Components of a Financial Plan
February 12, 2025
The repo market is probably the largest section of the money market. It is estimated that the daily volume of transactions in the repo market is between $2 trillion and $4 trillion. This is the market where the central bank, commercial banks as well as institutional investors play a major role. Since these are large […]
In the past month, the Dow Jones Industrial Average had seen a spectacular fall. The market had crashed more than a thousand points. This crash happened on the speculation that the Federal Reserve i.e. the central bank of America is planning to raise interest rates. The mere mention of the possibility of an interest rate […]
Dividend discount models are based on the assumption of constant or linear growth. However, a mere look at the empirical data will prove that this is not the case in reality. Growth is almost never linear or constant. In fact, in strategic management, the concept of product or company life cycle is taught wherein there […]
Over the years, the sporting business has quietly metamorphosized into a big business. The amount of money changing hands in the sports business today would have been considered unthinkable even a few years ago. It is common for franchises to be valued in billions of dollars. Star players also make millions of dollars while playing […]
Forex quotations can be quite complex for the average person. It takes some training and knowledge to understand that these quotations can be provided in more than one way! Also, it takes a little getting used to before a person can quickly comprehend these quotes and take quick decisions based on the same. In this […]
The domain of personal finance is exceptionally wide. There are lots of experts who have differing opinions, who coexist in the personal finance arena. However, in the early 2000s, a relatively unknown author by the name of Robert Kiyosaki started making waves in this area. Some of the ideas that he suggested were radically different from widely held beliefs amongst personal finance gurus. This is the reason why his book called “Rich Dad Poor Dad” became a controversial book.
However, it also needs to be mentioned that people who read the book found some of the advice to be very valuable. This is the reason why the book ended up being a best seller for many years in a row! Robert Kiyosaki ended up harvesting the rich dad poor dad brand and created an entire series of books, board games, and other merchandise that continues to be popular to date.
Even though the ideas proposed by Robert Kiyosaki are not part of the personal-finance curriculum in any major school, these ideas are still studied and practiced by many people around the world. This is the reason that in this article, we will talk about what the Rich Dad Poor Dad Philosophy Is and why it is controversial.
The name of the book rich dad poor dad is based on the contradictory education that Robert Kiyosaki received about money from his two dads. His biological father was a government employee i.e. the poor dad.
Robert Kiyosaki is of the opinion that his poor dad could not make enough money in his lifetime because he had some limiting beliefs about money.
He used to believe that excessive money is a bad thing and that people have to do something unethical to earn large sums of money. Also, he believed that money could only be earned only through labor. This is the reason why he would often try to negotiate better terms on his wages.
At the same time, Robert had the fortune to spend a lot of time with his friend’s father, whom he calls the Rich dad in his book. Because Robert spent time with two people from two different social strata, he was able to compare and contrast their thoughts.
According to Robert Kiyosaki, being rich or being poor is a matter of mindset and hence one must alter their personal beliefs in order to become rich.
The book became wildly popular as it offered the everyday middle-class people all over the world a sneak peek into the world of wealth and how do they think about wealth.
The book became wildly controversial because some of the advice given in the book goes directly against what is preached by most personal finance gurus. Hence, they thought that this book will confuse the people and give them bad advice on a massive scale. Some of the controversial pieces of advice mentioned in the book are as follows:
Robert Kiyosaki redefined the terms asset and liabilities. According to him, assets put money in your pocket whereas liability takes money out of your pocket. Since a larger, more expensive house takes money out in the form of property taxes and upkeep, he termed a person’s house a liability.
He also mentioned that if a person’s house is their biggest asset, then they are in financial trouble. This did not go down well with many personal finance gurus and housing finance companies which had been marketing mortgages as investments.
Robert Kiyosaki also portrayed the savers in a bad light since he believed that saving was a waste of time and borrowing money was actually more efficient. Robert Kiyosaki was criticized because he was misleading any young mind reading his book to form a skewed opinion about money as well as about how the world of business operates.
Robert Kiyosaki also mentioned some very useful information about how money works in his books. The good points which he mentioned added a lot of value to the lives of people. Those points will be mentioned in the forthcoming articles to give the reader a gist of the book.
Your email address will not be published. Required fields are marked *