Rich Dad, Poor Dad is one of the most famous books in all of personal finance. Though it came out in 1997, it’s still a #1 Best Seller on Amazon in 2021. Many of today’s most popular finance gurus cite it as the inspiration for their success.
I wanted to see what all the hype was about, so I grabbed a copy of the book, tore through it (it’s a pretty quick read), and compiled my thoughts for you here.
This Rich Dad, Poor Dad review will take a look at Robert Kiyosaki’s real lessons in this book (not just the ones he uses as names for his chapters) and help you decide whether it’s worth reading.
A Rich Dad, Poor Dad Summary
Right from the jump, Rich Dad, Poor Dad surprised me with its style and narrative framework. I expected more technical insight and investment math, but the book primarily consists of anecdotes that hold nuggets of (supposed) wisdom for the reader to absorb as if through osmosis.
Kiyosaki’s stories revolve around and contrast the lessons he received from his biological father (the educated but financially unsavvy poor dad) and his friend’s salesman father (the uneducated but clever, rich dad).
The book winds through Kiyosaki’s life and the reader witnesses him learning from his rich dad and rejecting the advice of his poor dad (which represents rising above the typical working-class mindset).
The book explains basic wealth generation in an understandable and inspirational way, and it’s a solid enough introduction to these concepts (at least for its time). However, it has issues that make its current relative value questionable.
Robert Kiyosaki’s Best Advice
I’ll start this Rich Dad, Poor Dad review with what I think Kiyosaki does well. Mainly, he makes some solid fundamental financial suggestions in an easily digestible manner.
The ideas might seem a bit shallow and apparent to anyone already engaged in entrepreneurship or investing, but they can be profound if it’s your first exposure to them. Let’s take a look.
1. Learn Personal Finance (And Teach It to Your Kids)
While this is a pretty obvious suggestion, it’s still a significant one. The book does a great job of showing the reader how meaningful it is to learn how to manage your money. That means saving a high percentage of your earnings and putting the money to work in profitable investments.
Kiyosaki says: “It’s not how much money you make. It’s how much money you keep.” You have to keep your spending down as your income goes up and invest the difference in assets, not liabilities.
While his definitions of assets and liabilities might not follow Generally Accepted Accounting Principles, it’s practical: assets put money in your pocket, and liabilities take money out of it.
He supports learning to cut your taxes, studying accounting, and mastering saving, then teaching all these skills to your children. I love all of these ideas, and I’m glad his presentation of them resonates with so many.
2. Find Ways to Escape the Rat Race (Make Your Money Work For You)
Not only does Kiyosaki cover the fundamental best practices for personal finance, but he also does a great job of painting an inspiring picture of their end goal: financial independence, retirement, security, being rich, or whatever you want to call it.
I’ve always believed that people truly begin to understand the significance of their personal finance decisions when they realize that they constitute a journey that can culminate in holding enough wealth that work becomes optional.
Kiyosaki makes escaping the rat race using investments or a self-sustaining business sound glamorous and inspirational. I’m grateful for anything that gets people to plan for a better future.
3. Master Your Emotions Regarding Money
This one isn’t a personal finance message that you’d typically see today, but I like it a lot. Money is a hugely emotional issue for many people, and we could all probably benefit from understanding why it makes us feel however it does.
People often let their emotions sabotage their finances or let their finances upset their emotional state. They might have a fear of investing, insecurity over their job, or a need for the latest and greatest gadgets.
He urges readers to face their fears, cynicism, laziness, bad habits, and arrogance when it comes to money. That seems like an arbitrary list of emotional issues, but I like the sentiment.
4. Develop a Broad and Valuable Skillset
In a capitalistic society, having a practical and marketable skillset is the key to making money. If you can provide tangible value that people are willing to pay for, you’ll always be able to support yourself.
Kiyosaki recommends learning to manage money, lead teams, build systems, and close sales. More than that, he suggests that people cultivate a habit of continuing to learn throughout their careers so that they never stagnate.
He argues that people can improve their situations most effectively if they keep an open mind, learn from their mistakes, and keep improving. It’s a valuable lesson and one of the best in the book.
Robert Kiyosaki’s Worst Advice
Now that we’ve covered the good stuff, what follows is my Rich Dad, Poor Dad criticism. I hate to say it, but there’s more to talk about here than I’d like.
Honestly, Kiyosaki strikes me as a pretty typical guru. His attitude and tone throughout the book both rub me the wrong way. For example, he comes across as just a little too obsessed with the stereotypical image of a rich and powerful man.
He describes his rich dad as a charismatic manly man of few words, with power behind his statements and smiles. Rich dad is tall, blunt, and always closing deals. He doesn’t do things like the other guys, and he’s pretty smug in his superior knowledge.
Rich dad and his lessons also come off as manipulative to me. He pulls the protagonists’ strings purportedly to teach them esoteric lessons too complex to be put into mere words.
The book just feels like it’s selling me something, and salesman gurus are by far my least favorite. Here are some of the specific ideas the book tries to sell to the reader that I don’t like.
1. You Should Start a Business and Get Rich Because Employees are Broke and Miserable
As someone who truly loves being self-employed, I hate to admit this, but it’s not the right path for everyone. If you’d rather not branch out on your own, that’s perfectly fine. There are plenty of people who enjoy their jobs, make good or great money, and save responsibly.
But Kiyosaki has a habit of putting down anyone who works for someone else and suggesting that employees are generally broke and unhappy. They just don’t get it.
His poor dad (already an insulting title), who worked a traditional job, couldn’t possibly understand what his rich dad understood thanks to all his business success.
Not only does Kiyosaki fail to address the risks and downsides to business ownership, but he also suggests some definitely-not-okay tax strategies using business entities. For example, he proposes using a corporation to write off vacations as board meetings or deduct health club expenses. Those moves can get you into much more trouble thsan they’re worth.
2. Academic Learning isn’t Valuable (Rich People Don’t Need It)
Kiyosaki also has a bad habit of downplaying the value of academic education and traditional learning. He seems to believe people who follow the general wisdom end up like his poor dad: highly educated but ineffective and stressed about their money. Rich people learn only by doing or from living life.
For example, rich dad says: “All too often business schools train employees to become sophisticated bean-counters. Heaven forbid a bean counter takes over a business. All they do is look at the numbers, fire people, and kill the business.”
Ironically, he promptly contradicts that claims, later saying: “Accounting is possibly the most confusing, boring subject in the world, but if you want to be rich long-term, it could be the most important subject.”
As an officially licensed and certified bean-counter, maybe he just hurt my feelings, but I don’t think so. Kiyosaki also glorifies rich dad’s cruel and unusual teaching methods, which included giving kids the silent treatment for weeks at a time while they work below minimum wage until they can’t take it anymore.
Because that’s how life teaches: “It just sorta pushes you around.”
3. Invest in Real Estate! It’s the Best Way to Get Rich!
At this point, you’ve probably noticed that many of his “worst lessons” have something to do with getting rich. That’s a significant part of what struck me as wrong about this book.
Getting rich isn’t really the point of personal finance. Maybe I need to “overcome my cynicism,” but I generally don’t trust gurus who toss that word around. Kiyosaki does it a bit too much for my comfort, and his suggested strategies for creating said riches aren’t always great either.
Mainly, it bothers me how strongly he doubles down on real estate. Investing in real estate can be a great way to build wealth, but (like self-employment) it’s not for everyone. It’s also not a requirement for a successful and diversified portfolio.
There are benefits to real estate investing, but Kiyosaki borders on implying that it’s a sure way to get rich quickly or inevitably. In reality, it’s a business like any other. There are unavoidable risks involved, and it takes knowledge, experience, and luck to succeed.
4. Jump Off Cliffs and Build Parachutes On Your Way Down
Last but not least, we have one of my biggest pet peeves in the whole book. Kiyosaki legitimately suggests that you pay yourself first (meaning your savings) even if that comes at the cost of paying your creditors, even if one of those creditors is the Internal Revenue Service!
Rich dad says: “So you see, after paying myself, the pressure to pay my taxes and the other creditors is so great that it forces me to seek other forms of income. The pressure to pay becomes my motivation. I’ve worked extra jobs, started other companies, traded in the stock market, anything just to make sure those guys don’t start yelling at me[…] If I had paid myself last, I would have felt no pressure, but I’d be broke.“
Don’t get me wrong, I’m all for prioritizing saving, but paying yourself first shouldn’t mean risking stiffing the people you owe money, wrecking your credit score, and racking up fees and interest. You pay your creditors and essential living expenses first, then you set aside your savings, and then you reverse engineer your remaining budget.
Is It Worth Reading Rich Dad, Poor Dad?
I don’t want this to upset anyone who considers the book to be the Holy Grail of personal finance, but I couldn’t recommend Rich Dad, Poor Dad to someone who asked me how to start managing their money better, let alone someone who already has some experience.
The book has a handful of positive lessons, but there’s nothing more profound in it than what you could find in the average personal finance blog these days. It’s mainly about inspiration, and there are places to get your inspiration these days without a side serving of Kiyosaki’s more troublesome ideas.
Do you agree with this review of Robert Kiyosaki’s Rich Dad, Poor Dad? What are your thoughts on this book? Let us know in the comments below!