I came across Robert Kiyosaki through a friend, it was his YouTube video on 'Rich Dad, Poor Dad'. I think I also saw his 4 quadrant video and it really made a lot of sense. So I finally bought his book Rich Dad Poor Dad [Amazon US | Amazon UK | Apple Bookstore]. I also bought his iPad game which takes the information in the book and turns it into practice.
Robert didn't really have two dad's, rather one biological and one who provided some much valued financial education. Despite his poor dad having a Ph.D and being a hard worker with a good salary, Robert describes this dad as 'Poor Dad'. Poor because he works for a pay check and pays tax, his money is working for anyone but him. His 'Rich Dad' was a friends father, a business man and a guy with sound financial education. 'Rich Dad' teaches Robert and his friend to make their money work for them.
There were a couple of major takeaways from the book for me that I think will ring true with many:
1. People are scared to move away from income and move towards 'Assets'. Not only is this due to fear of not being able to pay the bills but it can also be due to fear of loosing it all. I'd always considered myself good financially but Robert described me accurately. I'm amassing wealth but it isn't making me money, if I lost my job tomorrow, it doesn't cover costs.
2. The definition of an 'Asset'. It isn't the same as the dictionary, an 'Asset' is something that puts money in your pocket and a 'Liability' is something that takes money out of your pocket. This means the house you live in is not an asset by Kiyosaki definition. However, a rental property brining you in positive cash flow after deductions would be.
3. If you want something in life, for example a new car then you should buy assets to a sufficient level to cover the cost of the thing you want. For example, If I want a new Mercedes at £400 per month, then I'd do well to buy two rental properties brining me in £600-£800 profit - I can now afford my Mercedes.
4. Despite the fact that I thought I was awesome with money, I am focused on Income, not on assets. As a result, if I lost my income tomorrow then I would not have any money coming in to cover my costs. You are wealthy when money coming in from assets balances money going out from liabilities and living costs.
5. The rich don't worry about increasing taxes, they just avoid them using corporations, expenses etc.
In all, this was a very good read. There is a lot of thought provoking points in the book. It provides more insight than equivalent books in the market, but still will not leave you with anywhere near the financial education Robert has. This book does have a heavy property focus, since that is the crux of Robert's portfolio and you can see why in the United States. However, it will feel a little bit like a let down if you are a UK resident. All is not lost, I have another book which will show you that the UK property market, even with the new 2016 changes is still not a loosing investment. That review will follow shortly.
In short I highly recommend buying 'Rich Dad, Poor Dad' [Amazon US | Amazon UK | Apple Bookstore] and if you do, try his iPad game out after you have read a couple of chapters, it will further enhance your reading.