, although anyone that follows these principles can then do the studying needed to make smart investments.
Here are some of the key principles discussed in the book:
- Pay yourself first – While this is not a new idea, it is emphasized as the technique you should be using to build wealth.
- Focus on Assets – The author doesn’t view things like your house or car as an asset. Assets are investments that generate income. This is why paying yourself first and using that money to buy assets is so important to building wealth.
- Learn about money – A lot of this book is devoted to the importance of spending time learning about money. There as several examples about how Robert attended a seminar and then put what he learned into practice to make a lot of money.
- Different types of income
- Regular – income from a job for time you work.
- Passive – This could be something like rental income. It is typically income you get for making an initial transaction / purchase but have to do little or nothing later on.
- Portfolio – This is typically equities (stocks) where the income results from capital gains.
- Use debt wisely – Do not finance personal luxuries like cars, boats, etc. This type of debt does not create income and could have been used to purchase assets.
The principles listed above are only a few of the many that are written about by the author.
Interestingly, I had passed on reading this book for some time mostly due to the poor reviews it received, but fortunately I decided for myself to give it a shot. I actually enjoyed reading it and liked the story of having a Rich Dad and a Poor Dad to highlight the principles that Robert learned. Is there some shameless marketing in the book, yes in the Kindle version the last 18% of the book is a list of all his other books. What I liked about the book is that you can compare your own financial management to the principles outlined in the book, which can result in some changes in the way you look at money and how you are managing it. I would recommend the book for anyone who is not an expert in investing or finance, which is most of the population. Don’t read it if you are looking for a book on how to invest in stocks or real estate. You won’t find that kind of information here and there are many other books to read on those subjects that will go into great detail and help you build your knowledge. Like I said this book is about using Financial Principles to guide your journey to building wealth.
About the Author
Robert Toru Kiyosaki (born April 8, 1947) is an American businessman and author. Kiyosaki is the founder of Rich Global LLC and the Rich Dad Company, a private financial education company that provides personal finance and business education to people through books and videos. The company’s main revenues come from franchisees of the Rich Dad seminars that are conducted by independent people using Kiyosaki’s brand name for a fee. He is also the creator of the Cashflow board and software games to educate adults and children about business and financial concepts.
Kiyosaki’s seminars in the US and Canada are conducted in collaboration with a company called Whitney Information Network and are contracted out to local companies as franchisees in other countries. However, some attendees have sued Kiyosaki on claims that his high-priced seminars did not deliver anything special.
Kiyosaki is the author of more than 26 books, including the international self-published personal finance Rich Dad Poor Dad series of books which has been translated into 51 languages and sold over 27 million copies worldwide. He has been criticized for advocating the practices of debatable legality perceived as “get rich quick” philosophy. Kiyosaki is the subject of a class action suit against him by people who attended his seminars and has been the subject of two investigative documentaries by CBC Canada and WTAE USA. Kiyosaki’s company filed for bankruptcy in 2012.