![]() ![]() When you invest, once you understand where your risk is coming from you can then apply risk management strategies and techniques. ![]() But just understanding risk when you invest doesn’t eliminate the risk. My view is that you absolutely need to understand risk first so you can manage it. He talks about the fact that once you understand your risk, you should be prepared to accept it. ![]() The main criticism I have of Rich Dad Poor Dad is that Kiyosaki downplays investment risk throughout the book. Our real estate markets are fundamentally different. It’s worth noting for Australian readers that because he is based out of the US, the strategies and tactics Kiyosaki covers on real estate are less applicable to Aussie property buyers. I personally don’t think everyone is cut out to be a business owner, and I know many people who have created serious wealth without running a business. Too focused on entrepreneursĪ view of Kiyosaki’s that I don’t agree with is that you need to be an entrepreneur to get rich. With the above being said, on a second read of this bestselling finance book, I found a few things that didn’t sit quite right with me, including that it is too focused on entrepreneurs, not specific to Australia and downplays investment risk. Other commentators have suggested that some of the figures in the book may be overstated. For example, some commentators have pointed out that Kiyosaki’s ‘Rich Dad’ example may be fictionalised, although it could be said to be presented as being non-fiction. There has been criticism from some commentators about aspects of Rich Dad Poor Dad. With staggering house prices in most Australian major cities, I’ve found balancing the amount of your wealth tied up in your home vs how much you have in actual investments is a key driver of how ‘rich’ you actually are. Kiyosaki’s view that your home is not an asset – while not technically true – is a good way to think about your money, in my view. And while they do have value, he says these items are never really going to make you any money, so it doesn’t make a lot of sense to include them under what we think of as our ‘wealth’. It’s easy to fall into the trap of thinking possessions like cars, furniture, jewellery, etc, are assets. He says that basically everything we own that isn’t an investment (including your home, if you own one) is really a liability or a ‘toy’. In the book, Kiyosaki challenges some conventional views around what defines an asset vs a liability. The difference between assets and liabilities And while budgeting can seem ‘boring’ or only a small element of your money, having had insights into how many people manage their money, I agree that your savings strategy may be ‘mission critical’ to your level of monetary success. Kiyosaki also stresses the importance of being on top of your cashflow and savings strategy. I wholeheartedly agree with him on this.Īnd even more than just with wealth building, I’ve found that building your financial IQ is also a key to the elimination of stress that can be caused by money – something I think is possible for anyone who is prepared to put in the work to prioritise their financial wellbeing. Throughout Rich Dad Poor Dad, Kiyosaki talks about one of the keys to true wealth being building your financial knowledge. The main concepts that I think ring true a quarter of a century after being published are the importance of financial education, why you need to nail your savings and the difference between assets and liabilities. There are some gaps which I discuss below, but on balance this book may be a huge help to people who want to get ahead with their money. I’ve also become an author myself, publishing similarly about finance.įrom this experience, I can say that many of the wealth creation principles Kiyosaki writes about are, in my opinion, rock solid. Since reading this book, I’ve spent 20 years studying personal finance and investing, and over a decade helping people with their money, and in that time I’ve seen a lot of dos and don’ts. His message was: ‘It is possible for anyone to create significant wealth if they take the right approach.’ This became the trigger for me to pursue a career in personal finance. ![]() I was immediately captivated by the way Kiyosaki talked about money, the simplicity with which he explained concepts I had no idea about, and the different thinking he applied for how to ‘get rich’. I first read Rich Dad Poor Dad in 2001, after being given a copy by my Nan. The personal finance book, Rich Dad Poor Dad, is estimated to have sold more than 40 million copies across the globe since it was first self-published by US entrepreneur Robert Kiyosaki in 1997. But do the lessons still ring true? Financial adviser Ben Nash reviews the iconic book. Rich Dad Poor Dad was written by Robert Kiyosaki over 25 years ago. ![]()
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