Real Estate blog

Why I don’t like Rich Dad, Poor Dad

It’s hard to argue with the success that Robert T. Kiyoski has had with his Rich Dad series. Head over to Amazon.com and you’ll see almost fifty items on offer; Rich Dad in English, Rich Dad in Spanish, Rich Dad for women and kids. Even Rich Dad in Chinese. My personal favorite is the DVD Rich Dad’s 60 Minutes to Getting Rich. Ok, it’s a bit pricy at $79.99…but that’s a small price to pay for a DVD that will make you rich in 60 minutes, right?

Kiyosaki has developed an almost religious following (how else could one sell a Monopoly-like boardgame for $149.99) so the conventional wisdom is that I won’t win a lot of friends by criticizing his approach in a public forum like this one. But… dissenters are starting to pop up – interestingly John T. Reed’s blistering critique shows up at the top of a Google search for both “Kiyosaki” and “Rich Dad”.

Kiyosaki has become wildly wealthy selling his books and tapes and he couldn’t have done this without making an emotional connection with a lot of people. However, whether or not Kiyosaki is an investor that one would want to emulate is subject to debate; Rich Dad is full of questionable, vague advice and it’s tough to verify that he had any real success in his pre Rich Dad career.

The problem that I have with the Rich Dad is that the philosophy that he’s selling is not what the majority of readers really need. Analogies abound. Take a look at weight loss: Slim-fast, Hoodia and Anatrim all offer seductive sales pitches to overweight customers and rake in the big bucks doing so, but what these customers really need is a change in lifestyle, not a pill.

But lifestyle change is hard - doesn’t matter if you’re talking about getting a bit more exercise, or starting to save and invest with discipline – and advocating hard solutions doesn’t sell books. So better to offer up some folksy stories, a few vague truisms, and a heaping helping of motivational prose. There is a silver lining of wisdom that runs through Rich Dad, but the sales pitch is to glamorize a lifestyle of wealth and ease, and to do this Kiyosaki repeatedly emphasizes the material trappings of wealth. If the book motivates a few people to get off the sofa and take charge of their financial future then good for him, but the real message his is a compelling vision of a unlimited wealth just around the corner. You can glimpse it in the hazy distance when you read Rich Dad, but the implicit promise is that you’ll be able to pull it a bit closer with every Rich Dad product you buy. And, voila, before you know it you end up purchasing the $79.99 DVD and the $149.99 boardgame.

There’s not much substantive advice on investing offered in Rich Dad. His main theme is that you get rich by buying assets. Period. Most investors (and some speculators) realize that this isn’t true. You don’t get rich by buying assets, you get rich by buying the right assets. And buying the right assets is something that involves skill, discipline and knowledge. Education helps. So does a bit of luck and a lot of hard work.

Education and hard work are two elements that Kiyosaki specifically downplays. Working hard is for suckers in the Rich Dad world, and education is for dreamers who want to waste their time working for the man. That, in my view, is the greatest danger that Rich Dad holds for most readers. A solid college education, hands down, is the best investment that any young person can make. No other investment offers the return that can beat investing in a college education.

But that’s not a viewpoint that sells books. Kiyosaki’s target audience is made up primarily of folks who covet the lifestyle of the rich and famous, and he doesn’t want them to think that a lack of a formal education is an obstacle. His “education is a waste of time” pitch is designed to sell books.

Can you get ahead without an education?