Friday, September 14, 2007

Weekend Book Review - Rich Dad Poor Dad

I usually don't read much of finance advice centric books but this guy Bob Kiyosaki's book had been mentioned by many people who aim to think forward and think big. Usuually so most of the "Self help" "How to" series that I come across, I marginally see it with one eye open and hope not to see the book again, but this one is quite different in a sense that it highly talks about financial freedom and how to do it the wise way. Recently one of my family members too made a mention of this book which set me thinking I should read this book. Oh however, I was quite fascinated by this whole thing that I did a bit of research on this author and seems like there are quite a number of folks who seem to be against this thought - visit this "Site" for details.

Rich Dad, Poor Dad is Robert Kiyosaki's first best-selling book. In it, he advocates financial independence by means of investing, real estate, owning businesses, and the use of finance protection tactics.Rich Dad, Poor Dad is written in what is meant to be an entertaining anecdotal manner to make finances interesting. The most central element stressed by Kiyosaki is the advocacy of owning the system or means of production, rather than being an employee of someone else.

The book takes the form of a story. It is largely based on Kiyosaki's own upbringing and education in Hawaii, although the degree of fictionalization is disputed. Because of the heavy use of allegory, some readers believe that Kiyosaki created Rich Dad as an author surrogate (a literary device), discussed further in the criticism section below. I did a bit of "Googling" to find that many believe that the "Rich Dad" in the book, is actually the founder of the "ABC convenient stores" which is found in the most populated areas of a number of the islands of Hawaii.

The Poor Dad in the story is based on Kiyosaki's real father, a PhD holder and graduate of Stanford, Chicago, and Northwestern University, all on full scholarship, who was the head of the Education department of the state of Hawaii. In the book, he is greatly respected until he decides, late in his career, to take a stand on principle against the governor of Hawaii. This leads directly to Poor Dad losing his job, and his inability to find comparable work ever again. Because he has never learned to handle money, instead depending on the government (his employer) for support, he dies in severe debt.

In contrast to this character is Rich Dad, his best friend Michael's father. Rich Dad dropped out in 8th grade, but became a self-made multi-millionaire regardless. He teaches Kiyosaki and Michael a variety of financial lessons, and insists that the boys learn to make money work for them to avoid spending their whole lives working for money, like Rich Dad's employees, as well as Poor Dad, and indeed most of the people in the world.Anthony Robbins holds a seminar called 'Wealth Mastery'. Some have claimed that Rich Dad was a person named Richard Kimi, the deceased founder of Sand and Seaside Hawaiian Hotels.The book highlights the different attitudes to money, work and life of these two men, and how they in turn influenced key decisions in Kiyosaki's life.

Among some of the book's topics are:the value of financial intelligence that corporations spend first, then pay taxes, while individuals must pay taxes first that corporations are artificial entities that anyone can use, but the poor usually don't know how Kiyosaki says the rich think differently in how they define simple words like assets and wealth, and how they fund their luxuries. He explains that he defines an asset as any item which produces income (such as rental property,stocks or bonds), and a liability as anything which produces expense (such as one's own home, new widescreen TV, exercise machine, new garden tractor, motorcycle, computers, processed foods, swing sets, barbecue grill, tools, letting your property rundown and a new car every two years).No one disputes that the rich buy "income-producing assets". Kiyosaki argues that the poor buy worthless items that they think are assets, which clearly do not earn anything, and may have no market value.According to Kiyosaki, wealth is measured as the number of days the income from your assets will sustain you, and financial independence is achieved when your monthly income from assets exceeds your monthly expenses. Each dad had a different way of teaching their sons.

In the end, I strongly recommend anyone who has an interest to read to just do a light reading without thinking much to it. This book is a wonderful book, critically acclaimed and I think the guy has done good. I give it a 4 star on 5.

Labels: ,