Rich Dad, Poor Dad: What the rich teach their kids about money-That the poor and middle class do not! Is a wildly popular New York Times bestseller by Robert T. Kiyosaki with Sharon L. Lechter, C.P.A.
Although originally published in 1997, I did not read this book until recently. My sister sent it to me about two years ago as a gift. She loved it. I have mixed emotions.
For the most part, Rich Dad, Poor Dad is written by Robert Kiyosaki. Sharon Lechter organized and contributed to the material. So from here forward, they will collectively be known as “the author”.
The book starts with the author explaining Rich Dad and Poor Dad.
Rich Dad is the father of a friend of the author. He is an entrepreneur, and owns his own chain of stores in Hawaii.
Poor Dad is the author’s biological father. He has a stable, well paid job in Government.
At a relatively early age, the author and his friend ask “Rich Dad” for a job at one of his stores. Rich Dad agrees, but has conditions. Without getting too specific, Rich Dad grants the young boys requests, but agrees to pay them with very low wages. In addition to the minute pay scale, he would teach them lessons on becoming “rich”. The young boys agree, and go to work. After a few short weeks of working, the boys get frustrated. The boys had not even seen him at work to get their lessons. The author goes to speak to Rich Dad intending to ask for a raise. He waits patiently for an hour while people come and go at Rich Dad’s home office. Finally, when his turn comes, the author explains his frustration and tells Rich Dad that he believes that he is worth more and wants a raise. If he does not receive a wage increase, he will resign.
The author did not even see it coming, but Rich Dad had been teaching him. During the few short weeks that the author worked for him, Rich Dad illustrated how most people who work for someone else end up feeling. Overworked and unappreciated. He purposely let the boys work for pennies an hour to show them that working for someone else is not the path to prosperity. For many jobs, employees can be easily replaced. Working at the store is not a “specialized” skill, so he usually has no trouble replacing a worker who has left. His point: When working for someone else, you are only worth what the guy next to you is willing to accept. Often times, that is dirt cheap.
There are many stories about Rich Dad’s teachings when the author is a young boy. Some of the stories the author tells are pure gold. One in particular, had me laughing hysterically! It is about making money…in the most literal translation of the term, and would only be thought by a child.
The middle section of Rich Dad, Poor Dad presents itself more as a self-help book than a wealth building chronicle. There are still valuable lessons to be learned here, but much of this section is about getting past your own fears. Taking risk, as opposed to “playing it safe”, and learning outside the classroom. Financial intelligence is preached throughout Rich Dad, Poor Dad, but does not focus on things learned at school. Instead, the author focuses on investments that will gain more than modest returns, and how to research these types of investments.
Throughout Rich Dad, Poor Dad, it is apparent that much of this material is scattered and had to be put together by someone other than the author. There are some ideas that could have had more material injected, and there is some that seems cut short. At times, I was irked that there was not more detail regarding certain subjects.
There is also plenty of content that reminds me friends or family, and financial lessons I have learned from them. One thought specifically kept popping in my head:
My friend, Zach has an extraordinary entrepreneurial mind. He is very creative, especially when coming up with ideas to improve existing products or thinking “outside of the box”. Zach introduced me to one of the most creative ways I’ve ever encountered to earn money.
Zach used to go to foreclosure auctions. There were always plenty of “high roller” investors at these auctions buying land and homes. Zach was not interested in these. What he was looking for small bits of land attached to home plots that were occupied. These land plots, usually smaller than 1/2 acre, went for under $1000, sometimes as low as $100. Zach saw opportunities in these small plots of land. He would purchase them inexpensively, and visit owners of adjacent properties, offering the small land plot to expand their yard, or to provide room for an addition on their home. Most of the time, the homeowners were more than willing to fork over many times the amount of money that Zach paid for the land. They could have been smart and checked local records to see how much was paid for the land, but instead, they saw a deal, and paid up. It works out well for both parties. The homeowner expands his/her plot, and Zach makes a nice profit on his investment.
Zach’s story is what Rich Dad, Poor Dad is all about. Teaching yourself to use brain power to “create” money, as opposed to working for someone else and getting paid hourly. I completely realize that I did not get into much detail about the book itself, but after the halfway point, it loses all steam. The same ideas are regurgitated and put in different contexts until they are almost cliche.
For some, Rich Dad, Poor Dad will be a welcomed addition to their library. A place to go for inspiration when losing hope financially. For me, it is bland. I have all the motivation I need, therefore, this book is not for me. I can’t say the same will not be true for you.