Robert T. Kiyosaki’s book Rich Dad Poor Dad gives an interesting perspective on the importance of financial literacy. He gives advice and argues why building one’s financial independence, building wealth through assets and real estate can make anyone rich.
Kiyosaki supports many of his arguments through parables, an analogy from his past experiences, and the author presents the information in a reader-friendly way. This makes the book applicable to individuals who have little to none financial literacy, which is a topic the author tries to discuss.
Throughout the book, the author refers to assets and liabilities, and why it is important to distinguish them apart. Rudimentary diagrams are shown to make it clear for the reader what assets and liabilities are. However, the author brings up an interesting perspective that your house should not be considered an asset. This is because, as Kiyosaki argues, the house takes money out of your wallet – thus it is not an asset. But through an accountants point of view, the house would still be considered an asset because it is owned and controlled to produce value (if the house appreciates in value.) This is especially contradicting, hence the author does not give the ‘real’ definition of what assets and liabilities are.
Furthermore, to develop one’s financial IQ is another central lesson in the book. The author divides this term within 4 technical skills: the knowledge of accounting, investing, understand markets and the law. I think it is interesting that the author points to the law (which in my opinion would be the most important because it restricts and investor to what he or she can and cannot do) as a central part of financial intelligence, but does not give it a clear and thorough definition. I do understand what the author is referring to when mentions of the importance of law, but I am not sure everyone else does. Therefore I wish Robert T. Kiyosaki would have given a clearer definition and further examples to support his argument.
An overall good starting book for someone who has little to none financial or investing experience.