November 24, 2011 Leave a comment
This week we take a look at Rich Dad, Poor Dad by Robert Kiyosaki. RDPD tells the story of an extremely successful businessman who preaches to be financial literate. Kiyosaki claims that even the most intelligent people in the world who have tons of education can be poor because they don’t learn how to manage money correctly and make money work for them, instead they spend their lives working for money.
To illustrate his points, Kiyosaki tells his own story of growing up with two fathers. One is his well educated father with several post graduate degrees and a wealth of knowledge from studying. He also happens to be his “poor” father (and his biological one). The father to his childhood friend is who he considers his “rich dad”, a man who didn’t even complete high school and wound up an incredibly successful and wealthy businessman by learning how to make his money work for him instead of the other way around. Kiyosaki grew up learning from both individuals, attributing his success to being able to balance the two and learn from both.
Kiyosaki preaches a lot of things in this book, and drives home some interesting concepts that are worth noting. One such thing is that Kiyosaki drives home the difference between an asset and a liability. Anyone who has taken a finance or accounting course should be able to tell you the difference. However, Kiyosaki suggests that most people know the definition, but don’t understand the true nature behind them and how to recognize assets and increase the asset column (which is the key to successful long term financial independence).