What Rich Dad Poor Dad gets wrong...

Question

Newbie here. I listen to the BP podcast almost every day, and I notice that Rich Dad Poor Dad is suggested by a large number of guests in the Famous Four, or at least referred to frequently.

I've read the book and I think it's fantastic! But I'd like to know from those of you out there with more experience than I - What does Robert Kiyosaki get wrong? Or overstate/understate? Or is any of advice he gives dated? Or annoying?

Your opinions would be appreciated, and thanks for posting.

Dawn Brenengen · Answer

I really liked his books, and I think he's a pretty smart guy.  Unfortunately, I also think he's a sellout.  He supports MLMs and gets paid to show up on stage and say how great the business is.  I can't respect that.

Steve Vaughan · Answer

Beyond the books written a long time ago, I stay away from him.  He's associated with Clayton Morris, a complete crook  and he sells $700 seminars that just upsell to his platinum $15k tax strategies McRib whatever with no substance and no guarantees.

His advice to cash out a 401k to invest is just one example of bad tax advice IMO.  Don't need to spend $15k to know that advice is horrible from the get go.

Last time I listened to his podcasts (prior to stopping because of all the ads) he was calling for a stock market crash and doom.  He's been saying that for multiple years as new highs have been reached over and over.  I'm all about informed caution at Dow 26k, but he's been wrong for many years so far.

Caleb Heimsoth · Answer

@Will Kern his books are good for general information and a 30 thousand foot view of topics.  That’s about it.  I read rich dad poor dad probably about a year into Me doing REI and I learned basically nothing new.

I also don’t like how he just basically spends the whole book ripping his biological dad for making decisions he thought were poor.

There are many ways to get wealthy in this country and owning real estate isn’t the only one.  Lots of people get Rich working for others.  I think he doesn’t explain that well enough.

Then more recently I look at all his fear mongering about the economy tanking and it just is sad.  He’s a total sell out to seminars, guru programs in my opinion.

Ned Carey · Answer

@Will Kern Personally I am surprised how many people say that book is such an eye opener and impetus to get started in business. Yes it was a fun and interesting book to read.  Yes he did present some information in a new way.

But the concepts he presented, I understood when I was ten years old.

It is better to be a business owner than an employee. It is great if you can get to a place where you can live off your investments and not have to work. Maybe it was his excellent story telling shook people up an made them aware they could have these things too.

That said, the significant error I find is that he says a home is not an asset. This is not only technically wrong it is misleading. The point I believe he was trying to make, was probably missed by 90% of the readers. Of course maybe he wasn't trying to make a point, he was just plain wrong.

Dennis M. · Answer

He gets so much right and has helped most of us get up off the couch and into the game that I find myself having a hard time criticizing his books and information . If there’s anything I’d say negative it’s how he gives a false impression of the ease of starting up a business and also  the tax benefits surrounding investments . Setting up a single member llc does not offer the tax benefits he so willingly touts also today’s business environment is much more competitive With the way information travels compared to 1997 when his book came out

The content is more of a mindset motivational book (which it does very well ) than a 1-2-3 step to wealth formula that a lot of people expect to see

Dawn Brenengen · Answer

The more successful than average people who will do well with MLM or real estate investing are the same ones who do not need a guru to teach them how to do it.  Yes, the programs CAN work, but the success rate is so low for people that it really preys on the hopeful and more often than not, they end up losing a lot of money they can not afford.

I call him a sellout because I saw him as a smart, successful business person when I was younger, and now I see him slinging guru programs and MLMs.  He was already rich and didn't need to do that.

Larry Turowski · Answer

There are no good MLMs.  It is mathematically impossible for more than a fraction to succeed.  But hope springs eternal.

Larry Turowski · Answer

Completely agree.  As much as people site it as their favorite book, it seems as obvious as saying eat right and exercise.

Caleb Heimsoth · Answer

I agree that if you’re on BiggerPockets you have a desire to not be average, that doesn’t mean you aren’t average though at any given moment (financially speaking) and if that’s the case spending lots of money on guru programs and/or MLM companies probably isn’t a wise financial decision.  Even if the intent is to not be average, that doesn’t mean spending money on those things will change it.  If anything, it just makes it worse if you’re going into credit card debt (which a lot of people do for this stuff).

This is a side point, but why spend 75k, or whatever on guru materials when you can buy the same books etc for pennies on the dollar on eBay? If you want to spend good money to learn something like syndicating, I think that’s fine and can be beneficial but most people do it to receive generic “mentoring” or learn wholesaling, which can be learned for free on BP and/or from other books for literally a fraction of the cost.

Frank Wong · Answer

Hi Will,

I don't know if Kiyosaki gets anything wrong, but the only 2 books I ever read from him was RDPD and Cash Flow Quadrant.  He, in my opinion, is the Godfather of investing for the avg Joe.  It was the first book to put real estate investing in a broad spectrum and open peoples mind to changing their lives. I think the book is more about mindset and being financially free.  That's the purpose and I think it does that very well.

What Rich Dad Poor Dad gets wrong...

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