Book Review: Rich Dad, Poor Dad (this books irks me)

I decided to start reviewing some books that I read, and the first one up is Rich Dad, Poor Dad. I’ll do books on personal finance, entrepreneurship, and whatever else I think is cool. (If you have books you like, let me know.)

Speaking of books, you can download the first chapter of my New York Times Bestselling finance book, I Will Teach You To Be Rich, below.

Rich Dad, Poor Dad: What The Rich Teach Their Kids About Money–That The Poor and Middle Class Do Not!

I have grudging respect for this book, but every time someone raves about it, I get frustrated.

The Good

Rich Dad, Poor Dad is an absolute juggernaut of a book–it’s been on the bestseller lists for as long as I remember. I re-read this book yesterday. Man, there are some really great points, like how rich people make money work for them and how everyone else works for money. The first chapter is pure magic–read it. One of my favorite quotes is from his Rich Dad:

Most people never study the subject [money]. They go to work, get their paycheck, balance their checkbooks, and that’s it. On top of that, they wonder why they have money problems. Few realize that it’s their lack of financial education that is the problem.

He takes a dim view of people who blindly make decisions without stopping to ask themselves why:

A friend of mine in Hawaii is a great artist. He makes a sizable amount of money. One day his mother’s attorney called to tell him that she had left him $35,000. This is what was left of her estate after the attorney and the government took their shares. Immediately, he saw an opportunity to increase his business by using some of this money to advertise. Two months later, his first four-color, full-page ad appeared in an expensive magazine that targeted the very rich. The ad ran for three months. He received no replies from the ad, and all of his inheritance is now gone. He now wants to sue the magazine for misrepresentation.

This is a common case of someone who can build a beautiful hamburger, but knows little about business. When I asked him what he learned, his only reply was that “advertising salespeople are crooks.” I then asked if he would be willing to take a course in sales and a course in direct marketing. His reply, “I don’t have the time, and I don’t want to waste my money.”

The book does a fantastic job teaching how to think about work and money. Its early parts are some of the best I’ve read.

The Bad

I don’t agree with the book’s focus on real estate, which is far too complicated for beginning investors, and the high-level advice with few actionable recommendations. Many people love this book for teaching them how they’re supposed to think about money–but if you ask them what they’ve done to get there, in my experience, the people who rave about this book haven’t done much.

Ramit’s Verdict

Unfortunately, Rich Dad, Poor Dad doesn’t have many actionable suggestions. I’d recommend this book as an excellent way to challenge your thinking about work and money, but only if you combine it with other books that make tactical recommendations of financial issues. I’ll cover more books I love and hate later.

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