The Rich Dad Poor Dad Philosophy
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.
What is the Rich Dad Poor Dad Philosophy?
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 friends 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.
Why is it Controversial?
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:
- Most middle-class Americans have made their wealth in real estate. For the majority of Americans, their home is the biggest piece of wealth that they own. Robert Kiyosaki created controversy by mentioning in his book that homes arent actually wealthy but instead they are liabilities.
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 persons house a liability.
He also mentioned that if a persons 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 created another storm by mentioning the multi-level marketing schemes in favorable light throughout his books. Many financial gurus in America have believed that multi-level marketing businesses are actually extremely difficult businesses where the odds are stacked against the average person. This is the reason why they advise their clients to stay away from such businesses. However, Robert Kiyosaki was publicly advising people to try their hand at multi-level marketing businesses. Many personal finance gurus accused him of pushing people towards pyramid schemes.
- Robert Kiyosaki also landed up in controversy because of the way in which he portrayed people. Employees as well as self-employed people were portrayed as being diligent, hard-working but not rewarded enough financially. On the other hand, investors and business owners were portrayed as people who take a large chunk of the money which is generated from the enterprise.
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.
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