Rich Dad Poor Dad

[Xmailer9]

I'm almost halfway in the book, and the thing that stands out for me is "Don't work for money, let money work for you"
I will never again revert back to a 8-5 (office) job. It's not worth it. The time you spend at work never justifies the money you are getting.

I've been working for myself now.

 

[Johnone]

Four or five of them yes.



Yes it is.



Are you kidding?


His books are successful because the advice he gives makes it sound like any semiliterate rube can jump into investment and make a packet out of it. He doesn't tell you how to distinguish one investment from another.


I could have written that in a fortune cookie. It is NOT solid financial advice.


He throws every soundbite of advice he's received in the apparent handful of seminars he's attended to acquire his body of knowledge into a book. You can't make anything stick to him because he contradicts himself elsewhere. Thus, he will tell you to study everything you can. On the next page he'll tell you how he bought a bunch of houses and doubled his profits overnight. The man is a con artist.

I couldn't care less about the man behind the book. What's your obsession with him anyways? The topic of this thread is his book not him. That means, all the personal stuff you write about him is irrelevant.

The book as I said is aimed at a laymen level. And I even said it is a must-read for those who know little to nothing about finance and even said school children should read it. Meaning: It is a basic book about finance. Shouldn't even be considered for undergrad level.

His book is also a motivational book. So yes, I am glad he encourages people to study finance and giving them the belief they can be financialy successful. If that annoys you enough to say, "the advice he gives makes it sound like any semiliterate rube can jump into investment and make a packet out of it", then so be it. But he qualifies what he say by saying the readers need to get financially literate.

So, yes he says study. He encourages people to get financially savvy. In one of his books he even says the greatest investment you can make is in your education.

So, once again I don't care about the guy. The book is also not perfect. But it serves a specific function and it does that function well.

Ps. In his book about investments, he does tell people the different kind of investors and the mediums they use to invest their money. Have you forgotten that? Or did you not read that book?

Incorrect. His book is successful because his marketing is successful. His book is successful because it is an entertaining read. Best sellers are based on books sold - not financial prowess readers gain post reading said book.

So, he's a successful businessman. Doesn't all successful businessman/companies market well? Isn't Coca-Cola successful cause they market successfully? Or MacDonalds?

But, your missing the point/purpose of the book: to inspire people to become financially literate and thereby financially free. Many people, including myself, have read his book and come away with a desire to know more about the financial world and how to not live like a poor man with a poor man's mentality (i.e. buy useless junk, he call liabilities).

In my analysis, the book fulfills it purpose. It sparks a fire within the financial soul of a man for a purpose to know more and desire more about finances. It is up to you to decide how brightly you want the fire to burn. But if you come away from the book thinking you are the next Warren Buffet and don't need further study, then you and you alone are the fool.

You probably missclicked the link Cerebus provided. Here are the highlights:

/snip

No, I haven't read the link. Nor do I care about the man. The book is what we are discussing.

 

[cerebus]

The books are not foundational financial literacy. The advice they give is fundamentally very bad. Look at the litany of examples above. He advocates tax avoidance and even boasts - probably inaccurately - that he's committed tax fraud and insider trading. Is that the kind of advice you want a child to read? He advises that university education is a waste of time. He advises buying and flipping houses and many times states that the law of house price appreciation is somehow immutable. It is BAD advice.

 

[noxibox]

If there's a lesson to be learned from this book it is to write some books and get people to buy them. That is how he made his money.

 

[unskinnybob]

But, your missing the point/purpose of the book: to inspire people to become financially literate and thereby financially free. Many people, including myself, have read his book and come away with a desire to know more about the financial world and how to not live like a poor man with a poor man's mentality (i.e. buy useless junk, he call liabilities).

In my analysis, the book fulfills it purpose. It sparks a fire within the financial soul of a man for a purpose to know more and desire more about finances. It is up to you to decide how brightly you want the fire to burn. But if you come away from the book thinking you are the next Warren Buffet and don't need further study, then you and you alone are the fool.



No, I haven't read the link. Nor do I care about the man. The book is what we are discussing.

You must live in an endless state of bliss.

The book is sold as a work of non-fiction, in that it claims to be based on the writers success - the success he tries to "educate" the reader about. The point that escapes you is that the book is in fact a work of fiction, a farce. Saying the book teaches valuable life skills is like saying "The big friendly giant" by Roald Dahl is a good role model for the professional business man.

 

[WPD]

Lots of critics here, lol.

I can't really comment on the man behind the book, or his integrity, but can say that I read the book just coming out of school and it changed my outlook on money completely.

Agreed, to people who already has an idea of how the financial world works the book probably seems stupid, but teaching a youngster about the importance of cashflow, passive income, etc is valuable beyond measure. Things that are not taught in school and in all probability only handed down from parents (where you are lucky enough to have financially literate parents).

 

[Ou grote]

meh. Kinda. Its very popular & even somewhat entertaining. But as far as financial advice goes its mediocre at best.

Basically the book says:

1. Financial literacy is crucial
2. Flipping real estate ftw
3. Pay yourself first. Then when there is not enough money to pay SARS & creditors it'll motivate you.

All of this is dressed up as a story from Kiyosaki's childhood.

He also redefines "assets" as something which produces an income stream. i.e. House & Car <> Asset. Buying assets which produce an income stream is a solid plan, but maybe don't repeat that definition of an asset to someone with a finance background.

The main thing I learned from the book is that the fastest way to become rich is to create something popular...doesn't whether the thing in question is good or not.

Pretty good summary.

There's lots of similar books out there.
I'd rather go for one of the books written by a South African about South African finance.

 

[WilD_CaT]

For the layman, an asset is essentially something that will generate you future profits.

According to that definition, a house may or may not be an asset. You may be able to buy a house and as long as the value of that house increases by more than inflation, simply, you have an asset as your wealth is slowly increasing. Guys in finance will do a simple NPV calc to determine if, based on expectations of interest/capital repayments and the future selling value, buying makes sense.
Actually, the real "trick" is not, knowing this or having the ability to do this calculation, but how accurate your forecast is. Remember we just had this big housing bubble in the states and all the "experts" said that you should buy not rent, this was because they expected future prices to be extremely high (buy low, sell high). They were wrong.

The simple reason why this is the case, is because ultimately, a house must be used by someone for something, to have a roof, or a getaway or for storage etc. If everyone starts just buying houses to speculate, then ultimately no one is buying a house to live in - I.E. the house has no fundemental value, in which case, the only reason why prices go up in the short-term is the first speculators fooled the other schmucks, but in the long term the last person holding the property will lose.

You cannot create wealth if all of us build a chair, and simply "swap" chairs every few months and put a bigger and bigger price tag.

The advantages of Rent is that you don't have the larger capital+interest payments and generally the maintenance levies etc. get tackled by the landlord, but you are a fool (Or you landlord made a dumb investment) if he is not recovering all his maintenance costs from you in the rent he charges.

So it really all depends and is not as simple as, don't buy, rent.

Personally I would advise people not to take on too much debt, and thus if you are going to buy, do it later on in life once you have more savings, the prices are right and you do your research (nice area, value for money etc.)

Rent while young, save and if it makes financial sense, then buy. If it doesn't, don't.

If you are really smart, you'll get a job that allows you to work a lot from home, thus you can spend min cash and buy a house in the sticks, and you can get a LOT for your money, rather than spending R1mil on a 1/2 bedroom tiny bachelor pad in Sandton, you can have a 3/4 bedroom house, with double garages and a pool in Benoni.

However a house in the sticks means travelling, which is stressful and expensive, if you can't work from home a lot, and travelling is probably the biggest thing that negatively affects people and puts them under stress and pressure.

Most people might not believe so, but some studies done suggest if you win the lotto, a year from now you'll be in the same frame of mind as you are now and not any happier, whilst halving your travel time halved will make you MUCH happier over the same time frame.

 

[WilD_CaT]

I think if investing is simple, everyone would do it and be able to increase wealth. It isn't, there is no one solution.

I think maybe to people without any financial understanding, just thinking that buying a house is the default thing to do is wrong and by reading this okes book you realise that perhaps you should question what you've been led to accept and its a bit of a lightbulb moment.

If so, cool, but don't read his book as if its gospel. Be a little bit more skeptical.

 

[HavocXphere]

There's lots of similar books out there.
I'd rather go for one of the books written by a South African about South African finance.

Come to think of it I can't really think of a single personal finance book where I thought - wow. Business books sure, but not personal finance.

Can any of you guys think of any? (SA/intl)

Only thing I can think of is George Clason's The Richest Man in Babylon. Its OK, but also very very basic.

Pretty good summary.

 

[undesign]

Robert Kiyosaki is a conman who passes off marketing fluff as financial advice. There is NO evidence that rich dad ever existed, which, given his specificity of description, should be easy to establish. He constantly boasts about having profited in ventures that on closer inspection never happened and would have been untenable - such as particular property investments. In fact the only business experience he can reasonably claim to have had is the surfwear company. He makes claims to fortunes of which there is NO evidence, then boasts about tax evasion on those assets which presumably is the reason nobody has any evidence of them. His advice is so nebulous as to be meaningless (let money work for you.... what does that even mean?).

For solid financial advice, I implore you to look elsewhere.

http://www.johntreed.com/Kiyosaki.html

Couldn't agree more. He could probably summarise his books in one page and save everybody the hassle of reading through all the bloated waffle.

 

[Ou grote]

Come to think of it I can't really think of a single personal finance book where I thought - wow. Business books sure, but not personal finance.

Can any of you guys think of any? (SA/intl)

Only thing I can think of is George Clason's The Richest Man in Babylon. Its OK, but also very very basic.

I have one called Manage your money live your dreams by Sunel Veldtman.


It's not "wow" or "get rich quick", but covers most of what Rich dad does, and explains South African RA's, property, taxes, UT's etc.

Was R50 at Reader's warehouse.

 

[czc]

He advises buying and flipping houses and many times states that the law of house price appreciation is somehow immutable. It is BAD advice.

Hey he is the reason I bought such a cheap flat I think. People before had bought a few for investment but couldn't keep up with the payments.

 

[ponder]

you should also read the richest man in babylon

Someone gave me that book as a xmas gift but I've had other books to read in the mean time but I will eventualy get to it.

For the layman, an asset is essentially something that will generate you future profits.

According to that definition, a house may or may not be an asset.

Scenarios vary but people should really think hard about property depending on what you do with it. There's a lot of things they don't think about or take into consideration.

 

[HavocXphere]

I have one called Manage your money live your dreams by Sunel Veldtman.

It's not "wow" or "get rich quick", but covers most of what Rich dad does, and explains South African RA's, property, taxes, UT's etc.

Was R50 at Reader's warehouse.

Nice I'll have a look.

 

[WilD_CaT]

Scenarios vary but people should really think hard about property depending on what you do with it. There's a lot of things they don't think about or take into consideration.

True, the "hidden" costs are normally things people don't take into consideration.