Book Review Of Rich Dad Poor Dad Philosophy Essay
Rich Dad, Poor Dad: What The Rich Teach Their Kids About Money - That The Poor And Middle Class Do Not! Nobody wants to be poor. Everyone wants to be rich. However, no matter how high people reach or how hard people work, still many of us struggle financially, have insufficient funds to meet our expenses, are unprepared for retirement and simply are not able to attain all our wants. And there are only but a few “lucky ones” who end up being successful, money-wise. And the solutions that we normally come up with are to look for higher paying jobs, get a second or even a third job, acquire more assets and maybe hope to win the lottery.
In this book, the author presents that our thoughts and actions have great impact on our lives. Our way of thinking, choices and decisions lead us to become either rich or poor. By presenting two contrasting mentalities, we get to not just accept one but to ponder on both and choose for ourselves how we will live our lives. The central and most important point presented here is in order for us to prevent money struggle, as early as we can, we should already be thinking, reflecting and directing our thoughts toward becoming rich. We should teach and use our minds to harness the power of money.
This book is a wake up call to all of us to educate ourselves on money matters. Financial education is not being taught in school. We first learn it at home. And since most of us are not financially literate and the advice that we give are from past generations that do not really meet the changes of the present times, we end up teaching the young ones how to become like what most of us already are. A poor man can only teach much and mostly those teachings are what they have applied for themselves, thus continuing the cycle of money struggle. It is alarming to note that a lot of people are on their path to becoming poor each day and only a handful become mindful of their future and the future of nations and the rest of the world. I think finishing this book is not the point where we start applying this knowledge. Teaching our children but not changing our ways might just be not so beneficial, and so I suggest that upon learning this new perspective on money, one should realign his thinking, choices and decisions in order to fully reap the bounties.
Some of the advice presented in this book are quite scary and risky but they do challenge us to exercise our minds and stretch our thoughts. It was also surprising how Robert Kiyosaki began this book. He was downright challenging the traditional ways of sending our children to school, motivating them to get grades and finish their studies and influencing them to find a good job by telling us that this could be their path to becoming poor. Further, he clearly chose the Rich Dad for his role model, someone who did not even finish the eighth grade.
In the book, he refers to 2 dads, his biological father and the father of his friend who he loves as well. The biological father was clearly portrayed to have made wrong decisions and the other father has somewhat taken away the subject of his fatherhood. I admire the Rich Dad for being rich and for sharing his wealth of knowledge but he makes the Poor Dad look miserable and downright just wrong on how he has lived his life.
It was interesting to note as well that the Poor Dad is well educated and earns a substantial income but is, however, struggling financially and even left debts to pay when he passed away. It does not really fit what most of us accepts - that if one is well educated and has a good job, we expect him to be doing well and more than able to make ends meet.
Their pieces of advice are equally important. The Poor Dad tells of the knowledge he as gained from experiencing his life and gives advice on how to survive living that life. The Rich Dad gives advice that can empower you to achieve the best you can be in terms of wealth but I think it actually fails to tell you how to change the course of your life. Based on his sense of wealth, you must have made decisions based on the mentality of the rich and that you just have to keep the ball rolling. His mentality was also already set that “being poor is eternal.”
The other one tells you how to survive in this struggle. His advice might not get you anywhere but it helps you to survive. They were sound advice as well. While the other tells you how to play the road, how to handle your money and how to have more of it, he fails to answer how one can be rich from being poor. He tells you not to have the disposition of being poor and to make decisions as though you were rich yourself but still the problem is there - how to move from being poor to becoming rich when in his own words the condition of being poor is never ending.
It should also be noted that not all of us could be Rich Dads. Like the Poor Dad himself has mentioned, he chose to be a teacher. He could just have meant that money was not his goal. For some people, money is really not everything.
As a man who has had the opportunity to learn from two fathers, both starting off at their chosen paths, both with hopes and dreams and both with their own frames of mind, Robert Kiyosaki narrates how he has been able to compare and contrast the two mindsets, reflect on each contrasting thoughts and weigh for himself by which example to live by. It was engrossing how Robert managed to impart, through anecdotes from his childhood and significant dialogues, some of the most overwhelming and confusing concepts in finance. The manner by which he presents them was quite intelligible because all it takes really is simple math and confidence to be financially capable.
Although he claimed that both fathers were just starting off somewhere, one was getting richer and the other one was getting poorer. And the difference that he pointed was because of their mind set and the choices that governed their lives. What Robert failed to account for was the many reasons that drove people to make their choices. These reasons are valuable and most of the time more than govern the choices that we have made and the decisions we are to make. He also failed to account for the degree of motivation of each father and the intricate conditions they encountered along the way, but just points to laziness as what eats most of those with the mentality of the poor.
I was concluding hastily that this might just be another motivational book and is yet again another one that proposes positive thinking but then it was argued that even though we are optimistic we still might end up not becoming financially capable. What one needs is proper financial education for if one becomes financially literate he is able to free himself from any form of constraints brought about by money struggle and money itself.
By ingesting the way of thinking of the rich Robert was able to summarize and expound in six simple lessons the ideas he and his best friend, Mike, learned from experience and those that he imbibed while learning from the Rich Dad what makes the rich richer. Robert learned of how life really teaches us. Often it does not speak but rather pushes us. It is up to us how we will respond to it. Will we take the easy road or the road less traveled? Will we take the big money or will we realize what money really is and be able to harness its uses to our advantage? Life teaches differently. You often learn by not only sitting at your desk but by listening to different people – we should learn from the different facets of life.
At a very young age, Robert troubled and asked his Poor Dad how to become rich. He answered that he first need to learn how to make money. And with that abrupt discussion, he and his first business partner, Mike, soon came up with a solution – a literal moneymaking scheme that they have devised using lead toothpaste tubes, plaster of Paris molds and a lot of ingenuity. The Poor Dad, although flabbergasted with their little project, felt proud of how creative and bold the kids were, and told them to go on. With a little helping from the Poor Dad, they then turned to Mike’s father, the Rich Dad, to help them learn about how to make money.
Lesson 1: The Rich Don’t Work for Money. Robert and Mike sought the help of Mike’s father who agreed to teach them but with the precaution that he does not teach like how it is being done in school. They agreed but after weeks of dusting cans at a convenience store, Robert was ready to quit. The Rich Dad was prepared for this and was so impressed with how passionate Robert was to learning but got frustrated with getting low pay for his hard work. The Rich Dad then asks Robert to redirect his anger and apply it to learning.
The Rich Dad points out that in most failures we often blame others but there is really only one to blame – ourselves. And so we should change ourselves by not being ignorant, work up the courage to overcome our fears and desires and muster our own emotions.
Robert and Mike were offered a raise for as much as five dollars and were so tempted to take the deal already but kept their heads down for the want to learn a most valuable lesson - how to avoid being trapped in a “Rat Race,” a vicious cycle wherein money controls people’s lives as higher earnings bring about higher spending, magnified with the fear of not having money and losing the money, the want for money and the ignorance of financial education.
Overwhelmed by his first lesson, Robert and Mike ended up having to work for free. However, they soon find out that when they are not slaves for money they get to use their minds to find ways to earn money far beyond what the Rich Dad had to offer. And so they were presented with the opportunity for a good business. The kids were permitted to use the discarded comics at the stores for as long as they do not violate any rules. They opened a small comics library at Mike’s basement with his sister as the librarian for a fee. They were earning really well and were able to run the business without actually being there. And so even though the business soon had to be stopped, the kids learned for themselves how to be financially independent and to always be on the look out for opportunities instead of busily going about working for money and security.
Lesson 2: Why Teach Financial Literacy? Financial literacy is financial freedom. Robert entices the readers with the thought that at 47, he and his wife will be retiring and will be enjoying the fruits of the assets they have planted. Our graduates on the other hand are not equipped with the knowledge on how to direct their lives and be financially independent. They often end up thinking that to be successful, one needs to be rich quick. Robert proposes that one only needs to have a strong financial foundation and a simple knowledge of cash flows.
According to Robert there is only one very important rule in building one’s financial foundation that is to know the difference between an asset and a liability, and make sure that one acquires income-generating assets while keeping spending habits in check and liabilities to a minimum. Assets are those that put money in our pockets while liabilities are those that take money from our pockets. It is also essential to note that it is not a matter of how much one makes but rather how much one keeps.
The reason why the rich becomes richer and the poor becomes poorer is because of financial literacy. The poor struggles to meet their day-to-day expenses, the middle class purchase liabilities that they think are assets, while the rich keeps buying more real assets that generate income to meet their expenses, pay off their liabilities and then reinvesting in those assets.
The essence of financial literacy is that with one’s intelligence, one will find countless possibilities and solutions to their financial problems. However, without using one’s mind and money left alone, it is just money down the drain.
Lesson 3: Mind Your Own Business. Robert continues sharing making investments in real estate with McDonald’s as example. The real business of McDonald’s is really not selling hamburgers. It actually owns a lot of valuable real estate all over the United States and the rest of the world.
Robert suggests that one should keep his day job but should also have his own business on the side. He narrates his time selling photocopiers and at the same time building his asset portfolio using his savings that enabled him to buy a few real estates. He then finds himself earning more on his side job and so takes it on full-time.
Robert argues that in order to be fully financial independent, one should mind their own business. The main goal now is to own a business and become your own boss, and nurture that business using your financial intelligence. A good business is one that you do not have to man yourself. Once you have built a strong asset column using your financial intelligence, you can now reward yourself with luxury you can just pay off with the gains of your real assets. An example given was Robert’s wife when she purchased a much wanted Mercedes Benz as a reward from the gains of her apartment estates.
Lesson 4: The History of Taxes and Power of Corporations. Originally, taxes were set up to levy only on the rich but eventually the middle class and the poor end up carrying the burden as well. Further, the rich found a loophole to protect their money from heavy taxation – it is thru Corporation. It was explained that Corporations are not establishments but are merely documents that provide advantages to the rich. Apart from the use of Corporations, the rich have become accustomed to paying themselves first and paying bills and taxes last. While the poor earn their money, pay their taxes on that earning and live of what is left; the rich earn their money, spend as much as they can and are then taxed on what is left. And usually the spending the rich make is to buy more real assets and hardly take on liabilities.
Robert tells that in order to overcome constraints as such, one should take financial literacy seriously and have a good grasp of business by understanding financial statements, their strengths and weaknesses, being skillful at investment strategies, interpreting well the laws of supply and demand and knowing one’s legal boundaries. We do this to ensure who we are working for, others or ourselves? Who are we making rich?
Lesson 5: The Rich Invent Money. Using our most important asset, Robert proposes, we should be able to turn lemons into millions. However what holds most of us back is self-doubt. One should learn how to be bold, daring and brave and mix it with technical knowledge to one’s own gain.
Another hindrance mentioned is our tendency to cling to old ideas and resist change. We should know that information is the real wealth now and that it is time to go with the flow of the fast changing world. We should have that mentality of asking “what else can we do?” in order to find solutions and not wait for opportunity to present itself but rather do something for opportunity to be there. We need to be the one to create it and do something about it.
Lesson 6: Work to Learn – Do Not Work For Money. The Rich Dad advised Robert that he should know a little of everything, he should “pick up a sense of what is important and what is not.” Robert and Mike’s financial education expanded from attending different meetings and learning from different people in all facets of the Rich Dad’s business. He was grooming them in a way to prepare them in taking over his empire. Robert, however, decided to build his own. He then tried to experience working in different trades, overcoming some fears and learning new skills. His favorite was in dealing with emerging nations. He also entered the military in order to train how to run a group of people, which he then finds out as the most important skill to learn in leading a company.
The Rich Dad further posited that education is better than money - that in all of Robert’s experiences, he should look for companies that would teach him new skills and not only give him money for truly education is wealth that cannot be taken away from a person.
Overcoming Obstacles and Awakening Our Financial Genius. According to Robert, there are five personality traits that keep people from fully becoming financially independent - fear, cynicism, laziness, bad habits and arrogance. He explains why they were roadblocks to one’s freedom and that it really all lies on how one would use his mind to overcome them and handle them properly. He also proposed a series of doctrines he practices that one can adopt, imbibe and put into action in order to start conditioning the mind into becoming financially literate.
It is a good book. It tells us that financial education is a must and summarizes financial concepts in a rather intelligible way. It tells us not to be contented and rely on our wages as main source of income but rather use and free our minds to find the many opportunities that are actually present all around us. It also tells us that anyone can be rich, with the proper mindset and financial education, even without stellar grades in school. To be successful, it does not only mean that one is academically smart but should be street smart and know all the concepts of trade and their limitations. When Robert was telling about making choices and reflecting on some ideas, one could deduce that some of these may not actually work for some of us but having the basic essentials increases our chances for success and more advantageous outcomes.
If the book's purpose is to elicit a response from its readers, then elicit it did for after reading the book, it made me sort of panic and think about my own financial status and life plans at once. Some things that I take for granted are somehow put into the spotlight after reading this book. Where do I start? How do I get on the bandwagon? And ultimately, how do I get off the "Rat Race". But in retrospect, should I not be asking these questions before long? That is one good thing about this book. It warns the readers against our complacency. Most of us are so well entrenched in our routines with clockwork precision, sometimes mindlessly going about life without regard for self-improvement. This book attempts to disrupt this seemingly monotonous cycle and challenges us readers to step back and take an audit of our achievements as well as our plans.
This book tells us that we must keep a stable job but always be open for business opportunities and to not solely rely on our income but to invest on income-generating assets. I found it interesting when the book was able to explain how some things we value as assets could actually be liabilities in the long run. It somewhat prepares the readers, especially those who are about to make ventures. I also appreciate the simple diagrams the author constructed to help explain some of the concepts he was trying to get across. He really made me feel that to be financially literate, “all it takes is simple math.”
However, "It's not as simple as that" - most of the readers might share the same thought. This is not a technical book. It attempts to simplify some technical ideas to the less informed. If Robert was the kid learning the ropes from his rich dad in the story, then we readers are the kids this time, opening our eyes and ears to his instructions. If you expect to acquire some tidbits on how to get rich quickly, then you are in for a major disappointment. Obviously getting rich is really much more complicated than what is stated in the book, but since the intended audience are "kids" or the average person, this book should be taken as nothing more than a "to get your feet wet" sort of thing. It simplifies rather complex ideas and turns them into easily absorbed bits, taking from his own personal anecdotes. This book is a bestseller for a reason. It sells optimism. It markets self-esteem. Most of all, it offers hope and a lot of motivation. It does not only feed the mind but it also nurtures the soul, promoting self-efficacy.
I was particularly critical when he pointed out how a house is actually a liability. This I have to accept but to me it kind of tramples on people’s dreams and the idea of having the perfect home. Indeed it is an emotional topic but what can we do with it? There is no on and off switch to human emotions. Just the same, he proposes that we should first invest our time, money and efforts then when we have reaped the gains of our efforts that is when we reward ourselves, and for this example, a house.
It is a good book however there were points that are not to be taken at face value but we should rather keep a degree of skepticism as to the validity of some of his advice, taking in consideration our moral judgments. For instance, some of the advice that are bordering on the illegal like when he said he likes investing on real estates. He would start on small transactions then trade them for bigger ones and delays paying taxes on capital gains. Further, there was a concept when he said to, “have people work hard to put money in your pocket.” Robert mentioned that he pays his brokers well and all the intelligent people who work for him but he expects them to deliver and provide him with the knowledge of their specialty. This point is all right, however, it was inconsistent with the Rich Dad’s mentality when he just let his employees work for him at a low rate and wait for them to complain or even resign. To me he was kind of abusing his power and using the low people for his benefit. He was capitalizing on his workers’ fear, ignorance and indifference to make money for him at very low wage, which appalled me at first. This is in every sense of the word “wrong” in my opinion, although I believe this bit is in the book to drive home a point - one should drive away their fears and ignorance by becoming financially educated and that one should always be aware that there will be those who would be taking advantage of them.
It is but common sense that when starting a business, one should be able to read the movements of supply and demand. However, I did not feel right when he pointed out that there is an emotionally driven market out there. I felt that as a woman, I am so weak for being the target, albeit, it is a logical advice.
This book is good but only to some extent because, although it tackles some of the most confusing and difficult concepts of finance and that it tells you how to go about becoming rich, it did not go beyond just telling the readers what to do and what to be. The author left out the part where he should be telling how to actually do it and the practical and empirical evidences to support his advice. He tells his readers that they should conquer their fears but fails to tell them how, then supports his proposals with ventures he has made, some of which are plain risky. Further it fails to answer the part where, if ever the reader does have the confidence to make risks but do not have enough cash to go on, what would he do? He fails to answer where will that reader get the money? All he provided was for us to look for solutions by not focusing on money. As compared to 1956, it would be difficult to find freebies lying around shops nowadays. Would borrowing money be a solution here then, and is that not focusing on money still?
And although, in the beginning, he was somewhat demeaning the role of education, in a broader sense, he was actually telling us to educate ourselves with means beyond those that are practiced in school. He was actually proposing a new kind of education, one that is practical.
I would probably rate this book as satisfactory as it truly was able to capture my interest and engage me in analyzing my financial situation. However, it left me asking more questions. Probably that was a way for me to exercise my brain in applying the concepts but however motivating it was, there were holes that left me doubting. I think the right approach here is as the author proposed in the beginning of this book, to use our brain, make it fertile for ideas to thrive in it and to see both sides of the coin – to weigh the ideas that come our way, take what we need, reflect for ourselves then choose which ideas to live by.
Need an essay? You can buy essay help from us today!