Rich Dad's Guide to Investing: What the Rich Invest in That the Poor and Middle Class Do Not!

By Robert T. Kiyosaki, Sharon L. Lechter

13,948 ratings - 4.02* vote

Personal finance author and lecturer Robert T. Kiyosaki developed his unique economic perspective from two very different influences - two fathers. One father (Robert's real father) was a highly educated man but fiscally poor. The other was the father of Robert's best friend - that dad was a college drop-out who became a self-made multi-millionaire. In this follow-up to th Personal finance author and lecturer Robert T. Kiyosaki developed his unique economic perspective from two very

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Book details

Paperback, 384 pages
June 1st 2000 by Warner Books (NY)

(first published 2000)

Original Title
Rich Dad's Guide to Investing: What the Rich Invest in, That the Poor and the Middle Class Do Not!
ISBN
0446677469 (ISBN13: 9780446677462)
Edition Language
English

Community Reviews

Chad Warner

Like all Kiyosaki’s books that I’ve read so far (Rich Dad, Poor Dad, Cashflow Quadrant: Rich Dad's Guide to Financial Freedom, Rich Dad's Retire Young, Retire Rich), this one is more about developing the proper mental attitude to become rich, rather than a step-by-step handbook. He opens your eyes to the possibilities of obtaining wealth, gives a few general pointers, then leaves it up to you (and your financial team) to work out the details. His books are more strategic than operational, although there are operational tips sprinkled throughout.

Kiyosaki says that average investors invest to obtain comfort and security, but the rich invest primarily to become rich, and secondarily for comfort and security. He advises that you take advantage of the legal benefits of business ownership, acquiring assets as a business to minimize taxes.

The book’s subtitle promises to reveal what the rich invest in, that the poor and middle class do not. Kiyosaki says that average investors invest from the outside, through public stocks and mutual funds. He says that the real money is made by the rich when they invest from the inside: through businesses they start and then sell or take public, companies they invest in pre-IPO, and real estate. He also promotes hedges and "bear" investments to profit during market downturns, as well as traditional investments such as stocks and bonds. He strongly recommends that you assemble a financial team of lawyers, accountants, and financial advisers.

Kiyosaki summarizes this book near the end:
"In order to create a world of an abundance of money it does require a degree of creativity, a high standard of financial and business literacy, seeking opportunities rather than seeking more security, and to be more cooperative instead of competitive."


The book is divided into 3 phases. Phase 1 explains 13 Investor Lessons. Phase 2 describes several types of investors of increasing sophistication. In Phase 3, Kiyosaki presents his fundamentals for building a strong business.

If you’re looking for a book full of stock tips or real estate investing advice, this isn’t it. Instead, it contains general principles for starting and running a successful business, and advice on investing through that business.

I liked Kiyosaki’s advice to be an investor first, regardless of your profession. His nontraditional view of expenses is also thought-provoking: he says that debt, expenses, and losses are good, powerful forms of leverage when used to generate cash flow.

Investor Lessons
Lesson 1: Invest first to be rich, then to be comfortable and secure.
Lesson 5: Plan to be rich, not poor. Plan for financial abundance, not scarcity. Expand your financial vocabulary to expand your financial reality.
Lesson 6: Find a simple formula for getting rich and stick to it. Investing is a system; a dull, boring, almost mechanical process.
Lesson 9: Investing for comfort and security takes money, and is passive. Investing to be rich requires time, and is active.
Lesson 10: The real money comes from legal inside investing.

Notes

• To become rich, create assets rather than buying them. This is usually done by starting a business.
• Profit during down markets with short selling, put options, and other hedges.
• With earned income, you work for money and pay more taxes. With passive and portfolio income, your money works for you, and you pay fewer taxes.
• Microcaps have the highest returns. Become an inside investor by starting a business, or taking a controlling interest in an existing one.
• A business buys its assets with gross income, and pays taxes on net income. An individual/employee pays taxes on gross income, and buys assets with net income.
• To reduce your taxes, you want high expenses and low income, not low expenses and high income.

Peter

Much like all of the Rich Dad Roor dad series, this book was good, but not necessarily great. For me, it's a bit too generic and conceptual, and not not quite specific enough. However, there's not too many great alterntives in my opinion so this is still a decent and valid read.

The author does have a tendency to repeat himself in his books, as well as push/advertise for his various other products. I'm not a fan of purchasing a 200 page book and getting 10% advertising.

All in all, while not perfect, it's still good, valid and a worthwhile read.

Shang Shang

“Investing means different things to different people. In fact, there are different investments for the rich, poor, and middle class. Rich Dad’s Guide to Investing is a long-term guide for anyone who wants to become a rich investor and invest in what the rich invest in. As the title states, it is a ‘guide’ and offers no guarantees... only guidance.” - Robert Kiyosaki

S.Ach

Q: How to piss a socialist/anti-capitalism liberal off?
A: Gift him this book.

This is not only the worst book I have read on investment, but also, one of the worst books I read on ANY subject.

I didn't like the author's most famous "Rich Dad Poor Dad" with reasons listed in my review of the same.
What could one expect from a man who idolizes Donald Trump? ( Yes, I am biased. But, in my defense, I didn't know his adulation till I finished that book)

I had bought this along with the copy of Rich Dad Poor Dad, and I regret why I did that.
This book is an example of how a book shouldn't be written.
No. No. Don't think I am criticizing this book only because of the ideas the author holds that are diametrically opposite of those of mine.
Even if I discount the author's disdain towards the educated poor (yes, for him, poverty is a sin), towards working your way up through hardwork, towards austerity/minimalism, and his drooling over quick-gotten riches, working your ways out of tax laws, et al, my biggest peeve against this book is how it is written - it repeats the same sentences, points again and again and again and yet again, filling the pages, without providing any additional information. Absolutely terrible.

There is very little guidance about investment in this book. Mostly, it is all about why you should aim be rich, by hook or by crook ( and I felt like, the author would pat your back in private if you tell him how you chose the latter to gain your million). The author says - there are two problems in life, having less money and having more money, which one would you prefer? Sad way of looking at life, according to me.

If you really want to learn something about investment, DO NOT read this book.

Instead the book that I suggest is - The Intelligent Investor by Benjamin Graham.

Tan Yi Han

This is a book that aims to change our way of thinking about obtaining money.

Robert Kiyosaki starts out by asking why 90% of the world's fortune lies in the hands of only 10% of the people. What makes this 10% so different that they can dominate the world's wealth?

The main difference, he says, lies in the way we think. The poorer 90% believe in financial security through getting a stable job, working hard and squirrelling the money in the bank. Or if they do invest, they invest without the necessary knowledge and experience, merely relying on gut instinct or hearsay. Of course, they rarely succeed.

In this age, those who work the most physically are paid the least and taxed the most. We all need to learn to make money mentally.

Robert Kiyosaki's real dad (poor dad), was his real-life example of someone stuck in the "old" way of thinking. As a teacher, he believed in working hard and avoiding mistakes. He rose to a high position, but then he lost his job. His whole life was spent teaching, but now he had to start searching for another job and start from scratch.

Robert's friend's dad (rich dad), on the other hand, started from nothing, made a lot of mistakes, but eventually build a financial empire. Rich dad then used his wealth to quietly help others, giving it back to society.

So how do we become like rich dad?

Firstly, you have to ask yourself whether you are prepared to be rich. Some people just want to be secure. Some want to be comfortable.

To be secure or comfortable, Robert recommended relying on good financial advisors to help you come up with a financial plan. Talk to different financial advisors, and be clear on your goals, so they can help you better. Robert took a month to come back with a plan for financial security - a mechanical, automatic and boring plan. The plan for financial comfort was trickier - it took 4 months and Robert had to really think about what he wanted in a comfortable life.

The really exciting part is to come up with a plan to be RICH. Yet, Robert recommends that a person had to have a plan for financial security and a plan for financial comfort in place, before pursuing a plan to be rich. Simply because pursuing a plan to be rich HAS risk, and so you'll need to know you have something to fall back on if you do fail.

To be rich requires a lot of work. Although Robert briefly covers investment in real estate (passive income) and stocks/ bonds (portfolio income), in this book, Robert focuses on building a business. With a business, you can enjoy tax advantages, and eventually, people will pay YOU for stock, not the other way round.

Building a business may seem like a lot of work, but so is being able to invest well in real estate or stocks. Robert teaches a lot of tips on how to reduce risk, but there is always going to be risk involved and a steep learning curve. Robert himself failed his first... and second businesses. But he kept learning and got the hang of it.

For those who are just starting out, Robert suggests getting a job that can teach you useful skills eg. sales techniques/ communication skills, and then start a part-time business. Part of your income can serve as the capital for your business, and if your business fails, you can still fall back on your job.

Read the book for more tips! Many of the details are relevant only to the American system, but the general idea is universal. It is certainly very helpful for me, and I seem to be walking in his footsteps inadvertently =)



Carbon

I hated reading this book. Why I didn't just stop reading it, I don't know. As much as this book was easy to read, a "Guide to Investing" it is not. It should be changed to "A guide to becoming a business owner".

That's not why I got the sudden urge to fling this book across my room though. It's because every chapter is written as if it should be the first chapter. Never in my life have I read "This chapter will teach you..." or some variation of that phrase so many times as I have with this book.

To be honest, I feel like this book was mostly an advertising scheme. Almost half way through the book he starts talking about the board games he made and keeps mentioning them till the end. The books last few pages is just adds for the games.

Another thing I don't like is that he does not go into detail about investing. In fact, it feels like at some point in the book he realized that he wasn't talking about investing and gave a description of the different type of investors but then went back to how to become a business owner. The only thing he says about investing is that you should have a broker. And that is not a spoiler, believe me.

Either way, the book was interesting but I wanted to learn about investing and this books only accomplishment for me was passing the time for a very slow shift at work.

Xuewei

I've done a lot of self-reflection while reading this book. For the past 20 years, if I were to be very frank, i have been following my parents' advice closely, if not completely. Security and stability are what my parents expect from me. But deep inside, I know I must be more than that and I am forever grateful that i've read the series.

There has been a fundamental paradigm shift in my mindset and the way I think.

1. Keep searching, keep learning and keep challenging old ideas.
2. Learn to work hard mentally, not just physically.
3. School smarts are impt but so are street smarts. In fact, dean's list doesn't seem to be as appealing as it used to be. (Not excited any more). I'm more interested in developing my entrepreneurial skills and of course achieving my personal life goals.
4. Don't be average.
5. Learn to possess all the investors' controls
6. Appreciate,apply and master B-I Triangle

I have a long way to go and it's probably a tough one. But I can see my future more clearly and I've never felt this excited about embarking a new journey.

Edgeton

This book continues the RDPD tradition with discussions of financial literacy and investments. However, the book focuses more on the insider point of view: business develop and taking companies public. I just haven't found this information written in such an easy to read format. Even though I'm not yet at this stage in my investment life, I will keep this knowledge tucked away for future use...you never know when you will need it. This entire series is not about 'how to' but rather about financial guidance and direction for the average person. Since I've started reading this series (not necessarily in order), I've been committed to increasing my finanical education and consistently investing as I find opportunities that make sense to me (based on my current level of knowledge and experience). The information in this book just moved me another step closer to my financial goals.

vasu kapoor

I think this is like the final book of a trilogy. The Rich dad series has been of the most eye opening series of my life and has truly transformed my thinking.This book built upon the ideas of previous 2 books and gets technical by the end. If you were paying attention to it, it gave you the secret to financial immortality.But were you ?

Ryan Dobson

Was not very impressed. The whole rich dad series feels cheap and full of fluff.

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