By Dr. James M. Dahle, WCI Founder
The online personal finance community can be pretty critical of Robert Kiyosaki the author of the Rich Dad, Poor Dad book series. I've been critical myself. Employees who invest primarily in static asset allocations of low-cost, broadly diversified index mutual funds tend to be especially critical while entrepreneurs and real estate investors tend to be less critical.
Robert Kiyosaki's Rich Dad, Poor Dad Criticism
The main criticisms of Rich Dad, Poor Dad that I hear are:
- Kiyosaki is probably a liar (there likely never was a rich dad)
- Rich Dad, Poor Dad gives no concrete advice, just a collection of cliches about money
- Kiyosaki is just running a cult of personality
It's really not all that different from other well-known financial personalities like Suze Orman or Dave Ramsey, although I don't recall anyone ever calling either of them liars. But here's the way I look at all of them as well as every book, blog post, or podcast I ever encounter:
Take what you find useful and leave the rest.
Seriously. If you're looking for some guru who always gets everything right and with whom you will agree 100% on every controversial issue in the financial world, you are bound to be disappointed. Just take what you find useful from every source (including this one) and incorporate it into your own personal financial philosophy.
In this post, I'll discuss what I find useful in Rich Dad, Poor Dad. I bet some of my younger readers have not even heard of this book first published in the early 1990s.
The Book Rich Dad, Poor Dad Increases Interest in Finances
My mom read Rich Dad, Poor Dad. My mom. I think I might have gotten her to read The CoffeeHouse Investor once. But that's it for financial books. She actually picked this one up on her own, read it, and sent a summary out to her kids. There might be lots of bad ideas in the book (don't bother going to college for instance.) The book might be really short on specifics. But I truly believe that it often leads people to read other, more specific/accurate books. In that sense, it's a win.
Robert Kiyosaki Is a Marketing Genius
Kiyosaki has sold a lot of books and other stuff. So even if you aren't learning a thing from what he is selling, there is a lot to learn from how he is selling it. Dave Ramsey is similar. That dude can sell. He's got people volunteering to sell his stuff for him. He has people lining up to pay to come listen to him sell stuff to them.
It's brilliant. Kind of like the annual boat show. People buy a ticket to come do what they can do in the boat dealerships for free. That takes serious marketing skill. We all have something to sell and we can better learn how to do that by observing Kiyosaki. I mean, just look at the book's subtitle:
What the rich teach their kids about money– that the poor and middle class do not.
That is clickbait if I ever have ever seen it. That was clickbait before there was clickbait. A very impressive turn of phrase. Some people with marketing degrees never come up with a line that good.
Assets Make Money – A Key Concept of Rich Dad, Poor Dad
Perhaps the most important concept in Rich Dad, Poor Dad is that assets make money and liabilities cost money. It's not a perfect, absolute statement. But it's generally true. A car is generally not an asset, unless you're an Uber driver. I mean, it decreases in value, you have to pay to insure it, gas it, maintain it, and repair it.
I've been telling graduating medical students this for a decade–a house is not an awesome investment. It just isn't. Is it an investment? Sure. It may appreciate and it pays “dividends” of saved rent. But it's often not an awesome investment, especially when you don't hold on to it long enough for appreciation to make up for the heavy transaction costs.
On the other hand, stocks, bonds, mutual funds, investment properties, and other small businesses are assets. They have a positive expected return. They usually have positive cash flow. I love Kiyosaki's recommendation to FIRST buy the assets and then buy the liabilities. Now I'm not quite as big of a fan of leveraging up my life as he is — he suggests leveraging up the asset (investment property) and then using the cash flow to buy the liability (car) on credit, but I do like the idea of getting rich first before buying the outward signs of being rich.
The Cash Flow Quadrant By Robert Kiyosaki
This was a concept that proved so popular Kiyosaki wrote an entire book just on this. The idea was that income comes from four different places, or quadrants:
- E – Employee – You have a job
- S – Self-employed – You own a job
- C – Corporation – You own a business and others work for you
- I – Investor – Money works for you
Basically, each quadrant is better than the last because you pay less in taxes and earn more relative to the amount of work you put in. He goes all kinds of places with this quadrant in the follow-up book that doesn't necessarily make a lot of sense, but there is a fair amount of truth in the basic concepts.
It IS a lot easier to take deductions when you are self-employed than when you are an employee. The best tax deductions are business deductions. They're better than itemized deductions because you can take them all and still take the standardized deduction. They're better than above-the-line deductions because you don't have to pay payroll taxes on them. They're even better than the fancy QBI Deduction, which has all kinds of limitations and even then is only 20% of QBI. Business expenses just reduce your business income dollar for dollar.
Investment income IS taxed at a preferred rate. You are far better off tax-wise getting all of your living income from qualified dividends, long-term capital gains, and rent sheltered by depreciation than you are working for it. Not only do you enjoy the lower tax brackets (0% for some) but you also don't have to pay any payroll taxes on that money.
It IS a lot better to have others and your money working for you. When you hire an employee (or contractor), you (hopefully) never pay them exactly what they are really bringing in for you. You can't do that and have a profitable business. Some portion of their effort and work flows to you as profit.
It is the same when you own a real estate property. If all of the rent, appreciation, and tax breaks were paid out in expenses, there would be no purpose to owning the thing, at least in the long run.
When you own a total stock market index fund, there are literally millions of Americans who wake up each day and go to work FOR YOU. Some tiny percentage of their labor flows into your pocket because you own the business they are working for. Get enough of those tiny little employees and you never have to work a day in your life. That's capitalism.
Rich Dad, Poor Dad Encourages You To Be an Entrepreneur
A lesson that most folks take away from the book is that being an entrepreneur is generally a good thing. I think that's a wonderful lesson. Now, if you take it to an extreme (as Kiyosaki at times advocates) that will get you into trouble. But entrepreneurship done well has made a lot of people a lot of money, reduced a lot of burnout, and provided financial freedom to many.
That doesn't mean everyone has what it takes to be an entrepreneur. That doesn't mean everyone can become more wealthy as an entrepreneur than simply working hard in their chosen profession/job, carving out a big chunk of their earnings, and investing it wisely. But it is very much a viable path to a fulfilled, wealthy life.
One of the biggest criticisms of the book is that there are no specifics. Well, that's kind of how entrepreneurship is. You can't do it exactly as the last person did. It won't work again. You have to chart your own path. It isn't like the medical pipeline where you study organic chemistry, become the president of the pre-med club, study for 3 weeks for Step 1, do your medicine clerkship before your pediatrics clerkship, finish residency, pursue a fellowship, become a clinical instructor, then an assistant professor, then an associate professor, and then a full tenured professor. You can go from organic chemistry to CEO in 3 months. Or you can muddle around in a “medicine clerkship” for years before breaking out.
I am far less critical of this non-specific “be an entrepreneur” kind of advice in the book now that I am a successful entrepreneur. I'm actually amazed there are entrepreneur classes in business school. I just don't think most of what makes a good entrepreneur can be taught. I think the most successful ones pursued an idea/problem/solution and then learned the business skills required to carry it out rather than learned the business skills and then went looking for the great idea.
Abundance and Scarcity Mindsets
Another concept in Kiyosaki's writings is the idea of avoiding the “Scarcity Mindset.” The Scarcity Mindset is the idea that the pie is of a limited size. It cannot be grown. All that can happen is that you can get a bigger chunk of it. However, to do so, you must take it from someone else. So you end up being suspicious of others, focusing too much on your expenses instead of your income, and in the end, become miserly and poor.
The opposite is the Abundance Mindset, where you realize the pie can grow. Everyone can become more wealthy and there are no limits on your income. Part of this is just being optimistic, but I've run into enough people with a Scarcity Mindset that I think warnings about it are appropriate.
Imagine a FIRE blogger saving 90% of their income for ten years to hit the “Retire Button” to then live another 60 years washing Ziploc bags and reusing paper towels. At a certain point, it's better to just find paid work you actually like and work a few more years. As Seth Godin said,
Instead of wondering when your next vacation is, maybe you should set up a life you don't need to escape from.
Rich Dad, Poor Dad Claims Real Estate As a Good Investment
Another concept most people take from the writings of Kiyosaki is that real estate is a good investment. The index fund crowd poo-poos this idea entirely too much. I have simply met too many people who have become financially independent investing primarily in direct (or indirect) real estate to deny it is a valid way to invest and become wealthy.
That doesn't mean index funds are not good investments. That doesn't mean that there is not a lot of risk in real estate investing. It certainly doesn't mean there are not aspects of real estate investing that are like having a second job as a realtor, developer, landlord, handyman etc. That's all true. But it is still an asset class worthy of inclusion in a portfolio in some form and in some amount.
Is Rich Dad Poor, Dad a Good Book Worth Reading?
The bottom line is that in most financial books and blogs there are some pearls of wisdom. Sift through the rubbish, find them, and incorporate them into your life.
What do you think? Have you read Rich Dad, Poor Dad? What did you think of it? Comment below!
[This updated post was originally published in 2019.]
I love the advice to take what is good, and leave the rest. It always baffles me when some person emails me and tells me how they disagreed with a post I wrote. It doesn’t happen often, but when it does I always laugh and think, “Well, maybe that post wasn’t for you… but, perhaps, the next one will be.”
I’ve never read Rich Dad Poor Dad because of what I’ve heard from others about it. That said, I’ve also heard multiple people tell me that this book was THE book that got them interested in personal finance, an entrepreneurial mindset, or an abundance mindset. All of that is certainly a good thing.
TPP
I love Rich Dad, Poor Dad. It is one of the best investment books I’ve read. The three things you pointed out that people are critical about are rubbish. For example, it is totally irrelevant whether Rich Dad is real or not. It is the lessons that count. I’m retired today in part because of the lessons of Rich Dad Poor Dad and highly recommend it to young people to read.
I’m hoping my real estate book coming out this fall will put to rest the notion that owning investment real estate is another job. It is only a job if you choose to make it one. It is as active or passive as you wish it to be. I spent several years as a manager of my real estate. Today, I let it be passive, while I travel the world on the proceeds.
Thanks for pointing out the lessons you learned from Rich Dad Poor Dad. I took home a lot from several of his books.
Dr. Cory S. Fawcett
Prescription for Financial Success
I wish I could be more warm to owning real estate. Even when it is “passive,” I worry about it.
Jim, great article.
Why worry?
I actually worry less about my rent checks coming in than I do my stocks that soar even higher after 10 years of going up.
I read this book early on when I first got turned on to personal finance. It was one of the big books in the field (Millionaire Next Door was the first I read, then Dave Ramsey’s Total Money Makeover, then this).
I really did like the concept of the cash flow quadrant which was the main takeaway of this book for me. Realizing that money from different sources carried different tax implications was key in my decision to push my passive income quadrant to the point where it is today. When you realize how much of a tax arbitrage you have between a W2 job and a passive income stream it is no wonder a good portion of the FIRE community wants to retire early and live off passive income streams.
I read the book initially thinking this was a true story from the examples he provided and was disappointed when later found out that it was likely made up. I guess that is where marketing genius comes in. But even if it is fictitious the points behind it are still valid.
“Its really not all that different from other well-known financial personalities like Suze Orman or Dave Ramsey, although I don’t recall anyone ever calling either of them liars”
Here is over an hour of footage depicting Suze Orman as far worse than a liar.
https://www.youtube.com/watch?v=wZJh25-sO98
Great article and opinion piece WCI. It is true that if you look for a guru you are bound to be disappointed. I can honestly say that you are the closest thing to Guru status for the impact you had on my financial life. I appreciate you being direct and transparent in your conflict of interests.
Thanks for your kind words. Integrity is important to me and I hope I never do anything that will lower your opinion of mine.
I just think of Rich Dad Poor Dad as a parable similar to the Richest man in Babylon. It is a little bit scammy to claim it it was a true story, but otherwise it’s an effective vehicle to teach some important principles of wealth building. No need to become a disciple of any given author. All of us have a unique combination of education, skills, and motivation, so the best strategies to optimize those will vary from person to person.
I completely agree it doesn’t matter if Rich Dad was real. I was given this book for X-Mas in 2003 and it opened up the world of real estate for me. Most people don’t need a “cookbook answer” of how to invest but a different mindset, which is what I was needing. It set me on the path to passive income from real estate and has been my ticket into retirement. Having said that it is a bit off-putting now to see him push so hard to get people to buy into his “coaching” programs. I suspect a lot of unsuspecting people get fleeced by this.
Yes, I’m seeing lots of FB ads for that lately. Just a free seminar where they will sell you other products/services.
“Just take what you find useful from every source…and incorporate it into your own personal…philosophy.”
I feel like this is the number one generalizable lesson from residency, and it surprises me that so many people have trouble relating this to learning other things (finance included). We’re all just humans, and we all have a lot of good ideas as well as some bad ones.
As you said about marketing his books. After selling 32 million and counting, he knows how to sell books by presenting workshops all over the country. https://en.wikipedia.org/wiki/Rich_Dad_Poor_Dad
One of his workshops was here in the desert. One of his major critics is non-nother than John Reed who I also read about self-publishing and the book publishing industry. Reed knows a lot of stuff including real estate investing too as is one of the required books on this blog.
If any book, excellent, OK or terrible, gets the reader thinking about investing and money, that book is good. But on the other hand, there are so many other better books, podcasts, TV, radio shows, blogs, magazines, gurus, and documentaries on the financial industry, frugal living and investing, one would think that America would be financially literate by now. Nope. Millions of people buy new cars on 110% impulse and not about the long term consequences of such a horrific purchase. That’s just the beginning.
RDPD was one of the first financial books I read. I think the cash flow quadrant is a good lesson. However, he really doesn’t give you concrete steps to fix your financial life. So if your finances are a mess I don’t know that this is the first book I’d recommend.
I’ve read the vast majority of Rich Dad Poor Dad books. This is where I started and branched out significantly from there. One other thing I feel was missed in this article is the contribution to your financial vocabulary. I learned a ton from that. It’s worth it if you don’t mind sitting through the repeated stories that seem to appear over and over again throughout the series. Tom Wheelwright’s ‘Tax Free Wealth’ was an excellent contribution to the series.
I’m confused. A lot of financial bloggers will in one breath tell you that your house is not an investment, then in the next breath say what a great investment real estate is. I don’t quite get it.
Anyhow, thanks for the perspective. Always interesting, and often helpful.
The house you live in is not an investment, it’s an expense. The house you rent out to someone else is an investment. Investments put money in your pocket. Expenses take money out of your pocket.
Dr. Cory S. Fawcett
Prescription for Financial Success
These are quite confusing terms that people often define differently! At least how I see it, real estate like a primary home in is part consumption item, part *possible* investment. My home now provides a roof over my head. There are obviously expenses to maintain it. But at the same time, however, if sell it in a year, I’ll likely profit off of it due to appreciation in value, home equity built up over the years, and ROI for some renovations. But if I stay in this house forever, I will clearly not profit off of a sale. Though once I’ve paid off my mortgage, I would only have upkeep and bills to worry about—“saving” me money in the long run as the pro-homeownership argument goes.
I could easily lose money on a primary home “investment” if I overpay for my home in the first place, sink a bunch of money into it, and/or my local market tanks and I try to sell. Many people caution against viewing homeownership as an “investment” due to this common reality. It is clearly a balancing act. But around here, you’ll find a lot of skepticism for buying a dream house immediately because it is a quick way to put yourself in financial hardship… just check with you local bank at what you can get pre-approved for—it is totally bananas, even after the 2008-09 crisis!
On the other hand, “real estate investing” for many people in the financial blog-o-sphere means passive income such as owning a rental property (not a primary home). Others refer to funds one can invest in, like crowd funding a large apartment building. Some might even refer to it as flipping houses. Like I said, it all depends on your terminology!
I think the best way to think of it is as an investment that pays dividends of “saved rent” but there is certainly an aspect of consumption there, without doubt.
This writeup was very well done.
I am a big fan of Robert Kiyosaki. I remember when the book came out over 20 years ago. It profoundly influenced my thinking and the thinking of a whole generation of investors since then
Some reviewers such as John T Reed are quite harsh in their critiques. I think the main issue is the Rich Dad Poor Dad series is made for a conceptual, big picture explanation of how to make your money work for you. It is great for the “Lumpers” of the world, but not for the “Splitters.”
Those who like to focus on accurate factual data like a stereotypical engineer will likely be disappointed by a lack of detail and dozens of erroneous data points (ranging from misstated tax laws to an incorrect average lifespan of physicians). He also has been way off the mark with a lot of his predictions such as enormous stock market crashes or currency crises with the US dollar.
The description of a liar is particularly startling in his case. I could care less whether there is actually a “rich dad.” Even if he completely made up that person, he used it as a way to tell a narrative to explain otherwise dry, complicated, boring financial concepts.
I agree that he has a genius marketing machine. Some of his other books I liked even better such as “The Cash Flow Quadrant.” I think some of his early influences such as Sharon L Lechter, CPA helped with his early promotion and saw more potential than even he saw. His manuscript was sitting on his computer for a long time before he got prompted to make it a book. Initially, the Rich Dad Poor Dad book was just a brochure to help describe his cash flow game, but she and others saw more potential.
He influenced my thinking and convinced me that “Your house is not an investment.” I think that one fact alone saved me from having too much house and too much mortgage. A lot of people learn that lesson the hard way much later. He also stressed the importance of understanding numbers and the direction of cash flow by learning accounting (“The language of business.”)
I have heard his public speeches are not worth the time and money and that he overstates is real estate investment experience, but overall his conceptual explanations are true genius.
And although he would’ve done fine financially in the long run, he also benefited from the “Oprah Effect.” After he was on the Oprah Winfrey show his book really became an instant New York Times bestseller. Prior to that, he had gone from a game brochure to a self-published book with very little circulation.
He ultimately earned tens of millions of dollars and I think he earned every penny. He didn’t rest on his laurels as I would have after having an NYT bestseller and reaching Financial Independence.
I continue to recommend his writing for those who are not particularly interested in finance or investing but who want to read something that will draw them into the concepts of financial freedom.
I’m going to disagree with most. It’s a terrible book. There are so many untrue things in his books, I can’t believe that anyone would recommend it. And I’m not talking about fake Rich Dad (that’s the least of the book’s problems). There is stuff he recommends that is clearly illegal and/or unethical.
Also the fact that he has successfully marketed the book really is not an endorsement of the book’s content. If a snake oil salesman is good at marketing his snake oil, it doesn’t mean you should buy the oil.
Sure there are some things in there that are useful and should be obvious, but may not be to some people. But there are better places to get that info. The advice to take what is useful and leave the rest is of no use to a beginner who doesn’t know the difference from useful stuff and untrue garbage.
I remember reading this book when I was in my early teens, way back when amazon was purely an online bookstore which dabbled in a couple of other product lines (early 00’s)
These books may have their flaws but as you rightly point out, they are a great starting point and I think you also need to take the books in the context of their time too. We sit here in 2019 with an abundance of personal finance material online (WCI is a prime example!) but back when these books were written personal finance was not a very popular genre and there was not a huge amount of literature to get through.
My teenage amazon search was something along the Iines of “how do I become rich and successful?” and RDPD was not the only book I bought and read, but it was the only one I still remember. To me, that speaks volumes.
-Sterling
I really enjoyed the book reading it about 7/8 months ago (just to see what the hype was about), and despite being fairly saavy myself, the concept of assets and liability and breaking it down so simply really resonated with me.
Haters are going to hate, but it’s a good book with a lot of value.
It seems to be a polarizing book. I appreciate the WCI teaching of sifting through the garbage for the pearls.
When I read the book, I found the asset vs liability distinction really helpful. This explains how you could be house poor in a million dollar beautiful house, worrying about cash flow in retirement. It opened my eyes to the worth of income producing investments, rather than income sucking liabilities.
At the end of the day, does it put cash in your pocket or suck cash out of your pocket? That’s how you know what’s a true asset.
— TDD
As you mentioned Jim, it’s useful to take the good from a personality and discard the rest. Kiyosaki’s principles has plenty of flaws and there is much I disagree with in his philosophy…but there is plenty to take away from that can benefit almost anyone.
The mindset of owning assets that bring residual income was my takeaway from his books.
I personally liked the cash flow quadrant…it put a different spin on how I think about my job.
Good post. Interesting time for me. I am currently reading his newest book entitled “Fake”. I loved Rich Dad Poor Dad and like your mother, would list it as one of the best books I have ever read (fiction or non-fiction). In his new book, you can realize that some of his ideas are a little crazy. I think he kept his crazy in for the first book and decided to let it all out for this one. If you want to hoard cans of food and gold in a bunker in the Colorado mountains while you prepare for the Zombie apocalypse then “Fake” is for you! Reading Fake has tainted my view of Rich Dad Poor Dad a little.
Thanks,
When I read Rich Dad Poor Dad in the 1990s it broadened my horizons tremendously. I don’t remember whether it mattered whether he had a Rich Dad or not. The book was easy to read and presented some basic concepts of investing well. More importantly for me, it led to the Cash Flow Quadrant where for the first time I began to understand the differences between being employed vs a business owner, etc. I would credit it in my top 5 books that got me to F.I..
This is hands down a horrible book written buy a shady but savvy marketing genius.
I read it as a novice investor and found nothing actionable! But filled with just the most obvious statements that I already knew. Such as the difference between assets or liabilities.
He has such a shady background that I couldn’t and wouldn’t recommend his books to anyone especially a beginner. So many better and easy to read books like Simple Path to Wealth by Jim Collins.
RDPD is nothing but hype who targets an audience who they hope buy their seminars and the rest of the crap they try to sell to unsuspecting novices.
Which is why I would never suggest this book to anyone.
This book was one of the first books about investing that enligtenhed my vision about economics, especially the understanding of assets and liablities and more so, it has given me much to talk about with people outside the finance world.
The fact that this book give some strong arguments for why you can’t see the house your living in as an investment is a great topic to put some thoughts into a non-investor that talks about how great an investment their own house is, “paying yourself instead of paying someone else when renting something”. This debate can really give some great perspectives of how economics are complicated and what might seem like a good idea on the surface, can be even better when thought through.
Also, the cashflow game is amazing! Its a fun time-killer on a train or if your bored with some friends that are interested in economics or simply just want to play something similair to monopoly, yet more complicated.
That Robert Kiyosaki is a marketing genious, is not something that makes the book bad – that just means you know about it, if he had not been able to market it that well people would simply not know it.
I’m surprised at how positive this review is. I consider RDPD to be junk. The advice he offers is either obvious, vague to the point of being useless, incorrect (his understanding of corporations and the tax code are cartoonish), or harmful (spurning higher education, stocks, retirement accounts, and promoting high-risk real estate strategies and precious metals, recommending multi-level marketing). Most or all of his story of his childhood and military service career are probably fabricated. He uses non-standard definitions of assets and liabilities, which might confuse readers. It’s not hard to communicate that a car can be a “liability” using standard terminology – it’s called carrying cost. John Reed did an excellent deconstruction of RDPD, which can be found through Google.
My biggest criticism of RDPD is the overarching message. He says that if you just learn the “tricks of the rich”, you can be rich too, with minimal effort. It’s nothing but a dressed-up get rich quick scheme. What is the success rate for readers with no formal education, capital, or real estate experience becoming millionaires by buying distressed properties? Don’t get a job. Get rich on other people’s money, work three hours a week, spend your years traveling and living lavishly. Kiyosaki was recommending such strategies in the run-up to the 2007-8 housing collapse. This strategy seems to be designed to sell books, and funnel consumers through his increasingly expensive lineup of real estate seminars (which run well up into the 5-figures), but not to actually help people become financially successful. Check out the CBC Marketplace investigation on the RDPD seminars. Just watching it made me want to take a shower. I’m not against entrepreneurship or real estate investing. But pairing either activity with a degree and a “real” job provides stability, benefits, and source of capital, and will give a much higher chance of success.
I’m surprised Jim in particular had such a favorable opinion of this book, because its overall message and the details runs counter to so much of what he preaches on this site (most of which I completely agree with). Get trained in a skill that pays well and that you can sustain for a few decades, work really hard, learn the tax code and use it to your advantage, get a good rate of return on your capital for an appropriate level of risk, protect your assets. Yes, Jim did start a successful business from nothing. But he had an education and high income in parallel, and wouldn’t have even had the idea for this blog, or any of the content, if he weren’t already a doctor.
I’m all for taking the good where I find it. For example, I like Dave Ramsey’s advice on getting out of debt, but I hate his investing advice. Kiyosaki and RDPD though, there is so much bad stuff that goes right down to the core of his message that I couldn’t recommend this book to anyone. There are so many better options out there that don’t come with the heavy baggage. Start with Personal Finance for Dummies by Eric Tyson, or many others, or even this blog. Leave RDPD on the shelf.
I’m amazed you read this post and came away with the idea that I have an overall favorable opinion of the book.
You say you’re all for taking the good where you find it, but I’m not sure I believe you!
It’s not that I think you have an overall favorable opinion of RDPD. It’s that you do what I’ve heard many other people do, which is bending over backwards to find positive things to say about it about it. For example – it increases interest in finances. So may a call from a debt collector. I also disagree that there aren’t common elements of entrepreneurship that can be taught – market analysis, financing, discounted cash flow analysis, etc. Yes, you need a good idea, but once you have that, there are basic principles that apply to how most business form and grow. My master’s degree has some overlap with an MBA, and none of the curriculum was like most of the junk in RDPD.
I am happy to take good where I find it. The problem with RDPD is that the claimed “good” is so intertwined with bad advice that it’s hard to separate. For example, I would agree that real estate investing can be a great side gig, especially if you have some capital to throw at it and a day job to fall back on. It could even be a full-time occupation, eventually. But advising people to quit their job and start flipping foreclosures with zero-down loans is a recipe for disaster. Likewise, I absolutely believe in the value of starting your own business. But Kiyosaki says you should forego a formal education and normal job, go set up corporations (which he misrepresents as being some tax loophole for “the rich”), find business partners, wheel-and-deal, without a clear direction. Also dangerous. I find his “get other people do all the work for you” attitude particularly distasteful. Every single person I know who’s been successful, as an employee, real estate investor, or business owners has worked their butt off. So no, if someone wants to be an entrepreneur or real estate investor, there are much better resources out there. And most Americans will do just fine working in a decent paying job for a few decades, and saving 15% of their money in mutual funds inside retirement accounts. Plenty of doctors, lawyers, engineers, nurses, accountants, become millionaires this way. There’s nothing wrong with being an employee.
Compare this to Dave Ramsey. His rice-and-beans get-out-of-debt approach is exactly what many Americans need. I also really like his attitude for navigating financial issues in relationships. Unlike the claimed positives of RDPD, Ramsey’s positives stand on their own. Then, once someone is out of debt and starts saving in their 401k, they can head over to Bogleheads and get high-quality investing advice.
Can’t make everyone happy with every post. Sorry you didn’t like this one.
I suspect that many of us who have favorable impressions of RDPD, read the book in the late 90’s or early 2000s. It may have been due to skillful marketing, but the books were readily available and the concepts presented were easy to understand. The internet financial education community were in their diapers at the time. In a very readable manner, many thought provoking comments and ideas were introduced, and for many of us, for the first time. Despite the inherent issues with it, it got many of us seeing things differently from a financial point of view. Thus, I (we) give it credit in my financial journey.
There are so many other books, blogs, podcasts and even TikTok videos that are NOW readily available that do a better job of presenting the concepts that are presented in RDPD.
My wife and I make a point of introducing our kids to music, movies, and playing games etc. from our youth (70s-90s) with our kids. Sometimes the kids shake their head because the movies seems so simple, and not as terrifying (ex: Jurassic Park – the first time that freakin’ T-Rex walked up to the car and tried to eyeball the passengers) as it was when we first saw it. And I have to remind them that it was novel to us – at that time. Since then there have been many other versions, reproductions and perhaps better effects used to get a reaction from the audience, but we still give what we were first exposed to credit (and ignore the things that don’t hold up as well, with time).