Book Review: Rich Dad, Poor Dad

I have chosen to review this book for a couple reasons. While it focuses on personal finance, I feel that that subject is very important for an entrepreneur and or business owner. The information in this book can help anyone, should they choose to utilize it.

An Overview of the Book:

Rich Dad, Poor Dad is a book about two contrasting points of view on the subjects of money, business, and how personal thoughts shape your environment. Robert shares the story of his two fathers, and the choice he made at the age of nine to follow his rich dad’s advice. He writes:

One dad was highly educated and intelligent; he had a Ph.D. and had completed four years of under-graduate work in less than two years. He then went to Stanford University, the University of Chicago, and Northwestern University to do his advanced studies. All on full, financial scholarships.My other dad never finished the eighth grade. Both men were successful in their careers, working hard all their lives. Both earned substantial incomes.

Yet one dad struggled financially all his life and the other dad would become one of the richest men in Hawaii. One died leaving tens of millions of dollars to his family, charities, and his church. The other left a legacy of unpaid bills. Both men were strong, charismatic, and influential. Both men offered me advice, but they did not advise the same things.

A Different Perspective

The book takes its readers on a journey, from a young boy’s perspective to make its point. The lessons in this book are huge! To me, the greatest lesson is that our thoughts shape our lives. From that young age, Robert was given two very different viewpoints on the subject of money. Those view points gave an insight into how his two fathers thought about money, and about life, in general. Kiyosaki writes

Being a product of two strong dads allowed me the luxury of observing the effects that different thoughts have on one’s life. I noticed that people really do shape their lives through their thoughts.

The power of our thoughts may never be measured or appreciated, but it became obvious to me as a young boy that there was value and power in being aware of my thoughts and how I expressed myself. I noticed that my poor dad was poor not because of the amount of money he earned – which was significant – but because of his thoughts and actions. As a young boy having two fathers I became acutely aware of being careful in deciding which thoughts I chose to adopt as my own and to whom should I listen – my rich dad or my poor dad?

The book also goes one step further to illustrate how these two men thought. My favorites quotes are below:
Poor Dad: “The reason I’m not rich is because I have you kids.”
Rich Dad: “The reason I must be rich is because I have you kids.”

Poor Dad: “I can’t afford it.”
Rich Dad: “How can I afford it?”

Interesting Note: The statement “I can’t afford it” shuts down your thinking. By asking the right question, your mind opens up and looks for answers.

Poor Dad: “Pay myself last.”
Rich Dad: “Pay myself first.”

While the focus of this book appears to be money, it goes beyond that to get to the real focus: you. In other words, just as the quotes above show two different types of thinking, Rich Dad, Poor Dad brings these two different types to the surface through the subject of money. After all, everyone uses money to get through life, yet it is something that is often not talked about.

Applying Rich Dad, Poor Dad to Your Business

So you may be thinking, this is a great personal finance book, but Benjamin, how can it help my business? Well, to me, business is people. In other words, if you do not understand how you think about money, business,  assets, and liabilities for your personal financial statement, how in the world are you going to run a strong, powerful business?! To me, they go hand in hand. Understand yourself, your thoughts, how you deal with things, and then think about if that would work for your business.

Chances are, it may not. Why? It may be that you struggle personally with managing money, buying income-producing assets, and distinguishing what are actually liabilities that you have been calling assets. Rich Dad, Poor Dad gives you these answers. And in finding these answers and a new way of thinking, you can begin to shape your personal financial life as well as your business and company to meet your goals and surpass them.

Resources

If you enjoyed the Rich Dad philosophy, you will also like other books in the series or the Cashflow 101 game that I wrote about earlier. You can visit the official site at www.RichDad.com. You can purchase the Cashflow games from the official site as well. I highly recommend them for re-training your brain to become more financial literate.

Have you read this book? Has it helped you?