This book is named after Robert’s two fathers. His poor dad was an academic man with a PhD. His rich dad dropped out of the eighth grade. As an impressionable 9 year old boy he sought the secrets of the rich. Both his fathers had extreme differences in opinions. The book takes you through the lessons he learned from each dad.
Rich Dad is written to change the mindset of the reader. It very much targets the strategic level of personal finance. Instead of offering specifics on finance he offers a completely different way to look at money. The target audience are those people who are beginners. Beginners can be people with a lot of money or people with very little. Being rich has more to do with how you spend your money and less to do on how much you make.
How it affected me
This is a book that completely changed the way I think about money. This book grabbed me by the shoulders, shook me, and left me wide awake. There are some powerful truths in this book. Now I cringe when I hear about family and friends of mine buying bigger liabilities (i.e. Homes, cars, and consumer debt). While I’m tempted to buy toys instead of cash generating assets Rich Dad’s message comes into my head. I know that buying assets first requires more self control but the freedom in the future will be worth it.
One of the major criticisms is that “Rich Dad Poor Dad doesn’t give specifics on how to get rich”. I don’t know if I missed something but the book never indicates it’s going to teach specifics. Instead the book talks about the author being trained for almost 20 years before he ‘tests his wings’. The examples he does give are more overviews on how to think creatively about making money. The author encourages the reader to seek out ‘new recipes’ for making money. It’s an unfair criticism in that a single book can’t teach all things money related.
The next criticisms is the authors relationship to MLM or Multi Level Marketing. While he does advocate joining an MLM to build confidence and salesmanship he doesn’t say it’s the only way to do so. He offers his background in sales with Xerox as his personal example. He indicates that Xerox had the best corporate sales programs in the nation and he wanted to learn sales. He also joins the armed forces to learn how to lead troops. The criticism is blown out of context.
Memorable Quotes and Points
- Robert Kawasaki has a best friend named Mike. Mike’s dad is “Rich Dad”. The two boys agree to be taught by Mike’s dad. They’ve just worked for ten cents an hour every Saturday for a month. Both boys want a raise. In the park Mike’s dad asked them if they have learned any lessons yet. They shrug their shoulders. He continues:
“If you learn the lesson you’ll enjoy a life of great freedom and security. If you don’t learn the lesson you’ll end up like Mrs. Martin and most of the people playing softball in this park. They work very hard for a little money. Cling to the illusion of job security. Looking forward to a three week vacation and a skimpy pension after 45 years of work Now if that excites you, I’ll give you a raise to 25 cents an hour.”
“Most people never see the trap they’re in…it’s fear and ignorance that keep people trapped.”
- In some of his seminars he uses his CashFlow board game to teach with. There are some who draw an opportunity card and don’t have enough money to act on it. There are others who draw the same card, have the money, and are too afraid to act. Then there’s the majority of people that draw the card and have no idea that it’s a really nice opportunity.
- Invest in assets instead of saving.
- Learn how to read your personal balance sheet and income statement. In other words, become financially literate.
- The poor buy liabilities. The middle class buy liabilities and believes they are assets. The rich buy assets first and buy liabilities with the extra cash those assets produce.
- Select a job by what you’ll be learning not what you’ll be earning.
If you’ve read the book please leave a comment below.