Book review: Rich Dad, Poor Dad

[beth_leonard]

I flipped through the book "Rich Dad, Poor Dad" in a store once, and finally read it this year. In some ways it was more simplistic than I needed, but in other ways it was just right. I recommend it if you're squeamish about money and investing.

For me, one of the main take-aways is that my investments are real money. In fact, investments are more important than my full time employment for my long term income stream. Before reading this book, I'd certainly had the mindset that my money was the cash held in the bank, and my stocks were figurative play money to be invested and grown, but never to be touched. Stocks were for giving to charity, earned income (after taking out the max for 401K, company stock purchase, and taxes) was to be lived on.

When Jon and I both left our "real" jobs a few years ago that mindset began to change. I knew that our investments produced income, but never really had a handle on how to best spend/save/reinvest it. We set spending limits and developed the frivolous expense budget (which has been working quite well) but I still didn't know what sort of income was necessary to maintain our lifestyle.

Now that I've finished the book, I'm trying much harder to figure out our whole financial picture -- to learn the story the numbers are telling me. My gut says we're doing ok, but my brain wants to check and doesn't know how. I'm now planning to learn how to figure that out. I suppose you could say that one of my New Year's Resolutions (along with "wean at least one child" and "lose 5 lbs") is to learn more about our finances and to manage them better.

The second take-away is that it's important to learn these things, take classes and study it. Knowing the tax code is useful.

--Beth

Comments

[patrissimo.livejournal.com]

I haven't read the book, but you should be aware that the author is not honest. People have looked into his anecdotes, and many seem to be made up. (Like, the dads he talks about) That doesn't necessarily mean his advice is bad, but personally I see it as a big red flag.

Googling for [rich dad poor dad dishonest] finds some articles on the subject:

http://www.thesimpledollar.com/2007/01/26/deconstructing-robert-kiyosaki/
http://www.johntreed.com/Kiyosaki.html

[beth_leonard]

The first commenter on my post seems to be a troll, so I declined to comment (maybe I need to change my LJ settings so my blog isn't in their new "explore" area) but as I generally respect your opinions, I read those two sites you mentioned. My question now is, did you? The two articles, especially the John T. Reed one, use a rhetorical style that scream "bogus" to me. One commenter on the first site put it like this:

I have purchased eight of Kiyosaki’s (RK) books. In those books, RK reveals that Rich Dad is a literary tool to explain how money works. I can accept that without throwing the baby out with the bath water (unlike you or JT Reed).

Further, RK makes it clear that he is not a very good writer. I also accept that. Further he explains in these books that he is teaching in broad concepts and not outlining a dot-to-dot scheme to get rich. I also accept that.

RK also repeatedly outlines the risks of owning a business with his own examples of failure, and suggest various places how to overcome these risks, and why it’s important to overcome our fears. I also accept that.

RK also speaks of cultivating a desire to better oneself. I also accept that.

So, he’s not a great writer; teaches in broad terms and concepts; encourages his readers to accept risk; overcome their fear of failure; and cultivate a strong desire to succeed.

In my book, that’s about all a true entrepreneur needs.

So, what’s your problem really?

And by the way, John T. (Throw the baby out with the bath water) Reed has made himself legendary in scewering RK seven ways from Sunday. Reed has only read one RK book and extrapolates the most absurd conclusions for all of RK’s work. He is a conjecture artist just like you are.

If there's a site out there that has meaningful critics of his actual advice and investment strategies I do value your opinion. (One of the possible investments he recommends looking into is The 16% solution on Tax Lein Certificates. It sounds interesting enough for us to check out.)

--Beth

[patrissimo.livejournal.com]

I did read the pieces. I agree that they seem somewhat hatchet-job-ish. However, I believe the assertion that RK has lied about his life experiences, specifically the Rich Dad. I believe this because if it was false, it would be very easy for RK to prove. And he has incentive to do so. Also, some sources claim that he has admitted Rich Dad to be a fiction, despite claiming earlier that Rich Dad was real. For example, see this Google Answer, which cites the stories that are its sources:

https://answers.google.com/answers/threadview?id=399942

When pressed about the details of his 'Rich
Dad' by Laise, Kiyosaki finally says, 'Is Harry Potter real? Why don't
you let Rich Dad be a myth, like Harry Potter?'

Like I said in my original comment, I haven't read the book and I have no idea whether its investment strategies are good ones. But I am automatically skeptical of anyone who lies like RK appears to have. Fictionalizing is fine, if you are honest about it. But claiming that there was a real "Rich Dad" until his hometown newspaper had trouble finding said individual is not honest.