Wednesday, May 16, 2012

Book Review: Rich Dad Poor Dad

A book which has been inspiration to many people, but the book seems to have produced as many critics as champions. The first time I read the book, I felt inspired. I wanted to run out and start following some of the ideas in the book, but what I found is that you can’t just merely run down to the “courthouse steps,” spend five hours, and come away with thousands of rupees in your pocket. I happened to pick up this book because of its catchy title “Rich Dad, Poor Dad” and its tag phrase “What the Rich teach their kids about money - that the poor and middle class do not!”

 Rich Dad, Poor Dad will help you reshape the way you think about what you do with your money. By the time you finish the book, you will be able to evaluate your own thoughts and habits surrounding money, and determine what you will need to do differently to accumulate wealth. I think some people miss the point and think this is a "get rich quick" book. Clearly, it is not. You can get rich quicker though and this book explains how.

 The title Rich Dad, Poor Dad refers to the two main male influences that Robert had as a child. His own father, the figurative “poor dad,” worked at a steady job for a living, while the “rich dad” (the father of a friend) ran a multitude of businesses. Most of this book is told from the perspective of Robert learning from his “rich dad” about how to make money – and seeing how his “poor dad” made huge money mistakes. The first two thirds of the book covers six lessons taught to Robert by his rich dad.

At last, some tangible things: read books and take classes to educate yourself! Ask questions! Do something! These are all great tips, but I felt really uncomfortable realizing that the first direct, clear applicable tip found in the book came near the end – and it was to read more books. The book ended with a very brief section that outlined another unbelievably good financial situation.

Mr. Kiyosaki says his main intention behind writing this book is to educate financial literacy to those of us who are not blessed adequate to have a “Rich Dad” to explain us how to invest our money correctly. He argues that the present educational system renders us financially incompetent and, allows rich corporations and the Government to exploit us for money because of this lack of financial literacy. He offers many valuable insights into money management that he obtained from his “Rich Dad” and from his personal practice.

 His definition of ‘assets’ and ‘liabilities’ was a revelation to me, and a sad one at that, because I after reading it, I became conscious that most of the things that I considered my assets were actually liabilities in the long run. Through this book, he also gave detailed examples on how to manage ones cash flow so that returns from the assets can be invested into procuring more assets.

All said and done, I would take down two important lessons from this book:
  • The rich don’t work for money – they invent money
  • The need to work is to learn, not to earn money
The critics of the book say that the financial advice offered in this book is too general and not very accurate.

 
About the Author: Born and raised in Hawaii, Robert T. Kiyosaki co-founded an international education company that operated in seven countries, teaching business to tens of thousands of graduates. Now retired, Robert does what he enjoys most - INVESTING. Concerned about the growing gap between the haves and have not’s, Robert created the board game CASHFLOW, which teaches the game of money, here before only known by the rich.

 

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