Gwangju International Center

Generally speaking, personal finance books fall into one of two categories: those that offer step-by-step instructions on how to improve your financial situation and those that discuss how to think about money.  Rich Dad, Poor Dad is definitely in the latter category. I have some pretty mixed feelings on this book, because while Kiyosaki discusses some very intriguing ideas, he also at times descends into a rambling assembly of derogatory comments, disjoined commentary and inflammatory jargon that amounts to nothing.

On a positive note, Rich Dad, Poor Dad avoids overly technical language and contains a number of pretty cool "cash flow" diagrams, which make Kiyosaki's explanations easy to follow. Also, a lot of the book is written in the style of a parable, so it is more like reading a story, rather than a textbook. As well, I have to admit that the book provides a fresh perspective on financial matters, redefining what count as "assets." Kiyosaki says an “asset” is anything that generates revenue for you. Under this definition, the house you own and live in is not an “asset.” The ultimate goal, according to the book, is to reach a level where the income generated by your assets is greater than your expenses. So in theory, if you had a vending machine that provided you with enough profit to cover your rent and groceries, you would be "rich." While this is a nice idea, it is one of the last good ones in the book.

A lot of advice in Rich Dad, Poor Dad is far from practical and I feel that Kiyosaki tries to appeal to people's greed rather than common sense. For example, he describes multiple real-estate deals in which he claims to have made five-figure sums over a few days with little or none of his own money. To me that sounds too good to be true.  Something else that really irks me is that he repeatedly talks about all the cars and expensive stuff he has, as if the point of becoming wealthy is just to participate in conspicuous consumption.

But by far, my biggest gripe with this book is that Kiyosaki is opposed to living within one's means and instead insists that one should constantly seek to "increase one’s means." This sounds good in theory, but it also ignores that all too common phenomenon called "lifestyle inflation," meaning that when we make more money, we almost always spend more of it. Also, quotes such as "use the financial pressure (from lack of money) to inspire your financial genius to come up with new ways of making more money and then pay your bills" are laughable and not particularly helpful.

So basically, if you are looking for a way to pay down credit card debt or balance your cheque book, this is definitely not the book for you. I tend to feel that a more sensible approach to building wealth is to practice self-control and living below your means: not by taking on risky business deals as the author suggests.  That being said, I still think Rich Dad, Poor Dad is worth a read, because it will definitely help you think of money differently.