Review of Robert Kiyosaki’s Rich Dad, Poor Dad

By Pinyo, on July 16, 2007

A week ago my wife bought me a book Rich Dad, Poor Dad by Robert T. Kiyosaki. This book has been around for many years, but I didn’t read it until my wife literally threw it on my lap. My first reaction was inspired and mesmerized — the book got me thinking about money and wealth again. Here’s my thought on the book and Mr. Kiyosaki…

For me, the past few years were good, and I didn’t worry much about money. But now that I reflect on this matter, I always have been obsessed with it since I earned my first dollar. I recall buying a get rich quick book, which basically told me to make money by selling the same book to other people. I remember reading about many techniques (schemes really), spending money on stupid “investments”, and getting to the point where I almost joined Amway. I even have a whole shelf of books dedicated to the subject of wealth.

After I finished Rich Dad, I did a Google search on “Robert Kiyosaki” to find what else my new hero has to say, and found this interesting article: John T. Reed’s analysis of Robert T. Kiyosaki’s book Rich Dad, Poor Dad. Although, I didn’t like the tone that got a little too personal at times, I felt John’s analysis was very thorough and my perspective was more balanced afterward. If you read Rich Dad, Poor Dad, you have to read John’s article.

Basically, John discredited Robert’s status as a wealth expert / real-estate guru, and provided counterpoints to what Robert said in his book. I didn’t really care if Robert is a fraud, or Rich Dad is a fictional character; nor did I care much for John’s attack. However, I did learn from both men. I like how Robert’s story helped me focus on money by simplifying the mechanic of wealth building. In essence, if you want to have more money just do the following:

Increase your income,
Decrease your expenses,
Buy more stuff that makes you money (what he called assets), and
Buy less stuff that costs you money (what he called liabilities).

I also like the way he challenges the “I can’t afford it” mentality, and instead ask “How can I afford it?”

Lastly, I also agree with his 7 key skills:

Accounting
Investing
Economic
Law
Management of cash flow
Management of systems
Management of people

Other than that, I have to agree with John that some advice Robert dispensed were wrong and could be wholesomely dangerous. Here are some of the things I took from John’s analysis:

Do your research — don’t blindly believe what other people tells you
Getting rich is possible, but never as easy as some gurus want you to believe — it takes a lot of hard work and time
Education is a good thing. Although there are several high school drop outs that did spectacularly well, the overwhelming odd is that the more educated you are, the more money you will make (relative to people in your own area of study)
Having money work for you is great, but there is nothing wrong with working for your money. If you don’t like your job, then do something about it. Resenting your boss or your company is a cop out.

In closing, although I am not rich yet, nor am I a guru or an expert of any kind, I hope to use this blog as an online journal to discuss topics related to life, wealth, and happiness. In the end, I think it’s more practical to learn from someone who is making the journey, than someone who is already there (because they tend to forget how hard it is and make assumptions).

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Pinyo is the brain behind Moolanomy personal finance blog and a few other web sites. If you like this article, please subscribe for free daily email updates.

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13 Comments

Mark at financingyourfamily.com
July 16, 2007, 10:50

Welcome to my experiment, your first post is a good one, and I hope to see you updating continually, and creating a resource for both our readers’ use.
Pinyo
July 17, 2007, 6:10

Mark, thank you for your compliment. I am glad to be part of your personal finance blogs network and look forward to reading your posts.
Living Off Dividends
February 3, 2008, 1:27

I felt the same way after reading JTR’s post. I felt that the personal attacks and the reality of whether Kiyosaki’s rich uncle existed where totally irrelevant to the message which you’ve described succinctly.

I must however credit Kiyosaki with giving me the necessary push to start investing in real estate which really provided a financial boost a few years ago. Of course, I was smart enough to liquidate most of my holdings (especially in California) before the party stopped.
Investor Trip
June 20, 2008, 5:13

I was looking over my copy of Rich Dad, Poor Dad, and googled looking for some third party opinions on the book.

Kiyosaki tells the truth straight up. I think some people dislike his no BS attitude, but most of his book makes A LOT of sense.

There is a huge difference in the mindset of rich vs. poor people, and the sooner you learn, the better.
FFB
July 25, 2008, 10:12

I also read that article on Kiyosaki. It’s negative but very enlightening too.

I read RDPD early on in my financial “awakening.” What the book does well is inspire you to take control of your money/finances. What it lacks is a real concrete way to achieve wealth. I feel like you come away from the book ready to re-invent yourself and become wealthy and then you start to scratch your head asking yourself how?

In all I think it’s a good book to get people started off on if they need to start figuring out their finances. It does have the ability to inspire. The best would be to borrow it or take it out of the library (I’m sure a good part of Kiyosaki’s wealth is from selling his books).
Dividend Growth Investor
July 28, 2008, 9:26

I guess the problem that John Reed has uncovered about Kiyosaki is that he never actually made money the way he describes he did in his books. In other words the only way Kiyosaki ever made money was by selling motivational books.

I do agree however that his way of thinking in terms of assets producing cash flow is something I had never personally seen before. Most other books I have read focused solely on making as much money as possible form stocks/options/futures..
Somone
August 8, 2008, 5:05

As much as I enjoyed the content for many of Robert’s books – my copy of the Cashflow Quadrant absolutely fell apart while reading it – dodgy glue I believe. I sent an email to the publisher requesting another copy but never even got a reply. Because of this poor service and disrespect, I will never buy another one of his books.
the prodigy
October 13, 2008, 23:21

Have you read the reply of Robert Kiyosaki to john t reed? the rich dad poor dad was not meant to be for a Harvard Business School. The book gives hope to people, it simply says that even if you did bad grades in high school or college or even if you have a low paying job you can still achieve financial independence buy learning financially literate or everybody can do it.

Robert Kiyosaki doesn’t claim to be a investment guru, nor his book is not even a investment learning book, John T reed really disappointed me, I was hearing his audio books of success for quite some time, but this reply is really over the hill, so much anger, so much bitterness, he doesn’t even sound polite and honest. Too bad he got emotional here for some causes…, John T reed really disappointed me….. If you want me to be your pupil and you are my teacher RESPECT is needed, now how can i learned that from someone who can’t even show respect.
Aaron
April 27, 2009, 22:07

When I read John T Reed’s analysis of Kiyosaki’s book I was left thinking ‘why would somebody put so much effort to try to destroy somebody’s reputation?’. I realised the main reason is to gain publicity for Reed’s own books that he tries to sell on the same site. I’m glad other people commenting here also dislike Reed’s personal attacks.
I definately wouldn’t read any of Reed’s books after reading such a relentless abuse towards another writer.
Wailey
August 9, 2009, 23:31

I’ve read both John Reed’s analysis of Robert Kiyosaki’s book and the book Rich Dad Poor Dad and have another view. Both gentltmen actually are not attacking each other. They simily telling their own audiance of the views toward building wealth. John reminded people of risk analysis (that takes education) while Robert inspired people with principles and systems (that drive actions). Both views are vital in order not to turn investment into a disaster. Why not take the essence from both writers.
Steven
January 1, 2010, 0:56

Some might criticize and some are supportive. As for me, if you really know what is your condition now, and want some improvement, this is surely very inspiring book. However, lack of step-by-step getting rich examples, right?

But, you know what, if people give you a hard task how to be rich, well, you have to look for an answer. they won’t feed you up every single spoon.

So Invest your Time & Money into what? Actually really depends on people. Looking back at Robert Kiyosaki background, you would be able to know what to invest, Real Estate? Writing Books?. However, if you don’t like the field, you would really hard to get it started. The real answer is still in your hand that is “Invest” something that you comfortable of, and make the “Money” work for you.

In terms of the definition between the Assets and Liabilities, his definition might seems confusing. But if you read some more materials from Robert Kiyosaki, he wants us to make the “MONEY” work for us. So during the monthly installment of housing loan, making people pay at least half of your monthly installment by renting out. Saving you 50% installment as well as saving you 50% of the interest indirectly. However, if you plan to pay 100% installment until the final stage. Then decide to rent it out at later age, you are actually working for money until the loan is settled first.

Look carefully, the value you are paying today is actually for future value. For example, a property worth USD200K now, might be worth USD500k in 20 years time, correct? But if you calculate your monthly installment now, you might be paying at least USD450k from now onwards in addition to the interest and other charges.

In summary, if you work for “MONEY”, you are actually BUYING.
If “MONEY” work for you, you are actually INVESTING, meaning you put a very little money inside, the rest of the time, the money is paying by itself, and pouring in while you asleep and doing nothing.

I found this from website sayings:
“I am an engineer working in wireless technology. I buy the latest cell phones and PDAs when they become available. I buy a faster computer every year. Liabilities? No. Without using cutting edge technology on a regular basis, I would not have the successful career that I have. No toys, no knowledge, no promotion, no job, no income.”

Actually the meaning should be like this, making people pay for your upgrades, such as company that is willing to pay you all the expenses for learning new technologies. Getting a company sponsor your knowledge and appreciate your skills.

If you want to be successful to pay every single cents on your own, it is just like buying your house from your every single hard earning money.

Your asset = Hard earn money.
Robert Kiyosaki’s Asset = People pay for it continuously and more.
Alexei
January 3, 2010, 15:51

Robert Kiyosaki’s Public Response to John T. Reed’s Review of “Rich Dad Poor Dad”:

http://www.mastermindforum.com.....toreed.htm
John D
January 29, 2010, 17:42

Sorry folks but I really don’t need to read John T. Reed to smell a rat when I see one – sorry for the mixed metaphor:-)

I read rich kid, smart kid with great interest but growing disbelief. I think the tipping point was when he talks about how he would sit in the office by his rich dad’s side while he would hire and fire employees. Just doesn’t ring true.

This book does have some nice thoughts about recognizing different kinds of intelligence in kids.

It is extremely repetitive also. It is very repetitive. Almost as though he was stretching to fill up x number of pages. I found it repetitive.

The continual plugs for other products were also unprofessional.

In summary: read and enjoy these books for the random bits of wisdom therein, just don’t take them at all seriously. And for god’s sake don’t go to any “seminars”!!

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