Author Topic: What do you think of Rich Dad?  (Read 11049 times)

Noelle

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What do you think of Rich Dad?
« on: March 21, 2013, 11:38:38 AM »
Curious what other Mustachian's think of this guy:

http://www.richdad.com/Home.aspx

arebelspy

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Re: What do you think of Rich Dad?
« Reply #1 on: March 21, 2013, 12:25:12 PM »
He's great at selling himself.

In many of my circles (real estate), he's treated as a god.  I think he's fairly overhyped. 

Anyone reading Rich Dad should read John T. Reed's opinion afterwards.  It's not all accurate, but nor is it as bad as Reed says.  One should take a balanced view/approach, IMO.

I guess the idea of buy assets, not liabilities, is mind-blowing for some.  I'd take him with a large grain of salt and take some of his basic ideas/framework and discard the rest.  The cashflow quadrant is a little better than the original Rich Dad book, IMO.

That's all related to his work.  As far as the man personally, not a huge fan.  Again, he's a salesman and they pitch people into taking Rich Dad "classes" that are weekend seminars and mentorings that cost thousands of dollars.  Meh.

He seems to polarize people - they love him or hate him.  I'd trend towards the dislike, but there are a few things worth thinking about in his writings.

YMMV.
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Spork

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Re: What do you think of Rich Dad?
« Reply #2 on: March 21, 2013, 12:52:42 PM »

I think he's a little bit of a snake oil salesman.  I did really like the first book when I read it... but over time he's really rubbed me the wrong way.  Rah-rah-rah, send me some cash.

I'd also mention: he filed for bankruptcy last year: http://abcnews.go.com/Business/rich-dad-poor-dad-author-files-bankruptcy/story?id=17463158

Some will say "well, yeah, that's because he knows how to work the system like a rich guy" ... and I guess that is true.  But it also means the path he's taken is not the one I want to pursue.

kisserofsinners

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Re: What do you think of Rich Dad?
« Reply #3 on: March 21, 2013, 01:20:34 PM »
I think he's a jerk. It really bothers me that some people insist that the path to wealth leaves a trail of people not worth caring about enough to pay your taxes. I couldn't finish his first book. He is so convinced he's better than others who disagree with him. I wasn't worth continuing to care about his methods.

Getting wealthy by not paying your taxes is right up there with getting wealthy by stealing. #notcool

ChristopherPhilip

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Re: What do you think of Rich Dad?
« Reply #4 on: March 21, 2013, 03:22:58 PM »
I watched him on Oprah in 2001-02.  He's the reason I bought real estate as what he said blew my mind (at the time)!  Now I see him as a bit flaky and the kind of guy that never really followed his preachings.  Overall though, he was right, so I give him credit where it's due.

momo

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Re: What do you think of Rich Dad?
« Reply #5 on: March 21, 2013, 06:07:46 PM »
Agree with arebelspy. I take Kiyosaki's messages with a grain of salt. I prefer the second book only due to the "cash flow quadrant". This is IMO the most important part of his book, understanding how others leverage money. That said I definitely do not agree with his message that it is acceptable to buy properties the way he advocates, namely with no money down and even at times without even inspecting it. Just my ten cents. Your mileage may vary. Cheers!

Hamster

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Re: What do you think of Rich Dad?
« Reply #6 on: March 21, 2013, 07:34:04 PM »
Long ago, I read an old version of his book which I thought was about 10% inspirational or insightful, e.g. "your home is a liability, not an asset" (which isn't entirely true, but did made me think about things differently).

The other 90% was either hokey, complete crap designed to sell his other books/seminars, or even advising fraud. If I recall, he encouraged people to take a vacation to Hawaii, look at one For Sale property, then call the trip a business trip since you are a real estate investor. Unfortunately, the IRS actually has rules about these things, and Mr Kiyosaki didn't write them...

If you need someone to convince you that you can get more wealthy by doing things differently, then I suppose he could do that. If you are looking for ways to actually get there, the book doesn't provide them, and what it does tell you to do may get you in trouble.

ChristopherPhilip

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Re: What do you think of Rich Dad?
« Reply #7 on: March 22, 2013, 07:11:18 PM »
People should his book "Rich Dad, Poor Dad" and then move on.  He does define good assets and bad assets, then spends a lot of time training you to think about "financial learning and education" in other words, buy more of his material.  My brother in law went to his free training seminar and he wasn't even there.  A shill of his basically held them captive to try to coerce them into spending increasing amounts of money for more tailored seminars.  I laughed we he told me that!

arebelspy

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Re: What do you think of Rich Dad?
« Reply #8 on: March 22, 2013, 07:18:30 PM »
My brother in law went to his free training seminar and he wasn't even there.

Good thing he didn't go to one of the $10,000 ones where Kiyosaki isn't there.
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with three kids.
If you want to know more about us, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.

kudy

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Re: What do you think of Rich Dad?
« Reply #9 on: March 22, 2013, 07:37:32 PM »
My dad bought his board game at some point and we played it as a family two or 3 times... definitely not worth the ridiculous price they charge for it, but maybe it influences some of my siblings a bit?

frugalcoconut

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Re: What do you think of Rich Dad?
« Reply #10 on: April 21, 2013, 05:38:22 PM »
Reading the Rich Dad Poor Dad book series was certainly an eye-opener for me ... shifting my way of thinking (in a positive way).  I'm grateful for that "aha" moment.  I had already been on a decent financial path but it set my sights higher and motivated me to dig deeper into research on real estate and income-producing asset accumulation, etc.

I played the Cash Flow board game a couple of times ... I appreciate the encouragement to get out of the rate race because it goes against conventional wisdom and it desensitizes my natural aversion to debt (reinforcing the notion that sometimes you have to spend money to make money) plus it's helpful to practice those scenarios (and improve your skills) in a fictional environment rather than learn a hard lesson in real life.  ;)

Joel

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Re: What do you think of Rich Dad?
« Reply #11 on: April 21, 2013, 06:44:49 PM »
This is very interesting to me. I have a coworker who swears by Rich Dad Poor Dad and was giving advice to another coworker about buying immediately! Even with as little as 5% down. Even with interest rates so low, I have a hard time paying PMI as you are looking at 10-12% interest over the year in PMI payments and am very hesitant about jumping into real estate before I'm ready. Interesting to know that not everyone eats up everything he is speaking.

Will

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Re: What do you think of Rich Dad?
« Reply #12 on: April 21, 2013, 06:48:29 PM »
I know what Helaine Olen thinks of him, based on what she wrote in her book Pound Foolish.   She is not a fan, to say the least!

Nords

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Re: What do you think of Rich Dad?
« Reply #13 on: April 21, 2013, 08:24:50 PM »
I played the Cash Flow board game a couple of times ... I appreciate the encouragement to get out of the rate race because it goes against conventional wisdom and it desensitizes my natural aversion to debt (reinforcing the notion that sometimes you have to spend money to make money) plus it's helpful to practice those scenarios (and improve your skills) in a fictional environment rather than learn a hard lesson in real life.  ;)
It's been years since I played that game, but IIRC there was no option for cutting expenses and boosting savings.  Perhaps a newer version has a "frugal early retirement" approach.

sherr

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Re: What do you think of Rich Dad?
« Reply #14 on: April 22, 2013, 09:59:16 AM »
<sidebar>
Even with interest rates so low, I have a hard time paying PMI as you are looking at 10-12% interest over the year in PMI payments and am very hesitant about jumping into real estate before I'm ready.

Whoa, that can't be right can it? I used to have PMI payments, but it was $20 a month out of a $1050 payment (15-year fixed at 4.5%). Or are you saying that it's 10% of the interest portion of your payment? If so it's something to keep in mind, but not necessarily a deal killer. If your interest rate was going to be 3.5%, then an extra 10% on top of that would be a total of 3.85%. Still very low.
</sidebar>

Joel

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Re: What do you think of Rich Dad?
« Reply #15 on: April 22, 2013, 10:20:48 AM »
<sidebar>
Even with interest rates so low, I have a hard time paying PMI as you are looking at 10-12% interest over the year in PMI payments and am very hesitant about jumping into real estate before I'm ready.

Whoa, that can't be right can it? I used to have PMI payments, but it was $20 a month out of a $1050 payment (15-year fixed at 4.5%). Or are you saying that it's 10% of the interest portion of your payment? If so it's something to keep in mind, but not necessarily a deal killer. If your interest rate was going to be 3.5%, then an extra 10% on top of that would be a total of 3.85%. Still very low.
</sidebar>

Running a quick calculation on Wells Fargo.

A 200k house, 5% down, 190k loan. 3.944% interest on the loan, 946 monthly payment. plus a 106 pmi payment monthly.

106 x 12 = 1272 per year. So it's less than 1% per year of the total balance. about 10% of the payment. So you are right about that.

However, you are only paying PMI on that 15% you are not putting down initially. So you are only paying PMI as a result of not putting an additional 30k down and have 20% down.

1272 / 30k = 4.24%

So 4.24% + around 4% for the loan. You are looking at an 8-9% loan at least until you have 20% equity. So that's where my logic was coming from.
« Last Edit: April 22, 2013, 11:02:37 AM by Joel »

grantmeaname

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Re: What do you think of Rich Dad?
« Reply #16 on: April 22, 2013, 10:28:47 AM »
Really, aren't you paying 3.944% on the first 80% house value of the loan, and 3.944% plus PMI only for the last 10-15% LTV of your loan? Isn't all of that $1272 per year attributable to the last $30,000 you borrowed?

Joel

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Re: What do you think of Rich Dad?
« Reply #17 on: April 22, 2013, 11:03:11 AM »
Really, aren't you paying 3.944% on the first 80% house value of the loan, and 3.944% plus PMI only for the last 10-15% LTV of your loan? Isn't all of that $1272 per year attributable to the last $30,000 you borrowed?

It's really the first 30k you borrowed, see my edited post above...

Freda

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Re: What do you think of Rich Dad?
« Reply #18 on: April 22, 2013, 11:54:40 AM »
Ditto on snake oil and some of his tactics I would consider slightly unethical.  I have a friend who's all sucked into their seminars right now.  A friend I thought was too smart for that.

MrsStubble

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Re: What do you think of Rich Dad?
« Reply #19 on: May 14, 2013, 02:09:14 PM »
Reading the Rich Dad Poor Dad book series was certainly an eye-opener for me ... shifting my way of thinking (in a positive way).  I'm grateful for that "aha" moment.  I had already been on a decent financial path but it set my sights higher and motivated me to dig deeper into research on real estate and income-producing asset accumulation, etc.

Ditto.  I was 18 and working in college at Barnes & Noble shelving books when some random customer came up to me and said "Buy this book, it will change your life."  I bought it, read it, and then forgot about it for a few years as I made a descent mess of my finances.   But a few years ago I reread it and started reading every other book he recommended on finance, and it just clicked.  I was on a journey for more insight when I found ERE and this blog so I can honestly say if I didn't read his books I would have never changed my spending/living habits and come across MMM.

Now would I go to the seminars or buy the game????  Hell no!

meadow lark

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Re: What do you think of Rich Dad?
« Reply #20 on: May 14, 2013, 09:06:47 PM »
In 2011 I read one of his books about real estate that had been published in 2007.  Had lots of success stories about people who had just bought large numbers of rental condos in Florida with something like 1% down.  Bragging about the million dollar portfolios...  Pretty horrifying stuff when read in 2011...

iris lily

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Re: What do you think of Rich Dad?
« Reply #21 on: May 17, 2013, 09:06:56 AM »
Long ago, I read an old version of his book which I thought was about 10% inspirational or insightful, e.g. "your home is a liability, not an asset" (which isn't entirely true, but did made me think about things differently).

I agree, that one thing caused me to look at real estate differently even though I've never been a "real estate is my investment vehicle" person. His idea really stood out for me even though I've never liked real estate as an investment for me. Not saying that it's a bad deal for others.

Quote
The other 90% was either hokey, complete crap designed to sell his other books/seminars, or even advising fraud. If I recall, he encouraged people to take a vacation to Hawaii, look at one For Sale property, then call the trip a business trip since you are a real estate investor. Unfortunately, the IRS actually has rules about these things, and Mr Kiyosaki didn't write them...

Yep, I could have written your post. One clarifying idea for me, the rest was crap.



Lina

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Re: What do you think of Rich Dad?
« Reply #22 on: May 17, 2013, 02:40:10 PM »
I got started with the Rich dad series, whereafter I started reading more and more. I liked most the cashflow quadrant. I just look at him like most of the personal finance "gurus" that tries to sell you something. You pick the pieces that fit you. The books got me interested in real estates.

Dave Ramsey made me like the idea of a debt snowball although I don't like all the references to religion and god in his books.

Jakob at ERE made me look at retirement in a different light although I prefer a more comfortable MMM style life.

Get rich slowly was nice inspiration for a while before it changed to a multi author blog.

Your money or your life made me consider other costs when evaluating a new job but seriously I don't need to know how much money I have wasted during my working life.

nktokyo

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Re: What do you think of Rich Dad?
« Reply #23 on: May 17, 2013, 07:07:25 PM »
I agree with the overall theme of picking what works from various authors.

From Kiyosaki I picked up the following ideas:
  • The guys consistently making money with investing are those selling the investments
  • Build a business that buys real estate
  • Buy things that add income, don't buy other things
  • Pay for stuff with pre-tax money by running your life as a company
  • Put the time in and focus on an investment area - don't outsource your retirement

Another book along the lines of Rich Dad that I got a lot out of while ignoring a lot more was the Secrets of the Millionaire Mind.