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John T. Reed's analysis of Robert T. Kiyosaki's book Rich Dad, Poor Dad, Part 1

"Rich Dad, Poor Dad" is Fiction

John T. Reed, a real estate investor, looked into the accuracy of Kiyosaki's best-selling book and found it inaccurate:

  • The Rich Dad is most likely an invention. It's unlikely for an entrepreneur to succeed in construction, restaurants, and convenience stores. Authors history also doesn't match up.
  • Previously Kiyosaki named at least 2 other people as "the best teacher I ever had", making the same claim about the "Rich Dad" sound false.

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John T. Reed's analysis of Robert T. Kiyosaki's book Rich Dad, Poor Dad, Part 1

John T. Reed's analysis of Robert T. Kiyosaki's book Rich Dad, Poor Dad, Part 1

https://www.johntreed.com/blogs/john-t-reed-s-real-estate-investment-blog/61651011-john-t-reeds-analysis-of-robert-t-kiyosakis-book-rich-dad-poor-dad-part-1

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Key Ideas

"Rich Dad, Poor Dad" is Fiction

John T. Reed, a real estate investor, looked into the accuracy of Kiyosaki's best-selling book and found it inaccurate:

  • The Rich Dad is most likely an invention. It's unlikely for an entrepreneur to succeed in construction, restaurants, and convenience stores. Authors history also doesn't match up.
  • Previously Kiyosaki named at least 2 other people as "the best teacher I ever had", making the same claim about the "Rich Dad" sound false.

"Rich Dad, Poor Dad" contains dangerous advice

According to John T. Reed the famous book is filled with bad advice:

Dangerous advice

  • "If you're gonna go broke, go broke big"
  • Convinces people that college is for suckers

Law-breaking advice

  • Advocates committing a felony: have rich friends for trading stock based on non-public inside information, he says "That's what friends are for."
  • Recommends tax fraud by deducting vacations and health club dues
  • Brags about using a partner weasel clause in which his cat is his partner

Kiyosaki is making money from a personality cult

Many critics pointed out that Kiyosaki is selling a cult, not financial advice.

He is accused of tapping into the fantasies of the masses & being short on specifics, both attributes of religious cults.

SIMILAR ARTICLES & IDEAS:

The Cashsflow Quadrant
The Cashsflow Quadrant

The Cashflow Quadrant is a concept from Robert Kiyosaki's "Rich Dad Poor Dad" which represents the different methods by which income is generated:

  • Employee (E) – Othe...
Active vs Passive Income

There are 2 types of income:

Active Income: You are trading time for money. In order to make money you must perform something. Every day you start from zero.

Passive Income: You do not have to be present to generate income. Things like real estate, stocks, bonds are sources of passive income. You are literally making money while sleeping.

Rich Dad, Poor Dad
Rich Dad, Poor Dad

"Rich Dad, Poor Dad" is a best-selling personal finance book, written by Robert T. Kiyosaki and Sharon L. Lechter.

It reads like an allegorical story about Robert Kiyosaki a...

“Poor dad” vs "Rich Dad" Mentality

The “Poor dad”, a stereotype for the regular salary man, believes that one should work for money as an employee at a stable job. This mentality can trap a person into working a job they don’t love, but is willing to stick with because they have to pay the bills.

The "Rich dad", an entrepreneur, thinks wealth comes from experience-based learning (learn on the job, by becoming an entrepreneur) and multiple income streams.

When the “poor dad” encourages working your way up the ladder, “rich dad” laughs and says, “Why not own the ladder?”

Key lessons for becoming a "Rich Dad"

According to Kiyosaki in his book "Poor Dad, Rich Dad", rich people do certain things poor people don't:

  1. The rich buy assets (things that generate revenue like bonds), not liabilities (things that cost money like rent).
  2. The rich become financial literate through experience, not by studying hard at fancy schools.
  3. The rich learn to sell early on.
  4. The rich manage fear better. They take more risks and don't play it safe.
Robert Kiyosaki

“A person can be highly educated, professionally successful, and financially illiterate.”

Robert Kiyosaki
Financial Literacy Questions

A financially literate person should be able to answer these questions:

  • How much are they earning after tax and after saving for retirement? Is it fair considering their education level and job title?
  • Are they earning above sector median rates, below, or on par?
  • How much goes to their retirement accounts?
  • How much goes into their investments?
  • What are the rates of return on their investments when benchmarked against an index like the S&P 500?
  • What are their financial plans?
  • Can they read a company's financial statement?
  • Do they understand their tax benefits?
  • Do they understand their retirement requirements?
  • Do they have a plan for retiring?
Popular Personal Finance Books are Inspirational

Most of the popular finance books lack substantive advice on investing. They are inspirational & their core message is a good one: You are ultimately responsible for your own financial...

Rich Dad's Most Unconventional Idea

R. Kiyosaki's "Rich dad, Poor Dad" reads like a novel. The most shocking message of the book:

Don’t focus on your job or career. Think primarily about building personal wealth.

Rich Dad's Questionable Financial Advice

“With low interest rates, and an uncertain stock market, the old adages of saving and investing for the long term make no sense.”

It is what Kiyosaki recommends in his famous book, but saving and investing for the long term are exactly what most experts say you should do.

The Slow And The Fast Way To Build Wealth
  • The long-term approach to wealth building: If you’re younger and your income limits allow, open up a Roth IRA. Invest in mutual funds and ETFs while making sure you have enoug...
Todd Tresidder
Todd Tresidder

“Great wealth builders focus on both saving money and earning more.”

9 Ways To Building Wealth Fast
  1. Save on vehicles. Before buying a car, investigate vehicle reliability, pricing and financing.
  2. Rent. Most rentals offer more flexibility in case you need to move. Also, not having the mortgage payment allows you to start saving earlier.
  3. Don’t be a consumerist, buy only the things you really need.
  4. Save a percentage of your income so you have more money to invest.
  5. Work hard on your current work regardless of your feelings for it. It’s easier than finding a new great opportunity and may lead you into a promotion.
  6. Educate yourself even if it doesn’t bring any immediate benefit, being educated opens new opportunities on the long run.
  7. Invest in yourself and your marketing to open up new opportunities.
  8. Being an entrepreneur is the best way to maximize your earnings, short of being an investor. Try it, even if it fails the learning from it will be invaluable in your next attempt.
  9. Real estate won’t make you rich overnight, but it’s a solid strategy to increasing your network. 
Getting Rich Vs Staying Rich
Getting Rich Vs Staying Rich

The economy follows a cyclic path, with a different set of dynamics for getting rich, and for staying rich.

Nothing stays the same, and change is the only constant, with the very forces tha...

Humility And Fear
  • Being successful narrows our vision, making us rigid and averse towards change. The people who feel invincible and 'bullet-proof' after getting rich, usually do not stay rich.
  • Humility, coupled with a healthy dose of fear, keeps us on our toes and prevents us from being complacent.
  • Being open to change can make one's shift its business model, and pivot towards even greater success

Example: Netflix was a DVD rental service before pivoting into the world's biggest content streamer.

Think and Grow Rich

... is the most successful personal development book ever written. It was first published in 1937 and has since sold over 70 million copies. 

This tremendously successful book was...

Fundamental Principles From Think and Grow Rich
  • Everything which is tangible began as a thought: Anything that you create in your mind and trust that it is possible, you can achieve.
  • Win or quit, pick a side. Winners do not quit and quitters do not win.
  • Our minds receive ideas from the universe. The universe feeds us with ideas constantly.
  • If you have a burning desire for something, you can achieve it.
  • Failures don't mean that you have failed.
  • Have faith - an absolute certainty with no fear, that you will succeed.
  • Implementing your idea is the most important step of achieving your dreams.
The two tales about houses

The one story we tell ourselves about homeownership is it is a path to a more stable, equitable future. The idea is that it is a responsible decision that requires commitment and hope. It is center...

Owning a suburban home

The idea of owning a suburban home was fed to Americans by people in power: Suburbia has always been suitable for industry.

Big houses = big appliances. This fed the coal, steel, and automaking industries. With it came cars and oil that made the postwar American suburb possible. It is all as much a creature of government as of the market.

Reconsidering the suburban house 

The climate crisis and carbon dependency make potential homeowners reconsider the effects of suburban sprawl.

The September 11, 2001, terrorist attack and the market crash of 2008 sowed a sense of instability and propagated fears.

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