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Hi, guys, I picked up the following to help balance all the positive stuff about Rich Dad, Poor dad. I didnot write it, but here it is:
Rich Dad, Poor Dad, Liar Dad, Thief
Your Money | July 9, 2003 | Tim
Marc Miyake has lately been discussing Rich Dad, Poor Dad, and points to a number of sources which say or imply author Robert Kiyosaki:
Wrote about a fictional, hypothetical "Rich Dad", not a real-life human as one might think after listening to him
Doesn't appear to be all that wealthy
Seems confused about even the simplest, most basic aspects of money-making and wealth
Is instead skilled at building a cult-like following
Has written a book with lots of wrong and dangerous financial advice, apparently based on the (correct!) assumption most of his readers won't know any better
Has an anti-education bias
Writes and talks about wealth in terms more appropriate to leftist revolutionaries
Detractors wonder if Kiyosaki is still trying to make up for childhood slights from the wealthy
Here are several jaw-dropping examples from John Reed's website which debunks "Rich Dad, Poor Dad":
Home ownership: This is so basic even I know it! Kiyosaki claims his book will "challenge the belief that your house is an asset" and that "most people work all their lives paying for a home they will never own." Reed responds: "With each payment, their equity increases. Many people pay off their mortgage in full before they die. Almost all thoroughly enjoy their home both during and after the mortgage."
Corporations: Reed relates an incident from Kiyosaki's "Corporation" course, where he brags about the tax advantages of having one of his corporations buy him a $4,000 Rolex watch instead of buying himself. Reed points out that there's no difference here: You pay the same taxes on $4,000 worth of "Rolex" compensation from a company as you would on $4,000 cash. Again, this is a basic even I understand.
Insider trading: Though at points Kiyosaki advises to play by the rules, he says that the rich get that way is through "special rules" just for them (which he will teach us), including insider trading: "The reason you want to have rich friends who are close to the inside is because that is where the money is made. It's made on information. ... the sooner you know, the better your chances are for profits with minimal risk. That is what friends are for."
Need I point out insider trading is illegal, and that is -- in my book anyway -- certainly not what friends are for. Further, it ignores the fact that legitimate companies are more than Ponsy schemes or shell games, but in fact deliver a value and are created through a lot of hard work.
Real Estate: "In real estate, I can go out and in a day come up with four or five great potential deals." Reed counters: "Using the ratio most favorable to Kiyosaki's claim, 50 to 1, his boast means he looks at 200 to 250 properties a day. That's about ten properties per hour or one property every six minutes if he does not sleep or eat. Kind of reminds me of the 20,000 women Wilt Chamberlain claimed to have had sex with -- until somebody ran the daily numbers."
Envy: A lot of his financial advice seems to center around Marxist-style envy: "Most people, working for a paycheck, are making the owner, or the shareholders richer," and "You work for the bank. After taxes your next largest expense is usually your mortgage and credit-card debt." Reed points out that economic activity is not a zero sum game: "You should choose what you do only according to how it relates to your goals. You should not resent others benefiting from your efforts. Indeed, you will prosper most when you help others achieve their goals... Resenting bank profits is childish."
Reed has a wealth of debunking information at his site, and definintely makes an interesting read... though not a crucial one. Seems like a reasonable course of action would just be to stay the heck away from "Rich Dad, Poor Dad", advise those you love to do likewise, and not let it mess with your head so you won't have to ultimately unlearn the various financial "lessons" it will teach you.
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