Book - Rich Dad Poor Dad

**kork13** · 05-12-2021, 10:07 AM

Caveat: I haven't read it, not really interested to.

My understanding is that RDPD is basically a different slant on much of the standard financial advice offered by most financial gurus. One of the criticisms I've heard about RDPD is that the book's premise is largely fictional, built around the model of what he was trying to teach, although it is presented as a factual storyline. BL: Rather disingenuous. Also, that he over-simplifies certain topics, glosses over others, and advocates for liberal use of "other people's money" by way of debt, partnerships, investors, and so on. While certainly capable of producing positive results, for the average reader it's frequently ill-advised.

YMMV...but that's some of the reasoning behind me not caring to give it a read.

**bjl584** · 05-12-2021, 10:17 AM

I read that years ago.
I found it to be interesting and it did make me think about things differently.
But a lot of it seemed impractical if not impossible.

**QuarterMillionMan** · 05-12-2021, 10:45 AM

Shocking Prediction: The Price of Bitcoin by 2031 - Robert Breedlove - YouTube

Last night I watched him on You tube interview Robert Breedlove about bitcoin.

**Snicks** · 05-12-2021, 01:03 PM

I read that a long time ago so not sure I remember all the salient points. Like any financial book, there are good points but apply what works for your life. I personally have always seen a car as a depreciating asset. So, never made sense to pay off my car and finance my house which actually holds value unlike a car. Yes, a home's value can rise and fall but still has value whereas a car can be worth very little. I took the approach to pay off my home and finance my cars instead. And, our home has been paid off for years. I have no qualms to finance a car at low interest over several years. Keeps my cash flow handy to invest. I bought a new car in cash once and instantly regretted it. For us, that doesnt' fit our approach.

As for investing in real estate, I think you have to have a stomach for that. We are not fixer uppers, so having properties would be stressful for us. You need time and energy to deal with property issues, renters, etc. Not something we were able to take on. But, for those who want to, it can be a great investment.

**TexasHusker** · 05-12-2021, 01:07 PM

Whether something is an asset or liability is in the eye of the beholder.

**LivingAlmostLarge** · 05-12-2021, 09:33 PM

Cars and homes are liabilities but i still need to drive and live.

**amarowsky** · 05-13-2021, 05:52 AM

I recall reading that book quite some time ago. Seems a lot of his advice may have been more helpful back then.

One of his axioms I like, that is still useful to some. "If you buy something expensive [speaking of large assets] make someone else pay for them". <--- I kinda used this on my rental homes, and it has worked well. I have been considering starting a manufacturing project company, following similar ideas. (i.e. = Buy a large durable asset, let's say a machine [200t injection molding machine, or w/e you can use to add value for someone else] and try putting it to work on a transaction). <--- same idea, rinse and repeat for whatever problem you wanna solve; buy some storage to lease space, buy an expensive tool and lease it out to a contractor, buy some land and sell or lease out for raw material harvest, etc....) Just liking the idea of owning, durable, useful, difficult to aquire assets.

It maybe wise, it may not. I just know the level of injected money, speculative investing, and the modern use of "any data set and statistics" presented at a certain angle, can make a point for nearly any "investing advice/opinion"..... When there is information & speculation by firehose, going back to the basics kinda makes since. And oddly enough, buying "things" seems like the most basic and fundamental type of investments right now. (granted.... this will not replace my other investments, merely offer a new bucket to focus my balancing act on).

**disneysteve** · 05-13-2021, 05:56 AM

Assets are things you OWN.
Liabilities are things you OWE.

A house or a car can be both an asset and a liability if you have a mortgage or auto loan.

An asset may not generate income and may not appreciate in value, but it is still an asset if you can sell it and get money for it. An asset may also have expenses associated with it like maintenance, taxes, storage, etc.

**james.hendrickson** · 05-13-2021, 08:55 AM

Originally posted by myrdale View Post

I just finished Rich Dad Poor Dad by Robert Kiyosaki. I thought I would share.

The name of the book comes from comparing his father to his childhood friend's father. His father was a well educated teacher with a good paying job. His friends father had a very limited education. However as children his rich dad wasn't rich yet and his poor dad wasn't yet poor. As time went own his father kept working in the system. His friends father would invest in realestate and became fabulously wealthy.

While there are dozens of points listed in the book, the two that stuck with me were, the differences between assets and liabilities, and the concept of paying yourself first.

We as a whole have a very muddled view of what an asset is vs liability. A rough definition would be an asset generate income, while a liability consumes it.

You'll hear people say occasionally, "my house is my largest asset". Well it's not. Your house is actually a liability. Even today with a paid off mortgage, I am still paying insurance, taxes, and repairs on an annual basis. I am not suggesting that we should all go live in a tent, but it gives me some pause when I consider that mansion of a dream house that makes me drool every time I drive by it. If I had it, my insurance and taxes would be triple or more what they are now.

The same applies to cars. I saw in another thread someone posted about their car being an asset. Unless your driving for Uber or Grubhub, your vehicle really belongs in the liability category.

His point about paying yourself first was, before you pay any of your bills, invest as much as you can upfront. This will force you to work harder to earn more to pay the bill collectors. While I don't totally agree with the wording, I think the idea was to make sure investment is in the budget.

The book is written on about a 6th grade reading level. He does get a little repetitive in a couple of spots. Still it is worth reading.

Kiyosaki's definition of what an asset is frankly somewhat overly restrictive. In 'Rich Dad Poor Dad' he defines assets mostly clearly as based on cash flow. Its largely based on his comments in Chapter 2 - and its exemplified by this quote " An asset puts money in my pocket, a liability takes takes money out of my pocket".

Also in Chapter 2, in his cash flow pattern of the rich, he gives four examples of assets: dividend paying stock, rental income, interest, and royalties.

Under this definition and strictly speaking, growth stocks would be excluded, as would cryptocurrency, bullion, cash and undeveloped land.

It also ignores differential tax treatment of various asset classes, as well as the appreciation potential of some traditional assets.

Kioysaki's work has a lot of value for people looking for inspiration, but as a strict model for wealth building, it has some limitations.

**myrdale** · 05-14-2021, 09:18 AM

Originally posted by kork13 View Post

Caveat: I haven't read it, not really interested to.
One of the criticisms I've heard about RDPD is that the book's premise is largely fictional, built around the model of what he was trying to teach, although it is presented as a factual storyline. BL: Rather disingenuous. Also, that he over-simplifies certain topics, glosses over others, and advocates for liberal use of "other people's money" by way of debt, partnerships, investors, and so on. While certainly capable of producing positive results, for the average reader it's frequently ill-advised.

I don't disagree with the disingenuous of the story line, my personal thought on it was it was mostly fictional.

And for liberal use of other peoples money, falls inline with my comments about, paying yourself first. Invest before you pay your creditors. That felt backwards.

**myrdale** · 05-14-2021, 09:21 AM

Originally posted by LivingAlmostLarge View Post

Cars and homes are liabilities but i still need to drive and live.

This is true. The question is do you need a $750,000 house and a $150,000 car, or will a $120,000 house and a $20,000 car suffice?

**myrdale** · 05-14-2021, 09:29 AM

Originally posted by disneysteve View Post

Assets are things you OWN.
Liabilities are things you OWE.

A house or a car can be both an asset and a liability if you have a mortgage or auto loan.

An asset may not generate income and may not appreciate in value, but it is still an asset if you can sell it and get money for it. An asset may also have expenses associated with it like maintenance, taxes, storage, etc.

I'd agree with you, that as in your examples, these two classifications overlap greatly.

**myrdale** · 05-14-2021, 09:33 AM

Originally posted by TexasHusker View Post

Whether something is an asset or liability is in the eye of the beholder.

I am swayed to DisneySteve's point over that they can overlap. But I am not convinced something is an asset just because I say it is.

**myrdale** · 05-14-2021, 09:38 AM

Originally posted by james.hendrickson View Post

Kiyosaki's definition of what an asset is frankly somewhat overly restrictive...... An asset puts money in my pocket, a liability takes takes money out of my pocket".

Kioysaki's work has a lot of value for people looking for inspiration, but as a strict model for wealth building, it has some limitations.

This sums up the book as a whole to a T.

Book - Rich Dad Poor Dad