Rich Dad Poor Dad Book Review 2017

Few books create a lasting financial legacy while also creating a massive amount of controversy. For me, the first big book in this category was Rich Dad, Poor Dad, by Robert Kiyosaki. The book has some tremendously terrible, horrendous advice, but it also has truly life changing advice when it comes to investing and making more money especially.

I mean that line about life changing as I made a big change in my life after reading the book (#2 below)

Rich Dad Poor Dad Book Review 2017

First off, big props to J$ & team over at Rockstar Finance for inspiring me to create this post. I saw Rich Dad, Poor Dad easily took #1 on the Controversy poll, within this excellent article on personal finance books, where thousands of people were polled.

(new note added this morning before posting:) Another insightful post (in my view) so sharing it with you …by Mr. 1500 on the time Robert Kiyasaki Called Him a Loser.

Ouch.

As for my review of the book, I loved the book as it further developed the way I saw some basic terms in personal finance. I did not love the book for various reasons detailed below.

As for the good…

…Seeing the opportunity and knowing what to change, is often the easiest part, but without that vision, progress becomes impossible.

Before my take on what’s great and what’s terrible in the book, I wanted to summarize it first for anyone unfamiliar:

  • Poor Dad – Kiyasaki’s actual father who was a university professor and bad with $$.
  • Rich Dad – Kiyasaki’s ‘adopted’ father who was a hyper-successful business owner.
  • Robert Kiyosaki – The boy in the middle. Admires both but pursues Rich Dad’s $ strategy

(Interested in an audio version of some of these Rich Dad, Poor Dad notes? Here’s the Podcast episode from this week on the book and author 🙂

What’s Great in Rich Dad, Poor Dad?

I included a handful of my favorite points from the book, including a few that literally changed my life.

There are almost no books where I can make that claim, but you’ll see below why the ideas are very powerful, that is, if you haven’t heard of them yet.

So, what’s the first great takeaway?

“Don’t become a lawyer, build a business and hire lawyers.” – Rich Dad, Poor Dad (RDPD), Robert Kiyasaki

This one quote literally changed the direction of my life as I was gearing up to be a Tax Attorney since I was about 7 ½.

I graduated with my accounting degree, passed my CPA exams, and then focused on entrepreneurism, instead of law school.

If I instead had pursued Law School, the road would have been filled with more stress, more hours, more spending to deal with the stress and hours, and of course, some nice extra money to pay off those graduate student loans (hopefully, on time).

Regarding compensation and receiving money, Kiyosaki had this to say,

“Returns are minimal in spite of massive effort at the start, yet returns are massive with minimal effort over time.” – RDPD

It took a lot to get started.

The four phases of financial independence details how the first phase is The Matrix, where we are not even aware of financial strategies to build assets and eliminate debt.

Once we get started, I wish I could say it gets easier, but often it becomes more difficult. Adjusting our lifestyles is not easy, so we have to experience a lot of the pain and joy associated with growing in a new area of our lives.

The second half of the quote is what many people miss when they see big retirement numbers.

If you think you need to save $1,000,000 to reach $2,000,000 in 40 years, then you’ll be surprised to learn you’ll need much less to reach that mark. Most of the portfolio growth occurs near the end, when our contributions are much lower than the market returns on the overall portfolio.

“If you are not a brand, you are a commodity.” – RDPD

Today, we often receive compensation based on our value to the market. What we think our value is and what the market thinks it is, sadly, might be two completely different numbers.

If we are seen as a commodity in our 9-5, then we get replaced by the younger, more agile professional, or by technology.

Create that unique value within your organization, or become known as the king of your hill and your area of expertise, and you’ll become irreplaceable.

Similarly, brands attempt to position themselves to offer you something unique, or offer you the same goods with remarkable customer service, price, or some other type of differentiating factor. In our knowledge based economy, we often need to specialize, so, specialize with the intention of becoming a brand, not a commodity.

The last point I’ll add on the plus side, is this classic from the book that most are familiar with:

“House = Asset (for the bank)…

…Liability (for the owner)”

– me summin up RK

I love the example above because it is Kiyosaki’s way of introducing financial literacy.

The book kinda goes on and on about the story of Robert and his two fathers, but within the meat of these sections, there is this spectacular introduction to basic financial and accounting terms.

Fun stuff like assets, liabilities, cash flow statements, income statements, balance sheets, etc.

What Kiyosaki does next is remarkable.

Most people don’t know much about Financial Literacy but Kiyosaki manages to make it fun and interesting when he describes how Cash Flow quadrants can be optimized or detailing assets on a balance sheet. He does a great job of detailing what financial matters we should focus on and which ones we should either eliminate or ignore.

The book does not discourage real estate, as Kiyosaki himself highly recommend buying real estate in terms of investment properties. The book merely wants you to know your mortgages leaves you with less money in your pocket and gives money to the bank.

What’s Terrible in Rich Dad, Poor Dad?


Oh wow, where to start.

Robert Kiyasaki is a rather tricky individual to dive into.

Much of the hype in the book ends up getting back to accumulating assets that will provide revenue that will cover your liabilities and eliminate your expenses.

Simple, right?

The tricky part is Robert Kiyosaki might have made up the ENTIRE book.

There might never have been a Rich Dad, so it throws into question the whole book and yes, the man behind the pages.

Mr. Kiyasaki’s legal and business career (after the book was released) have led to some bankruptcies, lawsuits, and many very vocal negative complaints. I wouldn’t want to go on about the negatives, but there are many regarding the practices Mr. Kiyasaki appears to live by.

It appears Robert Kiyasaki is a best-selling author, and not a best-selling author.

That’s great and all for the millions and millions of people who have purchased his book, but last I looked, not all those people are Rich Dads or Moms or Rich Anythings.

If you’re interested in some big principle ideas that might challenge your viewpoints, then I recommend the book, but if you haven’t learned much about Personal Finance, I would recommend at least 5 books before RDPD.

What are your takeaways or negatives on Rich Dad, Poor Dad?

-Matt

P.S. What are some of your favorite books on money that I haven’t covered before in a Book Review? (For all my previous book reviews – Here’s the link.)

P.P.S. I forgot the link to the book! Hah, in case you wanted to pick it up for about $7 on Amazon, you can click on the image above. Thanks for reading!

4 comments… add one
  • Church Sep 21, 2017, 9:59 am

    Although I wasn’t dreaming of being a tax attorney at 7 1/2 years old like you, I did go the CPA route. Couldn’t have asked for a better path in Finance that opened more doors than I could ever walk through. Being a CPA made the book that much more easy to read and validation that accounting = cool!

    That being said, RDPD was a great rah-rah book I read in college, life-changing even. But “rah-rah” doesn’t exactly provide a road map on “how to”, which led me to other books.

    But like you said, he is a best “selling”, not best “author” and that there deserves some credit because we all bought it and put money in his pocket. Good for him.

    Great post, Distilled.

  • Mrs. Picky Pincher Sep 21, 2017, 11:23 am

    Ahhh, interesting. I laughed out loud when I read Mr. 1500’s post yesterday about being called a loser for following the 4% rule. Hahahaha. 🙂 I haven’t read RDPD; I still need to make my way through other classics like The Millionaire Next Door before I take on more controversial titles.

  • Debbi Sep 21, 2017, 1:15 pm

    I agree with the wisdom of the crowd on their first two picks and would have chosen the same but would have chosen Dave Ramsey’s Total Money Makeover as the third. Despite agreeing with all of his critics, I still recommend the book to desperate friends who are in a mess and do not know how to get out. He leads them through the steps in a clear manner with generally sound advice (and I talk to friends about the parts I do not agree with). For someone who has pretty much zero financial literacy, he can be a godsend. It surprised me that Suze Orman’s books do not appear anywhere on the list, given that she is an empire unto herself and could not help but wonder why, particularly since she is one of very few female voices on these topics.

  • Jay Sep 22, 2017, 6:22 am

    Thanks for your balanced review of this classic personal finance book. Regardless of what you think of the author, I found this book to be memorable and overall a net positive for my financial education. Also glad to see we share some of the same highlights!

Leave a Comment

View the Best Finance Blogs