Rich Dad Poor Dad: What the Rich Teach Their Kids About Money That the Poor and Middle Class Do Not! is a book by Robert T. Kiyosaki.
In a lot of ways, I don’t recommend the book. It comes with an irritating self-help tone that fails to acknowledge the systemic oppression many people face. And seems rather insensitive to refer to his actual dad, rich in education and love for his family, as poor dad while idolising his friend’s dad.
That said, this book articulates something I have struggled to articulate for a long time. It is this: if you want to be wealthy, you need more money coming in than going out. That sounds obvious so let me break it down.
Most people in the working class (people who work for a living, like me and most of you) think that buying your own home is the most important thing to do in life. They talk about their home being an asset. But it is not an asset in a profit and loss sense, it is a liability. Your house costs you money. Even after you have paid off the mortgage, you have council tax or property tax, utility bills, maintenance work, etc.
When we don’t have any money coming in, we’re forced to use our last resort: selling our bodies and our time in the form of labour to pay our bills. We forfeit our liberty, and often our health, to make someone else rich just to try and cover our rent or our mortgage.
What a lot of people do is try and buy a house and build a small pension. Essentially, they are trying to minimise their liabilities (eliminating the mortgage) and hoping that they can live on the small amount of income their pension brings in because they have reduced their outgoings to a pittance. But by this point, we’ve already lost what youth we had, and our majority of time on this earth.
Instead, we should focus on building assets: businesses, property, intellectual property, stock and bonds. Things that generate money so that our income can match our outgoings.
There are a couple of counterarguments to this. First, is this a fair world and should we be subjected to the oppression of capitalism? I think we should build a fairer, more equal world. But I don’t know how to do that. Nor is there any political appetite to alter capitalism. Yuval Noah Harari goes as far as to say it might not even be possible. I don’t think the outlook is quite that bleak but I don’t know what to do in the short term.
Second, is it fair to say Kiyosaki ignores the very real effect of oppressions, and then suggests everyone can aspire to be a member of the bourgeoisie? I honestly don’t know, but I do know that from a personal perspective, this book might do a better job of explaining why I focus on starting businesses rather than buying a home.
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This entry was posted on Monday, August 28th, 2023 at 11:00 am and is filed under Books. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.