Rich Dad Poor Dad, by Robert Kiyosaki (REVIEW)

Robert Kiyosaki published his most famous book, Rich Dad Poor Dad, back in 1997. In it he teaches us about personal finances through the lessons he learned from his rich dad. Rich Dad Poor Dad is an absolute juggernaut of a book. It has been in the top best sellers in the personal finances category for 20 years now, so it was about time I shared my thoughts on it.


Rich Dad Poor Dad is structured in 6 chapters, each of which corresponds to a lesson learned in his youth.


Critical response: The book, despite its incredible success, has found many critics through the years. The chapter that causes the most controversy is chapter 2, where he defines assets and liabilities. For Kiyosaki an asset is something that puts money in your pocket and a liability is something that takes money out of your pocket (anything with a cost). By this definition your home and your car, even though they have value and can be converted into cash, are not assets but liabilities. I do agree with Kiyosaki’s perspective on this. First homes and cars have costs and dig people deeper into the rat race. Nobody has ever become financially free just by owning a house and a car.



THINGS I HAVE LEARNED


Rich people don’t work for money; they make their money work for them. While poor people exchange their time for money at work, rich people build different income streams that work passively for them.


Examples of assets: properties, commodities, stocks, bonds, and intellectual property.

Examples of liabilities: credit cards, car payments, mortgage, and paid subscriptions.


Rich people spend their lives buying assets that generate cash flow for them. With that passive income they cover their expenses and then buy liabilities. In other words, rich people buy assets first, and that buys them liabilities. Poor people buy liabilities first and that’s why they are not able to be financially free.





We are never taught how to manage our money. Studying and becoming financially literate is the only way to become financially free.


If you want to earn your financial freedom, focus on buying assets. Wealth comes from accumulating enough assets to cover your expenses.


You should focus on learning, not earning. Once you have learned enough, money will follow.


Rich people build corporations, doing that helps them to keep more money saving taxes. Employees pay taxes on their salary and then spend while corporations pay taxes with what’s remaining after spending.






WHAT I LIKED


Good flow: Rich Dad Poor Dad is very, very easy to read. It tells the story of Robert Kiyosaki’s youth, where he had 2 strong male influences - his rich dad and his poor dad. The book is structured following the main six lessons that his rich dad taught him, and it usually flows with conversations and stories the young Kiyosaki had. The first chapters of this book are some of the best I have read.


Good points: The book has some very good points, like how rich people build their asset columns instead of the liabilities one.


Inspirational: It gives the reader a good kick in the a** and gets him reading. The usual outcome of this book is that people go to the bookstore and buy a couple more. I’m a big fan of anything that pushes people to improve themselves.



WHAT I DIDN’T LIKE


No practical help: Whilst inspirational, it lacks concrete advice or examples on what to do. If the reader is looking for a guide or a blueprint to follow, there is none of that here.


Momentum: Even though the first chapters of the book are amazing, it loses momentum halfway through it.


Doing what he preaches?: At some point he says how rich people should never show off and how he managed to build his asset column while still donating to charities and being a good Samaritan. A few pages after that he flexes and says how he bought a Porsche in what felt to me like a cocky way of proving his points.


I strongly recommend this book to beginner investors or anyone needing some inspiration.


Have you read it? Let me know if you agree/disagree with me in the comments.



You might be interested in:


Click here to buy Rich Dad Poor Dad.

Click here to read my review of Think and Grow Rich, by Napoleon Hill.

Click here to read my review of Mindset, by Carol S. Dweck.



Once again, thanks for your time, keep growing ;)

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