Nov 27, 2006

Rich Dad Poor Dad - Book Review

This book by Robert Kiyosaki was a fast read. I often have trouble finishing books I pick up, but this one was a relative breeze. The narrative is at times pulpish and repetitive but here are some messages:
  • Assets are stuff that generate lots of income for you (more than inflation); grow them
  • Liabilites are things that add to your expense column; limit them. Examples include a costly house that you are buying without a good asset base to back you with.
  • Taking on more and more liabilites with a rising income (due to 'Desire') keeps you in a never ending race to meet the resulting expenses (eg: mortgage payments). It is like a rat in a flywheel, runs all day but gets nowhere. Hence the term 'ratrace'.
  • It is key to overcome 'Fear' (of loss of income, stigma etc), which again keeps you in the rat race.
The take aways for me were:
  1. Learn to manage your fear and desire and get the hell out of the rat race before it consumes your life.
  2. Get wealthy - create recurring income from assets that exceeds monthly expenses. Then you can happily chuck that lousy job you are stuck at.
  3. 'Rich' is in the eye of the beholder (OR you can never be rich enough). I felt it is important to get wealthy (and not necessarily rich) since you get financial independence.
Apart from that Kiyosaki goes into a long banter about his real estate accomplishments (almost makes it sound easy how he made money out of thin air!), his child hood stories, his gadgets (Rolex, Porsche) etc which makes the book some sort of a novel. Nevertheless he has succeeded in spinning a best'sell'er out of the book with its curious title and racy reading. May be that is needed to grab the average buyer's attention who also gets some insights in the bargain.

Amazon Link to the book, 'Rich Dad, Poor Dad: What the Rich Teach Their Kids About Money--That the Poor and Middle Class Do Not!'


Anonymous said...

Very lucid review. Read his other books and review them. This will save me time - dont have to read, and money - dont have to buy.

Anonymous said...

Very nice review...
If you had read "Watch TV & Get RICH " cramer's book on stock tips.... i would love to read that review from you..

Anonymous said...

What I liked about the book is the way in which RK built it in the form of a story and narrated it. I have read a couple of management books and found it very dificult to read through the last page.