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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?

#81

Post by Czarnian »

aculver wrote: post #68
ArbitraryLimits wrote: post #53

Earlier quoted context omitted.

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.

Anyone familiar with this able to give a quick overview of the legality of this? I've looked into this before and it sounded to me like doing this too much (e.g. all your meals?) is dishonest and/or illegal.

It's legal until you get audited. Then, depending on the quality of your attorneys and accountants, it may still be legal.

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

#82

Post by Czarnian »

davidw wrote: post #69
tomp wrote: post #29

Earlier quoted context omitted.

Why scammy? It's pretty common sense that these books do not offer any recipes for wealth creation, but they do offer something very important: the correct mindset for wealth creation. That is something that many many people lack and need. Finally, if you find it useless, why do you assume that everybody else does so as well?

> these books do not offer any recipes for wealth creation Oh but they do: for the authors. The problem with them is that there is little of substance and lots of feel-good hand waving. The good bits could usually be summed up on a page. Compare and contrast, with, say "Founders at Work" where each story is different, unique and interesting in its own way.

Don't forget the ever-present promise that if you give him just twenty more dollars, he'll reveal the secrets to his success.

Unfortunately, the secret to his success IS the act of giving him twenty more dollars.

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

#83

Post by GFischer »

jpdoctor wrote: post #73
GFischer wrote: post #51

Earlier quoted context omitted.

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 min…

> maintaining them What?! How is that consistent with "invest in assets that make money for you without you having to be there"? Obviously I'm snarking. The idea that you can generate money and do no work is fertile ground for self-help hucksters. BTW: I've never met any landlord who ever believed that they weren't earning every penny, and who didn' have scars to show for it.

I'm sorry, I didn't want to refute your point, but I do believe that saying that "Income generating real estate is a recipe to hand your money over to scamsters" is too harsh and partially incorrect.

My father goes to his rental property maybe twice per year, so he most definitely isn't "there". He does have to keep it in mind, pay for repairs, and make some phone calls.

I believe that making money of rent is "earning every penny" because he put all his effort before in creating the capital, but, to make a comparison, he makes the same for his maybe one day a month (plus the initial capital) than I do for a month of work.

So I'd describe it as an "asset that makes money for you without you having to be there".

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

#84

Post by chaostheory »

From the point of view of the article, I think two of the major points aren't crap.

1) > 1. Education is important, but always second to financial literacy. People turn out poor because they’re not taught financial literacy.

The first one is apparent. I definitely agree that his books, especially the later titles are scammy. However they are not completely without any value. Kiyosaki is more like a motivational guru than a finance expert. I think the message that it's better to produce than to consume is pretty successfully conveyed.

3) >Pay yourself first. Even if the government comes knocking on your door, you deserve to be paid first. The best way to do this, in Kiyosaki’s opinion, is to hide under the umbrella of a corporation. The author fails to recognize the difference between business expenses and personal expenses.

I admit that this is bad advice, but for different reasons. It's something I wouldn't do myself, because it isn't ethical and not because it's not effective. Chances are if you're making below 500k, you can get away with this tactic. Even if the IRS does audit you, there are just so many ways to still make it out alive. (One of my friends used to work for a law firm specializing in taxes.)

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

#85

Post by paulhauggis »

huxley wrote: post #27
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…

"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…

"but it's not necessarily a path to success."

Nothing is an absolute guarantee. No matter what the path.

"Were repeatedly screwed by business partners and banks"

If your parents were "repeatedly" screwed over, they really need to take a look at their own decisions. I was screwed over a few times when I was younger. I learned from my mistakes and don't allow people to screw me over.

Your parents might be too honest and nice, which leads to people taking advantage of them. This will happen anywhere, not just business.

"it can be just another rat-race for lots of people."

Some people just aren't cut out to own their own business. My parents, for example, could never own their own business. They are too nice and would get screwed over (my Dad has gotten screwed over more than once in his life in various business deals).

One thing is true: you will never be rich working for other people and this is really the point of the book. For me personally, I would rather make $50K working for myself than $100K working for a large company. It's mostly about the freedom than the money.

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

#86

Post by paulhauggis »

rmgraham wrote: post #67
jhamburger wrote: post #41

Earlier quoted context omitted.

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.

It's been a while, but I'm pretty sure all of his books point out that 9/10 attempts result in failure; the trick being to see the failure early enough to recover and move onto the next attempt before it is too late.

Exactly!

You need to fail fast and keep tweaking your idea until it becomes a success. You also can't be married to one single idea. Many people have a problem with this.

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

#87

Post by pavelkaroukin »

The thing is - there is no recipe to become quickly wealthy. Everyone will have their own road and no one can use someone else's experience to get to the same place.

What this book gave - overall excitement about possible future, that's it. It should not motivate, not educate.

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

#88

Post by jarin »

davidw wrote: post #69
tomp wrote: post #29

Earlier quoted context omitted.

Why scammy? It's pretty common sense that these books do not offer any recipes for wealth creation, but they do offer something very important: the correct mindset for wealth creation. That is something that many many people lack and need. Finally, if you find it useless, why do you assume that everybody else does so as well?

> these books do not offer any recipes for wealth creation Oh but they do: for the authors. The problem with them is that there is little of substance and lots of feel-good hand waving. The good bits could usually be summed up on a page. Compare and contrast, with, say "Founders at Work" where each story is different, unique and interesting in its own way.

I agree that Founders at Work is a far superior book as far as useful, actionable information goes.

However, I probably would never have read Founders at Work if I hadn't been inspired to get into entrepreneurship by Rich Dad, Poor Dad.

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

#89

Post by dgreensp »

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…

Agreed entirely; I enjoyed RDPD as well. The review is indignant sputtering, as vague and insulting as the book is claimed to be. "Common sense looks like genius when it’s viewed from a cesspit of stupidity"? The reviewer's final attack is to admit you may learn something from the book, but only if you're stupid.

Every time someone (like the reviewer) uses the phrase "beat the market," I sigh and shake my head. To hear some people talk, you'd think getting a job was "beating the job market"; riding the bus is "beating the transportation market." Somewhere out there, phantasmic figures are matching opportunities with takers perfectly, so that every prospect becomes break even; every creative, individual, independent action you could take is rendered pointless by unseen forces. You might as well sit on your ass. It's efficient market theory turned demotivational wisdom.

Surely, if there were so much value to my being across town, it would cost me more than $2 bus fare. Or a professional trader would have already found me, told me where to go, and made a profit on the transaction. You can't beat the market.

I only developed a head for business in my 20s, but I imagine that if I had been running lemonade stands and mowing lawns as a kid, I would be immune to thinking that opportunities were for others to discover, or were already exploited, or that being enterprising only brings risk. This is the kind of lesson taught by RDPD, and I wonder if the reviewer has learned it.

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

#90

Post by moonchrome »

SkyMarshal wrote: post #55
jhamburger wrote: post #41

Earlier quoted context omitted.

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.

Not necessarily. Only a very naive entrepreneur would fall for this and they would be sorted out rather quick. People fail or know/realize the huge amount of uncertainty and still choose to do startups. Different people have different levels of risk aversion and there is no common goal/value system.
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