Tuesday, January 8, 2008

Book Review: Rich Dad, Poor Dad

Awhile back I decided to immerse myself in the world of personal finance, entrepreneurship, management, etc. Basically, I just read a bunch of books pertaining to each of these subjects to try to give myself a good overall idea of "best practices" that each of the authors would try to pass on to the readers.

One of the first books I read was Rich Dad, Poor Dad by Robert Kiyosaki and I have to tell you, I was pretty disappointed. This book had pretty nice reviews and has sold a bajillion copies so I figured I was in for a good book. I wasn't. This book tries to tell a general story that would persuade you to take control of your life and put yourself in a position to have constant cash flows coming in. Now I have no problem with this concept, except the fact that he almost seems to dismiss the fact that traditional savings and investment strategies can also allow you to take control of your life. For the majority of people, they will need to get rich slowly. Kiyosaki seems to almost push everyone towards investing in real estate or other "riskier" investments. For the average person, these are not smart investments. I hate to break it to you Robert, but not everyone has the knack to know where to invest in the real estate market or the knowledge and leadership skills to run their own business. However, everyone does have the ability to become rich by using simpler means. For most people, this means being disciplined over a long period of time and allowing the power of compounding to work in your favor.

While Kiyosaki is a great investor and obviously a very successful entrepreneur, I do not think his methods will work for the average person. Maybe, I am just a pansy that is too afraid to take the leap and run my own large Real Estate corporation but I am pretty sure I will be just fine in the long run if I sock away 15-20% of my check each week. To each his own I guess.


ChampDog said...

That's right and you got it. What he told in his book does not apply to anyone. He is teaching people how to become very rich. Becoming very rich of course you have to take greater risks. This book doesn't really apply to me, because I don't really want to become very rich. I just want to be financial freedom instead.

Derek said...

I completely agree with you. I couldn't have said it better. I would much rather have a 95% chance of becoming semi-rich by being disciplined and smart with my money rather than having a 10% chance of being super rich by taking big risks. That's just not my style.

Anonymous said...

The real problem is that he sells a system there is no proof he used himself. He got rich telling and selling a story about getting rich. It makes him a good salesman with a one trick pony, but it doesn't make him a savy investor. The book is decent motivation, but no real meat, just a lot of dangling carrots to get you to keep on buying his other books, seminars, tapes, etc. His Yahoo advice column is so full of bad math, scattershot advice, and contradictions that no matter what happens he can (and does) make the claim he predicted it. The folks I know who have made real money with real estate work very hard at it, take calculated risks, learn the business, and took a bit of serious time to build up to where they are. Just like the majority of people who become successful in anything.