Book Review: Rich Dad Poor Dad
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In Rich Dad Poor Dad, Kiyosaki basically reflects on his upbringing by two men, one is his college-educated poor father and the other is his wealthy friend’s rich father. After being introduced two contradicting methods of how to live life in his early childhood, Kiyosaki ultimately chooses to follow the path of the Rich Dad and has been rewarded for making such a crucial decision.
A couple of highlights of the book:
- Blame Financial Illiteracy
Kiyosaki openly blames the educational system for creating the can-never-get-ahead-in-life population, who continue to preach the seemingly unrewarding advice of: 1) go to college, 2) get good grades, and 3) obtain a high-paying job.
While I don’t agree that working for a boss means you’ll be poor, I totally agree that financial literacy education is virtually nonexistent – the reason that many young adults come into the real world without much financial knowledge. The college graduates who leave school burdened by tens(or hundreds) of thousands in student loan debt and credit card debt don’t know what hit them until it’s too late.
- Income-Generating Assets Are Key
Over the course of the book, you will come across the term “asset” – primarily the “assets” that generate income which will then allow you to buy more income-generating “assets” until you’ve amassed a financial empire.
I believe the most educational concept to take away from Rich Dad Poor Dad is that we must accumulate growth by reinvesting, which ends up accelerating the rate of growth. The concept resembles the power of compounding. An asset that generates income, that can then be used to buy more of that asset, is worth pursuing. For Kiyosaki, his preferred asset was real estate. He was able identify a profitable market at the right time and the right places – something not just anyone can do.
According to Kiyosaki, the everyday 9-to-5 job does not qualify as an asset that will make us rich because the income will not serve to make it a more profitable asset whereas rental income from one house can be used to buy more houses. Plus – he hates losing a chunk of money to taxes.
An Infomercial-Type Vibe
Throughout the whole book, I got the impression that Kiyosaki belonged on those TV infomercials where some unknown fellow offers a ridiculously unbelievable get-rich-quick program (or scam) through flipping houses. Why do I say that?
Despite claiming the mind as the most important “asset”, he repeatedly returns to the ambiguous income-generating “asset” that keeps me flipping pages to find out what it is.
**SPOILER ALERT** He never clearly states what income-generating “assets” that readers should consider. Sounds like a marketing tactic – you know, much like how “customers” made $100,000 in 2 weeks flipping a house with a mere $1,000 down payment without actually revealing how. I simply assumed such “assets” included businesses, real estate, and stocks – which are much more boring than using the word “assets”.
Overview
For all the bad rap that Kiyosaki has garnered, I did find Rich Dad Poor Dad to be an inspirational read. He represents the go-getter attitude with the financial know-how that exemplifies how many of us should seek the American dream. His methods and beliefs may not bode well for everyone who tries to follow in his footsteps so I’d suggest readers to read Rich Dad Poor Dad as a successful man’s story rather than a financial guide. If you are looking for steps and specifics, look somewhere else.
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