Rich Dad, Poor Dad

I am VERY late to this party (like, a decade), but I have started reading the book. While the financials might be out of date, the theory might be pretty good. And, it is so far. He is a Capitalist with a capital C. He is in it to make money and pay as few taxes as possible. However, the theory that he goes through and the insights he has into how people deal with money are good. He believes that people deal with money emotionally. I agree. He believes that the emotions most often involved are greed/desire and fear. The way he explains it, I agree. People are afraid of risk so they play it safe and get the good job and work as wage slaves their entire lives. They desire more money, thinking it will solve their problems but, if they are lucky enough to get it, they just become afraid of losing it all. This is generally true. What are we frugals doing but trying to get off that merry go round?


His advice isn’t that different from others that I have read that deal with making money. Learn the difference between an asset (something that brings in money) and a liability (something that drains money). In his view, your home, while necessary for shelter from the cold, is a liability. You pay taxes on it, you pay upkeep on it, you pay a mortgage on it. And saying that it’s your largest investment is troubling to him as well. Your investments should make money for you, not drain it. Even after you pay off your mortgage, you are still paying taxes and upkeep on your house – a drain. So, first you learn the difference, then you make sure you buy assets.


These assets can be anything that brings in money: real estate, royalties on intellectual property, a business that you own or control, stocks and mutual funds… Things like that. Keep working for a wage, but use the money that you have to buy and invest in assets rather than spending it on luxuries. Luxuries come last, after your investments are making enough money to cover their cost.


For all that he calls his own father “poor dad”, which is hard to take sometimes, his advice seems sound. He tends toward the purely Capitalist in that he doesn’t believe in the rich “paying for” the poor and thinks many things are entitlements to which no one is entitled. However, combining this with the social entrepreneurship that I had started reading about seems like a good intersection. You can use all of the Capitalist protections and money making ideas to create wealth that can then be used to help people. TOMS shoes is an example. They are wildly successful and yet have stayed true to their original mission – to help poor children get shoes. They have, in fact, been able to branch out into other areas of the world and other items to donate.


I am about half-way through the book at this point and he has covered all of that plus the skills needed to succeed in business and investing; financial literacy and the like. While I am not necessarily going to go out tomorrow and sink all of our money into the stock market or real estate, there are lessons to be learned here and things that I am going to need to ponder for a while (like that fear and greed thing; that was an eye-opener). I’ll let you know how it turns out though.

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2 Responses to Rich Dad, Poor Dad

  1. J.L. Bishop says:

    My biggest lesson from the youtube presentation I saw of him was what are assets and liabilities and I am looking for more opportunities to get my money working for me and not the other way around. I agree with you that it opened my eyes to different things!

    • The ideas of fear and greed motivating our interactions with money really stuck with me. The idea of assets and liabilities is so simple but it’s not something you think about. Everyone says your home is an asset, but I can see how it wouldn’t be. Very interesting.

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