FOREWORD
(the reader can skip if they do not like unnecessary public brainstorming)
The concept of money has always been very ambiguous irrespective of whether one had more of it or less. Simply, it can be said that money is a medium to obtain products (goods and services). Hence, more money meant more products. Who is going to give us this money? Someone to whom we give our product. "Our product", here, can mean a skill, a service, an actual and physical product, or anything of the like. Generally, we would prefer the product to be something highly skilled such that anyone could not be able to do that particular thing so that the demand for the same would be relatively higher and the said skill would warrant more money. When we go deeper into this line of thought we ourselves can come up with the understanding of the inception of many aspects of the financial structure of the world, right from monthly salaries, to EMIs, to Insurance. The general idea to smoothly pass along this structure is apparently taking the least risk possible and over time, that idea has formed a template, which we Indians now call "middle-class mentality". The book Rich Dad Poor Dad by Robert Kiyosaki, which I just read, challenges this mentality and asks if passing along a complex structure such as this actually means conquering it.
ACTUAL REVIEW
The first concern raised by the author is that schools don't teach their students about money and financial literacy. Commerce in school doesn't necessarily count as that because it is taught from the bird's eye view and not in the form of personal handling of money. In fact, no personal necessary human skills are directly acquired by people through education in school. This concern was introduced in the book by a personal anecdote of his, which resembled the "Jacket on-off " sequence followed by Jackie Chan's elaboration of a simple activity scene from Karate Kid. The author says he has two dads - the poor dad who gave birth to him; and the rich dad who was actually his friend's dad who taught him everything about money. What follows in this post is mentioning a number of his radical ideas and briefly discussing them.
The introduction chapter was a little shaky for me. The Rich Dad says some great things like elaborating on the importance of financial literacy and how the myth of "job security" has created a kind of a rat race preventing people to think out of the box and find creative solutions to earn money. However, he also evidently underpays his employees and in another instance says that employees not getting paid enough is not the employer problem. When asked about it he dodges the question and says that the employees will anyway not feel any amount to be sufficient and will never know that their financial plight cannot be relieved merely by a meagre increase in their monthly salary. While the previous statement can be agreed with, it is also the responsibility of the owner/leader to make sure their employees get their due and not make sanctimonious lectures on what they do with it. He says that employees must be fearless and ask for what they want but also naturally doesn't encourage the dissatisfaction of employees fuelling protests as we've always seen. This mentality is, all said and done, a toxic capitalist mentality which shouldn't be the first thing the kid in the book and the reader learn.
That being said, the book quickly gets to the point which is basically to provide a mental reset button to the readers on how they've viewed money and personal financing. Although I was aware of what assets and liabilities meant I never realized that a lot of the things I thought were assets such as buying a house were actually liabilities and vice versa. Although it might seem like it in the beginning, the book actually doesn't actually abhor salaried employees following a 'generic' routine but only presents a different idea that life. This idea when extrapolated (by myself here) is where one's skill which is achieved from learning/education is put to work which generates two things- the money for the company/individual; and more learning and knowledge which creates better/different skills and experience which is put into better/different work and this forms a functioning cycle. Now, this cycle as mentioned previously acts as a source of providing money to the individual regularly which a financially literate person would use to create another cycle of using that money as a premium to salvage a larger sum of money which expands the individual's financial capacity even at an early stage of the individual's career or when the individual is earning less money as salary. This second cycle is created through spending on assets such as creating businesses (whether or not it is run by the individual), stocks, bonds, income-generating real estate, promissory notes, and more.
The author and the Rich Dad also despise taxes so much and think of it as the government stealing money from you without your permission. Although it's a wrong conception, it is a good attitude to make the individual want to get back what the individual loses from taxes, if not more.
The book ends very well by giving specific inputs to improve in various points in the cycles mentioned above such as finding spirit, investing in learning such as attending various seminars, mastering life-formulae and relearning new ones, mastering self-discipline, and a lot more which can be inculcated irrespective of what your financial policy turns out to be.
Overall, this was quite an enriching book placing seeds for new thoughts on extremely pertinent subjects like money, skills, and management. But I would recommend taking some of what is said with a pinch of salt as although encouraging investment is a major suggestion, there are still many areas regarding one's personal financial decisions that could have been explored that did not come to the surface. Some examples would be discussing the role of banks, savings, handling insurance policies, and planning of events of large expense such as weddings. There are many more aspects of finance that a person as successful as the author or his Rich Dad could have enlightened the reader about but the book instead ends up chooses to focus on a singular message extensively. In the end, one should read this book to understand the importance of thinking about money, then learn in further depth on how to actually think about money.
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