Review of Rich Dad Poor Dad- Where it All Began!

This is without a doubt THE "Godfather" of finance self-development books. In this review of Rich Dad Poor Dad book, I intend on showing you why this book was so valuable to me and also some of the lessons taught in the book.     The book is basically a personal finance book told through a parable. It's all about Robert Kiyosaki's "Rich Dad", who was actually his friends Dad (a wealthy businessman), and his own "Poor Dad", who was a well-educated teacher that never got to grips with money. I can't wait to get into it so let's not waste any more time here...  

Rich Dad Poor Dad- The Overview and Rankings

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• Name: Rich Dad Poor Dad, What the Rich Teach Their Kids About Money- That the Poor and Middle Class Don't
• Author: Robert Kiyosaki- 100 out of 100
• Originality: 100 out of 100
• Practical methods: 89 out of 100
• Enjoyability: 100 out of 100
• Price: Kindle $7.48/ Paperback $6.98/ Hardcover $19.98
• Maketimeonline.com Rating: 98 out of 100

Pros and Cons

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Pros

• Provides so much financial intelligence relevant to the information age
• It can reshape the "normal" way you think about money (well it did for me!)
• Explains complex financial terms in simple easy to understand language e.g. financial statements, assets, liabilities etc.
• Provides so much motivation to want to learn more
• Makes you WANT to take action
• Shows how you can get started immediately for free- Words are free, so change your words!
• Explains different asset classes- Business, Real Estate, Paper Assets and Commodities

Cons

• The cheesy title can put people off.
• It can come across as "salesy" or "preachy" and some people just never want to be sold to. Even if what he says makes perfect sense!

 

Who is RDPD for?

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Anybody that is not happy in their current job. Anyone that wants to be able to live a lifestyle that they want. Anybody that doesn't want to stress about not having money for the rest of their life. Anyone that is looking to invest their hard earned money into something. It pretty much covers ANYONE! The book is easy to read, with so many stories in it. If you hate thinking about money and worry that you don't understand personal finance stuff, this book makes it so simple! My only regret is that I didn't read this book sooner. If you type in "Rich Dad Poor Dad Book Review" into Google you will probably find a LOT of negative reviews. Why? Because people tend to look for negative reviews as they feel they can find out what they want to hear about a book. Just think about any product you're interested in buying. If there are 200 positives and only 3 negatives, do you read the positive reviews? Of course not! You'd search for the negative ones and decide if what they are saying is legitimately a reason to put you off or if they are just fussy or had a one-off bad experience. Well as always I'm going to be completely honest with you, from my own point of view. You can make up your own mind about what you think.  

The 6 Lessons

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Lesson 1: The Rich Don’t Work For Money

Personally, I think this title should be: "The rich have money work for them", which is actually the subtitle but this is the main lesson. Trade your time for money... This is hands down the WORST relationship that people have in the information age! It is still ingrained into us that unless we put our own time into something we cannot get paid. This is true to a certain extent but the thing that has changed is that we can now put the time in once and get paid over and over again for this. Read more about this here. A lesson that Robert's "Rich Dad" taught him was not to work for money. He did this by getting Robert to work for FREE! Imagine if from an early age we did things to learn or for the internal joy of doing something. I've actually learnt a lot about this concept in recent years as a teacher through "Positive discipline". A large part of t his is not rewarding students with points or medals for making good choices, whilst not "punishing" poor choices by removing something. The idea is to make the students want to make good choices for themselves, whether rewards or "authority" are present. As soon as a reward is given for an action, it becomes very hard for students to do the same thing again without a reward. This is the same with us and money. Do you know anyone that says, "I'm not interested in money"? I bet it would be almost impossible to get these same people to carry on with their job if they didn't receive a paycheck at the end of the month. This really questions what value and pleasure most people are getting out of their job! People have their job to get that paycheck at the end of the month. Money can work much harder than we can 24/7... 365!  

Lesson 2: Why Teach Financial Literacy?

This is hands down the most original, controversial game changer part of the book. The 2 biggest terms I have learnt about money and when you wrap your head around these, your whole life can change:

An Asset = something that puts money in your pocket every month. A liability = something that takes money out of your pocket every month.

With these definitions, this means that the big family home that you've worked so hard to get your whole life is technically... a liability!!! Can you imagine how people felt when they heard this? There was uproar and people labelled the book as a joke... Then 2008 happened and people brutally found out what Mr Kiyosaki was talking about!     The above financial statements demonstrate how the poor, the middle class and the rich spend their money, respectively. I personally believe that when you understand these statements, everything you work towards buying will change (it certainly has for me). The book says that you become rich by accumulating assets. For example, my rental property is an asset and this website could potentially be an asset for years to come. If people read this post in years to come and purchase something through this website it is a few hours that I've spent after a day at work that has unlimited potential in how much money it could generate for me. I am putting the time in now to generate income over and over again in the future. I read this book in 2014 but it wasn't until the summer of 2015 until really understood this part of the book. Our house that we used to live in, in Buckinghamshire used to cost us pretty much all of the money that we earnt as teachers. All of a sudden we lived over 3,000 miles away and it was putting money into our pockets every month...

Our liability had become an asset!

 

Lesson 3: Mind Your Own Business

What's your side hustle? If you are in a job and you're reading this, I would like you to think about this question a lot over the next week. If you don't know, start to really think about your lives purpose, vision and values. We need to spend more time sorting out our own finances rather than spending them on shopping. One of the main reasons why I do not advocate spending your time being frugal or finding great discounts etc. is that when you focus on increasing your income, you find you don't have as much time to spend spending your money! The "live below your means" financial gurus are not telling you what to do, they are just telling you what NOT to do (and we already know this deep down!!!) Increasing your income is a double-edged sword in a good way. Just like "positive discipline" you are focusing your mind on what you want to achieve rather than what you don't want to achieve! If I told you to be frugal and to only spend 20% of your paycheck, you would constantly be fretting about money. If I told you to spend the next month learning as much as possible about affiliate marketing and writing a blog, you would spend your time learning a valuable skill, writing about things that interest you and you wouldn't have as much time to spend your money on "stuff"! We all know we don't need half the stuff we have, we all know that we "shouldn't" spend more money on clothes! But it's hard to stop a habit until you can replace it with another habit (read more about habits here). My question to you is why can't this other habit be rewarding, enjoyable and be a side hustle?  

Lesson 4: The History of Taxes and the Power of Corporations

BORING!! I hear you scream! Yes, taxes may be the most boring thing on earth. But that is why accountants exist! Anyone with a great accountant will tell you they are worth their weight in gold! I imagine some of the examples in this section are exaggerated slightly or are not overly simple, but I didn't get too worked up over the particulars. The main point is that if you are working as an employee you get ZERO help from taxes. If you use corporations, then you can have "business-related expenses" offset against your tax bill (and the great thing is you can carry on driving your car or using your phone all year!) Since reading this part of the book Sarah and I have set up a limited company in the UK for our property business. We also have moved to Qatar, a tax-free country, but that was a side benefit of it to us (obviously!!) We have quarterly (every 3 months) finance checks and use a Rich Dad template to assess our spending and income. I have just dug out one from April 2014 compared to September 2018, I am actually amazed at the difference (plus the passive income will increase over this next year). The first statement is our April 2014 Financial Statement Analysis and the next analysis is our September 2018 Financial Statement. If you want this financial template, (which does the analysis for you, all you do is put in your income/ expenses) it is included in the welcome email if you join the maketimeonline newsletter- check the sidebar or bottom of the page to receive this. Being accountable is a great way to make changes. The only way you can be accountable financially is if you track your finances, so make time to do this TODAY (if you wait until tomorrow, life will happen and it will be tomorrow again and again!)  

Lesson 5: The Rich Invent Money

What's that... Money doesn't grow on trees? Well... This is a part of the book that Robert uses an example of how to create money from your mind. His example is a property deal that put money (tax-free as it was from a loan) into his pocket and generated a monthly income. I genuinely was bewildered by this concept and thought he must be making this up. However, we are potentially 2 months away from doing a very similar thing with a property that we have bought (I will keep you posted!) However, the best way in today's world to do this is through the internet! It has never been easier to create your own content or products (through information, books and online courses) and this is literally using your own brain to produce an income. You don't have to spend ANYTHING on this (apart from time) and it can generate an income for years to come. So money may not grow on trees but it certainly can grow from your mind!  

Lesson 6: Work to Learn – Don’t Work For Money

Again, I'll go back to the earlier example. Imagine if everything we did was to learn or for personal fulfilment? Here's my story after I left University: I had NO idea what I wanted to do with my life! So I started applying for jobs just like everyone else. Jobs in London as a recruitment consultant, a salesman and anything that said something like "no experience required". I started getting some offers for certain recruitment positions but for some reason, I always talked myself out of it. I would think to myself that these people are too "pushy" or I didn't want to commute to London every day or the pay wasn't good enough (I don't know what I was expecting!!!) I ended up applying for one position that was a sales position "working in the field". It turned out to be door to door sales! I turned up at 2 pm and was paired up with another guy and spent a day "in the field". When I got back to their office (around 9 pm - it was dark and I was exhausted) I had a chat with the guy who "interviewed" me. He explained how the post was 100% commission but you can move up the company and end up having a team beneath you (you'd earn commission on all of their sales). I left their office to find my car had been clamped and I had to call some number and pay this guy £250 cash! All in all, this was a very bad day!!! However, for some reason... I nearly accepted it! I couldn't explain why to any of my family and I thought I would be judged if I did. I hadn't read this book yet, but it was because I wanted to "work to learn". I just couldn't explain this to anyone else. That evening my Dad said there was a position in the pharmacy at his Doctor's surgery, so I went in the next day and started working straight away. It's safe to say that I learnt diddly squat in this job, so I moved into teaching 3 months later!  

Why are the Title's and Sub-Titles so Controversial?

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Controversy Sells!! Robert Kiyosaki jokes continually about being a "best selling author", not a "best writing author". The title's need to be controversial to get people paying attention to them. If he wrote a book called "financial statements- assets and liabilities explained" do you think people would even pick it up? The theme throughout the book is how entrepreneurs get so many advantages compared to employees. Every entrepreneur needs to be able to sell. In fact, everybody needs to be able to sell, even if it's just you selling your idea over what to watch on TV. When you actually read the words in the book it's hard to argue with. Some of the titles and language he uses to describe employees can be seen as offensive and demeaning. However, he actually still talks about some of the standard financial advice you hear from everyone.     His “rich dad” is actually quite careful with his money. Although he has a business and earns good money, he drives a "normal" car and doesn’t live in a mansion. Too many people equate rich with material things, but these same messages come up time and again. You don't go and buy a Ferrari on finance!! When the cost of a Ferrari is pocket money, then you can pay cash if you must! People become very defensive when they are challenged for living the way that they currently are. This can make them find the negatives in everything and miss all of the crucial potentially life-changing messages in the book.  

What Have I Done Since Reading This Book?

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I read this in 2014 (about 4 years ago). The number one thing I've done... I've learnt more! This book sparked some interest that I didn't even know I had... reading self-development books and improving myself continually. I have read well over 100 self-development books since this. Some have been great, others utter garbage, but I learn something each time. Sarah and I have been on property courses and met some amazing people who are "crushing it" in life. Our business partners deal with millions of pounds worth of property, I have spoken with people earning 6 figures a month online and I continue to talk to new and inspiring people. We started a UK property company, which focusses on buying HMO's (shared house) in England. I certainly never thought I'd technically own 2 companies before turning 30! We started a blog in 2017 and I have since started this online business. I want to help as many people as possible choose to do what they want in life and find ways to increase their cashflow, rather than having to work paycheck to paycheck. It's all about creating TIME! We now set goals annually, quarterly and weekly. These are broken down into smaller daily goals that help us to achieve our bigger and longer-term goals in the future. We have changed our morning routine and daily habits. I got up early this morning and am currently writing this before going to work. Sarah is doing some yoga... If someone had told us we'd be doing this before work (we leave at 6 am!) a few years ago I would have told them they are crazy. The reason we do this is due to a book called "The Miracle Morning", which was actually a recommendation from Robert Kiyosaki! At no point does Robert directly tell you what to do. It is open to interpretation and depends on what your own goals are in life into which route you take.

The main message throughout the book is to keep learning- how can this be a bad thing?

   

Rich Dad Poor Dad: The "MakeTimeOnline" Review Final Word

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This book has literally changed my life. It was the first real self-development book I read so it's hard to say whether I am biased towards it because of that, or if the book is really that good!! On that same note, if I had read some other self-development book that was painful for me to read (and I've read a lot of these!) then there's a good chance I would have not bothered with them anymore! The main lesson is understanding assets and liabilities. The key to becoming "rich" is to acquire assets and limit your liabilities. For me becoming rich means creating a life where I have the time to choose what I'd like to do. I have some monstrous goals that I'd like to achieve in life, and I know I'm not going to be able to do this by relying on a paycheck each month. This book was my first jigsaw piece to figuring out how to make money online to free up my time. I continue to find new pieces all the time but I wouldn't have even started looking if it wasn't for Rich Dad Poor Dad. Keep changing for the better, Mike     If you have any questions and I mean ANY questions about RDPD, please leave them below. If you have read the book before or have any of your own opinions I'd love to hear from you too.   If you are interested in making money online to free up your time, have a look at my #1 recommended program here, which I am currently using.