Book Review: Rich Dad, Poor Dad
Rich Dad, Poor Dad was released back in 1997 by famous author, Robert Kiyosaki. Kiyosaki is a longstanding influencer in the personal finance space. As his website RichDad.com states, “With perspectives on money and investing that often contradict conventional wisdom, Robert earned an international reputation for straight talk, irreverence, and courage and has become a passionate and outspoken advocate for financial education.” He has several more recent books- but today we’re going to pull out a few highlights from his 90’s classic.
More than 20 years later, the themes and ideas of this timeless writing are still just as pressing and relevant. The premise of the book is a comparison between two men in Robert’s life that influenced the way he viewed personal finance. His biological dad is referred to as his “poor dad,” and his best friend’s dad is referred to as his “rich dad.”
These two relationships proved to be very influential and thought-provoking for Robert as he ironed out his own opinions on money and personal finance. Throughout the book, he compares and contrasts their views of money, work, and finance.
One of the essential points of Rich Dad, Poor Dad is the importance of financial literacy. Generally speaking, there is a lack of financial education taught in our school system. You may learn how to write a check and you’ll use a calculator, but you won’t learn how to save, budget, invest, or earn money. It is up to us, as individuals, to take ownership of our financial literacy. We don’t work because we love sitting at a desk 8 hours each day- we ultimately work to collect a paycheck. If we don’t know what to do with that paycheck or how to make it stretch to cover our basic needs, it’s all for not. We need to know what to do with our money when we get it- and that’s a major point Kiyosaki drives home through this book.
The second point ties in one of Kiyosaki’s many famous quotes: “The poor and middle class work for money. The rich have money work for them.” He goes on to talk about assets and liabilities. Assets produce money and increase in value (think investments or retirement accounts), whereas liabilities lose money and decrease in value (think fancy cars, clothes). Liabilities may provide temporary fulfillment but can be detrimental to our financial future. Kiyosaki emphasizes the importance of focusing our efforts on assets rather than liabilities.
To conclude, here are some other commonly quoted statements from Kiyosaki’s work:
“Winners are not afraid of losing. But losers are. Failure is part of the process of success. People who avoid failure also avoid success.”
“You’re only poor if you give up. The most important thing is that you did something. Most people only talk and dream of getting rich. You’ve done something.”
“The single most powerful asset we all have is our mind. If it is trained well, it can create enormous wealth in what seems to be an instant.”
“Workers work hard enough to not be fired, and owners pay just enough so that workers won’t quit.”
“I am concerned that too many people are focused too much on money and not on their greatest wealth, which is their education. If people are prepared to be flexible, keep an open mind and learn, they will grow richer and richer through the changes. If they think money will solve the problems, I am afraid those people will have a rough ride. Intelligence solves problems and produces money. Money without financial intelligence is money soon gone.”
“There is a difference between being poor and being broke. Broke is temporary. Poor is eternal.”
“Most people fail to realize that in life, it’s not how much money you make, it’s how much money you keep.”
As one of the first personal finance books I read, I would definitely recommend it for beginners. This is a classic when it comes to personal finance that will continue to be relevant for years to come.
Mike Kern, CPA