Rich Dad Poor Dad... Worst Personal Finance Book of All Time?

http://finchblogs.com/2012/02/07/rich-dad-poor-dad-review/

by slarvtrax • 14 years ago

134 132 14 years ago

toadi2• 14 years ago

Don't really get the arguments.

Don't spend more then you earn. So why is it bad to destroy your credit rating? Advise is not using credit.

Maybe he wrote the book for Europeans? We don't have a credit rating. Just if you fuck up you get blacklisted and don't receive any credit.

But we don't have a personal bankruptcy system either ;)

Actually it's not that bad to pay yourself first and the government later. You have to eat and make sure you can work. Here we have to pay taxes on invoices even when we didn't receive the money of the invoice yet. So I did the same and didn't pay the tax yet and postponed. It's a bit like taking credit from the government when late you pay interest.

So in some contexts maybe good advice?

euroclydon• 14 years ago

Sounds like you take it coming and going: someone else is holding on to your money, taking advantage of the float, and you on the other hand, have to pay interest to the government on money you don't even have yet.

Why do people put up with that?

dedward• 14 years ago

i found it a really sound book. I took away several points, it should change peoples perspective about what money is, or can be. I good credit rating should be a side effect of good financial practices. The modern day idea seems to be that you should pay to borrow as much as you can afford so that you can qualify to pay to borrow even more money down the road. With good financial practices, your credit rating should be fine, or if things are going so well for you that you dont need to borrow institutionally, your credit rating is irrelevant anyway. That said, credit is a good financial instrument if used properly.

The best take away was his definition of wealth.... when your income from your assetts pay for your lifestyle.....simple as that. thats wealthy.

roel_v• 14 years ago

"Maybe he wrote the book for Europeans? We don't have a credit rating. Just if you fuck up you get blacklisted and don't receive any credit."

Yes we do, at least some of us (I don't know about each and every Member State). It's not accessible to most people, since it's locked away behind credit rating bureau's models, but rest assured that there are many places that track e.g. how often you've not paid you phone bill on time.

I much prefer the US approach, at least it's out in the open that it exists, and you have a legal right to access your data.

weavejester2• 14 years ago

The UK is in Europe, and we certainly have credit rating agencies and personal bankruptcy.

Laws differ between countries in Europe. Please don't try and generalize unless you're certain there are no exceptions, otherwise it may give people incorrect information. Instead, mention your country specifically.

toadi2• 14 years ago

UK doesn't have the euro to start with. They have their own monetary system so it differs from all the other countries in the EU. Yes you live on an Island and are special ;)

The other EU countries just do an audit of existing loans, employment history, income, ...

If you miss payments you end up getting blacklisted for loans in the future. So we use some form of credit rating.

cd342• 14 years ago

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

Is probably one of the better resources regarding Robert Kiyosaki.

slarvtrax5• 14 years ago

Ha, excellent stuff. Pretty damning crucifixion of his claims to wealth wizardry!

zavulon3• 14 years ago

While it doesn't say anything about his arguments, it should be noted that John T. Reed is far from unbiased, he's Kiyosaki's direct competitor.

mgkimsal• 14 years ago

Certainly not unbiased, but there's very little in his criticism I've read that doesn't seem accurate. Regardless of who is making the criticism, Reed seems to have some pretty good points of criticism, and I've never heard/read good rebuttals to his points, other than "well, he's biased!"

fakeslimshady• 14 years ago

Haters will hate and John Reed is capitalizing on this fringe niche to sell his own investment books. Anyone who dismisses RDPD based solely on what Reed wrote is as big a sheep as what he calling Kiyosaki's fans.

I enjoyed RDPD and there were several other Rich Dad books I found very good : Success Stories and Form Your Own Corporation. I can hardly think of dryer subject material than corporate legal structures, but I found the RD book easy reading

salemh• 14 years ago

Direct competitor? John T Reed self publishes. He lacks $16,000+ "seminars" that tour the country. Kiyosaki puts on, a horrendous Yahoo! run of financial advice, etc. Reed educates by noting the falseness of other guru's: http://www.johntreed.com/Reedgururating.html

He is not unbiased as you say, but "direct competitor" is rather strong.

dennisgorelik2• 14 years ago

Self-contradictory advice reminds me of the Bible

:-)

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

ry0ohki• 14 years ago

It's written extremely poorly in my opinion (reads like a self help book), but the positive take-aways I got from it when I read it years ago... 1) Understand the difference between assets and liabilities (according to the author most people don't, which is shocking) 2) Take advantage of US taxation of corporations to spend money pre-tax as opposed to post tax (do this within the confines of tax law though) 3) You'll never get rich just doing what most people do, which is go to school, get a job, and work for 40 years. Starting a business is how the rich get rich.

alsocasey• 14 years ago

RDPD author's whole point about assets/liabilities centres around home-ownership and how many people see it as an asset or investment rather than a liability or cost-centre. It's the only good example of a common confusion in the book and it's really not that shocking in light of the market as most people will have experienced it and the marketing around refinancing and home-equity loans in the past decade.

klbarry• 14 years ago

This person severely misread the book. I could give quite a few examples from the writing. For instance, the child labor issue he brings up is ridiculous - "Rich Dad" obviously didn't benefit from this labor in any financial way.

The premise of the book is solid; invest in assets that make money for you without you having to be there. He specifically says in the book a few times that he doesn't necessarily advocate real estate investing, but to invest in what makes financial sense, as long as you invest in something. He gives this as a representative list of such investments:

1) Businesses that do not require your physical presence I.E. a web app that you have someone program once and people pay $10 a month for

2) Stocks

3) Bonds

4) Mutual funds

5) Income generating real estate

6) Royalties from intellectual property

7) Any other recurring sources of income

wisty2• 14 years ago

If the only valid point he has is that passive investments are a good thing, it's not a great personal finance book. You could learn a similar amount by looking up "investment" in a good dictionary.

maaku• 14 years ago

The 'point' of the book is that this contradicts general beliefs of society. For example, that hard work is what gets one rich. Going from poor to rich does require hard work, but which work you choose to do matters far more than how hard you work at it.

If you read HN then you already understand the premise of the book. But for society writ large "Rich Dad, Poor Dad" was a wakeup call to reexamine core values and life choices.

mjwalshe• 14 years ago

or reading "The Intelligent Investor" by Graham - Who is the guy that taught Warren Buffet every thing he knows.

slarvtrax5• 14 years ago

Unfortunately, only a tiny percentage of the book is dedicated to addressing these legitimate avenues for investment.

The rest of the book succeeds only in massacring the concepts. Insider trading? Illegal. Real-estate lowballing? The only guarantee is a bad reputation.

It wasn't hard to find lucrative investments in the late 90s. I can't help but wonder what happened to his real estate empire when the bubble burst, if it even existed.

There are many books that do justice to explaining those seven items you've mentioned. Rich Dad is definitely not one of them.

jpdoctor3• 14 years ago

> The premise of the book is solid; invest in assets that make money for you without you having to be there.

Sounds like a recipe to hand your money over to scamsters. Esp as it was proven out by "Income generating real estate" in the past decade.

GFischer3• 14 years ago

My grandparents live off "income generating real estate", and my father is on his way (it's his nest egg for his retirement).

They were not "flipping" properties; rather, they bought good properties when the market wasn't inflated, and rented them, maintaining them and keeping the tentants happy.

It does take some work, not as much as being employed of course, but you have to be on top of things and it takes some mindshare.

There's a real estate bubble here in Uruguay because property rentals pay above-average returns - currently way above average, but market forces are pushing them down as they should, rent is starting to drop as more apartments enter the market.

T-hawk• 14 years ago

"Rich Dad" does seriously advocate real estate, not to the exclusion of those other options but certainly above them. Real estate stands out mostly because of the leverage that a mortgage can provide: you can control the income and appreciation of a $250,000 asset with only $50k of actual capital. You can't get 5-to-1 leverage on stocks or other such passive investments.

That said, real estate is certainly no magic bullet. You certainly take on risk, of depreciation and vacancy time and deadbeat tenants. And it's hard work to keep a property maintained or expensive to hire someone to do it. It's not for everyone. These are the points that "Rich Dad" doesn't make and must be included for a balanced perspective.

thematt• 14 years ago

You can't get 5-to-1 leverage on stocks or other such passive investments.

Not exactly true. Derivatives have significant leverage, often times way more than 5-to-1.

fleitz2• 14 years ago

5 to 1 margin on stocks is not hard to achieve, it's just more risky than 5 to 1 on a mortgage because your position is marked to market where as mortgages are not marked to market, but are much more illiquid.

bstpierre• 14 years ago

The idea of a "passive investment" is a joke.

The example of a web app as a passive investment is crazy -- how many apps exist that won't require support, ongoing maintenance, etc? That's significant work.

Stocks, bonds, mutual funds -- the returns here are small enough that you can't generate income to live on without a huge up-front investment. If you could manage a consistent 8% yield you'd be doing well, and it would $1M to generate an $80k annual income.

Real estate -- I know a couple of part-time landlords, and this is not passive work. They have to deal with tenants, maintenance, etc. Sure, you can hire a property manager, but that cuts into your returns.

Royalties -- This is hardly passive. What's the half-life of IP these days? You can write a book, but it will likely be out of print within the year. If you manage to publish something reasonably popular, you'll likely have to build a franchise around it, which means that you'll have to work at writing more books. Even if you hire ghost writers, you have to find them, manage them, deal with marketing, etc.

One of the takeaway lessons I got from b-school was that "there are no long term economic rents". In other words: if something is profitable (easy money), then other people will enter the market and the profitability will decline. Sure, there are barriers to entry, etc. but all else equal the crowd will follow the easy money and suck the profit out of it.

GFischer3• 14 years ago

"Real estate -- I know a couple of part-time landlords, and this is not passive work. They have to deal with tenants, maintenance, etc. Sure, you can hire a property manager, but that cuts into your returns."

I posted somewhere down the thread that this has been my observation from watching my grandparents and father manage their investment properties (which were their retirement fund as retirement money in Uruguay is only good for basic survival).

"f something is profitable (easy money), then other people will enter the market and the profitability will decline"

Yep, but as you said, there are psychological barriers of entry which make the "short-term" profitability good enough for an individual, yet bad for foreign investors.

For example, you can make a 12% profit off real estate rentals here in Uruguay now, it's shifting downwards due to the market pressure, but for us locals it looks like a low-risk, high-reward investment opportunity, but for people in the developed world, the perceived risk of investing in a South American country is too great (and I'd agree, they need a local partner to avoid getting fleeced by the government, or investing in the wrong places, etc... local knowledge basically).

As it usually happens, I'm currently in debt and cannot take advantage of the investment opportunities (fortunately my parents and grandparents can :) ).

Czarnian5• 14 years ago

It's possible to make real estate income passively. The rub is that you either have to have lots and lots of money or lots of friends with lots of money. Either way, you need lots and lots of money to pull it off.

Many years ago, I worked for a property management company who's sole client was a partnership of about 30 people. Between the partners, only two were active partners. The rest did nothing more than show up during the first week of the month to get their disbursement check. This was before direct deposit was widespread.

Of course, the holdings were all commercial, were valued collectively at ~80 million, from initial investments of around ~15 mil (adjusted).

The main problem with "passive" income is that margins on passive income are so low that you need a huge amount of investment to make anything meaningful. You have to keep developing streams of income to replace ones that have burnt out. And you have to keep shoveling your profits back into the venture.

It's a long, hard slog.

zavulon3• 14 years ago

I disagree.. the most important message in the book is that business and entrepreneurship is the path to success, NOT being an employee and staying in the rat race. While it may be common sense to someone who's been in business for a while, or read a lot of similar literature, it's far from obvious to most people.

I'm not ashamed to say Rich Dad Poor Dad has been one of the most influential books I've read in my life. At 20, I had very little idea about business - I thought my path was clear: graduate with a degree, get a job, work up corporate ladder, etc. Reading this book was completely mind-blowing and eye-opening.

Yes, most of the advice is trivial, as I look at it now.. But there's certainly great value in the book - business vs "rat race", building assets vs liabilities, learning to sell, active vs passive income, what you can't afford your business can, value of financial literacy, and much more. But most importantly this: you can very rarely get rich working for someone else.

dkarl• 14 years ago

Sounds more like inspiration and self-help than personal finance. You could point to any number of career paths and say, "This is a well-established route to wealth, and if you work very very hard and manage your money well, you can become wealthy this way." For example, there are high-paying specialties in law and medicine where the rat race really does lead to wealth. You have to outcompete 95% of the people in your field to become wealthy, but the same thing is true of entrepreneurship.

firichapo• 14 years ago

It is more about self-help that anything else, and the people who swear by it use it as an argument of why it is such a crappy personal finance book. But then they promote it as a personal finance book. Nice loop there.

huxley• 14 years ago

"the most important message in the book is that business and entrepreneurship is the path to success"

No, it may be one of the best paths to wealth and independence --unless you're born into wealth already -- but it's not necessarily a path to success.

My parents worked themselves to the bone in business, were repeatedly screwed by business partners and banks. It didn't give them one bit of gratification.

My mother went back to university and got into not-for-profit microcredit and was reborn as a happy person.

My dad spent time with his kids and neighbours, when he passed away he had three times as many people come to the funeral as we had space for.

Entrepreneurship has a lot going for it, but it is very hard and given the barriers that can be thrown in your face, it can be just another rat-race for lots of people.

jhamburger• 14 years ago

I think history tends to be written by the winners when it comes to entrepreneurship. It's a lot harder- and a lot more luck involved- than many would admit.

zavulon3• 14 years ago

There's definitely a lot of examples of non-entrepreneurs being happy and content with life. The message from RDPD I've mentioned is not about success in personal life, but financial success. And yes, there's tons of examples of businesses failing, nobody said it was easy, etc.

Another of Kiyosaki's arguments that I agree with on this matter is that sure, you can become very rich and successful doctor/lawyer/athlete/movie star. But that path requires outstanding talent, athletic skills, intelligence, etc. For an "average" person that doesn't possess any of those, and is not born into wealth, business is the best way to financial success.

AlexBucataru2• 14 years ago

Also, success is not necessarily correlated with happiness. Success is more about getting what you wanted, while happiness is more about wanting what you've got.

krolley• 14 years ago

Your point is completely valid if it were a book about success. It is a personal finance book, and I assume most readers are trying to find out "how do I become rich?".

paulhauggis6• 14 years ago

"but it's not necessarily a path to success."

Nothing is an absolute guarantee. No matter what the path.

"Were repeatedly screwed by business partners and banks"

If your parents were "repeatedly" screwed over, they really need to take a look at their own decisions. I was screwed over a few times when I was younger. I learned from my mistakes and don't allow people to screw me over.

Your parents might be too honest and nice, which leads to people taking advantage of them. This will happen anywhere, not just business.

"it can be just another rat-race for lots of people."

Some people just aren't cut out to own their own business. My parents, for example, could never own their own business. They are too nice and would get screwed over (my Dad has gotten screwed over more than once in his life in various business deals).

One thing is true: you will never be rich working for other people and this is really the point of the book. For me personally, I would rather make $50K working for myself than $100K working for a large company. It's mostly about the freedom than the money.

brador• 14 years ago

"what you can't afford your business can"

Any more details on what this one means?

carguy1983• 14 years ago

I suspect it's referring to losing a job (a very big deal to most people) vs. losing a customer (not a very big deal to most well-run businesses).

Same with losing any resource that is concentrated in one supplier as an individual but spread out among multiple sources in a business. Could be cash flow/income or could be the loss of any number of real or financial or relationship assets that a diversified business inherently protects against.

ArbitraryLimits• 14 years ago

Tax breaks. A surprisingly large portion of the book is in praise (what's the opposite of a screed?) of having a company you control pay for your meals, car, and house so you avoid personal income tax.

ThomPete2• 14 years ago

I think you are confusing your success with the books ability to help you.

I am pretty sure the number of people who read the book dwarfs the number of people who actually are successful of those readers.

gm3• 14 years ago

What you say may be true, but it's no indicator (at all) of a weakness or invalidity in the book's message.

Just look at any book that advocates healthy eating as a way to lose weight and be healthy.

That's why the saying "You can lead a horse to water, but you can't make him drink" exists.

jarrett• 14 years ago

"But there's certainly great value in the book"--I don't think there is. Here's why I don't think Kiyosaki offers anything useful in the categories of knowledge you've identified:

- "business vs 'rat race'": As others have pointed out, business is certainly not better than the rat race for everyone, or even most people. Based on every study I've ever seen, the reality seems to be that starting a business is only appropriate or beneficial for a small subset of the population. I.e. people with certain unique skillsets, a high tolerance for risk, and boatloads of time to invest.

- "building assets vs liabilities": In other words "make lots of money, and try not to borrow too much." Well, duh. Anyone who would even think to buy a personal finance book can probably appreciate that income is desirable and debt undesirable. They don't need Kiyosaki's help with that.

- "learning to sell": I don't think Kiyosaki offers anything close to a practical guide on improving your sales skills.

- "active vs passive income": Passive income is not a realistic goal for the vast majority of people. Even if you found a successful business, chances are, you will continue to invest large amounts of effort to keep it running profitably. You pretty much have to win the startup lottery if you want passive income. As the term "startup lottery" implies, it's a pretty rare occurrence in the real world.

- "value of financial literacy": This is just the same as saying "it's a good idea to know how to make money." Telling people to have financial literacy is worthless if you don't offer any useful education on finance. It's even worse if you instead offer patently wrong advice, such as ignoring your taxes in order to "pay yourself."

13rules• 14 years ago

"the most important message in the book is that business and entrepreneurship is the path to success, NOT being an employee and staying in the rat race."

The best book that I have read that emphasizes this point is "The Millionaire Fastlane" — awesome, awesome read ... a must for anyone starting, running, or thinking about creating a business.

http://amzn.to/millionairefastlane

vsl2• 14 years ago

I agree - Kiyosaki is full of hot-air generalizations that will just as easily put you into huge financial headaches (e.g. huge investment losses, tax penalties, shot credit) as build wealth.

You can't underestimate the gullibility of the masses when a book starts getting some good initial publicity - the wave becomes its own animal with everyone repeating all of the good things previously said of the book, no matter how right or wrong. Sad to say, I bought and read the book a few years under the same guidance.

Product being up-sold like a time share? Superlative claims like a male enhancement product? Partnering with Donald Trump's hair? Check, check and check.

S_A_P• 14 years ago

The best way to make money? Sell advice/a book on how to make money. It seems to me that some of these investment opportunities are limited(real estate bargains, etc) so why would you tell the world to leverage them and remove competitive advantage?

It seems to me that if you have to buy infomercial time to sell advice, it isnt very good advice, or it isnt going to work. The Rich Dad, Poor Dad books seem to me like a Don Lapre pitch wrapped in a slightly nicer presentation.

jpdoctor3• 14 years ago

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

Kiyosaki added a note about fictionalizing, which caused a stir.

TamDenholm• 14 years ago

I think the book is 90% full of just filler text, i wish it was shorter. The advice i think is valuable which i took from the book was to concentrate on cashflow.

Analyse all the things you pay each month and try to get each of those payments to be less, this is especially easy for things like mobile phone contracts, gym memberships, TV subscriptions, etc. Then you have more money each month. If your cashflow is greater each month, you'll be better off.

I think this advice is applicable to most people and more importantly, its actionable.

martinkallstrom• 14 years ago

I disagree with the review. The book doesn't contain a complete and perfect path to personal wealth for anyone. But what book could ever accomplish that?

Disclaimer: I read it several years ago. But the takeaways of the book that stayed with me to this date are:

* Don't get emotionally attached to the concepts of money and debt. Money is not worth anything by itself and debt is not bad by itself. They are simply tools that you use and you can use them wisely or foolishly.

* Try to invest your money and time in a way that creates recurring income. I.e. a house is a very bad investment because it creates recurring costs rather than income. Of course you need somewhere to live but don't get emotionally attached to the idea that happiness equals living in a fancy house or driving a fancy car.

* Debt is nothing more and nothing less than a tool for creating recurring income as long as the costs of the debt are lower than the income it creates. Discounting for risk etc.

* The way we teach our kids "the value of money" is creating exactly the emotional ties above that will lead them to making bad decisions about their personal finances, and ties their happiness to how much money they have in the bank.

I don't know if these points are what the book says, simply because I don't know how much of it is my own interpretations. But reading this book allowed me to come to a number of conclusions that have been very helpful ever since. I can think more clearly about what money, income, debt and costs really are.

AlexBucataru2• 14 years ago

This would be a more accurate review that the OP :)

Another big takeaway for me was that you cannot have a healthy relationship with your money until you stop working for the money. Work for passion, curiosity, experience, whatever satisfies your mind, and you will start seeing the bigger opportunities for profit; the ones that can free you from the rat race of selling away your life (time & effort) in the hope of improving it.

dgreensp• 14 years ago

Agreed entirely; I enjoyed RDPD as well. The review is indignant sputtering, as vague and insulting as the book is claimed to be. "Common sense looks like genius when it’s viewed from a cesspit of stupidity"? The reviewer's final attack is to admit you may learn something from the book, but only if you're stupid.

Every time someone (like the reviewer) uses the phrase "beat the market," I sigh and shake my head. To hear some people talk, you'd think getting a job was "beating the job market"; riding the bus is "beating the transportation market." Somewhere out there, phantasmic figures are matching opportunities with takers perfectly, so that every prospect becomes break even; every creative, individual, independent action you could take is rendered pointless by unseen forces. You might as well sit on your ass. It's efficient market theory turned demotivational wisdom.

Surely, if there were so much value to my being across town, it would cost me more than $2 bus fare. Or a professional trader would have already found me, told me where to go, and made a profit on the transaction. You can't beat the market.

I only developed a head for business in my 20s, but I imagine that if I had been running lemonade stands and mowing lawns as a kid, I would be immune to thinking that opportunities were for others to discover, or were already exploited, or that being enterprising only brings risk. This is the kind of lesson taught by RDPD, and I wonder if the reviewer has learned it.

gm3• 14 years ago

You wrote exactly what I wanted to write in response to the article.

This book I read a long time ago, and it truly opened my eyes to another way of thinking.

For someone raised with an employee mindset (as I was), this book turns those notions on their head, and sparks a new way of looking at independence, wealth, debt, income, and initiative.

There are no hard answers found in the book. I don't think there was an intention to provide them. What there is is an explanation of how the world works at a different level (the company owners' level instead of the employee's level).

Like Chris Rock explained the difference between being rich and being wealthy ("Shaq's rich. Very rich. But the guy who signs his paycheck every month, that guy's wealthy."), this book explains how money works.

dev_jim• 14 years ago

I'm always fascinated as to why people on this board fervently defend scammy self-help books. Tim Ferris' completely phony 4-hour series provoked a similar reaction.

tomp3• 14 years ago

Why scammy? It's pretty common sense that these books do not offer any recipes for wealth creation, but they do offer something very important: the correct mindset for wealth creation. That is something that many many people lack and need.

Finally, if you find it useless, why do you assume that everybody else does so as well?

davidw• 14 years ago

> these books do not offer any recipes for wealth creation

Oh but they do: for the authors.

The problem with them is that there is little of substance and lots of feel-good hand waving. The good bits could usually be summed up on a page. Compare and contrast, with, say "Founders at Work" where each story is different, unique and interesting in its own way.

viscanti2• 14 years ago

I suppose we have different definitions of "scammy". RDPD and the 4-hour series both package up common-sense recommendations in a way that resonates with a lot of people. There might not be a whole lot of substance there, but I don't think that's the point. The people who buy (and enjoy) those books, are the ones who just want to find someone else saying what they're thinking. It's a bit of extra motivation towards their goal.

There's not a whole lot of value there beyond confirmation of common-sense ideas, but I don't think that's a scam.

zecho2• 14 years ago

The 4-hour series borders on sociopathic behavior at times. I'd hardly call it common sense. I think Dwight Garner's review of 4-Hour Body in the New York Times summed up exactly how I felt about 4-Hour Workweek: "“The 4-Hour Body” reads as if The New England Journal of Medicine had been hijacked by the editors of the SkyMall catalog."

blario• 14 years ago

I like the RDPD book*, but I couldn't even stomach the 4-hour work day. From page one, it screamed 100% false. Felt like I'd have to be retarded to believe any of it. Strangely, I haven't heard others say the same.

WA• 14 years ago

It's "4-hour work WEEK" :-)

I loved it. It's a motivational book, but as a disclaimer, I had my "muse" (business with passive income) already running before I read that book. I also had a day job, which I have quit now (actually, by the end of next week). The 4HWW gave me a strong impulse to do the step and quit my job.

And someone else mentioned here already: 4HWW is to give you a mindset. It worked pretty well for me.

itmag3• 14 years ago

Reading self help materials has been one of the major turning points in my life.

Without self-help materials I would still have been a somewhat gifted kid but also a total mess of a human being. Thanks to self help I am becoming more and more self-realized every day.

I am not going to downvote you, because I am genuinely curious what you have against Ferriss. Care to tell me more?

georgieporgie2• 14 years ago

What self-help materials do you recommend?

j452• 14 years ago

Nothings perfect, not even you, or I.

But, just because something isn't perfect, means it's no good. This mindset too, is troubling.

I think it's troubling to over-trivialize or generalize what any book can offer.

At the end of the day, it's up to us as individuals to take the good in everything. I found some things helpful in this book.

It's not at the core of my dominant world viewpoint, but helped me understand how to better (not perfectly, or completely) frame what I wanted in my future. It certainly didn't teach me how to get there.

fleitz2• 14 years ago

Self-help books are like placebos, they really don't do anything for you but if you read one you'll believe that you can be successful even though most of them are full of platitudes and not much actual content.

But on the other hand I think this is the most important part about them, they give people the feeling that they can succeed which is a necessary ingredient to taking risks to making yourself successful.

raintrees• 14 years ago

I would think even placebos provide value...

Like a rough economic cycle, picking up a new skill, or learning to program, sometimes I have to slog through something difficult that does not seem to be getting me anywhere before the light bulb goes on and I realize "oh, THAT'S why this whatever is done that way."

What's that other adage? Fake it till you make it?

forgottenpaswrd• 14 years ago

I think it is a good book. I agree it is really bad written, but also provides a different perspective over a few important areas, like owning(second) houses being liabilities instead of assets for most people, and them not realizing that.

tomp3• 14 years ago

I find it funny how the author of the article is bashing the book for offering no real ways of value creation, when he is an internet marketer... The very definition of no value creation.

I once got a book from this Warrior Forum (an online marketing forum) he speaks of, that would supposedly teach you how to earn money online. The main point of this book was that if you want to sell online, you must first find people who are willing to buy online, such as on (you guessed it!) the Warrior Forum itself! Funny enough, on that forum all the praises were positive, suggesting that people are too ashamed to admit they were cheated (or the admins, who took a large cut of all sales on this forum, deleted all posts that could have a negative financial impact). Thank god I downloaded the book!

I know that ad hominem argument is a logical fallacy, but I find it hard to believe the personal opinions of dishonest people.

slarvtrax5• 14 years ago

You realise I mentioned the Warrior Forum in a negative light, right? I think it's probably the worst forum in the world on the subject of wealth creation. Hence, the cesspit of stupidity.

For your information, Internet Marketing has much more to do with value creation than you probably think. It's a multi-million dollar industry. But if you confuse Internet Marketing with what you see on the Warrior Forum, I can see how it's easy to make that mistake...

tomp3• 14 years ago

Hm... My bad, then. Could you possibly point me to another resource so that I could get more informed? All I ever read was either affiliate marketing (which has certain value, but the better the product, the less it's needed) and the internet "get-rich-from-your-couch" schemes which are very... appalling.

paulhauggis6• 14 years ago

I frequently go to the warrior forum and it has helped me. How they make their money is usually not very good or over-saturated.(IE: referral marketing). However, the marketing methods have given me some great ideas. I borrow some of the ideas they use and market my own products.

itmag3• 14 years ago

I'm very interested in the metaphysics of wealth. Does anyone have any tips on that?

I have a copy of Georg Simmel's "The philosophy of money", which is supposed to be about that.

http://en.wikipedia.org/wiki/Georg_Simmel#The_Philosophy_of_...

j452• 14 years ago

This post missed the entire point of the book.

Time is wealth. Spending time how you want is being rich. Money is the tool that allows that.

How we earn money decides how rich, and wealthy we are. There is a better way to earn money than simply, and only working for money in exchange for our time.

Money you earn in exchange for your time will never be as much as what a business you setup can earn with out you.

This book teaches the difference between working "on" your business instead of in a business, whether it's your own, or someone elses. The E-Myth Revisited drives this point home even further.

Learning that there's another way to earn an income without your time is a powerful lesson. One that I think this post misses.

This book speaks to how there is no such thing as job security. While we in tech might be used to it, the majority of folks aren't.

Learning the only real job security is the security we create ourselves via multiple streams of income is often a troubling lesson to face, realize, accept, and adapt to.

These are huge, key, fundamental lessons that you either get, or you don't.

You can't wake up someone who doesn't know they're asleep, and as is evident here, sometimes we need to remember to learn to take the best good from everything.

Living in a world of possibilities is nothing like living in a world of doubts that accrue to seem insurmountable. We shouldn't live blindly faithful, or blindly doubtful, neither are fruitful.

blisper• 14 years ago

I use this book as a barometer (scale) of how bad a person's business sense or money sense is. If he/she considers the Rich Dad series book of any value - that's a measure of their ignorance and gullibility.

bryanh• 14 years ago

What these simplified self help books do well: they wrap important concepts into sound bytes that you can take with you wherever you go.

The fact that any given concept might not be revolutionary to you in particular is irrelevant.

The perfect example is "pay yourself first". It is catchy and simple way to wrap up the concept of "you can expense things that help you make money to a business".

patrickryan• 14 years ago

The quote I always remember from the book goes something like, "The average dad, also the poor dad, tells their children to work hard in school and get a steady job in a good company. The rich dad tells their children to start a company."

bufordtwain• 14 years ago

I recommend Felix Dennis' book "How to get Rich" as a good alternative to Rich Dad Poor Dad. Felix doesn't sugar coat his advice, he points out the sacrifice that will typically be involved in getting rich if that's what you want.

rubashov• 14 years ago

Yeah, he even goes on about compromised health. After a couple of his big scores he looked around the celebratory dinner table and realized how the preceding three years had badly aged people.

sireat• 14 years ago

I've read both and Dennis book is much better, plus it is also more authentic.

As has been pointed out, Kiyosaki made up his rich dad.

swang• 14 years ago

A couple months ago there was an article about people in NY who wanted to charge $3K+ to teach others how to program in Ruby. HN went ballistic, "How could you charge so much when you can learn it all on the Internet?"

Yet for some reason when the field isn't exactly an area of expertise for most HN readers, and the author of the book is giving only common sense financial advice, you get tons of people here saying that the book is pretty decent because it reaffirms common sense financial advice. Never mind that you can find most of this advice on the Internet... For Free!

So my question is, why isn't there more outrage that Robert Kiyosaki wrote a book and charges $11-20/book for common sense advice, but when people try to charge money to teach Ruby, people on HN get angry? Is it the price? Wouldn't you say that to someone who knows nothing about either subject, that a $3K class that teaches you a skill is worth more than a $20 advice book?

nostrademons• 14 years ago

Well, for me Rich Dad Poor Dad was free, because I got it out of the public library. People actually pay for books?

lrobb• 14 years ago

I think it's because people tend to discount what they know.

paulhauggis6• 14 years ago

"A couple months ago there was an article about people in NY who wanted to charge $3K+ to teach others how to program in Ruby. HN went ballistic, "How could you charge so much when you can learn it all on the Internet?""

A good personal tutor goes much further than reading something on the Internet. Especially something that could increase your yearly salary.

tferris• 14 years ago

im my opinion this blog post is kind of a very clever marketing FOR the book

slarvtrax5• 14 years ago

Ha, I can assure you that it's definitely not intended to be, even if that ends up becoming the case!

firebones• 14 years ago

Note that the link to the book contains the blog owner's Amazon affiliate referral code, so even if you disagree and click through to Amazon and buy something, he gets a cut. I'd love to see the economic benefit of this post to the author (along with the number of orders of the book the post actually induced).

This is not a moral judgment of linking to products you disavow, just intellectual curiosity about the results of such a counterintuitive marketing approach compared to affirmative recommendations of other popular books.

ghpdx• 14 years ago

When I read this book, I was a busser at a hotel restaurant. Some customer I was talking to had recommended it to me. He made me promise him I'd read it (seems kinda lame in retrospect).

I ignored a lot of it (like the risky real estate stuff), but what I took away from it was that you can't get rich working for someone else because you can only work so many hours in a day; you need to start your own business or invest to make lots of money. That seems like common sense now, but it wasn't for me at the time.

I'm not exaggerating when I say this-- I saved up and bought a Mac, bought books on HTML/CSS, PHP, Ruby, MySQL, Photoshop, Illustrator, design, etc., bootstrapped a SAAS company, and now I make a solid living off of it. This took me about 5 years because I started from scratch, but I can say I'm definitely a lot happier with my lifestyle now, than I was before I read the book, as cheesy as it was. Just my two cents.

sritch• 14 years ago

Ironically this is one of the first books I read that spurred my interest into Personal Finance. Ha.

AznHisoka2• 14 years ago

Does anyone else confuse Robert Kiyosaki with Guy Kawasaki?

ascentofstan• 14 years ago

"Personal self-discipline is the #1 delineating factor between the rich, the poor and the middle class"

The main takeaway point for me, and the most influential. Fresh out of college, I make several times the amount of money my entire family was raised on.

I have not played my hand at entrepreneurship yet (I have a regular job), but discipline is exactly what my poor family lacks. They are very gifted in terms of talent, passion, strong work ethic, but without financial discipline times were always tough growing up.

maxer• 14 years ago

i find a similar but very much better book is "the millionaire next door" which shows the traits of an average millionaire

chaostheory• 14 years ago

From the point of view of the article, I think two of the major points aren't crap.

1) > 1. Education is important, but always second to financial literacy. People turn out poor because they’re not taught financial literacy.

The first one is apparent. I definitely agree that his books, especially the later titles are scammy. However they are not completely without any value. Kiyosaki is more like a motivational guru than a finance expert. I think the message that it's better to produce than to consume is pretty successfully conveyed.

3) >Pay yourself first. Even if the government comes knocking on your door, you deserve to be paid first. The best way to do this, in Kiyosaki’s opinion, is to hide under the umbrella of a corporation. The author fails to recognize the difference between business expenses and personal expenses.

I admit that this is bad advice, but for different reasons. It's something I wouldn't do myself, because it isn't ethical and not because it's not effective. Chances are if you're making below 500k, you can get away with this tactic. Even if the IRS does audit you, there are just so many ways to still make it out alive. (One of my friends used to work for a law firm specializing in taxes.)

pavelkaroukin• 14 years ago

The thing is - there is no recipe to become quickly wealthy. Everyone will have their own road and no one can use someone else's experience to get to the same place.

What this book gave - overall excitement about possible future, that's it. It should not motivate, not educate.

arandomJohn• 14 years ago

Here's the thing. His rich dad is fictional. He doesn't make money the way he tells you to. He's not a real estate mogul. He make money selling books and seminars. If the advice he gives were so great he'd be Donald Trump ten times over.

gm3• 14 years ago

Kiyozaki has made a lot of money in real estate.

And he does cooperate a lot with Trump: http://www.amazon.com/Why-We-Want-You-Rich/dp/B0013MN78Q/ref...

At the very least they have written several books together.

blindhippo• 14 years ago

Haven't read Rich Dad Poor Dad but from what I got out of this article and several of the comments here is that the main point is disconnecting your personal time from your wealth generation.

Your time is better spent generating products/investments that generate wealth independent of your own input. It's really really hard to get rich as a consultant or even as an employee (though both can generate the capital to kick-start the real wealth generation).

A concept that was illuminated quite brilliantly to me when I read How to Get Rich by Felix Dennis.

However, I personally think intelligence and "balls" play a far bigger role in our ability to generate wealth for ourselves then anyone seems to give credit for. You can read all the books on finance you want, if you're an idiot, you will probably fail to get the returns you want. Same goes if you're a coward.

Personally, I'm lacking a bit in the balls, and hope I'm smart enough. We'll see in the next 10 years or so.

joedev• 14 years ago

"Worst of All Time"? I would have thought one of these would at least be a contender for that title.

"Turning Your Ordinary Photos into Your Lifetime Employees" - http://www.amazon.com/Automated-Income-Ordinary-Employees-eb...

"Getting Started in Property Flipping" - http://www.amazon.com/Getting-Started-Property-Flipping-Thom...

or even: "Watch TV, Get Rich" - http://www.amazon.com/Jim-Cramers-Mad-Money-Watch/dp/1416537...

handzhiev• 14 years ago

No, it's not. The book is pretty basic and the author might be scam but the book is good enough for the average person who does not have a clue of finance management.

mixmastamyk• 14 years ago

A lousy critique. RDPD is far from perfect, but it has a few good nuggets. The author barely scratches the surface what he actually dislikes about it, and instead angrily slings poo and expects us to agree and join in the ridicule.

In short, unconvincing link-bait submitted by the author, using a tactic just as sleazy as what he condemns Kiyosaki for. Would downvote if I could.

dennisgorelik2• 14 years ago

Such angry article is a funny way to sell the book (and get his Amazon affiliate commission).

EREFUNDO• 14 years ago

That is the beauty and curse of entrepreneurship, there is no clear goal post, no absolutes, just approximations. It takes a lot of toughness to go through the emotional roller coaster of excitement and enthusiasm to frustration and disappointment. That is why most fail, that is why most don't even start. Resilience is the name of the game.

quietness2• 14 years ago

Rich Dad Poor Dad was not meant to be a Biblical be-all end-all; in one of his talks, he mentioned that the original manuscript is supposed to be a manual for the game he invented, "Cashflow 101," which was trashed by the first testers for being a long and complicated game, but anyway.

The author nailed down the first point, about financial literacy being critical, and people turning out poor because of the lack of it. If this were not true, most if not all summa cum laude graduates would own, instead of just work for, a company; they succeeded in traditional education, but know nothing about finance.

The two others are completely off. RDPD was never meant to be an instruction booklet on how to become rich, much less how to get rich in real estate. He also misunderstood the concept of "paying yourself first" to mean "don't pay your taxes," which is simply false. He made it sound like Kiyosaki is some selfish person who is demanding the rest of the world to be the same; but if you read the rest of the book, he actually points out that rich people are very unselfish, because they give what other people want: jobs, products, services, etc., as opposed to those who just want to be paid more despite being mediocre. He also said that if you want to be rich, you have to give other people what they want.

Kiyosaki's example about being "inspired" by the screaming of creditors and the government is nothing more than that: a personal example. He didn't say everyone should follow that example. In fact, he said a couple of paragraphs later: "If you do not like financial pressure, then find a formula that works for you." And he said a few paragraphs prior: "If you cannot get control of yourself, do not try to get rich. You might first want to join the Marine Corps or some religious order so you can get control of yourself." He's clear about the dangers of falling to the temptation of spending on consumer debt and using investment to cover it up.

Also, that little bit about child labor is odd. It's not like Rich Dad was trying to make millions from his son and his friend. It was more of a lesson to show how employees live their lives; personal experience tends to be a more powerful teacher, after all.

Saying that, I admit that some of the stories in some of his other books were simply repeated from this one. It must be kind of him to assume that the readers of his other books haven't read the others, but it can get annoying reading the same story.

Rich Dad Poor Dad... Worst Personal Finance Book of All Time?

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