Rich Dad Poor Dad is a book written by Robert Kiyosaki and Sharon Lechter. The book is an autobiographical account of Robert Kiyosaki’s aim of achieving financial security. The book is the first in a series of books written by Kiyosaki on achieving financial freedom and unraveling the secrets of success of the rich. The book has enlisted several measures for the same like financial planning, real estate, owning businesses and investing.
The portrayal of Kiyosaki as an ordinary person born in a middle class family but working his way to getting rich and achieving financial security can motivate any person to vie for the same.
The book is an account of the different attitudes of his rich dad and his poor dad towards money and how to work for it. His poor dad being his real dad who’s a highly educated person having a Ph.D. an now working as a college professor while his rich dad was his friend’s father owning a grocery store who went on to become one of the richest men in Hawaii. The book is an account of how he learned from both his fathers who had completely different views about money in life with his poor dad saying “The love of money is the root of all evil.” while his rich dad would say “The lack of money is the root of all evil.” It’s about how his highly educated dad struggled economically throughout his life while his less educated one was financially sound and died leaving tens of millions of dollars for his family.
According to Kiyosaki, the key to financial freedom lies in building up assets and minimizing liabilities. Having criticized our educational system for the absence of financial education which according to him can only produce workers, he has highlighted the value of financial intelligence and the need to invest more in that area. Some highly useful topics of the books include- the corporations spend first and then pay taxes while individuals pay taxes first; and how corporations are just artificial entities which anyone can own. He has used the term ‘rat race’ for the financial struggle and has stressed that the only way to get out of it is to improve your proficiency at both accounting and investing. He’s developed a game ‘Cashflow Quadrant’ which teaches one to get out of that ‘rat race’. A famous quote from the book is ‘The trouble with the rat-race is that even if you win it you’re still a rat’.
The book includes some highly controversial remarks like calling the home as a liability instead of an asset. He has also advocated having few ‘good investments’ rather than diversifying. The book lacks some concrete measures to actually get started and is more of a motivational text. The authenticity of the characters in the book, especially the rich dad, is also debatable with a person that rich in a small state like Hawaii must have been widely known. The claims of Kiyosaki’s personal achievements in the book have been labeled as exaggerations with Kiyosaki not having provided any proof of them.
All these criticism not withstanding, Rich Dad Poor Dad is a must read for all those wishing to achieve financial security for the motivation it provides to work for getting out of the ‘rat race’. The book has got the potential to change one’s outlook towards money and to realize how lack of financial education is the real cause of all the struggles related to money.
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