Comments: My List of Must-Read Books

I recently posted My List of Must-Read Books and someone asked the following question:

What about the book Rich Dad Poor Dad? Have you read that one? It's one at the top of my list.

I didn't get to respond right away, and someone posted the following comment:

I have read several books in the Rich Dad / Poor Dad series. I like them, with two caveats. First, they bear a strong stylistic resemblance to The Richest Man In Babylon. They share some of the good points of that book in that both make some very important points about personal finance and investing in the form of parables. You will get much of the same value for The Richest Man In Babylon in that respect. Secondly, not all of Kiyosaki's advice is not for everyone or for every stage in your investing career. I suspect that most of it is useful to some of his audience.

Read Kiyosaki carefully. There are some real gems of universal advice. One I particularly liked was to not view your home as an asset. It's a good example of why you should think about his advice. I agree that your home is not an asset per se. However, I disagree that it is solely a liability. The reason is that most liabilities are things you can do without if you want to. You don't have to carry a credit card balance or take out a loan to buy a car, but you are going to have to wait longer to make purchases. However, you need a place to live, whether you buy or rent. As such, I would rate his books favorably, but in the neighborhood of about 5-6 stars.

This is where I net out for the most part with the following additions:

1. I think there's a big difference between Rich Dad and The Richest Man in Babylon, though I like both.

2. Overall, I think Rich Dad would get 7 stars from me. There's some good stuff in it.

3. I don't really care whether or not the stories of the two dads are true or not (an objection that's been raised in the past years), the financial advice is generally good.

4. In the past few years, Kiyosaki himself has become a bit more "unusual" in his financial suggestions. So much so that I don't agree with his most of his current philosophies. Said another way, while I like the Rich Dad book, Kiyosaki's current teachings wouldn't get many stars in my book.

Comments

[Joe D]

I recommend that you and your readers check out http://johntreed.com/Kiyosaki.html for a thorough criticism/debunking of the Kikosaki mystique.

[FMF]

Joe --

I've read that, but can't agree with it 100%. Obviously the author has his own point of view and intentions (to sell his own book) and he spends most of his time on topics that are not of interest to me (like whether or not Kiyosaki actually had a rich/poor dad -- who cares?). Plus, his tone is vengeful, spiteful, and sarcastic which I find difficult to read.

I think you need to separate personalities from what they say (in other words, do they have some ideas/concepts that work despite the fact that they have some bad personal traits) and my thoughts on RD/PD above do this.

[javasoy]

I can't take advice from anyone that didn't actually create wealth from what they teach. in this case, John Reed was right, Rob K didn't make his fortune by investing in real estate. He did it in selling his books and his ludicrous board game. Personally, I don't care too much about the real estate "investment" business. it's too much work and (because of the huge leverage) the risk is too high for a low margin business. The game makes up the low margin by the high dollar amount, which requires a higher leverage to achieve sensible ROE.

Business class 101. Anywayz, I am off topic here. Rob K thinks education is worth crap, which I absolutely disagree with.

[Yow Chuan]

I have read John's article a some time back when I was discussing about Kiyosaki's methods of creating wealth with my friends.

And I would say all publications and books out there is only a guideline and knowledge pool that we come upon in our path to financial independence, and it is up to us to apply them in our lives in and see if it is a valid course of action. Many however, due to the hype of the moment (you can even call it hypnotism), quit their job and become self-employed without even planning it thoroughly.

It's just a guide, and every decision we make is based upon the knowledge that we've accumulated. So I guess the more we read, the better the quality of our decisions will be.

It's true to say that "one man's poison is another man's meat".

And yeah, if John Reed had soften his approach a little, he might have received a higher degree of respect from the majority of the readers.

[Duane Gran]

Kiyosaki is a writer foremost, and it isn't clear if he is actually a successful investor, but I think fondly of "Rich Dad, Poor Dad" since it got me on the track to managing finances well. I've "graduated" to better advice, but I think his writing is still set apart from the rest for his ability to explain the difference between an asset and a liability. I believe the ability to internalize the value of an asset, in such a way that you feel as good about purchasing it as one feels about purchasing a liability, is the key to good financial wisdom. For this nugget, I remain positive about Kiyosaki.