Rich Dad Poor Dad by Robert T. Kiyosaki, written with accountant Sharon L. Lechter and self-published in 1997, became a long-running bestseller after a slow start. It tells the story of two men who shaped Kiyosaki’s view of money: his own father, a highly educated government employee, and the father of his best friend, a businessman with little formal schooling. Warner Books picked it up in 2000, and a 20th anniversary edition followed in 2017.
What is Rich Dad Poor Dad about?
The book is a set of parables. The poor dad works hard, earns a decent salary, pays a lot of tax and never gets ahead. The rich dad owns businesses and property, pays himself through them and teaches his son and young Robert to make money work for them. Each chapter turns one conversation between the boys and the rich dad into a rule about money.
The best-known rule is the difference between assets and liabilities. Kiyosaki defines an asset as anything that puts cash into your pocket and a liability as anything that takes cash out. By that standard, a family home with a mortgage is a liability, while a rental flat that earns more than it costs is an asset. He argues that the middle class buys liabilities they think are assets, and the rich buy assets that pay for their lifestyle.
Other chapters cover minding your own business (building assets alongside a job), the tax advantages of owning a company, working to learn instead of working for pay, and overcoming the fear that keeps people from investing. The tone is motivational, with short chapters and simple diagrams of income and expense flows.
What are the main lessons for founders?
- Judge spending by cash flow. A new office, a company car or an expensive tool is a liability unless it brings in more money than it costs. Ask that question before every big purchase.
- Learn to read the numbers. Founders who understand income statements, balance sheets and cash flow make better calls and get respect from investors and accountants.
- Build something that pays without you. The book pushes readers to own systems, from businesses to property, so their income does not depend on hours worked.
- Pick jobs for the skills they teach. Early in a career, a role in sales or finance can be worth more than a higher salary elsewhere.
- Name your fear. Many people stay employed because losing money scares them more than staying stuck. Seeing that clearly is the first step towards starting a company.
Who should read Rich Dad Poor Dad?
It works as a first money book for students, employees thinking about leaving a job and founders who grew up in families where nobody talked about investing. The simple language and stories make it a quick, motivating read, and it starts conversations about assets and cash flow that many people never have.
Experienced founders, anyone with a finance background and readers looking for a concrete investment plan can skip it. The book inspires, and it gives very little instruction.
How do you put Rich Dad Poor Dad to work this week?
- List everything you and your company own and owe. Mark each item as cash in or cash out per month using Kiyosaki’s definition.
- Read your last three months of company statements line by line and write one question about each number you cannot explain. Book an hour with your accountant to answer them.
- Pick one expense that brings in nothing and either cut it or set a date by which it must pay for itself.
To turn that money thinking into a plan for a business of your own, the free Business Plan Generator on Fe/male Switch lays out income, costs and assumptions in one document.
Where does Rich Dad Poor Dad fall short?
The advice is vague where readers need detail. The book urges people to buy property and businesses without explaining how to analyse a deal, manage risk or recover from losses, and some of its tax ideas depend on US rules. Critics such as investment author John T. Reed and Slate’s Rob Walker called much of the advice wrong or empty, and Kiyosaki long avoided saying who the rich dad was, which fed doubts about how literal the story is. Read it for the mindset and turn to Profit First for a practical system to keep cash in a small company.