Book Review: Rich Dad Poor Dad

Published 8/14/07 (Modified 3/22/11)
By MoneyBlueBook

Yes I know, the book's been out for years now. I did read excerpts from it in the past, but it wasn't until recently that I sat down and read it in its entirety - Robert Kiyosaki's bestseller Rich Dad Poor Dad: What the Rich Teach Their Kids About Money That the Poor And Middle Class Do Not.

The book is somewhat entertaining and written in a very anecdotal style. It compares and contrasts the teachings of his "poor dad", his respected and educated paycheck earning father, with his "rich dad", his friend's father, a drop out but self made millionaire. The book stresses several important themes:

• You should learn the type of financial literacy that is never taught in school. Disturbingly, he downplays the importance of a traditional education.
• You'll never get rich by chasing a higher salary. Apparently, working hard is now a fad.
• You should buy income generating assets, rather than liabilities. Assets are defined as items that generate income such as rental property, stocks or bonds. Liabilities are items that produce expenses such as your home, material goods that you buy, and even your car.

My Thoughts And Take On The Book

The main thing I got out of it was that it's important to increase your financial education and to invest in income producing, passive income type assets. Buying gadgets and toys can contribute to happiness and a better quality of life, but they usually have no earning power, although one can argue whether they have any further residual market value (eBay!).

The book unabashedly idolizes the lifestyles of the rich and obsesses with the need to make money. Sure, money is very important, but there is just an overall meanness and disdain for ordinary folks in this book. The only value that seems to be taught is the need to strike it rich so that the reader too can one day show off his or her abundance of wealth and material possessions.

Kiysosaki also overly stresses and emphasizes investment in real estate. Clearly, it's how he made the bulk of his fortune but at the same time, he doesn't do a particularly clear job of explaining just how he accomplished that. I fear that he may ultimately succeed in leading a few eager but inexperienced lemmings down into the housing market abyss in search of stellar real estate profits that are currently no longer there.