Home > Media > Books > Robert T. Kiyosaki and Sharon L. Lechter - Rich Dad, Poor Dad: What the Rich Teach Their Kids About Money That the Poor and Middle Class Do Not
Robert T. Kiyosaki and Sharon L. Lechter - Rich Dad, Poor Dad: What the Rich Teach Their Kids About Money That the Poor and Middle Class Do Not
Pros: Lots of good information for people who just starting out.
Cons: A little difficult to apply some of the principles once you are already established.
The Bottom Line: This is an interesting book, and the information in side of it makes complete sense. It will get you thinking in a completely different way.
msmorvay's Full Review: Robert T. Kiyosaki and Sharon L. Lechter - Rich Da...
In my never ending search for life time financial security and hopes for early retirement for my husband I have read tons of financial books over the past couple of years. There were two books that came highly recommended to my husband and my self by a couple of financially successful friends of ours. One was the. Millionaire Next Door, and the other was of course this one, Rich Dad Poor Dad, What The Rich Teach Their Kids About Money That The Poor and Middle Class Do Not.
My husband and I both read the Millionaire Next Door, and after that I read Rich Dad Poor Dad. I started reading it shortly after the Millionaire Next Door, but I actually read the book in bits and pieces over a couple of months. Not that it isn’t interesting enough to read all at once it is just that being a Mom of two young ones, and trying to run my own home business keeps me pretty busy.
The beginning of the book pretty much describes Robert Kiyosaki growing up years. He considers himself to have had two Dads. One was of course his natural Dad the one who raised him and the other was the father of his best friend, who was a local successful, and wealthy businessman. Kiyosaki says that while his real father was a very intelligent hard working man, he found that he did not make the most wise decisions when it came to money. Basically he says his real Dad who he calls his “Poor Dad” worked for money. Over the years Kiyosaki grew to have a lot of respect for his best friends father who he calls his “Rich Dad”. “Rich Dad” was way ahead of the financial game because instead of working for money, he had money working for him. This is not to say that his “Rich Dad” did not work, he did but he also had a lot of things going on in the back ground that were earning him money as well. While his “Poor Dad” had a PHD and also an additional substantial amount of education. “Rich Dad” never finished the 8th grade, and yet when he passed away he left 10’s of millions of behind. When Kiyosoki’s real highly educated father passed away he left nothing behind, except for some bills.
How can two highly successful men leave the world in such different places on the financial spectrum? The answer: financial intelligence, and as I mentioned before having the ability to make your money work for you. He also makes it abundantly clear that in the corporate world that when everything is stacked up it is the working man and woman, the company employees that lose out. Basically if you are only depending on income from a job you are putting yourself at financial risk, because that job may not be there tomorrow. This seems to ring true from what I can see. All around me friends and family are being laid off.
Even my own husband who just a couple of years ago was extremely marketable due to his career went through a couple months of un-employment. Not because he is no longer marketable but because there is a lot less of a market, and this happened almost suddenly. In case you are wondering he is in the tech field. He was able to get a job before he was out of work for the entire 2 months and he was given 2 weeks severance. So we were only out of 5 weeks of pay. With un-employment and my pitiful earnings, (I make about $200 a month on average with my little business), and by tightening up on our spending we were able to get through it by only touching $200 from our savings. We were lucky this time, but we are concerned that his new company may soon be having lay offs as well.
All of this has made convinced me that what Kiyoski says in this book is true. As long as my we have to keep depending on a company to sustain our life style we are always going to be at constant risk of losing everything we have. This thought is pretty scary, as I am sure most of you can relate. With our economy in such a tail spin right now I am afraid that things will only get worse before they get better and many more hard working people are going to lose their jobs. So I believe now more than ever that we need to find a way to make our money work for us instead of the other way around. Unfortunately even investments are hitting the pooper these days.
How did Kiyoski do it? Mostly real estate, and mostly with a whole lot more guts than I think that I can muster. If you want to learn more about some of his accomplishments then read the book, he has a lot of interesting little stories to tell about lucky or ingenious transactions, and all of this is quite interesting. And even if you come away from the book not learning anything that will directly help you it is interesting to read his story.
In this book Kiyoski shares his personal rules for financial success, and most of them can be applied by anyone. He also states that you should not be ruled by your processions. He says that what most people call investments such as their homes he considers them to be expenses. He is not saying you shouldn’t have these things but that we should have our money working for us in such a way that these things are paid for by our working money, and not as monthly expenses to us. As an example he did not purchase his first big fancy sports car until after his money had earned him enough to pay for that car in full. In other words don’t live your life being in debt to others. In other words, and I quote,
“Don’t get into large debt positions that you may have to pay for. Keep your expenses
low. Build your assets first. Then, buy the big house or nice car. Being stuck in the
rat race is not intelligent.”
Like most financial publications written recently Kiyoski says that you should pay your self first, because those who pay everyone else first often find that there is nothing left. He also talks a lot about being wise enough to use your money in such a way that you are not giving it all away to the government. He firmly says to never ever and cheat the government and definitely pay what you owe, but he says “the wealthy” know how to pay less than the rest of us. He does not provide a lot of information on this in the book so if you want to learn the more about tax strategies you will have to get another one of his books about tax tricks of the wealthy. Which is the next book on my reading list.
In the book Kiyoski also talks about income saying that there are essentially three types:
1. Earned Income
2. Passive Income
3. Portfolio Income
He explains all of this more in the book.
How Has It Helped Me
Is this book the answer to all of my financial prayers? No, indeed it is not. As I mentioned earlier a lot of what Kiyoski did to make his money was risky or at least took a lot of guts. Guts that I just don’t have. I am certain that I could have really benefited from this book had I read it back in college, but of course a lot of the lessons I am a day late and a dollar short to use now. I am certainly not going to sell my house now because I read this book. But if I had read this book in college or when my husband and I first got married my husband and I may have handled things differently, and perhaps may have started our financial planning when we first got engaged and were still going to school. We were engaged for 4 years by the way. If we had been thinking during that 4 years about our financial future the way Kiyoski recommends we would have been way ahead of the game. Instead we though we would graduate, get jobs, get married, and buy a home and cars and what ever. We thought we had a pretty good plan, but while we were both still living with our parents long before we said I do we should have been putting what little money we had extra to work for us, and maybe when we got married we would have had a large amount of the money needed to buy a home, and therefore would have had less expenses, and had more money to put into our portfolio and into passive income investments.
If you know someone who is in college or who is graduating soon and you would like to give them a gift that may very well change their future for the better this could be the best present you can give them. Even if you know someone who is graduating from High School you may want to get them a copy of this book. Of course they probably will put it in storage for a couple of years but eventually they will pick it up, probably around the time that financial independents becomes a bit more of a reality.
Not to say that there is not some good information in this book for us people who are already on that wonderful roller coaster of personal finance. There is some great information for us too, but I just think that this book could be way more beneficial to those who have a clean slate to start with.
This book won’t change my life dramatically but it has definitely got me thinking in a different way, and my husband and myself are making moves in a more positive financial direction, and we will be applying some of the rules that were outlined in this book.
The Barnes & Noble Review The advice that dads traditionally give is so commonplace, it seems almost clichéd Go to school and do well. Save your mone...More at Barnes & Noble.com
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