Is it worth reading “Rich Dad Poor Dad” by Robert Kiyosaki ?

“Rich Dad Poor Dad” is one of the best books you can read on personal finance, especially if you are a beginner in this area. This is because it is simple ( no hard terminology, numbers or a special background needed), entertaining ( with Robert’s life stories) and at the same time very rich in information about personal finance and how to achieve financial freedom.

On top of that, (at least for me), this book also acts as a motivational stimulant and opens our eyes on the different opportunities we can have in front of us. That’s why it should be readd periodically and it should necessarily be on your bookshelf.

First of all let’s start with the author of this book (Robert Kiyosaki):

1. Robert Kiyosaki’s net worth is around 80 million US$
2. The first two of his companies went bankrupt
3. He made his fortune in the real estate
4. He retired at the age of 47

Now let’s get to the book :

The book consists of 10 chapters and is split into two parts. The first part, “Lessons”, teaches 6 lessons about personal finance and how to get rich. The second part “Beginnings” contains two chapters which teaches or shows the reader how to apply the concepts acquired in the previous chapters.

The chapters are written in mainly two forms, one is in the form of a narrative, where Robert teaches us a lesson through a story, and another is very theoretical, where he explains hard concepts using diagrams and examples from his own life-experience and the life experience of other famous entrepreneurs like Ray Kroq (the founder of McDonald’s).

Let’s see the lessons offered in this book :

Lesson 1: The Rich Don’t Work For Money

Lesson 1 tries to get across the idea that the “Rich” don’t work for money, but they let money work for them. Thus the author argues that a job of every individual should be acquiring more assets that create income, and let money work for them. 

This is probably one of the most important parts of the book.

Lesson 2: Why Teach Financial Literacy

This part of the book is the most fundamental part, as it redefines the terms asset(something that puts money in your pocket) and liability (something that takes money out of your pocket). These definitions are as a fundament of the whole philosophy of the book.

The lesson taught here is that one should acquire assets and minimise their liabilities in order to become rich. (Simple here but harder in practice)

Despite these definitions being controversial, as the critics suggest, here I acquired a very important lesson on personal finance, and in my opinion one should decide for himself whether to use these concepts or not. (more than 58 million people chose to, will you)

Lesson 3: Mind Your Own Business

This chapter suggests that a person should not be relying only on one source of income, but rather seek to create multiple sources in their free time from work. This can be creating their own company, investing in assets, and other activities which generate passive income.

The author here uses Ray Kroc ( the founder of McDonald's) as an example. 

Lesson 4: The History of Taxes and the Power of Corporations

Here the author suggests that in order to become and stay rich, one should minimise his taxes. The way to do it the author suggests is through the mechanisms of a corporate structure.

As the author puts it simply “ The rich spend and then pay taxes, whereas the poor pay taxes and then spend”, what allows the rich to do that, a corporate structure.

This chapter however has been heavily criticised as being inaccurate and a bit unrealistic in the examples the author uses, like buying a Porsche on the company’s money. However the benefits of the tax minimisation that the corporate structure brings cannot be denied, despite the facts being overstated.

Lesson 5: The Rich Invent Money

The author, in this part, expresses the idea that opportunities are everywhere and that it is only a matter of seeing them and taking action that makes one rich. He explains this concept very well and uses examples from his own experience in order to prove his point.

His examples however are said to be outdated and that those deals don’t happen anymore, and even thought that may be true we cannot deny that there are still possibilities of “making money” and that the concept can be applied everywhere.

Lesson 6: Work to Learn – Don’t Work For Money

The core of the lesson is that one should always strive to learn and eventually get free from the financial chains holding us in the working and middle classes.

While this part is very controversial, with the author “insulting” the people who choose to stay employed, the core of the lesson is what we should be focused on. Understanding the concept and then everyone deciding for themselves.

Beginnings

This is the part of the book where the author starts preparing the audience to start taking action and their path towards financial freedom.

Overcoming Obstacles

This helps the reader understand and overcome the psychological barriers to investing in assets.

It primarily deals with the feelings of fear, cynicism, laziness, and arrogance. All of which are proven to be barriers to our success.

Getting Started

This chapter puts all the ingredients in one jar and mixes them all up helping the reader understand the importance of productivity and risk taking in becoming rich.

Still Want More?

This part suggests that the reader shall educate himself as much as possible in order to achieve success.

This book proved of great value to me and I hope that this article made up your mind on this book.

Final Note:
This book proved of great value to me and I hope that this article made up your mind on this book.

Some facts about the book suggests that it very popular among the public, the book having been sold more than 58 million copies worldwide, and the book being in the New York Times best-seller list for six years in a row.

In my opinion it is a great book that one should keep on their bookshelf and read periodically.

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