Sunday, January 30, 2005

'Rich Dad Poor Dad's' author disses dad for dollars

‘What the Rich Teach Their Kids about Money – That the Poor and Middle Class do Not!’ exclaims the blurb on the front cover of Rich Dad, Poor Dad, and this drew me in. I have had a gut-level suspicion for years that rich people just aren’t like the rest of us. It’s reinforced when I hear about things like Dennis Kozlowski of Tyco and his $6,000 shower curtain. You have to really think highly of yourself to believe you need a $6,000 shower curtain, to not cheat yourself by settling for a piece of crap that costs $600. So I was pre-disposed to like what Mr. Kiyosaki had to say. At the very least I was curious. While I am not rich, I have enough disposable income for impulse buys on, so the book was in my mailbox a few days later.

The central story (some would call it mythology) of ‘Rich Dad, Poor Dad’ goes like this: Kiyosaki’s real father, the superintendent of education for the public school system of Hawaii (not exactly a piddly job), was ‘poor Dad’, who embraced middle class values (specifically: working hard at a job your whole life and saving along the way). Kiyosaki’s friend Mike’s dad was ‘rich Dad’, a sort of undifferentiated entrepreneurial type who represented the value system and way of thinking of the wealthy (in a nutshell: take risks, make money ‘work for you’, ‘pay yourself first’ to give yourself greater motivation to make money to pay your creditors). Young Kiyosaki and Mike became Daniel-san type apprentices to ‘Rich Dad’, who taught them lessons like ‘working a day job is for suckers’ by making them work in a little store he owned. Kiyosaki embraces the lessons taught to him by ‘Rich Dad’, and refers to them throughout the book. His real father, ‘Poor Dad’, gets the consolation prize of being ‘not an example to others, but rather a warning’.

My attitude toward Kiyosaki soured as I read the book. What kind of jackass puts down his Dad in order to sell books? Why would Kiyosaki need to do this, especially if, as he claims, he has ‘escaped the Rat Race’ and doesn’t really need the money? Further, why is Kiyosaki running all over the world hustling his books and games (Cashflow! - the Prologue is kind of an infomercial for it) if he's independently wealthy? These and other questions along those lines were raised during the course of reading the book. It took a while to read it, as it was gradually demoted from primary reading material to bathroom reading.

I tried to look past Kiyosaki’s shameful disrespect for his own father (another question, perhaps not a politically correct one: isn't respect for one's family typically highly encouraged and valued in Asian cultures?) in order to learn things that might make me a better father for my little girl, at least where money management was concerned. She may yet grow up to write a book maligning me or a thinly veiled fictionalization of me, but I don’t want that to be due to laziness or negligence on my part.

Kiyosaki seems to have made most of his money through real-estate transactions and management of rental properties. The book is full of little anecdotes about his clever deals. The book gets to be like listening to some rich guy tell you about himself while you drive him to the airport.

At one point, Kiyosaki sheds the burden of credibility completely, saying he encourages people to get involved in multi-level marketing. At this point the bull-shit detector could no longer be ignored. After some further investigation, I found that Kiyosaki does have an affiliation with Amway, and supposedly was unable to get his book published until he hooked up with the MLM crowd. For further info, see this email to John T. Reed on his website.

John T. Reed also has a pretty thorough analysis of Kiyosaki’s book, including interesting investigation into whether or not Kiyosaki really is who he says he is (what he finds out about Kiyosaki suggests that rather than having some master plan for life, Kiyosaki kind of drifted from one thing to another until he found something that worked for him, which would make him just like every other schlub out there trying to get by).

The Reed analysis makes for more interesting reading than Kiyosaki’s book. FWIW, Kiyosaki replied to Reed's criticisms, although his response mostly seems to be a defensive effort to scrape together support for his thesis that 'most rich people have sub-exceptional intelligence'.

If you're interested in learning more about money and investing, there’s no need to give up hope. There are some good books and resources out there about investing and money. I’ll talk about other stuff I’ve read or am reading in the future.

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