As part of the Boost My Budget project I’m challenging myself to read one money-related book every month! See previous reviews here.
[easyazon_image align=”left” height=”500″ identifier=”B0175P82RA” locale=”UK” src=”http://www.boostmybudget.com/wp-content/uploads/2016/12/51zcMqY7GQL.jpg” tag=”boomybud-21″ width=”333″] This month’s review is [easyazon_link identifier=”B0175P82RA” locale=”UK” tag=”boomybud-21″]Rich Dad Poor Dad[/easyazon_link] by Robert T. Kiyosaki.
I was excited to read this book!
According to the cover, it’s ‘the #1 personal finance book of all time’. I’ve seen it recommended over and over again on personal finance blogs and reading lists.
So did I love it?
Some parts are definitely very motivating. Kiyosaki is a smooth talker, and I can see why the book is a best seller.
As he reminds us constantly, he is first and foremost a salesman, after all.
Despite this – or perhaps because of this – there are many parts that left a bad taste in my mouth, for reasons I’ll go into later in this review.
A tale of two dads
The premise of the book is that Kiyosaki grew up with two dads: spoiler alert! – a rich dad and a poor dad.
The rich dad was poorly educated and came from a humble background, but went on to become ‘one of the richest men in Hawaii’.
The poor dad was highly educated and had a well-paying job, but could not manage his money and had no financial security.
After amusing myself imagining that Kiyosaki had two gay dads (unlikely for his era) and wondering why they didn’t combine their finances, I found out that poor old ‘Poor Dad’ was his real dad who brought him up, whereas ‘Rich Dad’ was his best friend’s father, who mentored him as a child and in his early career.
The book is based around six lessons which Rich Dad taught him growing up. These, apparently, are the secrets that rich people know about and poor people don’t.
The lesson titles are a bit ridiculous. They include ‘Why teach financial literacy?’ (that’s not a lesson) and ‘Mind your own business’ (by which he apparently means: own a business).
I really struggled to get into Rich Dad Poor Dad.
My first, and most superficial issue:
Rich dad is basically a nasty snob. He thinks his employees are suckers who don’t deserve a decent wage.
I KNOW Kiyosaki says this to get us all riled up and inspired to start our own businesses, but seriously:
Is this the guy we’re supposed to emulate? The guy who sneers at people on the minimum wage and keeps people waiting for hours just because he can? Apparently so.
The whole book also just feels really mean to his real dad, but I guess I’m just a softy.
Ok, putting aside my feelings about the weird dad power-play going on, is there any good financial advice here?
There are lots of vague and dodgy claims masquerading as advice. The sort that you would expect to get from some random know-it-all in the pub, not from a successful millionaire letting you into his business secrets.
For example, Kiyosaki is a big fan of investing in property. He encourages you to invest in property even if you don’t have money for a deposit and can’t get a loan from the bank.
He says this without giving any real instructions on how to magically acquire a property with no funds, but reading between the lines, I think the answer is ‘have rich friends‘.
Kiyosaki is a big fan of MLM as a respectable business model, and recommends it as a starting point to get your business training.
Hmm, no thanks.
I also take issue with his repeated advice that you ‘pay yourself first’. I have heard this before but it usually seems to mean that you should pay into your savings before spending what’s left on fun. Solid advice.
Kiyosaki’s version is: buy investments before paying your bills.
Yes, before paying your bills.
This goes against any other personal finance advice I’ve ever read and I frankly think it’s terrible. His (or ‘Rich Dad’s’) theory is that you will be more motivated to get out and earn money if you reach the end of the month and have bills unpaid. I think it’s grossly irresponsible to encourage people to do this.
Oh yeah, and at one point he claims that you need rich friends so that you can commit insider trading. Seriously.
I think my dislike of Rich Dad Poor Dad boils down to the fact that it’s just plain irresponsible. The ‘advice’ is not practical or sensible for the majority of readers. And promoting insider trading? How did this guy get published?
By the way, apparently Kiyosaki has gone bankrupt several times in his life – something he doesn’t mention in his book.
One repeated theme of Rich Dad Poor Dad is that you need to take risks in order to be successful.
I understand that some level of risk is unavoidable in any investment. However, if the worst case scenario is bankruptcy, most people simply can’t afford to take that risk, and it seems disingenuous of Kiyosaki to encourage people to dive in there without mentioning the possible fall out.
Again, it’s just irresponsible. And kind of scary to think what might happen to some people diving in without professional financial advice or education.
I was kind of surprised that I found so many problems with such a well-regarded book, but a quick google showed me that I was not alone.
Alongside the many positive reviews, I found some that pointed out huge issues with Kiyosaki and his products.
According to Tough Nickel, ‘rich dad’ is not even real. After much probing from journalists, Kiyosaki apparently implied that he is ‘a myth, like Harry Potter’.
Young And Thrifty wrote about a hidden camera investigation that showed the Rich Dad live seminars to be one big sales pitch run by fraudulent presenters.
Ethan Vanderbuilt has some pretty illuminating information about Kiyosaki’s background and seminars.
Basically, several people have claimed he is one big fraud. He made his fortune through selling his books and seminars, with no proof of real financial success outside of that.
I think you need to read this book with a huge mountain of salt, and be aware of Kiyosaki’s background – but I didn’t totally hate it.
There are some things I think we can take away.
One of the differences between Rich Dad and Poor Dad is that Poor Dad apparently says ‘I can’t afford that’, whereas (fictional) Rich Dad asks: ‘how can I afford it?’
I do like this mindset and I am trying to apply it myself. It’s actually quite a powerful way of thinking and it helps to keep my side hustle motivation high!
The book in general does a good job of motivating people to want to earn extra income streams.
Earlier I talked about how Rich Dad came across as nasty, but the truth is, there are an awful lot of people who think that way, and if we want to be successful, we have to understand how the world works.
My own boss is not quite as callous as Rich Dad (I hope!), but it’s true that ultimately his business exists to make maximum profit – for him, not for me.
My boss is not a bad person but he is not running our company as a charity to support us. He’s always going to keep salaries as low as he can get away with, and he would fire people in an instant if he had to cut costs drastically to save his business.
This book did a good job at reinforcing the idea that if you ever want to be independent financially, you have to make your own sources of income.
Most of Rich Dad Poor Dad’s lessons boil down to the idea that you want to acquire income-producing assets and reduce liabilities.
This idea is a basic one, but it’s good to have a reminder –
And it could be eye-opening for people who have never thought about having income streams outside of their job before.
Boost My Budget rating
Yes, there are a LOT of issues with Rich Dad Poor Dad and its author. But there are a few good insights hidden away in there, and it will definitely give you a good shot of motivation to up your side hustle game.
I think it’s worth a read also just because it is regarded as such a classic of personal finance, and it’s good to know a bit more about the man who has informed so many opinions.
Give it a go, but be careful what you buy into!
Here are some of the personal finance and money related titles on my reading list.
Have you read any of these? Any more recommendations for me? Come back soon for more reviews!
- [easyazon_link identifier=”B00QH9NTSI” locale=”UK” tag=”boomybud-21″]A Random Walk Down Wall Street[/easyazon_link] by Burton G. Malkiel
- [easyazon_link identifier=”1563523302″ locale=”UK” tag=”boomybud-21″]The Millionaire Next Door[/easyazon_link] by Thomas J. Stanley and William D. Danko
- [easyazon_link identifier=”1119356296″ locale=”UK” tag=”boomybud-21″]The Millionaire Teacher[/easyazon_link] by Andrew Hallam
- [easyazon_link identifier=”0061234060″ locale=”UK” tag=”boomybud-21″]It’s Not About The Money[/easyazon_link] by Brent Kessel
- [easyazon_link identifier=”0553813641″ locale=”UK” tag=”boomybud-21″]The Millionaire Mind[/easyazon_link] by Thomas J. Stanley
- [easyazon_link identifier=”1615890424″ locale=”UK” tag=”boomybud-21″]The Richest Man in Babylon[/easyazon_link] by George S. Clason
- [easyazon_link identifier=”0316857750″ locale=”UK” tag=”boomybud-21″]Rich Dad Poor Dad[/easyazon_link] by Robert Kiyosaki
- [easyazon_link identifier=”0340998059″ locale=”UK” tag=”boomybud-21″]I Will Teach You To Be Rich[/easyazon_link] by Ramit Sethi
- [easyazon_link identifier=”1481528777″ locale=”UK” tag=”boomybud-21″]Rich Bitch[/easyazon_link] by Nicole Lapin
- [easyazon_link identifier=”1447286316″ locale=”UK” tag=”boomybud-21″]The $100 Startup[/easyazon_link] by Chris Guillebeau
- [easyazon_link identifier=”1781800685″ locale=”UK” tag=”boomybud-21″]Money, A Love Story[/easyazon_link] by Kate Northrup
Disclaimer: this post contains affiliate links. All opinions are my own!