Rich Dad, Poor Dad – Book Review

A couple weeks ago I wrote a review on my favourite personal finance book: The Wealthy Barber.  I have read many more personal finance books, and some probably give overall better advice than that found in Rich Dad, Poor Dad by Robert Kiyosaki; however, the main idea presented in the book was responsible for opening my eyes to the difference in thinking between rich people and everyone else and this is why I would recommend reading it.  Kiyosaki seeks to show the reader how middle-class and sub-middle-class look at money much differently.  This revelation represents a fairly major philosophy change for most people and for that reason alone it is worth reading the book.  In order to illustrate his theme Kiyosaki compares the attitudes towards wealth that his “Poor Dad” (his biological father) and his “Rich Dad” (his best friend’s father) have.

Money Is A Means To An End… Not The End Result

The most important lesson that you can take away from Rich Dad, Poor Dad, is that rich people see money as a tool to build more wealth, while non-rich people usually see money as a means to get what consumer items they want.  Kiyosaki explains how his “Rich Dad” didn’t have much a formal education, but he worked hard and reinvested his profits into “assets,” or ventures that would eventually create more wealth.  His “Poor Dad” held multiple post-secondary degrees and worked his was up the ladder in the public education sector (obviously he wasn’t actually poor at all, Kiyosaki just uses him to illustrate his point about wealth management).  Eventually his “Poor Dad” got heavily involved with the teachers union, and was always talking about how the rich deserved to be taxed more so that everyone could have “just a little more” and live the “perfect” life.  He also felt that plenty of paid holidays and other benefits should be standard all the time so that he could enjoy life more.  Of course, “Poor Dad” also spent his paycheque on consumer goods for the family to enjoy and was always chasing a certain lifestyle that (as Kiyosaki points out) he wanted paid for by his tax-funded job.  This central theme of rich people seeing money as a tool to generate assets that then make more money, while everyone else tries to gain money in order to get specific items for their own consumption or use is pretty enlightening.

The Man With Two Dads…

After Kiyosaki outlines this central theme he goes onto explain how he patterned his life after this childhood.  He takes several jobs (including one in the military) that he sees as skill-building processes instead of the means to a paycheque.  All the while, he has his eye on opportunities to build wealth.  Eventually he becomes fairly successful from real estate wheeling and dealing.

Is All Debt Bad?

One interesting insight that Rich Dad, Poor Dad provided me with that has since been confirmed in talking to other knowledgeable people, is the attitude towards debt that people have and how this affects building wealth.  Poor people often get into debt using credit to buy consumer goods that they consume and then have to pay interest on.  This often leads to individuals leading excessive lifestyles and getting trapped in destructive debt cycles.  Middle-Class people like Kiyosaki’s Dad save up their money, pay off their mortgage as fast as possible, and generally see debt as evil.  You won’t get into trouble with this outlook, but you aren’t getting the maximum benefit either.  Rich people, or people who are focused on building wealth, see credit as just another tool that can help them acquire profitable assets.  Taking out debt for investment purposes is so encouraged by Canadian and American governments that they have even provided tax incentives to do it.  This is one of the ways wealthy people get out of paying a lot of taxes.  For example, Warren Buffett (3rd wealthiest person in the world) observed a couple of years ago that he had a lower average tax rate on his income than his secretary did on her relatively modest paycheque.  Most people would wonder how this could be since we have a progressive tax system that is supposed to take higher tax rates from those that can afford it because of higher incomes.  The fact is that Buffett (and most wealthy people) make much of their money from the stock market and real estate investments.  The government always wants more money invested in these areas so they give huge tax breaks (and growing larger every few years) to people that use credit as a tool to build wealth.  Buffett’s secretary made her income from direct payment, whereas Buffett made his from stock market proceeds and he was rewarded for this with a lower tax rate.


I would be remiss if I didn’t mention the criticisms that Kiyosaki has had concerning the book over the years.  Critics have questioned everything from the identity of his “Poor Dad” to the legitimacy of his real estate investments, and Kiyosaki’s name has been mentioned in numerous other scams.  For me, the bottom line is that his book opened my eyes to the difference in perspective that allow some people to build wealth through a capitalist system, while others will forever be chasing the latest accessory in their quest to keep up with their neighbours.

Being A Capitalist In The 21st Century

In today’s world economy it is almost inevitable that we will some transfer of wealth from mature economies such as those in Europe and North America to emerging powerhouses like China, India and Brazil.  The average worker salaries in both the public (see Wisconsin for further proof) and private sectors will be squeezed in the years to come.  The flip side of this coin is that if you think like a capitalist instead of a consumer, you can see that there are tremendous growth opportunities for companies based in these burgeoning regions.  I believe one of the best ways to grow your wealth in the years to come will be to invest abroad.  I would have never considered this line of thinking before reading Rich Dad, Poor Dad, and so regardless of if the details are completely correc,t I think the book is definitely worth a read.

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12 years ago

Couldn’t agree more with your review. :) It’s a good book to read if you want inspiration and to change your mindset on how one makes money, though I wouldn’t take any concrete advice from it (e.g. only look for foreclosures, spend big money on seminars to educate yourself on real estate etc.).

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