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Rich Dad Poor Dad... Worst Personal Finance Book of All Time?

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Re: Rich Dad Poor Dad... Worst Personal Finance Book of All Time?

#51

Post by GFischer »

jpdoctor wrote: post #18
klbarry wrote: post #7

This person severely misread the book. I could give quite a few examples from the writing. For instance, the child labor issue he brings up is ridiculous - "Rich Dad" obviously didn't benefit from this labor in any financial way. The premise of the book is solid; invest in assets that make money for you without you having to be there. He specifically says in the book a few times that he doesn't necessarily advocate r…

> The premise of the book is solid; invest in assets that make money for you without you having to be there. Sounds like a recipe to hand your money over to scamsters. Esp as it was proven out by "Income generating real estate" in the past decade.

My grandparents live off "income generating real estate", and my father is on his way (it's his nest egg for his retirement).

They were not "flipping" properties; rather, they bought good properties when the market wasn't inflated, and rented them, maintaining them and keeping the tentants happy.

It does take some work, not as much as being employed of course, but you have to be on top of things and it takes some mindshare.

There's a real estate bubble here in Uruguay because property rentals pay above-average returns - currently way above average, but market forces are pushing them down as they should, rent is starting to drop as more apartments enter the market.

Re: Rich Dad Poor Dad... Worst Personal Finance Book of All Time?

#52

Post by jisaacstone »

jhamburger wrote: post #41
huxley wrote: post #27

Earlier quoted context omitted.

"the most important message in the book is that business and entrepreneurship is the path to success" No, it may be one of the best paths to wealth and independence --unless you're born into wealth already -- but it's not necessarily a path to success. My parents worked themselves to the bone in business, were repeatedly screwed by business partners and banks. It didn't give them one bit of gratification. My mother w…

I think history tends to be written by the winners when it comes to entrepreneurship. It's a lot harder- and a lot more luck involved- than many would admit.

I think the problem is not the failure to admit - most entrepreneurs would admit the struggle with honesty. It is more like an availability heuristic - success stories make the news, failures usually do not, and so many people have no idea what the success rate is.

Re: Rich Dad Poor Dad... Worst Personal Finance Book of All Time?

#53

Post by ArbitraryLimits »

brador wrote: post #31
zavulon wrote: post #10

I disagree.. the most important message in the book is that business and entrepreneurship is the path to success, NOT being an employee and staying in the rat race. While it may be common sense to someone who's been in business for a while, or read a lot of similar literature, it's far from obvious to most people. I'm not ashamed to say Rich Dad Poor Dad has been one of the most influential books I've read in my life…

"what you can't afford your business can" Any more details on what this one means?

Tax breaks. A surprisingly large portion of the book is in praise (what's the opposite of a screed?) of having a company you control pay for your meals, car, and house so you avoid personal income tax.

Re: Rich Dad Poor Dad... Worst Personal Finance Book of All Time?

#54

Post by bstpierre »

klbarry wrote: post #7

This person severely misread the book. I could give quite a few examples from the writing. For instance, the child labor issue he brings up is ridiculous - "Rich Dad" obviously didn't benefit from this labor in any financial way. The premise of the book is solid; invest in assets that make money for you without you having to be there. He specifically says in the book a few times that he doesn't necessarily advocate r…

The idea of a "passive investment" is a joke.

The example of a web app as a passive investment is crazy -- how many apps exist that won't require support, ongoing maintenance, etc? That's significant work.

Stocks, bonds, mutual funds -- the returns here are small enough that you can't generate income to live on without a huge up-front investment. If you could manage a consistent 8% yield you'd be doing well, and it would $1M to generate an $80k annual income.

Real estate -- I know a couple of part-time landlords, and this is not passive work. They have to deal with tenants, maintenance, etc. Sure, you can hire a property manager, but that cuts into your returns.

Royalties -- This is hardly passive. What's the half-life of IP these days? You can write a book, but it will likely be out of print within the year. If you manage to publish something reasonably popular, you'll likely have to build a franchise around it, which means that you'll have to work at writing more books. Even if you hire ghost writers, you have to find them, manage them, deal with marketing, etc.

One of the takeaway lessons I got from b-school was that "there are no long term economic rents". In other words: if something is profitable (easy money), then other people will enter the market and the profitability will decline. Sure, there are barriers to entry, etc. but all else equal the crowd will follow the easy money and suck the profit out of it.

Re: Rich Dad Poor Dad... Worst Personal Finance Book of All Time?

#55

Post by SkyMarshal »

jhamburger wrote: post #41
huxley wrote: post #27

Earlier quoted context omitted.

"the most important message in the book is that business and entrepreneurship is the path to success" No, it may be one of the best paths to wealth and independence --unless you're born into wealth already -- but it's not necessarily a path to success. My parents worked themselves to the bone in business, were repeatedly screwed by business partners and banks. It didn't give them one bit of gratification. My mother w…

I think history tends to be written by the winners when it comes to entrepreneurship. It's a lot harder- and a lot more luck involved- than many would admit.

Survivorship bias and narrative fallacy pervade almost everything, it seems.

Re: Rich Dad Poor Dad... Worst Personal Finance Book of All Time?

#56

Post by swang »

A couple months ago there was an article about people in NY who wanted to charge $3K+ to teach others how to program in Ruby. HN went ballistic, "How could you charge so much when you can learn it all on the Internet?"

Yet for some reason when the field isn't exactly an area of expertise for most HN readers, and the author of the book is giving only common sense financial advice, you get tons of people here saying that the book is pretty decent because it reaffirms common sense financial advice. Never mind that you can find most of this advice on the Internet... For Free!

So my question is, why isn't there more outrage that Robert Kiyosaki wrote a book and charges $11-20/book for common sense advice, but when people try to charge money to teach Ruby, people on HN get angry? Is it the price? Wouldn't you say that to someone who knows nothing about either subject, that a $3K class that teaches you a skill is worth more than a $20 advice book?

Re: Rich Dad Poor Dad... Worst Personal Finance Book of All Time?

#59

Post by nostrademons »

swang wrote: post #56

A couple months ago there was an article about people in NY who wanted to charge $3K+ to teach others how to program in Ruby. HN went ballistic, "How could you charge so much when you can learn it all on the Internet?" Yet for some reason when the field isn't exactly an area of expertise for most HN readers, and the author of the book is giving only common sense financial advice, you get tons of people here saying th…

Well, for me Rich Dad Poor Dad was free, because I got it out of the public library. People actually pay for books?

Re: Rich Dad Poor Dad... Worst Personal Finance Book of All Time?

#60

Post by AlexBucataru »

martinkallstrom wrote: post #24

I disagree with the review. The book doesn't contain a complete and perfect path to personal wealth for anyone. But what book could ever accomplish that? Disclaimer: I read it several years ago. But the takeaways of the book that stayed with me to this date are: * Don't get emotionally attached to the concepts of money and debt. Money is not worth anything by itself and debt is not bad by itself. They are simply tool…

This would be a more accurate review that the OP :)

Another big takeaway for me was that you cannot have a healthy relationship with your money until you stop working for the money. Work for passion, curiosity, experience, whatever satisfies your mind, and you will start seeing the bigger opportunities for profit; the ones that can free you from the rat race of selling away your life (time & effort) in the hope of improving it.

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