There are several reasons I don't like Kiyosaki's books including:
- I didn't learn a single thing that I could apply from the 3 that I read (Rich Dad Poor Dad, Cashflow Quadrant and Rich Kid Smart Kid). He has no strategies that can be followed. There is only the vague sense of "you can do it too".
Even he says that most of the change you need to make is in mindset - thinking in terms of assets and liabilities and being able to recognise the difference between the two. eg: cars.
Just this one thing can change a person's life. We get loads of young blokes coming into the workshop with pretty clapped-out Commodores and Falcons. Not worth a pie. But, they want to lower them, put on 20" wheels and all this (I was the same ). It's terrific in their mind, but it's really a waste of money. Now, if they knew the asset/liability rule, they would spend bugger-all on the money-pit bomb, keep it on the road just as transport instead of some misplaced status symbol, and put their money into some other investment that might allow them to retire at 40 and buy all the cool cars they want.
- He significantly undervalues education and the ability of wage earners to generate wealth. Somehow he ignores all the high earning employed people with good educations out there (yes I realise the payoffs are higher by owning your own business but so are the downsides).
No he doesn't. He illustrates what most people do; they place all their importance on the you-beaut education to make them rich, but we all know that there are many high earning folk who are still broke, and can wind up with nothing because they don't have financial education. Doctors are one of the worst offenders in this regard sadly.
One of the strangest contradictions in his books (and one I think is particularly pertinent) is that he says that an investor needs to mind their own business. But then he says that wage earners are just making their employers and corporations, banks and the government rich.
What he means by this is while you are making your boss rich, you should also be working on your own business; your own financial empire.
If you're minding your own business surely you don't care how much money they are making
If more wage earners cared about their boss's business, many more people might keep their jobs. What I mean by this is; if we all strive to increase and improve the business we work in as an employee, the business will (hopefully) expand, more jobs would be created, and the better employees would get rewarded with better salaries.
Unfortunately, too many people have the "it's not my job" mentality. They do the bare minimum, shirk as much responsibility as they can get away with (first hand experience), watch the clock and so on. Happily, as a karma thing; most of these people don't advance up the corporate ladder, thus confirming their beliefs and their behaviour, and are often the first to be let go during the lean times..even if they've been there a long time (probably been dead wood for a while, and getting a way with it - or so they thought).
- you should only be assessing your own risk / reward / effort trade off!
See above sentences.
I didn't mean this post to turn into a hatchet job but I just think that his books are the worst of the ones regularly quoted on 'must read investment' lists. A book for entertainment - maybe (but not my style) - a book about investing - definitely not.
Maybe your expectations were to get the "nuts and bolts". I thought like this at first, then I realised he
was - the mindset is part of your nuts and bolts.
