Book 7: Rich Dad, Poor Dad

I just finished reading Rich Dad, Poor Dad by Robert Kiyosaki. I must say that I was a bit disapointed in it. It came highly recommended. For the most part, I liked the book. He compared his real dad, who he called Poor Dad, to his friend's dad, who he called Rich Dad. His Poor Dad was highly educated and had a government job and his Rich Dad was uneducated and was self-Employed.

My main dislike of the book is that he seemed to discount the value of education. To me, it seemed like he didn't see the value of education and he thought the only way to be successful was the own your own business. His plan seemed like a get-rich-quick plan, but hardly works for most people. According to the other books I have read this year, I have learned that financial success takes time, effort, and a "crock pot" mentality. Wealth building takes time.

He tells the story about how he made all his money in Real Estate. Real Estate is a really great investment, but it does come with risks. He said he took a $500 weekend seminar and learned how to flip Spec Houses. It's a good idea but it doesn't always work and to suggest that it does, is wrong. Houses don't always go up in value. Sometimes markets bubbles burst and if you have a bunch of debt piled in Spec houses, you will get foreclosed on (ie. Our House). The man who owned our house watched the weekend seminar, drank the kool-aid, and bought a bunch of rentals and now my dad's bank owns most of them. If you want to invest in Real Estate pay cash for it.

"Studies show that 100% of the foreclosures happen on homes with a Mortgage." - Dave Ramsey

He did have some good points where he says too many people let their money control their lives. That they go through life working for money and never really making it, instead of letting their money work for them.

"Many great financial problems are caused by going along with the crowd and trying to keep up with the Jones." (If you remember the information from The Millionaire Next Door most of the "Jones" are broke.)

Roberts doesn't like to pay taxes...and I don't think I know anyone that does. He made some interesting observations about them though. At one time, Americans were anti-taxes. It wasnt until 1913 that an Income tax became permanent in America. Before that the only taxes collected were temporary to pay for wars.

"It is the idea of Robin Hood, or taking from the rich to give to the poor that has caused the most pain for the poor and the middle class. The reason the middle class is so heavily taxes is because of the Robin Hood ideal. The real reality is that the rich are not taxed. It's the middle class who pays for the poor, especially the educated upper-income middle class...The idea of taxes was made popular, and accepted by the majority, by telling the poor and the middle class that taxes were created only to punish the rich...Although it was intended to punish the rich, in reality it would up punishing the very people who voted for it, the poor and middle class."