Since I’m a nice chap I’m going to save you the trouble of reading Rich Dad, Poor Dad. Its key points are:
- Make money work for you, instead of working for money (easier said than done)
- Invest your money in assets (stocks, shares, property)
- Once you’ve put money into an asset, never take it out
- Take calculated risks
- Your home is never an asset
Thats it. Thats all you need to know! The rest is common sense. What got me really thinking though was the last point. Common consensus is that you that your home is an asset, but if you think about it logically, and as the book points out, it isn’t and never will be.
Essentially the mortgage for your home is a liability and even when you pay it off, you still have expenses on your home to pay. Such as council tax, general maintenance etc. At no point does it make you any money which is what an asset should do.
If you rented out part of your home to bring in income it could be partly counted as an asset, but thats not something I’d like to do! Also if you decide to buy a new house, more than likely it’ll be bigger, so will cost more. All you’re doing is making your mortgage liability larger. Pretty obvious stuff when you think about it!
So the basic idea is you invest money in assets that make a return that covers its costs, your expenses and liabilities and hopefully make you some extra income.
The whole rich dad, poor dad concept was interesting. His rich dad was actually a friend’s dad who taught him the techniques to become rich. His poor dad was his real dad who was a highly educated man who worked hard all his life but always seemed to have no money. The story of the two are intertwined throughout the book which helps to make an otherwise slow read interesting.
The more I read it, the more I wanted to know and it was at this point the book fell over in a heap. I wanted more detail and information but it was sadly lacking. A lot of the content is heavily, and I really mean heavily repeated! I know repetition is a good way of enforcing an idea but I think I got it after the first five times.
But what annoyed me most was that after finishing the main book there was a short 3 page advert about CASHFLOW the board game (a related product by the same chap). In the description were mentions of different types of stocks and purchase methods, something not mentioned anyway in the book. Further explanation of that would have been great!
The book seems to be done in such a way to lead you onto other books in the series (and there are more). In parts its not particularly well written and some of later sections read as if they’ve been tacked on in newer editions. Amusingly the author, Robert Kiyosaki, points out he is a terrible writer but a good salesman (page 156 if you’re wondering). I’ll not disagree!
Overall though it has some interesting points and it really got me thinking, which is always a good thing. Plus I’m motivated to find out more but I’m in two minds as to whether to get the next book, Rich Dad, Poor Dad 2: Cash Flow Quadrant. I think I’ll make a note of other books noted in the text and look them up instead.