Rich Dad Poor Dad Thoughts?

[Samson Kay]

On a vacation to Whistler this past week I managed to read Rich Dad, Poor Dad (in between shredding the slopes) and thought that it was an interesting read. The concept of the rich buy assets versus buying liabilities made common sense even though I never thought to put it into words that way. And his discussion about always paying himself first.

How can he do that?! Is he saying that he always pays his salary first before all debt? And what kind of liabilities is he talking about? I mean people like nice things, but nice things arent generally good investments (i.e. boats, cars, diamonds).

What do you guys do? How do you incorporate the Rich Dad Poor Dad philosophy into your business?

[Anthony Armstrong]

I read Rich Dad, Poor Dad back in '06 when I was trying to get out of debt. That book combined with Dave Ramsey's Total Money Makeover, I came up with a great plan to reduce and eventually eliminate my credit card debt. At that time, I wasn't anywhere near thinking about REI, so the how-to comparison isn't fair to make. I agree with many of the other posts that say that it is about a mindset change.

The paying yourself first idea speaks to reserving 10% of your income for savings off of the top. The rest you budget all of the way out. If you happen to not use some of the money, you would just apply it to your savings again. That same premise is in The Richest Man in Babylon as well.

[Gerald K.]

Originally posted by @David C.:

Originally posted by @Gerald K.:

Originally posted by @Justin B.:
What you have to realize is that just by being on this forum, you probably have more "common sense" about money and business than most people. I remember when I read RDPD about 10-12 years ago, I had the same level of education as probably 95% of the population. The only thing I had ever been taught was go to school, get a job, and work until your 65 and then retire and hopefully you're not too old to enjoy it. All the adults in my life (parents, cousins, aunt/uncle's, grandparents, friend's parents, etc) ALL followed that path. I didn't have a "Rich Dad". so when I read RDPD it was a HUGE eye opener for me. It's written for people with the education I had. If I were to re-read it again, I would probably have the attitude of it being common sense and I wouldn't learn much from it at this stage, but the reason why it's recommended so much is because the way of thinking he puts forth in that book is different than everything most people have been taught. If you are already a business person or investing in real estate, RDPD probably won't have an impact on you, so don't downplay a book just because you know everything that's already in it.

Justin, I think you nailed it. It was written for the average Joe. It's not a sophistcated business book and I would not recommend it for someone already savvy with business or real estate. The average person would not even consider changing what they've basically been brainwashed to believe.

I'm most concerned for the average Joe who will use this book as an excuse to save nothing for retirement(401k is a scam), cheat on their taxes(he says everything is a business expense!), and quit school(advanced degrees are for losers).

I'm not afraid the experienced people here will fall for his nonsense, but they recommend it as a 'starting book' and its dangerous for the uneducated.

David C., I don't recall the book Rich Dad Poor Dad suggesting saving nothing for retirement, cheating on taxes, and quiting school, but since you mention it, please provide the exact quote and where they can be found in the book.

[Duncan Taylor]

Originally posted by @Gerald K.:
I don't recall the book Rich Dad Poor Dad suggesting saving nothing for retirement, cheating on taxes, and quiting school, but since you mention it, please provide the exact quote and where they can be found in the book.

Are you sure you read the book? You don't remember his discussion about 401ks? Or about college or about holding a job? You don't remember his discussions about writing off the cost of vacations and Rolex watches?

The one I REALLY love is his disdain for charitable giving. Which is a big part of the reason I do what I do, not to have but to cheerfully give.

[David C.]

@Gerald K. I'm guessing you have the book handy. Can you give me some quotes about his opinions on 401k plans? or the stock market?

How about some quotes about what he expenses to his corporations and why that's so great?

I'm sure you'll find a quote or two about 'education is important' but there is also quite a lot about it being a waste of time and money.

@Bryan L. didn't you learn from RK that the advice to 'go to school, get a good job and save for retirement' was a bad idea? you almost say that exactly above. Can you find me the quotes to support that?

@Bryan L. thinks its a great book for slamming retirement savings and college, but @Gerald K. insists that I find the page number to prove its in there.

I'm confused? @Gerald K. what do you think he says about these issues?

[Bryan L.]

Someone is putting words in my mouth now. I'm tired of this thread. I don't see how anyone can argue with someone who says that a book had a positive influence on them.

But one final thought. My most favorite part of the book is when RK talks about meeting (or talking with) some young writer who complains about how bad RK is as a writer (and I agree with that, he's a terrible writer). And RK responds with the line "would you rather be a world's best writer, or a best selling author?". Now, don't quote or mention me anymore on this thread. It's getting old.

[Duncan Taylor]

Originally posted by @Bryan L.:
...
My most favorite part of the book is when RK talks about meeting (or talking with) some young writer who complains about how bad RK is as a writer (and I agree with that, he's a terrible writer). And RK responds with the line "would you rather be a world's best writer, or a best selling author?".
...

That just about sums it up. His goal was to be a best selling author. Not accurate. Not factual. But, a best selling author. He is not alone in that goal...

http://www.thesmokinggun.com/documents/celebrity/million-little-lies

Like others, I am done with this thread.

I think I need a shower to get the 'Kiyosaki' off me.

[Gerald K.]

Originally posted by @Duncan Taylor:

Originally posted by @Gerald K.:
I don't recall the book Rich Dad Poor Dad suggesting saving nothing for retirement, cheating on taxes, and quiting school, but since you mention it, please provide the exact quote and where they can be found in the book.

Are you sure you read the book? You don't remember his discussion about 401ks? Or about college or about holding a job? You don't remember his discussions about writing off the cost of vacations and Rolex watches?

The one I REALLY love is his disdain for charitable giving. Which is a big part of the reason I do what I do, not to have but to cheerfully give.

Yes, and I don't recall that. Please provide the quotes and where they can be found in the book Rich Dad Poor Dad.

Three buckets are described in the book. Saving, investing, and giving. Did you read it?

[Gerald K.]

Originally posted by @David C.:
@Gerald K. I'm guessing you have the book handy. Can you give me some quotes about his opinions on 401k plans? or the stock market?

How about some quotes about what he expenses to his corporations and why that's so great?

I'm sure you'll find a quote or two about 'education is important' but there is also quite a lot about it being a waste of time and money.

@Bryan L. didn't you learn from RK that the advice to 'go to school, get a good job and save for retirement' was a bad idea? you almost say that exactly above. Can you find me the quotes to support that?

@Bryan L. thinks its a great book for slamming retirement savings and college, but @Gerald K. insists that I find the page number to prove its in there.

I'm confused? @Gerald K. what do you think he says about these issues?

David C., I don't recall any of the things you mentioned about not saving for retirement, cheating on taxes, or not going to college in the book Rich Dad Poor Dad. Those are pretty strong statements so that's why I asked for quotes from the book.

The book references his neighbor investiing in a 401k and retiring in his 50's with 4 million dollars. It actually promotes investing in assets, 401k or otherwise. I don't recall it saying not to go to school but that our school system lacks financial education and trains you to be an employee, not a business owner or investor. I think the point was instead of relying soley on your employer or your paycheck, buy income producing assets. It says most people focus on increasing their pay - getting a raise - versus increasing their assets. That doesn't mean don't go to college.

[Kenneth LaVoie]

Rich Dad books do serve a purpose I think: To get you excited about the core concepts. Sure, he's full of sh*t as to his own success, and his RE numbers never quite add up but his concepts and core advice is sound and motivational. So in that vein, his material has value. (Without enthusiasm and "chomping at the bit-ness we won't get far!)

The concept of paying yourself first is sound because of a variant of Murphy's law. If you pay all your obligations first and just have a rule to "put what's leftover" in savings...there is rarely anything left over. By putting 10% of your gross in savings right away, you force yourself to stretch, make things work with the remaining 90%.

[Bill Gulley]

Seems the "lessons" learned are elementary and with a little research one could have bought an Accounting 101 used text book for $5.00 and learned a heck of a lot more. (Current Assets, Earning Assets vs Current Liabilities and Depreciating Assets) So I guess the fantasy portion was rather expensive. And, most probably think having a concept is knowing, but they probably still don't know nor can they identify and apply related aspects.

Text books are so boring to read, unless you understand that the basic aspects of business are the foundation to any money making venture and then you can become very excited, so long as you can keep in mind the end result of learning.

It's tough trying to learn a profession through comic books. :)

BTW, there are over 500 posts or threads on this comic book. I'd think that would be enough.

[Will Barnard]

Holy Mary Mother of . . . This thread takes the saying of beating a dead horse to a whole new level!

Opinions are like rear ends, everybody has one and most are partial to there own. That said, I don't understand why everybody keeps arguing over who's opinion is correct or better. None are correct and none are wrong,just cutting to the chase here for those who don't realize that. If you got something positive out of the book, great. If you can't stand RK, great. If you think his books are crap, great. If you think his books are the best things that you ever read, great. If RK is a liar a cheat, or a fraud, who cares, it is not harming you so move on.

Just my simple thoughts and opinions. Have a great investment day everybody and read or don't read RK, it's all good either way!

[Jacob Sanders]

I actually just finished the book this afternoon, and I loved it! As some of the people have said, this isn't a "How-To" book at all. This book is all about the mindset of the rich and wealthy. He gives some examples of investment strategies in the book, but does not go into great detail regarding HOW to do them. But I am okay with that because it's not that kind of book. There are many great concepts to learn in this book and I think that they can be applied to many aspects of our lives, both professional and personal. 

For example:

His concept of paying yourself first is not new at all. People have been saying that for years. What he means by paying yourself first is just that: pay yourself first. What I have done is set up my direct deposit to put 15% of my paycheck into my "asset" account every two weeks. I am paying myself FIRST by doing that. Whatever I have left over (essentially whatever my paycheck actually IS) is what I have to work with (pay bills, groceries, etc).

It's a very powerful strategy and I think he hit the nail on the head. 

Take the book with a grain of salt, but keep an open mind as you discover some of the "nuggets" of wisdom sprinkled throughout the book. 

[Bhekizwe M.]

i'm forever grateful to people like Robert Kiyosaki through his Rich Dad books whether the characters were fictitious or not.A House is a liability unless it puts money in your pocket is one of the lessons.Another:Mind your own business(start now)

In the other books, the cashflow quadrant is a game changer.

[Tim Watts]

It is an easy read and does a good job at revealing that there are different views of money.  Similar to the book "Richest Man in Babylon"...  uses a narrative to talk about having your money work for you, thinking about how you use your money and time.  Thinking in terms of asset and liability.  All of these things were foreign to me unti I read the book.  It put a bug in my head.

He also spent time talking about stocks and starting businesses... I would not try to implement anything exactly from his book, but it was worth the read.  I checked it out from the library... I personally enjoyed the Richest Man in Babylon more when it comes to mindset of getting money working for you.

[Eric Thomson]

@Samson Kay I don't regret reading RDPD. That is where many successful real estate investors started. But I would never pay money to attend any of their events ("free" or otherwise). The book has some great things to offer. The idea of making your money work for you is definitely a golden nugget that should be taken from the book. There are several other nuggets in there as well. But I would not buy into everything it teaches. Paying yourself first is borderline (if not full on) irresponsible. His point is that desperation to pay your bills will lead to greater financial creativity. Let being financially independent be your motivator for greater financial creativity. I don't think you wasted your time reading the book, just approach anything anybody is trying to sell you with skepticism. 

[Patrick H.]

I read the book and took it to heart. he doesn't give a secret sauce on purpose it's meant to give you a different way of thinking. If I hadent of read the book I wouldn't have been able to quit my  job Friday and retired at 36.   The secret sauce is 4 green houses one red hotel. I've read almost all of the rich dad series of books and it has changed my life.

[Thiago Pagonha]

Hello guys :-)

I just started reading Rich Dad, Poor Dad and was completely blown away by what I read so far. It is a huge change of paradigm coming from someone that is stuck in the rat race and now is building his financial intelligence to become wealthy ;-)

With that being said, and as a beginner in investing, I have a very simple doubt about Real State. Let's say I need to move and will earn an inheritance of $300k. What is the best option for me to do with this money since I plan to move ?

1. Buy a house with the money so I won't need to pay any mortgage or rent.

2. Rent a house and invest this money so It'll eventually generate enough cash flow to pay for my rent.

3. Buy a house AND invest so the cash flow that could be generated by the investment would pay for the mortgage.

Which of these options are the most financially intelligent ? Or is there any other option ?

Thanks in advance :-) 

[Steven Foster Wilson]

Quote from @Samson Kay:

On a vacation to Whistler this past week I managed to read Rich Dad, Poor Dad (in between shredding the slopes) and thought that it was an interesting read. The concept of the rich buy assets versus buying liabilities made common sense even though I never thought to put it into words that way. And his discussion about always paying himself first.

How can he do that?! Is he saying that he always pays his salary first before all debt? And what kind of liabilities is he talking about? I mean people like nice things, but nice things arent generally good investments (i.e. boats, cars, diamonds).

What do you guys do? How do you incorporate the Rich Dad Poor Dad philosophy into your business?

 One thing my wife and I have choose not to do is pay off her student debt. We make the required payments but with our RE we have been able to and could still pay it off at anytime. But why? She has a 4% interest rate that has been on hold because of Covid on and off for the last few years. It builds her credit and we are able to buy so many more assets with that money. The opposite approach to Rich Dad Poor Dad is Dave Ramsey, we have choose to go the Robert Kiosaki way. 

[Wale Lawal]

@Samson Kay

Here are my key takeaways from Rich Dad, Poor Dad.

1. The rich buy assets, not liabilities
2. Financial literacy can only be learned through experience
3. Learn to sell
4. Fear and self-doubt are your greatest barriers to success
5. Always think in terms of opportunities
6. Most people work for money — rich people have money work for them
7. It's not how much money you make that matters — it's how much money you keep.

I try to apply above takeaways in my day to day business and I think I am getting pretty good results.

All the best!