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Written back in 1997 by Robert Kiyosaki and Sharon Lechter, Rich Dad Poor Dad has been a subject to a great deal of scrutiny, receiving a lot of praise and some amount of criticism. I have purchased my copy sometimes back in 2007 and to this day I am pretty split in how to set my personal evaluation of this book.
Therefore, I will point out all critical elements to you objectively so that you can make up your own mind.
Generally, the book in itself is about emphasis of financial intelligence or as the author call it – Financial Literacy! It is a fact that the book has been widely popular ever since it was published, and it has been sold better than most successful music records, reaching almost 30 000 000 copies in sales worldwide.
The Content Summary
The book starts with authors real life experience and story in his early life. He grew up in Hawaii where he had two different examples and approaches to money in form of two dads (that is where the book name comes from).
I have had funny reaction to this even from the start when I red the book for the first time, but setting my personal views at the side, these two dads where complete opposite to each other. The one was highly educated but poor, while the other was rich without the significant education.
Without going into much details about it, in his early age the author turned to the rich dad to teach him about the money and how to get rich, and that is how the whole journey starts.
In the rest of the book following topics are covered:
- What rich people teach their kids about money that poor and middle class are not even aware of.
- What is the difference between assets and liabilities, and the need of acquiring assets.
- The common view or residential investment as asset is wrong. It is liability, not an asset.
- The value of financial intelligence and literacy.
- The importance of business and financial skills when it comes to financial success.
- The importance of investment and entrepreneurial skills to reach long-lasting prosperity.
Praises and Criticism
One interesting fact about this book that I did not know myself in the beginning, is that author has been previously inspired by the Donald Trumps literary debut from 1987 – Trump: The Art of the Deal. I do not know for sure, but that is probably the reason why Trump praised the book and later wrote new one together with Kiyosaki called – Why We Want You To Be Rich, Two Men One Message
The book has been also endorsed by many other celebrity figures. Oprah Winfrey has talked about it and endorsed it on one of her shows, and we all know what effect that has on gaining the popularity. I am absolutely certain that it contributed to such high volumes of sales.
But the book has also been criticized. American author and journalist Rob Walker, has reviewed the book as pure nosense, widely criticizing most of the vital elements of the book, and he is not the only one.
But it seems that one particular detail in the book has triggered a lot of debate, and that is the part about the difference between asset and liability. Let me dig into that little bit more cause that is the part that I have been having some problems with, too.
Let me quote what the author himself wrote at the end of the book, in epilogue:
“The main reason this book was to share insights into how increased financial intelligence can be used to solve many of life’s common problems. Without financial training, we all too often use the standard formulas to get through the life, such as to work hard, save, borrow and pay excessive taxes. Today we need better information.”
The reason why I quote him on this is because he explains himself what the purpose if this book is. We really need better information and I think he did a great job in with this book general.
Reading this book you will find out about the difference between common work-hard mentality and more intelligent realization of financial possibilities. The way I see it, Kiyosaki has done a pretty good job explaining all this and there is a lot to be learned from this book.
There is one thing in particular that I think is valuable, but that happens to be a part that has created a lot of debate ever since, and that is the difference between the asset and liability. It is valuable because he brought this to peoples attention putting things in right perspective in general.
But he also made a mistake in not setting the clear line between those two.
He states that residential investments (house, apartments) are not assets, but liability. Generally, he is right, because if you would observe majority people and their behavior in these things, it confirms his point that these investments drain the personal economy.
But we can not forget the fact that this kind of investments has also brought a lot of profits to those who have been smart in a way of doing it. I guess the book needs to be red with the open mind.
One other thing with this book that I personally see as a con is that it is not giving any practical solutions to some of problems described. Nobody can deny that we all need to reconsider our priorities and learn more about financial possibilities available. Nobody can deny the need to acquire as many assets as possible, while getting rid of liabilities.
But this is what he gives as list of assets:
– Business that do not require my presence
– Mutual funds
– Income-generating real estate
– Notes (IOUs)
– Royalties from the intellectual properties, such as music, scripts, patents.
– Anything else that has value, produces income or appreciates and has a ready market.
This is a great and very valid list, I am not arguing against it. But there is no practical value to it at all. I am sure everybody know about stocks and bonds but investing into them, for the ordinary Joe, is the same as gambling in Las Vegas. These things are no joke!
You may get lucky but on the longer run – you will lose.
I do not see the point in putting these in front of people considering the fact that you need a life time of learning and experience to successfully utilize them. Do not misunderstand me here, it is good to give the information about things, but what is the point if you don`t give the manual when needed?
In with these things the manual is everything.
If I would summarize this whole review, I would say the following!
Get the book and read it. I definitely recommend it cause it provides a lot of useful information. My biggest pro lies in questioning of the common way of going through the life. But the book is purely informative so keep that in mind! It does not give much when it comes to practical use.
I would give it 7/10 at the best, maybe even 6.5/10.
Read it and see for yourself, you got nothing to lose. You can find the book for free online, you don`t have to pay for it. Forget about what I or anybody else said about it, come to your own conclusions.
If you have something to ad, maybe some questions about it or maybe just generally disagree with me, leave me the comment below!
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