Rich Dad, Poor Dad Review – Revisited 20 Years Later
Since its debut in 1997, Robert T. Kiyosaki's Robert Kiyosaki's Rich Dad, Poor Dad has been a landmark among personal finance books, a best-seller that has sold nearly 40 million copies worldwide.
I first read the book back in 2000, when I was still a budding entrepreneur. I figured I would re-read it now that I have more experience under my belt. I also wanted to see if it's held up to the test of time, and if I would like it as much as I did when I first read Rich Dad, Poor Dad. A lot has happened financially in the past 20 years, and I'm curious if some of Kyosaki's predictions came true.
Our Rating - 8
When I first read the book, I primarily liked how Kiyosaki viewed the world from a different perspective. It got me to think differently about my business and investing than I had previously.
Kiyosaki seems to be a polarizing figure: You either love or hate his work. The Simple Dollar review of Kiyosaki's work, for example, adds a lot of personal bias, and I don't think that's fair.
I try to take a more neutral viewpoint and will review the book based upon my experience in the business world.
Rich Dad, Poor Dad should be viewed as a general starting point — an investment/startup summary, rather than a list of specific items to do as an entrepreneur.
Robert Kiyosaki emphasizes six key points throughout the book. These points — which differentiate between his “poor” dad (his real dad) and the “rich” dad that helped him understand business and become wealthy — are:
- The rich don’t work for money
- The importance of financial literacy
- Minding your own business
- Taxes and corporations
- The rich invent money
- The need to work to learn and not to work for money
Good Points in the Book
Flawed Educational System
As Robert mentions many times in the book, our traditional educational system is flawed. Our education system is designed primarily to create employees and could be a negative influence for an entrepreneur. As Kiyosaki mentions, he's not suggesting that people skip higher education; he's suggesting higher education does not assist with “street smarts.” Financial literacy is something that is rarely discussed in school, and if it is discussed, it is only at basic levels. Based upon my personal background, I've made this a personal focus and will make sure my children are well educated in this subject.
The cost of education continues to increase much faster than the rate of inflation. It's becoming more clear our education system is broken. Robert's statements about this topic are accurate.
Being an Entrepreneur Is Less Risky
The popular belief is that owning a business is riskier than working for someone else. In my opinion, owning a business gives you all sorts of self-reliance skills you would not get when working for someone else. If anything, with today's “cradle to grave” mentality, we are creating more dependent individuals.
Owning a business has given me much more independence and many more invaluable skills I could still use if I were to work for someone else. On a weekly basis, I now do things I used to consider risky or could never imagine doing before owning a business.
Your Primary Residence Is NOT an Asset
Over the years it generally has been accepted that your primary residence is an asset. Robert flat-out states (I believe correctly) that your home is not an asset, since it does not generate positive cash flow. The housing bubble and collapse proved this correct.
“Rich people acquire assets. The poor and middle class acquire liabilities, but they think they are assets.”
While rental properties have also gone down in value, if you focus on positive cash flow, you still are bringing in money every month. Robert even states in his book that home values do not always go up.
Pretty much all consumable goods are liabilities — something even I got tripped up with. Kiyosaki states you should buy investments that generate cash flow to help pay for your “doodads.” I think this is a great way to look at how to purchase your toys.
What Is an Asset or Liability?
“An asset is something that puts money in my pocket. A liability is something that takes money out of my pocket.”
A load of Kiyosaki's critics point out that this statement doesn't follow general accounting standards. This is true, and Robert acknowledges this. The point, which many miss, is that you should be focusing on cash flow to get wealthy.
“Wealth is a person’s ability to survive so many number of days forward… or if I stopped working today, how long could I survive?”
I still refer back to this statement today and have devoted a few posts to this topic:
Complaints About the Book
There are many reports that Robert's “Rich Dad” does not exist and was made up. This is more than likely true, but there have been many personal finance books that are works of fiction. (The book Wealthy Barber comes to mind.)
The issue some people have with Robert is that he presents his book as a work of non-fiction when it's not, and I agree with this complaint. I find it interesting that John Reed's website puts down Robert's work, but at the same time also sells Reed's own work.
Robert does downplay the role of risk in the investment suggestions. This is somewhat accurate, but he suggests that you should fully understand your investments before diving in. Robert states that investing is risky only if you don't fully understand what you are investing in.
Summary
While I still recommend this book, especially for beginning entrepreneurs, the book has some flaws. In my opinion, many topics he discusses hold the test of time. But take some of what Robert Kiyosaki says with a grain of salt. It should be read, if not for the motivation, just to get you to think differently than a salaried employee. I don't love or hate it, hence the reason why I give this book 3 out of 5 stars.
If you do decide to read Robert's books, I recommend reading only Rich Dad, Poor Dad and Rich Dad's Cashflow Quadrant. Most of the other books are simply a rehash of these two books. I DO NOT recommend attending any local seminars.
I will keep his book on my list of best personal finance books for the primary reason to get you to think outside the box.
This guy is either an idiot or a swindler. I used to think swindler, but lately I’m more on the fence. He gives truly bizarre advice that is likely to derail financial futures. I’ve dedicated a personal finance blog to attempting to dispel his shinaniganry (richdadrichdad.com). How he ever became relevant in the personal finance world is beyond me.
I have a little bit of savings. I don’t have any knowledge of or interest in really pouring myself into real estate. The question I have is, very practically, how do I get started investing in something that’s going to yield more than a savings account consistently?
Larry, I am new to Rich Dad Poor Dad. What are some other books you recommend? I am working in a 9 to 5 job and ready to break free of the rat race.
I wonder, if your primary home is not an asset, when you have extra money, should you pay off your mortgage first, or use the money to generate more cash flow, if the mortgage interest rate is 4.25%. Isn’t reducing your liability = increasing your asset?
I absolutely agree with the seminar part. I just came back on 27/8 having attended a $205 seminar held in Melbourne, Australia. The speakers including Robert were meant to educate us on a variety of topics from crypto to selling online . Even a 16 yr old today knows more than what they imparted because it was all about the further programs that they were including Robert wanted to sell..so I came home with less than what I would get from a free seminar. Plesse keep away from Robert and his gang of crooks.
I take exception to your thought that the rest of his books are just a rehash. The other books in his series that are written by his experts are top of the line. ABCs and Advanced guide to real estate investing and property management are really key to knowing how to invest and how to either manage your property or ensure that your property manager is managing your property properly.
Rich dad was a real person, google “Richard Kimi” sometime. His son, Alan, has come forward recently and verified this. Hope that puts the pointless debate to rest so we can focus on the actual message
Why would you spend most of your time writing books, giving seminars, producing weekly multimedia shows if you were making millions wheeling and dealing investments?
These con artists spend most of their time doing what makes them the most money, and that’s selling books, seminars, and multimedia shows peddling their snake oil to simpletons.
Turb i agree, I was pretty disappointed, i was to be given books and CD’s for doing the 3 day course, and did not get them, all it was was about the $35000 to do the mentor-ship, I paid for the 3 days so they can con another $35000 from me !!! Nope but they got the 20 year old had them on the phones getting several credit cards to pay for the mentorship, SHAME SHAME SHAME !!!
why wouldn’t you recommend attending his local seminar?
Not directly owned by Robert and high pressure upsell for costly and useless seminars.
Why do you not suggest attending his seminars?
Cash Flow Quadrant gave me my aha moment. No it didn’t lead me by the nose or hold my hand but it certainly changed how I view making money. I know people people from all classes, poor, middle class and rich. What I”ve noted is the poor and lower middle class view money very different than people in the upper and rich class. RK fits into the rich of course. It’s worth a read.
well to everyone on this page im probably the only one who has taken his seminars and I have been successful. I don’t work for him and im not getting paid for this. I literally had 50 dollars in my account, came up with the money to take his real estate seminar and in 6 months I have purchased 8 properties with a total cash flow of almost 20,000 a month. His program does work, just like anything else in life its not for everyone and not everyone succeeds. Im now enrolled in his stock seminar and hope to be as successful in that.
That is so far-fetched. I bet you won’t be able to see this post, but I think that it is possible for what you are saying to be true if you have knowledge of real estate and some juicy, hot contacts. Congratulations if what you are saying is true, but 8 properties with no money? That’s impossible in my mind that you borrowed that capital, I doubt any bank would allow you to be that leveraged, and if you have investors then you aren’t taking the $20k home a month. Did you do some small scale, one-off job and made over $100k in that 6 months?
I have never seen any evidence that Kiyosaki’s made a cent by using his own teaching. My understanding is that he made his money when some Amway groups (closed market) began to promote his book to their brainwashed followers. I believe his Rich Dad seminars are a scam. The seminars are basically recruitment pitches for more costly seminars.
His advice sounds dangerous and at times, illegal. I believe he lied about his “rich dad” to keep his book as a non fiction piece of work.
On any rich dad seminar infomercials, those giving success testimonies have the label of “unique” experience. Hardly anyone makes any money following his advice. I would bet that more money is lost than gained by following the advice in the book. The popularity amongst Amway folks only confirms this even more in my opinion.
Well, I was once a huge fan of Rich dad but then facts started to appear… that his company went bankrupt, that the whole story described in his book was fictional, that his “get rich” courses are based on upselling more and more expensive seminars but won’t teach anything useful… list goes on and on.
The Rich dad book is definitely worth a shot, but for serious readers, I recommend following books:
http://www.amazon.com/dp/0984358102/
http://www.amazon.com/dp/1591845610
http://www.amazon.com/dp/B00KPH0KSU
I read rich dad poor dad and several other books in the series and I don’t have the three E’s ….education, experience, and excess cash. I would say I have a ton of education in the rich dad series and I did feel inspired by it. I was disaponted to find out rich dad simply never existed but maybe rich dad is needed to inspire. I would guess being that I don’t have experience or any excess cash that simply buying or better yet creating an asset that produces cash flow and reinvesting that money into other assets seems logical to me that doing that would probably make you rich…..honestly that idea sure beats the heck out of the “working for money idea” I much rather have “money work for me”. Even thought I know rich dad is fake I still want to make money work for me something that never entered my mind previous to the rich dad series. With that in mind I think the book has value. Also when I first heard the idea of create an asset I thought it was pretty much an impossible task that I could not think of a single idea that could be turned into an asset. I kept mentally practicing turn an idea into an asset and now I have several ideas that I think do have potential. (However I am not sure how to provide a foundation for the ideas) I also continue to challenge myself daily to come up with new ideas that could turn into assets. Without reading rich dad the thought of creating the ideas never would have entered my mind so rich dad book just might make me rich after all.
I watched a documentary on Netflix last week called the Zeitgeist Addendum. What a mess the global monetary system is. Its just a big Ponzi scheme. I have a sense that this type of system will not be around for many more generations. It benefits the few and leaves the majority of the world’s people in the lurch. What a nightmare.
“The aim of the book is to get all of us to think differently, to question the way we live,etc.”
Ha, ha, ha, not really, the aim of the book is to make him money, period. As with all of these self help type of scam artist, if he has truly made a fortune using his own advise (which appears to be doubtful) why would he be willing, or the least bit interested, in helping you, me, or anyone that he doesn’t know to do the same?
What what I’ve read briefly about this whole scam is that it is nothing but an up sale scam. First you buy the book, which has made him roughly $9 million, then you’re encouraged to attend his “Free” seminars. At the free seminars your encouraged to attend longer seminars that cost anywhere from $199 to $500. If you bite that apple, at the entry level paid seminars your encouraged to attend even longer seminars that cost thousands of dollars. Supposedly they even ask you to pay $32K for a personal mentor to teach you the ropes.
How’s that old saying go? There’s a sucker born every minute.
He is right about some things, but they are more common sense things, that anyone who bothers to think about, or look at, can easily see or realize for themselves. Our educational system has been turned into a profit generating system, (like our healthcare system), and doesn’t do much but teach people how to be worker bees, slaves. And if there is the least bit of concern about our country and the educational level of our citizens becoming lower and lower, why is our advanced educational system being priced out of more and more peoples ability? Shouldn’t a top priority of our country be that our citizens are as educated as possible? Not even! Capitalism and greed doesn’t work so well when everyone is equally educated and knows the ropes. Keep the masses as dumb as possible so they can be taken advantage of, so much for patriotism.
The stock markets? Anyone who has a functioning brain should be able to see what a crooked, corrupt, scam it is. And ever since the wonderful eighties, when the Wall Street beast was unleashed, our public has been at their mercy. Thanks to the elimination of protected retirement accounts of days gone by, now most peoples retirement funds are wrapped up in pathetic 401K accounts in the crooked stock market. If they can manage to privatize Social Security they’ll literally have all the marbles. Everyday there is story after story of this person or that person being charged with
this crime or that crime, insider trading, lying, cheating stealing, and that’s just the few stories that make the press. Bottom line, just like these self help guru’s, if a person is infatuated with money, they live and breath making money, and getting as much of it as they can, they more than likely could care less about you, other than getting as much of your money as they can.
The aim of the book is to get all of us to think differently, to question the way we live,etc.
I know this comment is a little late, but, what do you think about “paying yourself first”… I believe a passage in the book outlines rewarding yourself first, which creates a cycle of putting more pressure on yourself to come up with new ways to pay for all of your doodads.
My reaction to Robert’s book was not of enlightenment, or criticism – but I felt more of a confirmation that I’m not crazy for thinking differently from others. When one is surrounded by people who blindly subscribe to the rat-race, it can make one feel like an outsider. I found his book to be reassuring and encouraging. My only problem now is that I don’t know how to get from point A to point B.
The concept of “Pay yourself first” was first introduced, as far as I can tell, in The Richest Man in Babylon (TRMIB) by George Clason. Many financial gurus have taught this same principle, but Clason was the first to put it in writing. It is a life-changing concept.
Agree 100% the book is PERFECT for a person’s first read during their journey to financial freedom, independence, and education but it is FAR from the end all be all. I have taken issue with some of Robert Kiyosaki’s teachings for years and have found it difficult to explain to people how it is a great book but a horrible one at the same time. The best take away from the book for me was creating positive cash flow with your own finances in order to invest in other opportunities.
Agree entirely that the book has some good points. For me about half the book felt fairly useless since I didn’t intend to go into real estate (and he focuses on that heavily, not just on the one chapter but throughout the whole book), and I also am turned off by stories that are purported to be true but you’re not sure if they are (ie, as mentioned the whole ‘rich dad’ scenario). However, my philosophy in reading books is to take out as much as I can, read it with a grain of salt as is suggested, and let the rest go. The primary takeaways for me were the fact that you don’t need a university education to be a success, you need to think differently about money, and owning your own business is an excellent thing to do. All good!
I agree with the points in this article and many of the comments others have posted. I was raised by loving parents that unfortunately follow “poor” thinking – i.e. go to school to get a degree, then go to work for someone else, followed by going into debt for a house, car, etc., then work until you are too old to enjoy retirement. Rich Dad, Poor Dad gave me a different perspective on personal finance using a story to illustrate his points. Whether these stories were fiction or non-fiction does not matter to me, my main concern is the underlying message that the author is trying to get across.
This book ranks up there on my personal finance list, right next to the Richest Man in Babylon. Thanks for posting this as it made me revisit the ideas Robert put forth as the rich way of thinking!
A lot of people recommend the richest man in Babylon and I also read the book but I don’t think it tells you enough to be useful. It simply says save 10% of your income and find a way to invest into something that you feel is good. (See how short that is and that’s the whole book pretty much) I think with the huge massive gaping hole of what that investment is the book can easily not be of much value to most people so I would not recommend the book
it gives you fundation. It will not tell you instructions step by step. you need to use your brain and do the leg work brother. This 2 books do a great job in starting the process of changing your mindset in regards to money. Is up to the reader to embark in the journey
Totally agree with the article writers assessment of the book. As with everything in life one must look at the information presented and apply what works for them. The book is not a manual of actuals steps on how to make money, it is however an eye opener and a good start to “minding your own business”. The book does have some far fetched stories which I presume Robert thought would add credence to his theories. Shame he didn’t just say this is the story of My Rich dad, Poor Dad… However, sometimes I think people take what is written in these types of books as pure gospel, and forget that some of these ideas are just theories and one mans way of doing something. I think that as the writer says take some of what Robert K writes with a pinch of salt and only take the info that relates to, and can help you move forward in minding you own business…
There are a lot of negatives that have been written about the rich dad series of books and Kiyosaki – a lot of which is probably true. That being said, though, I still find the books inspirational.
These books are very inspirational and regardless what the cynics say about them, so many people have benefited directly and indirectly from reading them. Most of the stuff that this guy brings out; Old capitalism versus new capitalism, Financial intelligence and education and the importance of both, the possible pitfalls of the American social security system and medicare, Taxation system-who it favors and who it hurts the most, all the stuff about residential homes not being assets, the dollar and how it continues to decline in value and the rest all this stuff is absolutely true. We can argue about it but we still have to objectively look at what this guy is saying, regardless of whether he is saying is factual or otherwise.
I totally agree with everything you said 🙂
I think “Rich Dad” is a composite of all the financial books authors that Robert read, and even partially himself. In some ways, I think he’s saying his way was better than his dads (Poor Dad), so I wonder is in a small sense he’s writing that he was right and his dad was wrong? lol
You think? Where is your evidence?
The guy’s a liar about the nature of the book (ie. it’s pure fiction). In several places he advises readers to commit criminal acts (fraudulent contracts, insider trading etc.). He’s a complete accounting failure, not understanding even the basic terminology. His basic advice (buy real estate because it’s an “asset”) was the worst possible advice to give at the time the book came out. He’s now selling stock trading scams.
Kiyosaki’s a loser. The book is horrible. I will never see what good anyone could possibly see in him.
Hi,
You are aware his book came out in 1999/2000, way before the housing bubble. He also says to buy rental properties, not a big primary residence. That’s a big difference. Rental properties, even underwater should be still generating positive cash flow.
Fraudulent contracts – I assume his cat partner? If a contract is truly made that’s with a cat, it’s an invalid contract no question.
Insider trading – I took the excerpt from the book, since it appears you are referencing John T. Reed’s info. Let’s put it in full context as Reed does not.
How is what he’s describing illegal and in fact states NOT to do anything illegal. Reed kinda omits this part of it.
There is “inside” information that is legal to the eyes of the SEC.
There is also been discussion over the years to legalize some aspects of insider information.
The Wikipedia link discusses this in depth.
https://en.wikipedia.org/wiki/Insider_trading
Overall John T. Reed has a beef with Robert, and he obviously is trying to sell his own stuff. Basically saying Robert’s work stinks, buy my stuff instead. If the guy had nothing to sell that would help his credibility, but directly on this page he’s selling his own books…hmmm.
Regarding trading scams, can you elaborate on those details? I do know the local seminars are pure crap. Check out this video:
http://www.cbc.ca/player/play/1404600019
I’m only reviewing what’s in the book, and my experience as an entrepreneur – Does what’s discussed in the book apply and is it accurate? Anything else outside of the book is not relevant for the review. Meaning don’t throw out the baby with the bathwater.
I have no idea who John T. Reed is (although I’ve googled him since you mention him). But trading US equities on material inside information is illegal. There is essentially no way to do it legally. Advising people to do so is simply stupid. And while it is something the rich sometimes do, it’s not a smart thing to emulate.
Whether it OUGHT to be legal or not is a different question. Being a bond man myself, I think insider trading laws are stupid. But it is the law, and as Martha Stewart can tell you it’s a law worth following.
As to the stock seminar stuff, it’s just junk. It’s a field I have some knowledge and hard won experience in, and nothing he’s selling is going to make anyone any money. There’s just no simple push-button method for making outsized market returns with any consistency. In order to do that, you need real trading and/or analysis skills and real capital. The people being targeted by his seminars are poor – no capital. And it takes a minimum of a year’s immersion to teach trading skills. Not a weekend seminar.
W, the link I mentioned is about real estate. My question was about stock seminars. Robert is offering them? I’m not aware of any he is offering hence my question to you.
I’m a value investor so I think all technical trading systems are junk anyways. If Robert or anyone else offers one. The one who makes the money is the one selling the “system”.
Yes, he is now selling stock seminars – [rich dad stock].
For what it’s worth, there ARE technical systems that work. That said, anything worth trading is likely NOT for sale – they’re the property of private trading firms both big and small who have no intention of killing the goose laying golden eggs.
Ahh, typo: google [rich dad stock] to find them.
The performance of the Quantitative mutual fund and hedged quant funduant funds has been relatively poor over the past 3 years.
You might be right but remember every body has some where to start and no body is going to get rich or capital after attending one seminar. But if it inspires them to change their old mentalities about money and they general perception regarding making money then that might as well be a good start.
The tone and harshness of your criticism tells me you have a problem. Th enook is a simple motivational book with a story. It does not do the awful things you claim. As I remember it, heclearly and often tells the reader to get expert advice.
I really like how peopel who don’t know him can just claim te hstory is made up! How do you know?
You don’t.
I think the main criticisms of Robert are as you suggest, that a lot of the story was fictional and that he’s never even been in the military (or if he was, not in the role that he suggests he was).
However, shoot the message not the messenger. I think the message is still pretty inspirational, and it has had a big impact on me.
This type of attitude is infuriating. Try applying it to any other area of your life. Imagine hiring a personal trainer to train you only to find out that they have no background in personal training. How would you feel? Would you say “well hey at least I got back into the gym!”? No, you’d demand your money back.
Why are you ok paying a fraud to give you financial advice?
I have to agree with your assessment. The main thing I got out of the book is looking at assets as putting money in my pocket and liabilities as taking money away. That leads right into the concepts of cash flow, passive income, and financial freedom.