Despite its popularity, Robert Kiyosaki’s Rich Dad Poor Dad doesn’t teach us much about personal finance. Kiyosaki’s motivational tone may give you a short-lived jolt of inspiration, but his ideas are, ultimately, more flash than substance.
The falsehoods in this book outweigh the truths, and Kiyosaki seems to favor showmanship over concrete financial advice. He exalts the goal of becoming rich, but offers little about how to achieve it.
Read on for the full Rich Dad Poor Dad review, starting with a brief summary of the sensationalized work.
Rich Dad Poor Dad: Summary
In Rich Dad Poor Dad, Kiyosaki discusses growing up in Hawaii and learning from two men, his father and his next door neighbor. According to Kiyosaki, his father struggled financially while his wealthy neighbor amassed a fortune. He comes to call his influential neighbor his “rich dad” and his actual father his “poor dad.”
As the byline of his book suggests – “What the rich teach their kids about money – that the poor and middle class do not!“ – Kiyosaki believes that the wealthy think about money differently from the poor and middle class. He suggests that they know the importance of accumulating assets, and that “the rich focus on their asset columns while everyone else focuses on their income statements.”
He encourages people to be entrepreneurial and self-employed, and he questions the value of traditional education. In Kiyosaki’s mind, it’s much more valuable to have financial literacy skills and to “think rich” than to have a college degree. Rather than saying you can’t afford something, he writes, you should open up possibilities for yourself by asking, “How can I afford it?”
On its most basic level, Rich Dad Poor Dad contains a few useful pointers about finance. When you look deeper, though, the book’s problems begin to emerge. Before delving into where the book goes off the rails in this Rich Dad Poor Dad review, let’s consider what it gets right.
What Rich Dad Poor Dad Gets Right: 3 Main Lessons
There are three main points in Rich Dad Poor Dad that are sound financial advice. Each is a general point that prompts readers to think critically about assets and their personal finances.
1. Accumulating Assets Is Important IF You Want to Be Independently Wealthy
Kiyosaki talks at length about how people who are independently wealthy focus on productive assets rather than income. When he says, “The poor and the middle class work for money. The rich have money work for them,” he’s referring to productive assets, like rental properties, that generate money without much input of labor from the owners.
Kiyosaki praises real estate, although investments in stock index funds are just as, if not more, useful for most people looking to accumulate productive assets. If you’re already a professional in your late 20s or 30s, then you must accumulate assets if you want to become independently wealthy. Why?
Your 30s tend to be a time of peak income. If you’re not already making enough to be independently wealthy, then chances are that your income is not going to be doubling or tripling anytime soon. To reach your financial goal, you should direct your attention to productive assets.
However, a point that Kiyosaki ignores is that not everyone wants to be independently wealthy, and that’s perfectly fine. We can’t all be self-employed. For people who might prefer to remain employees for a variety of reasons, the accumulation of productive assets is not necessarily a driving force in the management of personal finances.
Kiyosaki makes a valid point that the key to being independently wealthy for working professionals involves the collection of productive assets. However, this idea is not necessarily a universal one that would apply to the majority of readers.
2. Assets Must Pay You Money
One unconventional point that Kiyosaki makes has to do with his definition of assets and liabilities. He departs from traditional thought by labeling everything a liability that does not pay you money. A house, he says, is a liability and not an asset, because it does not pay you, and it costs money to maintain.
While it’s a bit extreme to call a house a liability, it is true that assets must pay you money if they’re going to help you accumulate wealth. A better terminology might be “enjoyment assets,” like a house, car, or boat, and “cash flow assets,” like investments or rental properties. To move beyond your yearly income and make more money, you would need to focus on cash flow assets.
3. We Need Better Financial Literacy Skills
Finally, Kiyosaki laments that the majority of people, particularly those whose families can’t afford personal financial advisors, are simply not taught the financial literacy skills they need to succeed in a capitalist economy. He’s not wrong that financial skills are not taught well on a large-scale basis or to people who are traditional employees.
Skills like creativity, entrepreneurship, or the benefits of being self-employed are not widely proliferated by employers. Many of us are on our own when it comes to developing our financial literacy and distinguishing between the good information and the bad.
Luckily, we can learn a great deal from books written by qualified financial experts. Overall, however, Rich Dad Poor Dad isn’t one of those books.
Where Rich Dad Poor Dad Goes Wrong: 3 Major Criticisms
While Rich Dad Poor Dad prompts us to think about assets and our personal finances, it doesn’t teach its readers much beyond that. It has a myopic focus on the superiority of being self-employed, and its stance on traditional education is downright wrong when you look at statistics of education level and income.
These are the three biggest criticisms of Rich Dad Poor Dad that undermine the book’s worth as a financial guide.
1. More Flash Than Substance
It’s really easy to get excited when reading Rich Dad Poor Dad. Kiyosaki writes like a motivational speaker, appealing to your desires and promising quick fixes and big rewards. Kiyosaki’s book is infused with the idea that if people just change their mindset and learn his secret insights, then they’ll be wealthy.
Who doesn’t like the sound of financial freedom? Kiyosaki has seized upon a rich vein of reader interest. You start to feel like you’re working toward financial independence simply by racing through the pages of his book.
In the end, though, you’ll find yourself looking for extra pages with actual, concrete advice. Kiyosaki offers few steps to accumulate wealth and achieve financial freedom. He gives an inspiring intro act, but when the smoke clears, there’s no main show behind the curtain.
Some of the few tips that Kiyosaki does offer, furthermore, are questionable. For whatever reason, probably because of his own personal experience, he celebrates real estate and slams stocks. In reality, there’s no such distinction between the two investments. Both are fine, and stocks are actually a much better option for the average investor.
Kiyosaki’s chapters may seem at times aspirational and inspirational, but there are very few times when they’re informational. When he does touch on concrete advice, it’s narrow in scope and oftentimes misleading.
2. Too Black and White About Being Self-Employed
Kiyosaki takes a hard stance on the merits of working for a company versus working for yourself. He says categorically that employees have less desirable lives. Some Rich Dad Poor Dad quotes call employed people “hamsters” and “rats” for “choosing the rat race.” Whatever your view, Kiyosaki’s choice of rodent-related metaphors to describe the employed is undeniably insulting.
What underlies Kiyosaki’s assumption that everyone should be independently wealthy and self-employed beside his own personal experience? In fact, the authors of the bestselling book The Millionaire Next Door revealed that many of America’s millionaires are employees who save prudently and invest their income wisely.
In Kiyosaki’s mind, a job is only useful as a way to learn skills that you can eventually use to start your own business. But what about, say, a professional who makes $100K a year, can send her kids to high-quality schools, care for her parents, and regularly eat at her favorite restaurants? What about a nurse who is not highly paid but gains great fulfillment and satisfaction from caring for others?
In focusing on asset accumulation, Kiyosaki ignores issues of quality of life and day-to-day spending that, in essence, have a lot to do with what people are talking about when they say they want to be rich. Few people imagine wealth as a life of storing assets away in a vault. If an income can give you the financial resources to live an enjoyable life (and ideally, other kinds of fulfillment, too), then how does remaining an employee and sticking with an income make you a “hamster” spinning fruitlessly on a company wheel?
Kiyosaki’s entire premise rests on his assumption that all people should strive to be self-employed and independently wealthy. It’s unclear, though, why this is a desirable guideline to shape your approach to finances. If anything, this perspective may be merely a cheap tactic to establish narrative control. By acting like other people are wrong, Kiyosaki establishes his advice as right and superior. It is little more than a salesmanship tactic, and a flimsy one at that.
When it comes to accumulating wealth and boosting your personal finances, you might not find that asset accumulation and self-employment are superior to stable employment.
3. Ignores the Value of Education
Kisoyaki’s actual father, who he calls his “poor dad,” was highly educated. He graduated from Stanford, Chicago, and Northwestern universities, ultimately with a Ph.D. He headed Hawaii’s education department, owned his home, and could be considered upper middle class.
According to Kiyosaki, his father struggled with finances, or perhaps he just never accumulated wealth in the way that his “rich dad” neighbor did. His neighbor, by contrast, was an 8th-grade dropout. Kiyosaki concludes that traditional education is ineffective, even a sham. Becoming wealthy has to do with financial skills, he says, which can, and perhaps must, be learned outside of the classroom.
Kiyosaki’s denigration of education is both dangerous and wrong. Many studies show that higher education levels correlate to higher income levels. People with higher educational attainment are also more likely to have more stable relationships and a greater sense of well-being.
Consider the data below from the Bureau of Labor Statistics (2015). It compares median weekly earnings and unemployment rates with educational attainment.
| Education Level | Median Weekly Earnings | Unemployment Rate |
| Doctoral degree | $1,623 | 1.70% |
| Professional degree | $1,730 | 1.50% |
| Master’s degree | $1,341 | 2.40% |
| Bachelor’s degree | $1,137 | 2.80% |
| Associate’s degree | $798 | 3.80% |
| Some college, no degree | $738 | 5.00% |
| High school diploma | $678 | 5.40% |
| Less than a high school diploma | $493 | 8.00% |
When education goes up, so does income. By downplaying the value of education, Kiyosaki is ignoring the statistical reality. Given the problems and skewed perspective in Rich Dad Poor Dad, is it worth reading overall? Should you join the millions of other people who have read this book in the hopes of gaining some financial insight?
Should You Read Rich Dad Poor Dad?
If you’re new to personal finance, you should steer clear of Rich Dad Poor Dad. The entire book pushes a motivational, quick fix mentality that is neither useful nor applicable to most people. Plus, its anti-educational tone could lead many down a risky and fruitless path.
Some readers praise the book for getting them to start thinking about their approach to finances and to open themselves up to the idea that they could make more money than they had previously thought possible. The book can accomplish this kind of inspiration, but there are lots of better finance books out there that can motivate while instructing at the same time. Rich Dad Poor Dad is woefully light when it comes to concrete, effective action.
As discussed above, the best parts of this book are the ones that discuss the importance of building future cash flow for those who want to be independently wealthy. You must accumulate cash flow assets, rather than enjoyment assets, that will generate money beyond your annual income.
However, reducing your consumption and investing your income in a smart way is another way to accumulate wealth. If you read The Millionaire Next Door, you’ll discover that increasing your savings rate, rather than dramatically increasing your income stream, is the most common path that people take to become millionaires within a single generation.
Kiyosaki’s perspective is extreme, and those new to personal finance risk getting turned off by his condescending attitude toward anyone who chooses to stay employed rather than make the leap to self-employment. How many people can his polarizing stance connect with, in the end? Not many.
Rich Dad Poor Dad: Final Thoughts
Having sold over 36 million copies worldwide, Rich Dad Poor Dad clearly resonated with a lot of people who share the dream of financial independence and security. Unfortunately, the book is more grounded in emotion and aspiration than in fact. It offers little in the way of a blueprint for those wishing to follow in Kiyosaki’s footprints, or at least for those who want to move closer to realizing the dream of financial independence.
If you decide to give the book a try, make sure to read it with a grain of salt. It’s all too easy to get impressed by Kiyosaki’s lavish lifestyle and promises of financial transformation, but in the end, you’ll find yourself in the same financial position, minus the cost of one book.
Rich Dad Poor Dad promises riches on its surface, but you’ll find few gems within its pages. There are books that will teach you essential financial literacy skills to manage and maximize your money in an effective way. Rich Dad Poor Dad, though, isn’t one of them.
