Wednesday, May 11, 2011
When my daughter Raeann had to write a critique for her critical writing class in college on the book Rich Dad Poor Dad. My first Thought was, "wow, what a great book for a critical writing class." This book has been used in companies like AmWay and other multilevel marketing to their neophyte sales staff to give them the motivation to sell their products. My brother became enamored of this book, but the book itself is based on a fraud.
By my daughter Raeann
A Critique of Rich Dad Poor Dad
Robert Kiyosaki’s self-help book “Rich Dad Poor Dad” is a mixed bag of sorts. It offers some valuable financial advice for the average investor, but the book is geared toward the risk-taker, and that is its major fault. It takes a certain type of individual to be able to incorporate the philosophy set forth in Kiyosaki’s book, yet he makes it sound as if anyone can implement it. But not everyone can take on the kind of risk Kiyosaki suggests. Although the author provides some valuable life lessons such as choosing the right friends and having good money management skills, he also appears to be anti-school and implies that his is the only way to become self-made, and as Robert Lang points out in the South African Sunday Times it also seems that his two “dads” are archetypes, not real people as he claims.
Kiyosaki tells us to choose friends wisely. He makes the valid point that friends can be important in the decisions one makes when he states, “I have friends who have actually taken the vow of poverty as well as friends who earn millions every year. The point is I learn from all of them, and I consciously make an effort to learn from them. ” (169). Kiyosaki explains that you can learn from your friends from all walks of life, and you must choose them carefully. There is a saying in Spanish: “Dime con quien andas, y te dire quien eres.” It means “Tell me with whom you walk and I will tell you who you are.” People tend to emulate the people with whom they associate, and Kiyosaki is wise to recommend to his readers that they attend to the significant influencing factor in everyone’s life. Kiyosaki makes a point that we should cultivate relationships from people who are knowledgeable about money because this is how one learns. But it can be confusing to the reader when he said that he actually sought out people who had money even though some had later become friends. It is understandable to want to learn more about finance and money, but continuously to try and seek out those with money would appear that money would become the all consuming motive for friendship, not the friendship itself. Friends can either have a good impact on life or they can have a negative impact, so choosing friends carefully is a good life skill to know and use, and this is good advice Kiyosaki gives, but money should not be the all-consuming motive. Kiyosaki also has some good ideas on money management.
Kiyosaki stresses the importance of financial literacy. Financial literacy is learning about money, assets, liabilities, cash flow, and stocks. It is very important to learn about money, especially from a young age, he implies, because this way the youth will make the right financial decisions that will last a lifetime, and not grow up living from paycheck to paycheck. A lottery winner will end up impoverished because of financial illiteracy he notes. He stresses this point when he says, “it is not how much you make, it is how much money you keep” (56). He talks about paying oneself first as a way of accumulating wealth. As time goes on, savings will increase and investments will grow with the magic of compounding at phenomenal rates. These nice pithy clichés sound nice to the unsuspecting reader, and his advice to become educated in finance is good but basic common sense, and for some strange reason, Kiyosaki also appears to be anti-school.
According to the author, school is no longer an important element in advancing a career. Kiyosaki seems to be under the belief that instead of making you rich, school often trains you how to make others rich when he says, “A problem with school is that you often become what you study…the mistake in becoming what you study is that too many people forget to mind their own business. They spend their lives minding someone else’s business and making that person rich” (87). By minding someone else’s business, he means working as an employee instead of being an employer or an entrepreneur. In fact, In Kiyosaki mind, schools actually steer individuals in the wrong direction. While this is true to a degree, Kiyosaki does not address the fact that not everyone is cutout to be an entrepreneur. Career oriented people go to school, obtain a degree, spend a lifetime working for an employer, build wealth slowly over time, and retire happily at 65. Kiyosaki tends to brush these people aside. He makes it seem as if the only way to be rich is to leave the vagaries of school behind and “mind your own business.” He doesn’t mention anything about the good aspects of going to school, which can be discouraging for some readers who have been successful and consider school to be a training ground in itself. And what better place to meet the kind of friends Kiyosaki would have his readers make? Just ask the founders of Microsoft, Google and Facebook about that! And when he talks about risk- taking it can be just as far-reaching.
Kiyosaki does admit that there is risk in his philosophy of accumulating wealth and that one even needs to overcome the fear of losing money. He goes so far as to say, by quoting his favorite Texas expression, “If you’re going to go broke, go big” (149). How many people are going to want to go broke? And while there are people that can recover from going broke - what about the people that cannot? What about the emotional toll that such a loss would have on the family? How many foreclosures have we seen in this economic crisis or stores boarded up and closed? Did any of these people decide to take Kiyosaki’s advice?
Any self-help book calling itself Rich Dad Poor Dad would seem to promise a lot, and self-made rich man Robert T. Kiyosaki's playbook does not disappoint. However, along with promise comes the presumption that every reader embraces risk taking and eschews formal education the way he does. Such transformative advice as choosing the right friends is not as much bad as it is obvious, impractical, and ingenuous. Having good money management skills is not bad advice, either, just time-worn. But really, who would be willing to follow the advice of an author who plays coy when it comes to identifying the two dads he uses to embody his claims? (Economy Business and Finance 1) Perhaps this book’s strongest point is that it personifies his philosophy so exactly. Instead of going to school or a job, use business terminology to write a flimsy book on the obvious, find some friends in the publishing business, and then watch as other people’s money moves from their pockets to his.