Rich Dad Poor Dad by Robert Kiyosaki – Review
While I have heard the principles of Rich Dad Poor Dad discussed in many places over the years, I had never actually read the book. I mostly assumed I already knew what it said. What Kiyoski calls arrogance that leads to ignorance.
I don’t remember what got me curious, but after reading a reference to Kiyosaki and Rich Dad Poor Dad, I wanted to know how it was that he had two dads. Eventually the curiosity got the best of me and I headed over to the book store and picked up a copy. I figured I could at least use it to impress my coaching clients since I did not really expect to learn anything about making money from this book.
Boy was I wrong! This book was a real epiphany for me. I have been having a lot of these lately. I suppose it is evidence of my becoming more in vibrational alignment with my virtual fortune as Ester Hicks would say.
So, if you are curious like I was about how he had two dads, I will let out that little secret. The “poor dad” was his actual father whom he lived with. His father was not exactly poor by most standards. He was a well paid educator with a good middle class job. The “rich dad” was the father of his best friend Mike. Mike’s dad was a businessman who was just starting his empire. While Mike’s dad probably had less to show for his efforts in the early days, his philosophy of life led him on great wealth.
Robert learned much about life from both men.
Looking at my own life and my mentors, I see that although my own father was very successful in his career as an engineer, he still had the philosophy of specialization offered by Robert’s poor dad. Even though my grandfather owned his own business, he was more of a solo artist and not really into the business building philosophy of Mike’s dad.
I was taught from a very early age that if you wanted something done right, you had to do it yourself. Over the years, I have become very good at several specialties such as engineering project management, workplace safety systems, and machinery maintenance. While I am good at managing a team, I have always had the idea that I could do everything better myself. When working on my own time, I prefer to work alone as I get more done.
From reading this book, I finally realize why so many “smart” kids do not do well financially and the C students become rich. The first reason is that the school systems focus on creating good employees. They create students who learn to follow the rules and don’t cause trouble. While I was a bit of an exception to the not causing trouble part of that as I became Valedictorian of my high school, I was better at conforming to the rules than breaking them.
The school systems do not teach financial skills. While I had plenty of courses on chemistry, physics, English, and mathematics, I never had a class on money management in high school. Even in college, I studied general economics and engineering economics, but I never really learned how wealth was created. I just learned how to be a good employee and help corporations make money from my engineering skills.
My formal education totally failed me in teaching me how to produce wealth.
I did once have the opportunity to learn about wealth, but I let that opportunity pass me by. I never realized what an opportunity it was until after reading this book. I remember that while I was in my freshman year at Ole Miss, I spent a lot of time with my Grandfather. He had what I would now call a benevolent sponsor. This man owned several businesses and thousands of acres of land in North Mississippi. He gave my granddad a shop to play in and work on his inventions.
He saw how I worked with my grandfather and seemed to like me. I did not realize at the time he was offering me an opportunity to learn like the one Mike’s dad gave Robert in the book. I totally missed what he was trying to give me.
In the book, Kiyosaki explains how he was groomed to understand the various aspects of businesses by working at various businesses owned my Mike’s dad. Often the work was without pay. The only reward was the education received. This is one of the principles taught in the book – “work to learn not for pay.” Kiyosaky goes on to describe how he took a series of jobs after college that taught him various skills that enabled him to build his business empire. Mike apparently did very well also in managing and continuing to grow his fathers businesses.
Kiyosaki learned the importance of education from his poor dad. He realized that lack of education is what holds most people back from great wealth. So thankfully for his readers, he has decided to build a business out of teaching people how to become rich or at least more financially aware.
As, I mentioned earlier, the primary concept that has been my big epiphany is that of using the skill of others to help me. As I learned more about business, I realized that there are skills that I just don’t have that I need to make money. I had set out to learn them but even though I am a fast learner, I will be too old to care by the time I learn all I need to know to do it all myself. I need to learn to take advantage of specialists who do know these things.
I have had to make some real emotional decisions as I realize that there are people much younger than me who already know what I need to know. Deciding that I can learn from these “young punks” is an ongoing struggle, but my previous spiritual work has prepaved the road for this. I have learned to value all people and not prejudge them based on some stereotype or other prejudice.
The most important concept I found in the book however is his redefining of an asset and a liability. In my corporate engineering work, I defined all capital and physical goods as assets. These were things that had tangible value and could be sold. I thought of my car and my boat and my house as assets. After all, I could list these as collateral for a loan.
Kiyosaki however defines an asset as something that brings in income. Houses, cars and boats cost money to maintain and operate so they are really liabilities.
Kiyosaki’s wealth building strategy is one of building assets. He continually adds to his collection of income producing items. He is not worried about saving for retirement as he continues to build a passive income generating system. He can now do what he enjoys which seems to be teaching. Naturally he has found a way to turn his love of teaching into an income producing system as well.
For a while, I worked with a client who was a house flipper. He would buy a run down house and we would fix it up together. Then he sold it. While this was a way to get income, in the end he had lost his asset by selling the house. Had he chosen to rent out the house he could have had a steady income. Or, had he traded up the property he could have continued to grow his business as explained in the book. This particular client eventually returned to his job as a truck driver and I got a bad taste for house flipping. I now see how he could have had much better results had we both had a better understanding of how the money system works.
In chapter eight, he covers the major obstacles to success and how to overcome them. While the list is familiar to anyone who has studied self help literature, his recommendations on how to deal with them hit me differently.
In the section on dealing with fear, he acknowledges that we all have fears. However, most of us never face them. Instead we avoid what we fear. We create protective systems to help us avoid what we fear. I saw this in the corporate world and thought it must be the right way to get ahead. However, as explained in the book, even the CEO of a major corporation is still an employee. A high paid employee, but still an employee. It takes a different mind set to be a business owner or investor.
Facing my fear of loosing money will be my biggest obstacle in implementing what I have learned in the book. I have gotten very good and minimizing risks in my career. At one time, one of my job duties was risk management. I got very good at eliminating risks for the company. However as Kiyosaki says, there is always risk. We just have to learn to manage the risk.
When I read that paragraph, I remember riding in the co driver seat of a rally race car. We were sliding toward a tree after my driver entered a corner just a little hot for the low traction conditions. After he recovered control of the car, he told me that rally racing was all about risk management. You had to go fast even if there was risk of sliding into a tree.
Another obstacle to success that Kiyosaki talks about is dealing with cynicism. In school, you don’t get to be valedictorian unless you are good at pleasing people. If teachers and principles like you, you will get better grades and get the benefit of the doubt when you make an occasional mistake. So I learned to take cynicism very seriously. I always wanted to be a perfectionist. I learned this both in school and at church. What I wanted was not important. I was here to make other people happy.
My recent spiritual awakening has reversed my perspective on this. Now that I have learned to love myself and understand that nothing is more important than that I feel good about myself, I can now face the cynics. Most of them have no idea what they are talking about anyway. He gives several examples in his book about how people have backed out of deals that could have made them a lot of money because they listened to a totally uninformed cynic. It is always easier to find potential fault in something than it is to actually build a system that works. I intend to work on creating my own systems from now on and see how they work. At least as soon as I get over that fear I just mentioned.
Another obstacle he addresses is laziness. He defines laziness in a different way than I have ever read before. He says people who busy themselves to avoid a task are lazy. He says people often find excuses not to do what would make them successful because they don’t have time due to too many tasks like mowing the yard and doing their jobs. Even though most people would see these people as busy and productive, he calls them lazy because they do not focus their efforts on income producing activity. They avoid what really needs to be done by focusing on menial tasks.
The most important concept I got from the book was to look at my assets. This weekend, I will be attending the Rich Dad Poor Dad stock trading seminar. Hopefully there I will learn how to do a better job of managing my stock portfolio. My son and I have started looking at rental property and I am always looking for more ways to start businesses.
I still believe my greatest assets are my skills and experience. I hope to be able to share those through my web site and classes that I plan to teach. I know I have a lot of knowledge that can be of benefit to others and I believe I can make a business out of sharing that knowledge with people who will benefit form it.
I have passed on my copy of Rich Dad Poor Dad to my older son. When he is done I have asked him to pass it to his younger brother. I hope our generation can be the one to break the cycle and they can become Rich Dads to their children.