Rich Dad Poor Dad Book Review - 3 Lessons

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Some people love this book, some people hate it. I get it and I am ok with a debate on this post. I have thick skin. Personally I feel like I have to disclose that I read 40 or so books a year and often read books that I don’t like looking for at least a nugget or two to add value to my life and my business. 

Here are the 3 main lessons I’ve taken from this book:

  1. 1. A simple but beautiful definition for my friends without a CPA or MBA: Assets vs Liabilities. Assets are things that put money into your pocket. Liabilities are things that take money out of your pocket. The best example of how this impacted my life is from the first time I read this book at I think 20 years old. I have never owned a personal residence and may never own one. The last house I lived in was in La Jolla, CA on the cliff, beach front. The house was worth something like $5MM-$8MM. The property taxes if purchased when I was renting it for the last two years would have been about $50k-$80k/year. The maintenance of the beautiful yard would have been about $3k/year. Insurance about $5k/year. If you were able to mortgage the entire thing your mortgage payments would range from $240k-$400k/year. I rented that house for $8,500/month. I took the money I saved and instead of putting it against mortgage payments like I always see realtors advertise “why are you paying someone else’s mortgage” and I bought cash flowing rental properties.
  2. 2. Wealthy people do not work for money. They make money work for them. This is a lesson learned in almost every biography of the mega-wealthy investors I have studied. It is broken down into simple terms that anyone can understand. This book helps normal people think about money from a different vantage point.
  3. 3. The most important thing you can grow is not your asset column (that’s second) but your financial education. I couldn’t agree more again I am reading about 40 non-fiction books a year. If you study Mark Zuckerberg, Bill Gates, Warren Buffett, Elon Musk, etc they are all fanatic readers. The more knowledge you are able to accumulate the better informed decisions you can make.

Over all I give the book a 4 out of 5-star review for the average investor and a must read review for any non-investor. 

I couldn't disagree more. All of it is poorly written. Most of it is simplistic. Some of it is contradictory.  Some is poor advice (some illegal). Some is incorrect. Much of it is far fetched--probably fictional. If you want a detailed, well researched review, John T. Reed offers a good one: 

John T. Reed's analysis of Robert T. Kiyosaki's book Rich Dad, Poor Dad, Part 1

Wow @Jeff Rabinowitz I've never heard such a strong anti-RDPD sentiment before.

Also, I lean you way about how it's not that well written AND that gives me hope. I need a team of editors to clean up my work.

Good discussion guys! 

No one can disagree on the impact that RK's framework has had on a generation of investors. His outlines has improved many lives - so I admire him and I'm inspired to create something that helps others build wealth as well.

Originally posted by @Jeff Rabinowitz :

I couldn't disagree more. All of it is poorly written. Most of it is simplistic. Some of it is contradictory.  Some is poor advice (some illegal). Some is incorrect. Much of it is far fetched--probably fictional. If you want a detailed, well researched review, John T. Reed offers a good one: 

John T. Reed's analysis of Robert T. Kiyosaki's book Rich Dad, Poor Dad, Part 1

 Everyone has an opinion.  I respect that. 

- What does the book suggest that is illegal?

I have to agree with Jeff.

You will never get rich with income, you get rich through appreciation, eventually you must invest income into assets to build wealth. What you missed in your beach house example was that somebody bought that 8 million dollar property at sometime for much less than 8 million dollars. Rich Dads preaching against owning a personal residence I find to be very bad advice. Many people have leveraged a residence to slingshot them into real estate investing. Without a personal residence many of those people would have never been able to get started. One of the biggest disservices Kiyosaki has done is label a residence a liability.

I'm glad you have actually done some real estate investing, most people I meet who are voracious readers are also paralyzed, they are full of knowledge but have no ability to put their knowledge into action. There is a fine line between knowing everything and those who know just enough to be able to do something.

I love it! Great bullet points, and I agree with all of them. Nice to hear from someone who dug the book, rather than all the people wondering why they aren't millionaires off passive income just because they read the book.

Props.

@James Paine , it has been a long time since I read the book and by the end I was just skimming it. If I recall correctly, Kiyosaki writes several times of getting inside information from his friends to trade stocks. That is absolutely illegal. Take a look at Reed's critique.

@Al Williamson , take a look at Reed's critique. It is very detailed and points out flat out lies in the book. Kiyosaki has never given any evidence that Rich Dad exists or that he had purchased any rental property before writing the book. Obviously,, he is an excellent marketer but his books are mainly fluff. "The poor work for money while the rich make money work for them". What does that mean? Just get a pile of money and invest it? Where did the money come from? I suppose we could go back to that other great financial writer Steve Martin who gave the following advice on how to make a million dollars: "First get a million dollars. Now put it in the bank and collect interest until you double it."

I think that the simplicity and the motivational style that the book is written in is what makes it so effective. It's perfect for the book's target audience.

Despite what some may say on here, I would highly recommend it for a new investor who could use some inspiration.