Are you looking for a Rich Dad Poor Dad review? Is Rich Dad Poor Dad worth your time to read? Should you trust and implement what is taught in the book?
The book claims to teach you the differences between working for money and making money work for you as well as the myth of having to earn a high income to be rich.
However, it might wonder if it is just an overhyped scam.
If you want to know whether you should spend your valuable to read the Rich Dad Poor Dad book, this comprehensive review is for you. You will get all the answers here.
I have read Rich Dad Poor Dad a few times. So I can tell you everything you need to know about this book.
At the end of this book review, I’ll also tell you the best way to achieve financial success.
Rich Dad Poor Dad Review – Key Takeaways
- Book Name: Rich Dad Poor Dad
- Author: Robert Kiyosaki
- Overall Rating: 2/5
- Who is it For: Anyone looking to get out of the “rat race”; Anyone interested in learning how the rich gets rich; Anyone wondering how to approach investing
- The Best Alternative: An All-in-One Platform For Building an Online Business
In this Rich Dad Poor Dad review, I’m going to cover the following topics.
What is Rich Dad Poor Dad?
Rich Dad Poor Dad is a book that explores the steps to becoming financially independent and wealthy by combining autobiography and personal experience.
The author claims to teach you the things that we’re never taught in school. Instead, he claims to tell you the knowledge the upper-class passes on to their children for becoming and staying rich.
To support his claims, he points to his highly successful career as an investor and his ability to retire young at the age of 47.
The life of Robert Kiyosaki, the author of Rich Dad Poor Dad, was shaped by two influential fathers.
Kiyosaki’s biological father, Poor Dad, was a highly intelligent and very well-educated man. The poor father believed hard work would lead to good grades and a meaningful job. The poor father, however, failed to make good money despite having all these good qualities.
Kiyosaki’s best friend’s father was the Rich Dad. Rich Dad believed financial education is essential for making money work for you. He believed in learning how money works and making it work for you.
Although Rich Dad was an eighth-grade dropout, he eventually became a millionaire through his financial acumen.
In the book, Kiyosaki describes how Rich Dad made money and what mistakes Poor Dad made.
Kiyosaki discusses six lessons he learned from his Rich Dad in the first six chapters, which make up around two-thirds of the entire book.
Who is Robert Kiyosaki?
Robert Kiyosaki is a Japanese American born in Hilo, Hawaii. With an estimated net worth of over $80 million, Robert Kiyosaki is a successful investor and entrepreneur. Over 26 million copies of his books have been sold worldwide under the Rich Dad brand.
Robert Kiyosaki is truly a multi-talented personality. He is an entrepreneur, investor, motivational speaker, author and also a financial knowledge activist.
Upon graduating from Hilo High School, he went to the U.S. Merchant Marine Academy. During the Vietnam War, he served as a gunship pilot and was recognized with the Air Medal as a graduate of the academy.
In 1975, Kiyosaki worked as a sales person for Xerox machines after leaving the Marine Corps. He later founded his own business which sold Velcro surfer wallets.
Although the company was successful for a period of time, it unfortunately went out of business.
At the beginning of the 1980s Kiyosaki tried his hand at a business that certified rock band t-shirts. The business was sold in 1985.
After struggling for nearly a decade to achieve success, Kiyosaki retired at the age of 47 to pursue other endeavors. Then he founded Cashflow Technologies, Inc. in 1997 and rose once again. He runs two of his brands under this company, Rich Dad and Cashflow.
Apart from running Rich Dad and Cashflow Technologies Inc. Kiyosaki has also invested in a number of other ventures.
He acquired a silver mine in South America in 2002, and he took a gold mine public in China in 2003.
According to his book, ‘Conspiracy of the Rich’, he mentioned that he intended to take the copper mine public when copper prices and values increased.
During his teenage years, Robert Kiyosaki began working with gold and silver coins. It is his theory that if you have a few dollars, you can buy precious metal coins, and by doing so you will be prepared to confront the “biggest crashes in history”.
The reason he claims to be a ‘gold bug’ is that he own several commodities like silver and gold, so he can protect himself from any losses that may result from the misprinting of the U.S dollar.
Additionally, Kiyosaki also owns and invests in real estate. It is no secret that he invests a great deal of money in real estate, and has a great deal of real estate development ventures. He is involved in various property management projects all over the country.
As he revealed in an episode of The Alex Jones Show in 2010, he owns large apartment complexes, hotels, and golf courses as part of his assets. Also, he has invested in various oil drilling companies, oil wells, as well as in a startup solar company that is still in its infancy.
It is to be noted, however, that he was harmed by the failure of his company, Rich Global LLC, which announced bankruptcy in August 2012.
Rich Dad Poor Dad Overview
This book is written in a narrative style and framework. Rather than providing technical insight and investment math, the book primarily offers anecdotes with nuggets of supposed wisdom.
He compares lessons from his biological father (the intelligent but financially inept father) to the father of his friend (an uneducated, but smart and wealthy father).
The book weaves through Kiyosaki’s life learning from his rich dad and turning down advice from his poor father (thereby eclipsing the typical working-class mindset).
However, some concepts in this book are questionable, which I will tell you in the next section. Now, let me tell you briefly what each chapter is about.
Chapter 1: Rich Dad, Poor Dad
Robert Kiyoski introduces us to his Rich Dad and his Poor Dad in the first chapter.
The father of his friend, Mike (also called the Rich Dad), foils the plan that he and his friend use to make money through illegal means.
Throughout these entire sequence, he imparts important financial knowledge to them, and the primary theme of the lesson is to break free of the rat race.
His biological father is referred to as “The Poor Dad” in the story, because he holds a PhD, however he only holds a 9 to 5 position.
Chapter 2: The Rich don’t work for money
It is at this point in this chapter that the Rich Dad teaches Kiyosaki why he shouldn’t work for money.
He explains how the wealthy take advantage of opportunities in life, while the poor ignore them since they are too preoccupied to think about what they can do for sustenance and security.
Middle-class and poor people aren’t taught to take risks and they work in sheltered, salaried jobs under fear and greed.
Chapter 3: Why teach financial literacy
It’s important to distinguish assets from liabilities, and Chapter 3 teaches you how to do that.
Rich Dad emphasizes the importance of financial literacy, as, without it, even the wealthy can lose their fortunes. They lose money due to their poor financial decisions and bad habits.
Those who continue to get richer invest in assets and limit their liabilities to the bare minimum. On the other hand, the poor remain poor because they fail to purchase assets and pile up liabilities.
Assets are things that generate cash flow, appreciate in value, and have a market. Conversely, liabilities cost money, don’t earn income, and decrease over time.
The chapter’s key insight is that it is not just about how much you earn. It is your ability to retain your assets that defines your wealth.
Chapter 4: Mind your own business
Here is a chapter in which the Rich Dad explains why you shouldn’t mind your employer’s business. It isn’t yours, so it doesn’t belong to you.
You should seek out options for starting your own business and becoming your own boss if you wish to attain financial independence.
The author emphasizes the importance of building assets, including stocks, bonds, real estate, royalties, mutual funds, etc. Assets are anything that generates income.
Chapter 5: The history of taxes and the power of corporations
A major theme of this chapter relates to how the rich manipulate the poor and middle class to protect and enhance their assets.
Essentially, the rich play the investment game where they understand the corporate structure and use any legal means to minimize their taxes.
The owners of businesses first earn, spend, then pay taxes, whereas the poor and middle class earn, pay taxes, then spend.
The author encourages readers to increase their financial IQ by studying investing and strategies, accounting, and law.
Chapter 6: The rich invent money
As Kiyosaki says, each one of us was born with the ability to do things we were born to do, but can suppress that ability because of self-doubt and fear.
A bold and adventurous person is more likely to be successful in life than just a smart one.
Take advantage of the opportunities and take the risks in order to get financially ahead. One should not sit and wait for opportunities to present themselves.
Chapter 7: Work to Learn, Don’t Work for Money
As Kiyosaki explains in this chapter, in order to be financially free, an individual needs to possess certain skills.
An example he uses is of a woman who has a masters degree in English literature, but when Kiyosaki says she should learn how to sell, she takes offense.
If one is serious about getting rich, he stresses the importance of learning how to manage people, systems, and cash flows.
Hence, to be financially successful, selling, marketing, and communications are very important.
Chapter 8: Overcoming Obstacles
In this chapter, Kiyosaki explains the five personality types that impede human success: fear, cynicism, bad habits, laziness, and arrogance.
He believes that fear is natural, but how you handle it matters. Being rich is, after all, more of a psychological than a skills game.
A person should pay more attention to rewards than to obstacles.
Chapter 9: Getting Started
The purpose of this chapter is to give you a few tips on how to build your personal wealth.
To become rich, you’ll have to find a driving force bigger than your current circumstances. It is very important to remain hungry for learning.
Furthermore, he suggests that you choose your friends carefully and that you shouldn’t be afraid to befriend those who are passionate about money because you will learn a great deal from them. This was opposite the teachings of Kiyosaki’s Poor Dad, who said talking about money was bad and we should keep away from them.
Chapter 10: Still want more? Here are some To-Dos
As he concludes this final chapter, Kiyosaki offers great advice on creating personal wealth.
By taking seminars and courses, as well as learning from successful individuals within the industry, he encourages people to constantly strive to learn new things.
It’s universally true that the more one learns, the more one can earn, and that action always triumphs over inaction.
9 Misconceptions in the Rich Dad Poor Dad
1. The Educational System is Flawed
Many times in the book, Robert mentions the shortcomings of our traditional education system.
Robert claims that the educational system is predominantly designed to produce employees and could negatively impact entrepreneurs. The school talks very little about financial literacy.
I don’t fully agree with this. The educational system is not flawed. It serves an important purpose to ensure every person contributes to the development of society in different aspects. We need doctors, nurses, engineers, accountants, manufacturers etc.
Robert seems to ignore the basic theory of division of labour. Society should be diverse in order to prosper. The world doesn’t need a lot of entrepreneurs.
Robert seems to project his own value or desire about entrepreneurship onto the educational system and falsely claims it is flawed. If the educational system only talks about entrepreneurship, society will not be able to function properly.
2. Your Primary Residence Is not an Asset
Most people now consider their primary residence a valuable asset. According to Robert, a home does not generate positive cash flow, so it is not an asset.
Robert says that in spite of the fall in the value of rental properties, positive cash flow means you still make money month after month. On the other hand, home values don’t always go up.
I don’t agree with this. Your primary residence should be an asset as well because you can sell it whenever you want. Also, if you purchased your home at a low price, you might be able to gain a lot from the increase in home value when the market booms. It doesn’t make sense to treat your home as a liability.
3. Develop a Broad Skillset
Capitalism revolves around having a marketable skill set that is practical and marketable. In order to stay financially stable, you need to provide tangible value people are willing to pay for.
To succeed in business, Kiyosaki recommends building systems, managing money, and leading teams. He also emphasizes the importance of cultivating a habit of learning a broad range of skills.
While I agree that learning is important, I don’t agree that one should develop a very broad skill set. It takes a lot of time to master one skill. So it’s not possible to learn many skills at the same time. If your skill is just mediocre, you won’t be able to make any money with it.
Therefore, I think the better approach is to focus on one high-income skill.
4. Employees are Broke and Miserable
Despite the fact that I truly enjoy the freedom of being self-employed, not everyone can take this route. It is possible to enjoy your job and make a lot of money. There are many high-income employees in many professions.
However, Kiyosaki teases those who work for others and says they are generally broke and unhappy. This is very biased.
Kiyosaki seems to omit the risks and downsides of business ownership. Of course, there are ways to manage risk, but still, there are risks if your business sells products or services.
I do business as well, so I don’t discourage you to do business if you are interested. Actually, there are some ways to build a business risk-free thanks to the internet. I will tell you more about this business opportunity at the end of this review.
5. Academic Learning isn’t Valuable
Kiyosaki tends to undervalue academic learning and traditional learning. In fact, academic learning is very important.
We often don’t realize that studying academic subjects develops a range of important skills. Studying academic subjects affects both our brains and our lives.
Throughout our lives, we often have many questions, doubts, and anxieties. Academic subjects like science, maths, geography and so on can answer most of these questions. We also gain an appreciation for the miracles of science through a scholarly study. We learn that many of these miracles are scientific rather than magical.
In academic subjects such as math and physics, we solve a lot of logical problems, and this also prepares us for the real world when we have to solve some of our daily problems logically. By solving problems logically, we can avert many situations in life that would otherwise be unwanted.
Also, ironically, Robert conceded that accounting could be the most important subject in the world if you wish to be rich long-term.
6. Investing in Real Estate is the Best Way to Get Rich
The whole book is about how to get rich.
However, Robert seems to stick too much to real estate, which irritates me. It’s true that real estate investing can be a great way to build wealth, but not everyone is suited for it.
The benefits of investing in real estate are numerous, but Kiyosaki seems to imply that it’s a sure way to get rich. As a business, it’s no different from any other. The risk of failure can’t be avoided, and knowledge, experience, and luck are all needed to succeed.
In fact, real estate investing is not easy and the capital risk is huge. There are other ways to get rich without any capital risk. I will tell you more about this opportunity at the end of this review.
7. Pay Yourself First
Kiyosaki suggests paying yourself first, meaning your savings. But I don’t completely agree with this.
Do not get me wrong, I am in favor of prioritizing saving, but you shouldn’t risk stiffing the people you owe money, wrecking your credit score, and accruing fees and interest by paying yourself first. The first thing you do is pay off your creditors and essential living expenses, then you set aside your savings, and finally you reverse engineer the rest of the budget.
You may go bankrupt if you always pay yourself first and ignore your debts.
8. You Must Become an Entrepreneur to Get Rich
To get rich, you need to be an entrepreneur, Kiyosaki says. I disagree. I personally don’t think everyone is cut out to run a business, and I know some people who built significant wealth without having their own business.
9. Downplays investment risk
Rich Dad Poor Dad tends to downplay investment risks in every chapter. Robert says that after understanding your risks, you should be prepared to accept them. The key to managing risk is to understand it first. However, even if you understand risk, you cannot eliminate it.
When you invest, you need to understand where your risk is coming from in order to use risk management techniques and strategies. Nevertheless, there are always some risks. There are risks in buying stocks, buying property, and any other investments.
Therefore, I don’t recommend people to do investment before they have a large sum of spare cash. And to generate a large amount of cash, you can start a risk-free side-hustle, which I will tell you about later.
Is Rich Dad Poor Dad a Scam?
I cannot say Rich Dad Poor Dad is a scam. There are some valuable insights. But it’s not a bible for achieving financial success.
You cannot become rich by simply reading this book. Actually, the book doesn’t teach you anything practical. It’s more about a rich mindset. You will not learn a business model that you can start to make money.
In fact, Rich Dad Poor Dad has been criticized by many commentators for a lot of misconceptions mentioned in the book. Some figures in the book are overstated.
Also, some commentators have pointed out that Kiyosaki’s “Rich Dad” story may be fictionalized. It seems that Robert makes it look like a real-life story to make it more persuasive. This is a smart approach but some people might treat it as a scam or unethical tactic.
Rich Dad Poor Dad Pros and Cons
Rich Dad Poor Dad Pros
- It’s right that investing in assets will produce even more income
- Budgeting and expense control are encouraged
- Mentions the advantages of investing in real estate over other types of assets
- Underlines the importance of thinking and learning continuously
- Focuses on rich mindset
Rich Dad Poor Dad Cons
- It may be difficult to duplicate Kiyosaki’s success examples since they were unique to his situation
- Several sections of the book are also lacking in detail, making it more difficult to apply the concepts discussed
- Demonizes people who want to follow the herd rather than think for themselves
- Rich Dad Poor Dad is just a motivational book, so you cannot get any practical business advice
- Robert doesn’t teach you a business model to start making money
- There are a few misconceptions as mentioned above
Rich Dad Poor Dad Review: Final Verdict
Many people recommend Rich Dad Poor Dad to entrepreneurs, especially those just starting out. However, it has some shortcomings.
It seems to me that he discusses many controversial topics. I think that is the reason why it’s popular. People like controversial books.
It is best to take a grain of salt with some of what Robert Kiyosaki says. He tends to project a lot of his own preference or value, which might not be true for everyone.
The book offers a few positive lessons, but it isn’t as profound as the average personal finance blog today.
I don’t want to disappoint anyone who regards Rich Dad Poor Dad as the Holy Grail of personal finance, but I would not recommend it to someone who is looking for tips on how to manage money more effectively.
You might read it if you want to learn a different angle of looking into things. But don’t expect to become rich after reading this book.
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Rich Dad Poor Dad Review FAQs
Does rich dad poor dad really work?
Rich Dad Poor Dad doesn’t work if you want to become rich by reading this book. It’s true that Kiyosaki may inspire you to make more investments or even start a business. But as I said, this entails risks and you need to acquire the related knowledge before you can make any money.
Rich Dad Poor Dad doesn’t teach you the technical or operational stuff. It’s just a book that is motivational in nature. So you won’t be able to make more money because of it.
What is the story of Rich Dad Poor Dad?
The book tells Robert’s story of growing up with two fathers: his own and his friend’s rich father, and how both men influenced his thinking on money and investing. However, I reckon this story is fictional only.
Is Rich Dad Poor Dad worth reading?
Rich Dad Poor Dad is not a very long story. So if you really want to read it, you can finish it in a few days. In the book, Robert Kiyosaki does share some interesting concepts that are worth your time to think about.
Although I don’t agree with everything he says, he is quite an inspiring person. By reading this book, you will be encouraged to ask yourself many questions about personal finance and how to become rich. The book doesn’t give you the concrete steps to achieve financial success though.
How did Robert Kiyosaki make his money?
A lifelong investor, speaker, and real estate investor, Kiyosaki built everlasting wealth through his series of books Rich Dad Poor Dad.
Most of his earnings come from seminars conducted by people who have paid to be able to use his company’s name for marketing purposes.
So Robert Kiyosaki is like many gurus who make money by teaching people how to make money.
Is Kiyosaki a billionaire?
Robert Kiyosaki is not a billionaire. He has an estimated net worth of $100 million as of 2021.