Thursday, August 30, 2007

Book Review: Rich Dad, Poor Dad

OK, so it's an old one, originally printed in 1997, but it's been popping up on lots of my blogs so I figured I would give it a read. Truth is, I wish I had read it in 1997, when it was new and I was 17, then it would've been news to me.

The book itself is basically the explanation of his life with two "dads" (the second dad is actually his best friend's dad, but we get the point). One dad is "highly educated" but never rich; the other dad is your prototypical "dropped out of school, got wealthy" type of guy. He typefies the behaviour of both fathers into a "Rich" and a "Poor" mentality. The book is a basically a compare and contrast of the two philosophies centered around his six lessons that his Rich father taught him. The lessons are:
  1. The Rich don't work for money

  2. Why teach financial literacy?

  3. Mind your own business

  4. The history of taxes the power of corporations

  5. The rich invent money

  6. Work to learn - don't work for money

OK, so they don't all sound like lessons, a bunch of them actually sound like chapter titles (hello #4?) and they are. But hey, the history of taxes? The power of corporations? Man sounds pretty complex, pretty powerful... yeah... it's 10 pages long, maybe like 4000 words, it reads like a short essay without the footnotes or references.

Still we can do justice to the history of taxation in America in 10 pages, right? Not really, not when half of it has to be tied in to your vision of the world. And that's the fundamental failing of this book, it's basically 200 padded pages of pump you up, go out and learn. He's basically all about eschewing the establishment and focusing your learning on how to make money. He's very focused on stating how the "old ways" of school, work (house, car, kids) and retire are all gone, without really mentioning that they were never there in the first place.

He talks about how schools don't teach what it takes for people to be independently wealthy as if schools actually had that purpose in mind. We don't build schools to teach the leaders of tomorrow, it's not really a secret, we run schools to build more efficient peons, but hey one visit to my high school would've made that evident. My family had dinner table discussions about this stuff in high school. The smart kids make it through despite the system not because of the system, we knew that, I knew that, I still went to University. Then again, we also talked about the general death of pensions and the "pointlessness" of retirement (see Die Broke). Yeah, so maybe he's right, the smartest kids learn stuff at home as well as at school, but then, my parents aren't Rich either.

Long story short (not that the book is very long), Kiyosaki has some potentially novel ideas. There are tons of people who have never thought in the ways that Kiyosaki is espousing. So I guess that's good for them, it's just terribly unfortunate that he's not really a good writer. His book is like fragments thrown together where the same stories are repeated and the same points belaboured. It's like a series of bad essays with no supporting documents and no footnotes and the same point to all of them: become more financially savvy and you will become "Rich" instead of "Poor". But he doesn't bother with history, he just gives you the short "Kiyosaki"-esque version, he mentions the gold standard in passing and never follows up. He talks about his Cashflow game in basically every chapter but doesn't bother to even provide an Appendix with details or rules of the game. Some of paragraphs read like rewrites of paragraphs from other sections (they probably were), he just repeats himself so much.

And maybe that's my big issue with the whole book. Kiyosaki is not trying to provide you with "information" so much as "inspiration". He wants you to read his 200 hundred pages and subscribe to his philosophy. Some call this their PF bible, but to me it is to personal finance what Rocky is to boxing training; it's all sizzle, no steak. Of course, great steak needs some sizzle, just like great boxers need heart, but reading this book won't make you rich, it'll just make you want to be rich.

If you want to actually be rich, then look elsewhere, he simply doesn't provide any more details: pay yourself first, make your money work for you, hire people smarter than you, blah, blah, blah. He doesn't list a book on hiring skilled people; or point you to specific books on where to start investing and where to finish investing; or send you to guides on being frugal; he doesn't give you the top 10 wealth ways of ordinary people. All of this important, actual information, is left as an exercise to the reader. He just wants you to agree that he is right about wealthy people. He simply doesn't provide any real direction on any of these things, he's not interested in teaching PF 101 he just wants you to agree that he's right and then he wants you go out and teach yourself.

Yes Mr. Kiyosaki, you are correct. There it's done, now go read something with information like Tom Hopkins: "How to Master the Art of Selling" or Stephen Covey's 7 (or 8) habits.

PS: If you want to know a lot more about the Gold Standard, look here, and check out the first two videos. They have propoganda issues, but it's a good run at understanding money and the banks and the actual history behind the whole deal.


Anonymous said...

Thanks for the mention! You've got some interesting info here. We've also got similar backgrounds since I work in technology too. I'll be lurking around to see what you've written...

The Digerati Life said...

Thanks for the mention! You've got some interesting info here. We've also got similar backgrounds since I work in technology too. I'll be lurking around to see what you've written...

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