‘Rich Dad Poor Dad’ Published 27 Years Ago. Are We Smarter With Our Money?

The Good, The Bad, The Ugly, and The Impossible of Robert Kiyosaki’s teachings.

40 million copies of this iconic personal finance book have been sold worldwide since 1997.

Maybe you have never read this book.

But you must have heard about it.

Yet, despite its book sales, many people think it says a lot about nothing. My friend, Denis Gorbunov, thinks so.

There is nothing specific or actionable, I hear him scream.

But… really.

I have these questions.

Did RK teach us anything?

And what did we miss, if any?

On the Rich Doesn’t Work for Money

My personal experience says this is true.

Of course, I am not referring to me, per se. I belong to that stinky ‘E’ & ‘S’ quadrant. I wish I was in ‘B’ and ‘I’.

My friends running their [own] businesses or relying solely on their investments and trading income for their livelihood swear by this line of thought.

• They work for themselves.
• They grind to get their businesses off the ground.
• They aren’t working for money. They spend money to get money.

The 3rd point is one I took a long while to understand. Not working for a paycheck? That is unbelievable.

I understood, eventually.

You will if you are an entrepreneur.

You spend money on marketing, right? It generates leads. You convert leads into sales.

So, yes.

They don’t work for money.

They work to build their assets.

And they spend money to get money.

It’s real. And it does sound crazy. It does… if you are not exposed to such people around you.

On Good Debt, Bad Debt.

I love this lesson.

It got me thinking.

This is another one of those lessons that split people into 2 camps.

• Get out of debt. It is bad, no matter what. It crushed you.
• Learn how to use it. Then, use it. Debt is leverage.

Now, now.

Please.

Don’t tell me when you stand. I am not here to pick a fight on personal finance preferences and philosophy. I respect your views.

Here’s what I think about good debt and bad.

There is nothing wrong with borrowing money. Especially so when we borrow money for productivity purposes.

Just look at the companies we invest in.

They have,

• Bank loans,
• Credit lines,
• Medium, Long-Term notes.

And many other financial liabilities.

Companies aren’t uncomfortable borrowing money.

They do it to finance new product development projects, new plants in Norway, and new production methods. Businesses borrow to grow. No sweat.

Every $1 they borrow returns $1.50.

They return the bank that borrowed $1, plus interest, and keep the rest.

That is good debt.

So, what is bad debt?

This is my [overly] simplistic interpretation. Don’t ding me.

Bad debt happens when we borrow money to buy things that don’t produce more money. Our wallets don’t grow fatter.

That, to me, is bad debt.

So, yes. There is a line in the sand between good and bad debt.

I believe it.

On How Much You Make Versus How Much You Keep

Have you had any friends drowning in credit card debt?

I have.

They spiral their way to bankruptcy.

I have friends in high-income jobs. $12,000 monthly. $14,000 monthly. A Chief Financial Officer making $23,000 monthly with annual stock compensation.

Did they get richer?

Nope.

They are broke.

That is because they have issues holding on to their money. They simply can’t.

Try telling a spendthrift buying luxury goods to stop swiping their credit cards. It won’t work. I have a 100% failure rate with my friends with money-like-water problems.

Money comes in, money goes out.

Not enough money to buy frivolous stuff?

They borrow via their credit cards.

What happens at the end of the month?

• They spend all their income away,
• They have credit card debt to repay,
• They apply for more credit cards to cover their credit card bills.

Robert Kiyosaki is right.

Financial literacy matters.

• When we are smart with our money — We get to keep it.
• When we are d**b with our money — We earn it, spend it, and borrow more of it.

Earning a high income has nothing to do with financial intelligence. This, I agree.

Is It Difficult to Get Rich Following Robert’s Advice?

The direct answer is yes.

And it has nothing to do with Robert Kiyosaki’s personal finance advice. They work. But there are caveats.

I have 5 reasons for saying so.

1. We are uncomfortable with debt.
2. We are not business people.
3. We are not investors.
4. We believe in retail spending.
5. We want to buy assets with our own money, not borrow money to do the same.

The core idea of using Other People’s Money is weird to us. Other People’s Money involves borrowing money.

You cannot unlock OPM’s potential if you are uncomfortable with borrowing money.

This mentality — or aversion if you will — is common. When I told Mum and Dad about debt as leverage, Mum said this to me.

“Isn’t it risky? What if you borrowed money to build a business, and it flops? You must repay your loans with zero income, right? Why not get a job? It’s stable.”

First of all — Nothing wrong with such thinking.

Next — It says a lot about our psychology towards risk.

We [naturally] avoid risk. This thinking is hardwired into our minds. What if it fails? What if you make no money?

We have a different attitude towards life. Some of us are more willing to take risks to achieve our dreams. Others want nothing to do with additional financial stress.

Who is right? Who is wrong?

Everyone is correct.

No one is wrong.

Here’s why.

It doesn’t matter how we get there, so long as we get there. Don’t lose sleep over money. You lose your sanity.

And you pop more white hair.

When it comes to money, be comfortable with what you can and willing to do.

• If you are cautious, so be it.
• If you are comfortable taking risks, go for it.

Really. That is it.

It is about us, not Robert Kiyosaki. Or his famous book.

The Close

Are we smarter with our money in 2024?

Maybe?

Reading the #1 personal finance book does open our eyes to many possibilities.

That said, we rely on ourselves to,

• Advance our finance knowledge,
• Execute and get things done,
• Get richer.

And come on.

Why would you [even] rely on a book to [actually] get rich?

That one book cannot do what you must do to get rich.

Come on.

Denis Gorbunov inspired me to write this article.

Do read his viewpoints on Robert Kiyosaki here.