Guru, Book, & Course Reviews
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback
Updated over 2 years ago, 07/08/2022
Rich Dad Poor Dad Thoughts?
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?
Well put. I'd forgotten about his comment about writing off a Rolex.
As I said before, Kiyosaki has absolutely NO CLUE what we teach our kids.
I have no problem agreeing to disagree. I know having one's 'hero' talked about as a charlatan, which he is, can be upsetting.
For what it is worth, I too would like to know what others learned from RDPD they didn't already know.
As @David C. mentioned above, "The Millionaire Next Door" is a great read for anyone wanting to learn how to create real wealth and to learn what we actually teach our kids and grandkids.
The only problem is unlike RDPD, The Millionaire Next Door doesn't try to convince you there is some super secret knowledge being kept from you. Since most people want to be wealthy but aren't willing to do the work required, it doesn't spark their imagination like the RK works of fiction. Yes, I know there are exceptions. Yes I know some people have read his book and still been successful. I read his book. That is how I know he is full of bovine excrement in what he claims people like me teach our kids.
Creating wealth is all common sense, the mechanics are surprisingly simple. It's the discipline needed to actually do it some people lack.
WOW,
There sure is some heat on this Kiyosaki topic.
I thought I would post a video to spice things up a bit more haha
http://www.youtube.com/watch?v=HE6nT0oyPt8
Thanks and have a great day.
- Engelo Rumora
- Podcast Guest on Show #89
OK, here's the hill-billy again. BS and Masters degrees in Mechanical Engineering, both from state schools in the rural South. In case you don't know, engineering degrees don't allow much room for electives. Math is the minor by default. Never had a business class, accounting class, marketing, or anything along those lines other than one course in Engineering Economics where I learned about the time value of money and how to economically justify capital projects in a factory or how to compare one project to another.
Now I'm just appalled that y'all are out there rehabbing houses with absolutely no knowledge of structures (sorry, had to throw in that bit of sarcasm).
Back to being serious now, I understood the basics about money out of high school, and learned much more by reading Dave Ramsey (even though I think some of his advice is also bad, and I obviously don't follow it all).
Here's what I learned from R.K. I learned that I had other options in life for a career other than working at a j.o.b. Here's a little history about this Southern hick. I come from a long line of hard-working people who were far from rich, so no, they didn't teach me what the rich teach their kids, what R.K. teaches his kids, or what Duncan teaches his kids. Hell, www.duncansaid.com has only been around for a few days, and my parents haven't seen it yet. My grandfather was an illiterate share-cropper in Mississippi, so he never read R.K., duncansaid.com, Millionaire, or anything else obviously. My father learned a skill in the Army, but his best advice to me when I was young was to "go off to state college and get that engineering degree so you can get a good j.o.b.". He didn't even know to insert the periods. Anyway, the economy has changed so much since then. At the time he was giving that advice, it was pretty good advice. But not now. And, unfortunately, our state colleges also prepare students for "high paying j.o.bs like engineering". For a time I sat on the advisory board for the Mechanical Engineering department for one of those schools. And it really burned me up that there was no thought about teaching our students about entrepreneurship, business, etc. But again, if you haven't studied engineering you don't know, but there are NO electives in the program other than your technical electives. Do I concentrate in solid mechanics, thermal/fluids, manufacturing and materials, aerodynamics, etc? A wee bit of humanities thrown in, but there's no such thing as "free electives" in a typical engineering program. Anyway, there it is. The main thing that I learned from R.K. was that I had options in life.
And someone referred to how R.K. "uses anecdotal stories that were modified to make a point". I think that's what we call a parable, and people have been learning from parables for at least 2014 years.
One final thought. It seems odd, but I like fried green tomatoes, but not ripe red tomatoes. Now, how can someone tell me that I am wrong in this? Similarly, how can someone tell me that I didn't learn anything of value from a book that I read.
I understand and I should have acknowledged early on some people have been motivated by RDPD to take action. That is a good thing.
But, if you run your life the way he advises in that book, you run the risk of jail (insider trading), having to live off your kids (401Ks are for suckers) having to live hand to mouth (j.o.b.s are for losers) and ending up bankrupt (If you are going to fail, fail big).
So, it if motivates someone, GREAT!
By the way, I've never had a j.o.b. because I have always loved what I did. The old saying is very true, if you love what you do, you never 'work' a day in your life.
I'm having a hard time following you on the tomatoes, fried green or ripe, but that might be because I can't stand the things. I'm sure Freud would read something into that from my childhood. :-)
I guess if I had to pick one 'secret' every successful person I personally know shares, it would be passion. Without, you will stick it out when things get rough.
@Bryan L. said:
"My father learned a skill in the Army, but his best advice to me when I was young was to "go off to state college and get that engineering degree so you can get a good j.o.b.". He didn't even know to insert the periods. Anyway, the economy has changed so much since then. At the time he was giving that advice, it was pretty good advice. But not now. And, unfortunately, our state colleges also prepare students for "high paying j.o.bs like engineering"."
You see - my problem is - I still believe that's great advice. I don't think engineering students should be taught entrepreneurship - I think the idea you can teach it is a bunch of bunk. I think a high paying job like engineering is the 'most likely path to wealth for most people'. Now - its still not very likely - because most people enjoy doodads and don't pursue wealth. But - I still think, for most people, a college education and a 401k are the most likely ways for them to have a good solid life. It gives them the option of investing, even quitting for a while in their 30's to chase their dream of being a landlord, but if they have a strong marketable skill - they will be operating from a position of power.
The economy has NOT changed that much - if you look at the data, the unemployment rate during the great recession was rarely over 5% for the college educated, while it was well over 10% for those without college.
@Duncan Taylor - I've had jobs I didn't like. I took pride in doing them well. Following your passion is bad advice for most people, as their passion will be art, or music or some such nonsense with very low probability of ever having any kind of financial security. Passion is best relegated to your hobbies if its not a lucrative passion.
As for the tomatoes, like whichever ones you like, but if you start saying one of the best books ever written said you should eat them green and covered in arsenic and anyone who eats a red-one is a stupid sheep, I'm going to call you on it and beg you to not recommend that book.
Originally posted by @David C.:
@Duncan Taylor - I've had jobs I didn't like. I took pride in doing them well. Following your passion is bad advice for most people, as their passion will be art, or music or some such nonsense with very low probability of ever having any kind of financial security. Passion is best relegated to your hobbies if its not a lucrative passion. As for the tomatoes, like whichever ones you like, but if you start saying one of the best books ever written said you should eat them green and covered in arsenic and anyone who eats a red-one is a stupid sheep, I'm going to call you on it and beg you to not recommend that book.
ROFLMAO! I wish I could vote twice for that one. I will have to make a note to visit tomorrow and vote for that one. I've already voted for you twice today.
That is stupid 'feature' in my opinion, not that it matters.
As to the passion, I was not clear, it's not that you should follow your passion no matter what, but you need to have passion about what you do. You exhibited that when you said you took pride in doing jobs well even if you didn't like them. We've all been there, done that and got the tee shirt.
Although, I will tell you my long term life goal includes a passion item I don't share in public. It is not one that would make me money, on the contrary. But, it has been a motivator over the years to stay focused on the steps that have brought me within 2-3 years of achieving.
@Ali Boone be careful using wealth as a litmus test for the people who you listen to. Bernie Madoff would have passed that test. And many great thinkers of our time would not.
Ever watch American Greed? lots of those folks look pretty successful and have lots of money, maybe even lots of houses, until they don't.
I have lived almost exactly the life that RK says does not work: I went to college, got a degree, got a good job, and invested the extra in stocks and mutual funds. By being good at my job, I was able to quit and go working for myself, but this never involved any leverage(no OPM), or any tax fraud, I'm still 'trading hours for dollars' which I think he frowns upon. It has worked out splendidly and I'm no stock market genius.
During the housing collapse, I saw 400,000 disappear across my different accounts. It all came back, plus more, more, more, more.
I'm going to teach my kids to do the same: get a good education and solid skills, be willing to work hard and treat people right. Appreciate that many people live on way less than you earn, you can live a decent life and still save a LOT, and that savings adds up, and provides freedom from worry.
I think you are awesome @Ali Boone - you have a great strategy going and I have only the utmost respect for you. I really wish you did not advocate for RK. Its hard to me to reconcile hot much I loathe him and how many of the respected posters here give him credit.
I don't see stock investing and RE investing as two things that must battle for supremacy. They are different. RE has some risk that a diversified stock portfolio does not have, but it also has much greater opportunities for leverage, it provides the opportunity to earn the PM fees by self-managing, it has the tax advantages. I think there's a place for both.
Many people do poorly in stocks, because they buy high and sell low. Many people were ruined by their RE investments when the housing collapse happened. This does not make one better than the other.
Originally posted by @David C.:
@Max P. His takeaway was:
Spend your money wisely. If you get a paycheck, don't spend it all on wants, save some and invest.
Really? nobody ever told you that? This is a 'great book' and a 'top recommendation' because it provides that gem of absolutely basic common sense? Did you not have parents? I think I learned that from winnie the pooh. My 9 year old knows this - he was told to learn it from cub scouts and I taught him that. I did not taught him to hate work, or to expense rolexes like RK says I would be teaching my kids.
I'm sorry - it infuriates me that this pathalogical liar is held up as 'helpful' and given credit by so many of you, and you continue to spread his thought cancer by recommending his books.
I don't know who you are, but that's uncalled for. You don't know where someone is coming from, what their background is.
I didn't grow up in this country. I moved here after high school, so I don't know what cub scouts teaches, but it sounds like you have a smart 9 year old and you should be proud of him.
All I have known since I moved to US is to work hard and things will happen.
This is a public forum and people will have their opinions. You don't have to agree with anyone's opinion, but there's a way to handle yourself in public forums. I hope this is not how you handle yourself in public.
There could be a private lender reading your post and can get completely turned off.
As for RDPD book, it's not a novel idea, but who cares how many people get influenced by that book. As long as people weed out the bad stuff and learn something of value from the good stuff in the book, that's all that matters.
You never know what triggers an individual. Everyone is unique in their own way. Everyone gets motivated by different things. For all I care, people could read 50 Shades of Grey, get motivated and become filthy rich.
@David C. - What has changed in this economy is that employers no longer value highly skilled and trained workers. Even engineers are thought of as a liability, not an asset (we come full circle). I've been laid off 3 times in my career despite being highly educated and working quite hard. And it sucks when you get laid off. It sucks financially and it sucks mentally and emotionally. So I choose not to play their game any longer.
Following the Dave Ramsey advice is a sure-fire method to success - if you define success as being slightly above average. Sure, it's better than being below average, but I for one am sick and damn tired of sitting in a friggin cubicle working my *** off for someone else who will lay me off when the quarterly reports dip, chunking money into a 401(k) that earns a paltry 13% per year on average. I've not yet been able to be fully 100% self-employed for the long-term, but, the good times that I've had being self-employed were some of the best times of my life. And I've learned from both, Dave Ramsey and R.K.
@Bryan L. is 100% right on this. As the CEO of my company, my allegiance is to the stockholders first, last and everywhere in between.
Say what you will about that, but it is a simple fact of life.
That doesn't mean we can't create a great workplace where people want to be, but that is a means to an end. Whether to add new employees or layoff current ones is not a simple metric of sales are up or sales are down. It is all about the bottom line return to the shareholders.
I'm shocked you are only getting a 13% return per year, is that including the employer match?
As for Dave Ramsey he is very good at one thing. Showing people who have completely screwed up their financial life how to start the process of turning it around. He is not one who will help you make a gazillion dollars. But, if you follow his advice you will have a comfortable retirement and your kids will likely be able to build upon that foundation.
@Account Closed
I'm sorry for calling you out directly, it was rude, there was a point I wanted to make, that the 'good advice' culled from the book is often very generic - there are many books by authors who do not advocate cheating on taxes, who do not disdain education and hard work, etc... Those books could also have taught that lesson, but the one that keeps getting recommended number one is this horrible book.
I am proud of my son, and I appreciate that I was very lucky that my Dad taught me to be frugal and work hard, and save the difference. When I read RDPD, I feel like he would laugh at my Dad and his hard work - and I'm proud of my Dad - he came to this country with nothing, and worked a crappy job in a supermarket for his whole career and saved what he could. RK would call him a loser and a joke. He came from nothing and got his kids into a very good school district, and now his widow(my mom) has social security, his pension, a paid off house, and significant savings to draw on. He did great things and never made over 45,000/year. Hard working people who find a way to save the difference are great examples for our children.
I did not come from money or anything fancy, both of my parents were immigrants with high school education - they arrived here under 20 and with the clothes on their back. They knew what poor was, and they knew that being educated and in the US put you into the top spot in our world no matter what your net worth is.
As for hard money, the only side of that I'll ever be on is the lending side. I don't need to worry about who I offend - I have my f.u. money.
As some of my other ramblings say: the reality is the book gets a lot of people moving. Some of those people are successful. I'd bet many more are not, and are hurt greatly by this book.
Without getting into the RDPD issue, I did want to address the paltry 13% average annual return.
Invest $10k a year that earns 13% over a 40 year career, produces a total of $11,454,811.89.
@Bryan L. if you got laid off 3 times, you also found jobs 3 times, right? people without that engineering degree are not so lucky. You followed good advice when you got the degree.
As for the 401k only getting you to only 'above average' I beg to differ, all you have to do is be a bulldog. Max out the contributions, every year, up market and down market. Forget matching, reduce your taxes today, and get the money away from your grubby hands so you can't buy doodads. In 20 years, you'll be WAY ABOVE AVERAGE because most people think small and chase shiny baubles. For many people they think that 'maxxing out' means - "contribute enough to get the full employer match" - no, the max is the MAX.
I will admit, I'm self-employed for mainly the reason you cite, that companies don't invest in their employees or seem to value them, and I'm also self employed because of the amazing amounts you can pile into a solo-401k. Mainly I'm self employed because the consultants get the cool new projects while the employees are stuck keeping the old junk running. Also, the consultants make almost 3 times as much money in my line of work.
The 13% number is the number that Ramsey quotes as the "long term average" of the stock market. I think that everyone whose contributed on this thread can make better returns than that on their own in real estate. That's why we are here. And who wants to chunk money into a 401k for 40 years so that you can be a millionaire upon retirement only to find out that you're old and your health is bad due to the stress of that j.o.b. I want to live life now, not 40 years from now.
@Bryan L. I'm not here to beat the stock market.
I'm here to read horror stories of landlording to keep myself from becoming one because it sounds so cool.
I'm here to learn important rules like the 2% rule, the 50% rule.
I'm here to live vicariously through and learn from J Scott and Will Barnard.
I'm here to make contacts with Ali Boone and Chris Clothier.
I'm here to watch threads that slam the gurus and warn people away from them.
I'm here to learn something new each time Joel Owens posts.
I'm here to watch Steven Hamilton put the smack down on bad tax advice.
I'm here to see how long before Duncan Taylor gets banned or his head explodes.
As for only having the money when you are old, once you have slammed in the money for 10 years, you will be in a pretty good place, and the stress will melt away. Bosses really lose their teeth once you have your f.u. money. And you don't have to wait 40 years for 11 million to have your f.u. money. If you have your engineering degree and some work experience, and a few hundred grand in your 401k, you'll be stress free by 40.
I feel like it seems like I'm advocating against RE investing, that's not how I feel. I feel that RK's tax-cheating, education disdain, stock market misrepresenting, book, is a bad bad book. That's all. I think real estate is awesome, and if people have the drive like you @Bryan L. - people can do great things with RE.
If you enjoyed engineering and didn't have sucky bosses, and you put that same energy and passion into that and saved the absolute max in your 401k, you'd have gone very far and not had to worry about money for long.
@David C. I don't think you were directing your post to me, but I do want to respond. I have been a self employed business owner for more than 20 years. I did so prior to ever reading any RK book. I could not agree more that his books are very, very elementary and often times, he repeats the same thing over and over (perhaps to fill up pages in his book, I don't know). For me personally, I certainly did NOT first think to operate from the right side of the quadrant after reading his books. Even if I had, it was my personality traits that have got me where I am today (assertiveness, aggressiveness, dependability, self motivated, and determined). These and many others are traits required for success in business. My point to this and any recommendation I ever give to read the book is not to first discover these hidden secrets, they are not secrets at all, but common sense, but for many, it is a thought process and path that can often be forgotten or overlooked,mor perhaps simply known but not applied. Reading the books, in my opinion, refreshes that thinking.
Now, I don't remember parts where he suggested cheating on taxes or any other bad advice, perhaps I too simply skip or ignore such poor advice, but let's be real, who on this board can say they have NEVER taken a tax deduction for something that was not 100% legit business deduction!
Are the RK books very basic, filled with common sense, and perhaps with some poor advice? Sure, but I personally take from the good and suggest others do the same.
great post above David,, I am here for much the same things.
I don't recall RK advice that 401k accounts are for suckers, if he really did state something to that nature, I will premise all my suggestions to read his book with a disclaimer to IGNORE the horrific 401k advice. Nothing could be better than utilizing a tax advantaged account to grow your wealth, reduce taxes, save for retirement, and offer all the bells and whistles a 401k gives. Now, the W-2 employee with the 401k has much less advantages as opposed to the self employed solo 401k owner by far!
I owe my start to that book. Since then I've read about 100 other business, financial, real estate, etc books from all kinds of differing authors (probably 30 or more in all) and talked with others, read blogs, websites, and joined BP. There should never be a single book (or resource) that one follows. I don't think there is a single book that I haven't disagreed with some advice somewhere in it. This includes RDPD.
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. I've run across books that after I read them, I said well that was a waste of time. Not because it was bad but because I've read 20 other books like it and I learned nothing new. but that doesn't make it a bad book. I know some of his advice in there is questionable, but the overall message is still valuable. Again, I've taken everything I've learned from RDPD plus everything else I've read and combined it to figure out what is good advice vs bad advice for me.
Now here's the kicker. Without the people who go to school, get a good job, work until their 65, and then retire, the businesses that we all know and love couldn't exist. If 50% of the world were "entrepreneurs", then the whole system would fall apart. The world can only have so many "Rich Dad's". All the rest of the people need to be the "rat race" people so the system works. I need someone to eventually do all the jobs I don't want to. I need a lawyer, an accountant, a contractor, etc etc. So even though the book is written for "everyone" very few will actually do it like I did. In about 5-10 years, I should be at a place where if I wanted to, I could play golf every day and check in about once a month and never have to worry about money again. I know a lot of you are there now. I love real estate so I don't know if I'll ever "retire" but I will have absolute freedom and the choice that everyone else with a 9-5 won't have. So I owe the actual "kick in the butt" to RDPD. It's what started this journey I'm on now.
I'd actually like to hear a critique of RDPD from someone like me 10 years ago (someone who owns no real estate, has never thought about owning any and who has a 9-5 with a 401k and hasn't seriously thought about owning their own business). Everyone who I've heard say something negative about it already has the financial education for the RDPD book to not be valuable to them.
#1 New Member Introductions Contributor
- Solo 401k Expert
- Anaheim Hills, CA
- 6,194
- Votes |
- 17,822
- Posts
#1 New Member Introductions Contributor
- Solo 401k Expert
- Anaheim Hills, CA
Originally posted by @Will Barnard:
I don't recall RK advice that 401k accounts are for suckers, if he really did state something to that nature, I will premise all my suggestions to read his book with a disclaimer to IGNORE the horrific 401k advice. Nothing could be better than utilizing a tax advantaged account to grow your wealth, reduce taxes, save for retirement, and offer all the bells and whistles a 401k gives. Now, the W-2 employee with the 401k has much less advantages as opposed to the self employed solo 401k owner by far!
Great point Will, by creating self directed 401k and doing proper preparation you setting your self up for success financially in the long run. I am not 100% against stock market, but with conventional accounts that is all available to you. And that is not a true diversification. I personally had retirement accounts for many years but it wasn't until I used self directed 401k that I was able to grow it considerably. Self directed account gives you investment options, while conventional IRA/401k accounts are not designed to benefit you in the first place, but the fund managers.
- Dmitriy Fomichenko
- (949) 228-9393
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. They are just resigned to the fact that they will work until they're 65 or 70 and then finally retire, and as you put it Justin, hope they are not too old to enjoy it. The stock market doesn't give a steady 13%. Just look at the S&P 500 over the past 20 years. Internet bubble burst. Housing bubble burst. And now what? Fed bubble burst? Who knows? Compared to today's job insecurity, outsourcing, and 401ks, I bet the average person would love to live back in the day when employers were loyal to their workers, when they could get a job for life and expect a nice pension to retire on. Those days are gone! The book was written for the average person to "click the switch" to a new way of thinking. The average person wouldn't even consider owning rental property or being a landlord. Ask the average person about that and it immediately conjurs up houses being trashed by tenants and phone calls in the middle of the night about overflowing toilets. The main theme of RDPD that repeats over and over is common sense to real estate investors, but not to the average Joe, there families, friends etc. I don't think anyone said ALL the advice in the book was good. It is very heavily against the standard philosphy of - go to school, get a good job, invest for the long term - "for a reason" - to compare and contrast and to emphasize a point so it has more impact on the reader. It wasn't written for those sending their kids to Harvard or Yale but it might make sense to those with a 100K in student loans that are unable to find a job. Each person has a different perspective depending on their own life experiences. A lot of the success of the RDPD book had to do with timing. Many people could relate to what he was trying to say. RDPD doesn't give you enough information to do it all, so you're going to have to read other books to figure it out. Any person that would only use this one book, or just Kiyosaki's advice to invest deserves what they get.
I really enjoyed and it is a bit upsetting to find out it is fiction. It is a great story and personally found it was inspiring. Although after reading the book and going to the semirars there is one think one thing that I am not fond of. Rich dad poor dad in a way sells you the idea that beign an investor is very honky dory and I have learned from the little time I have been doing this that, that is not the case. It takes hard work and dedication just like in any other field not just inspiration and simple idea. So in conclusion I love the book very inpirational but dont think that the concept of the book is as easy as it sound. Its like the saying that says " Its simple but it is not easy".
Originally posted by @Gerald K.:
Originally posted by @Justin B.:
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.
Rich Dad Poor Dad is a great read and put things into perspective for me in regards to the subjects you just brought up.
The concept of the rich buy assets versus buying liabilities: Robert writes about the time he wanted to buy a new car. But as we all know, once you drive off the car lot, the value of the car depreciates, becoming a liability because you wouldn't be able to get back what you paid for it. So instead of buying the car, he goes shopping for a property (asset), which he rents out. That rental income is then used to pay for the car payments. So he bought an asset, which will continue to appreciate, to pay for his liability.
Another example, which I've put into practice, is that you can put your kids through college if you plan early enough and invest in real estate. If you buy an investment property, 18 years later, it will have likely appreciated in value, and after 18 years of the tenant paying down the mortgage, would give you additional equity to use. You could use the equity for your kid's college fund, use as a down payment on their 1st home, or to pay for their wedding. And you still have the asset that's still being rented and payed down. That's how the rich pay for assets and not liabilities.
When he discusses to always pay yourself first, he's saying that the first bill you pay, should be to yourself (10% of your income). His first priority with his income is to set aside 10%. He treats himself like the most important creditor and pays that bill first, even if it means he'll be short on another. But logically, who would want to compromise their own credit with this practice, especially if you're barely getting by. That's why it's so hard to fathom. I think he meant that if you practice this discipline, it will force you to live within your means, and by keeping this discipline, you continue to pay yourself 1st, which can ultimately be used towards purchasing assets.
You're right, people like nice things, but those nice things, i.e. boats, cars, diamonds, are not good investments, they're actually liabilities. For example: Go buy one of those luxuries and try to sell it to someone else, and see if you could get back what you paid for it. Once you buy that big screen TV, chalk it up as a liability/Doodad. Good investments put money into your pocket and increase your net worth, i.e. real estate, stocks, notes, etc.
After I read Rich Dad Poor Dad, back in 1999, I was determined to get as much educated as possible in real estate investing, as the book recommended. So, I took many courses, but made sure to put the techniques that I learned into action because it was only when I made money, that I could purchase, plan, and schedule another course. So I essentially paid for my real estate education with my real estate investments.