
Rich dad, poor dad – the story that formed my views on making money - mwidell
https://micaelwidell.com/rich-dad-poor-dad/
======
pkorzeniewski
The problem with all these "how to get rich" books is that they're full of
anecdotes, quotations, fictional stories, motivational bullshit etc. which
make you feel good while reading them, but as soon as you put the book back on
the shelf, it's all gone. It's just a temporary boost of energy and
motivation, because reading requires almost no effort and more often that not
it's just another way of procrastination. Seriously, do you think the majority
of rich people prepared for "getting rich" by reading hundreds of motivational
and self-help books? It's not like you'll find some magical recipe in one of
the books which you can just apply to your life and 10 years from now become a
billionare. Each success story is so different and depends on so many factors
- being in right time at the right place among the most important - that it's
impossible to simply recreate any of them and just wait for the results.

~~~
allwein
> do you think the majority of rich people prepared for "getting rich" by
> reading hundreds of motivational and self-help books?

No, I don't. But you know what they do have? They've grown up in a household
and a culture that teaches them thousands of small lessons in being and
staying rich. They don't have to read about it, because their parents and
friends and lawyers and accountants and country club associates have all been
reinforcing those lessons their entire lives.

~~~
reboog711
According to The Millionaire Next Door; I am not sure this is true. Many
children of 'rich people' have their lifestyle funded by their parents and
only learn how to spend beyond their means; which does not accumulate them
wealth in the long-term.

~~~
surge
That's basically the difference from what used to be referred to as 'new' rich
vs 'old' rich back in the day. The old rich were families whose wealth passed
down or perpetuated through generations specifically because they taught their
kids the discipline needed to build and keep wealth. Where as new rich fizzled
out fairly quickly.

~~~
dragonwriter
> The old rich were families whose wealth passed down or perpetuated through
> generations specifically because they taught their kids the discipline
> needed to build and keep wealth.

No, the old rich were families whose wealth was secured by long-established
bonds of connection with other old-rich families who constituted the ruling
class and dominated politics and business and acted together, for protection
of their mutual interest, as a tribe jealously defending against outsiders,
the new rich were those who had secured money but not yet been admitted to the
ruling tribe.

(This is still the case, though "old rich" and "new rich" aren't particularly
popular terms for it; if your family has connections where, e.g., the Saudi
royals will bail out your failing enterprises for the value of maintaining a
useful network, and you wealthy establishment donors will pour fortunes into
your brothers campaign for office for the same reason _despite being willing
to say that they think the whole thing is a waste as long as they can be
anonymous while doing so_ , what your parents have given to you is
_connections_ more than _discipline_.)

------
dsr_
The basic problem with Kiyosaki is that he wrote a work of fiction and passed
it off as autobiography.

No, wait, the basic problem is that he is passing inspirational advice off as
financial advice.

But don't take my word for it, read the critique:

[http://www.johntreed.com/blogs/john-t-reed-s-real-estate-
inv...](http://www.johntreed.com/blogs/john-t-reed-s-real-estate-investment-
blog/61651011-john-t-reeds-analysis-of-robert-t-kiyosakis-book-rich-dad-poor-
dad-part-1)

~~~
tim333
Also he's outsourced some of his seminars to some pretty sketchy operators
[http://youngandthrifty.ca/rich-dad-poor-dad-seminars-a-
scam/](http://youngandthrifty.ca/rich-dad-poor-dad-seminars-a-scam/)

~~~
MCRed
General advice for anyone young who is reading this-- if the person you're
trying to learn from offers seminars, it's a good sign he's not worth your
time, and seminars are rarely worth the money. "Free" ones are the worst.

Good books are the best educational value (though maybe some MooCs are a
better value now.)

------
twistedanimator
Hands down the best book I have read on money is Your Money or Your Life:
[http://amzn.com/0143115766](http://amzn.com/0143115766)

I'm a naturally frugal person, but the book helped me formulate new ways of
thinking about money and my relationship with it. The major concept being that
money is a representation of your life energy. You work X hours a day at an
hourly rate of $Y. Knowing those numbers allows you to think about purchases
in a new way. For instance, "That new phone will cost me 2.5 days of work" or
"If someone offered me $500 or the new phone, which would I take?" If you
chose the $500, then you know you don't need to buy the phone.

I would recommend Your Money or Your Life before all other financial "self-
help" books. In fact, I think I'm going read it again.

~~~
hammock
That advice seems to apply to wage slaves (hourly rate) but not entrepreneurs
or salespersons (not hourly).

Many other financial books recommend developing income streams outside of
selling your labor at an hourly or yearly rate, which would seem to be missing
from your book.

~~~
twistedanimator
Even the salaryman can calculate his hourly rate.

I am salaried, but when I sat down and calculated my hourly rate, I was a
little shocked. I didn't factor in benefits or anything besides my after tax
take home pay. It's as simple as $(2 week paycheck) / 80\. What you get is
effectively your hourly rate.

As a salaryman, knowing this value will help you avoid working overtime since
overtime is unpaid. The more hours you work, the less your effective hourly
rate. I would argue that if you are asked (either implicitly or explicitly) to
work more than 40 hours a week, you should find a different job as you are
diluting your own pay.

~~~
tome
I think you're misunderstanding hammock. Indeed _only_ (forms of) the
salaryman can calculate an hourly rate.

------
tmorton
RDPD is basically a fad diet book. There's some good advice, but it's mixed
with bad advice and illegal schemes, slathered with a thick layer of
inspirational bullshit.

For a better personal finance book, try "I will teach you to be rich", despite
the clickbait title: [http://www.amazon.com/Will-Teach-You-To-
Rich/dp/0761147489](http://www.amazon.com/Will-Teach-You-To-
Rich/dp/0761147489)

~~~
lowmagnet
Also, my interactions with Ramit (through his blog) have always been a
pleasant experience.

The title and bright color was bait by his own admission. The point being he
follows it up with great _practical_ advice instead of stories and filler.

------
branchless
How I hate people like this. "Building assets and letting them work for you".
For this you can read: "be the footsoldier for the banks who have a monopoly
on money creation. Ask the bank to create money for you then use this to join
the land monopolists. Then let those stupid little people who are actually
creating wealth rent it back from you. This way you get a stream of their
labour." For assets read "property".

People should be aiming to keep most of the wealth they create. What makes the
world shit, and what we cannot all do, is live off the backs of others.

If he knows people who are billionaires they go there by not passing on the
wealth created by others. _Nobody_ adds a billion of wealth creation, not even
Gates.

~~~
charlesdm
Debt is a lever, in itself it's neither good nor bad.

If I have a $10m net worth, I might want to lend someone $1m for a year on
which they will pay me 5% interest per year. If that person can turn that
million into one and a half million, what's the problem?

~~~
Kinnard
Not when it's only issued by a monopoly.

~~~
tome
Who says only banks can make loans?

~~~
Kinnard
That's the thing, they don't loan the money, they create it, banks haven't
functioned the way they're popularly imagined to function for centuries. And
it's so sad that this false image is the moral basis for banks going after
borrowers assets.

The bank doesn't lend you someone else's money, it creates the money(no
effort) and you have to work and put up real collateral to pay it back.

By G-d we should all be working to expose and undo this madness.

~~~
tome
> it creates the money(no effort)

Err, there most certainly is an effort assessing credit risk and dealing with
the fallout when someone defaults.

~~~
Kinnard
What exactly is the risk to the Bank in lending out money they just created?

~~~
tome
They didn't magic it out of thin air. It's a liability to them. If the loan is
paid into another bank they then have to transfer central bank deposits to
that other bank. If the loan is never paid back then they've lost money.

Is it genuinely not obvious to you than bank deposits aren't something that
banks can create and destroy on a whim?

~~~
Kinnard
That's actually not quite correct. The loan itself is an asset to the bank.
When you sign the promissory note, they then give you a balance at the bank in
the amount of the principal of the note, THAT is the liability.

The loan is the asset because that is money coming into the bank. Your
deposits are liabilities because that is money you could withdraw from the
bank.

So it is both a liability and an asset. They don't create it out of thin air,
they create it out of ink and paper. It's a hack of the double-entry
bookkeeping system.

I recommend Paul Grignon's Money As Debt:
[https://www.youtube.com/watch?v=jqvKjsIxT_8](https://www.youtube.com/watch?v=jqvKjsIxT_8)

~~~
tome
The balance in the bank, which is colloquially called a "loan", is a liability
to the bank, yes.

And do you agree there is a "risk to the Bank in lending out money they just
created" or is that still up for discussion?

~~~
Kinnard
No, the balance in the bank is not the loan. You need some understanding of
double-entry bookkeeping to understand fractional reserve banking. The
loan(promissory note), is on the banks balance sheet as an asset. Your balance
which you can withdraw as cash is on the banks balance sheet as a liability.

What is the bank risking when it creates the money and uses the
anachronistically titled "loan" contract to distribute it? • They risk only
being able to extract so much labor. • They risk taking on collateral which is
a REAL asset that someone worked for, like their home if they're unable to
generate enough of the assets the banks just write into existence. • They risk
passing the buck up the ladder ultimately to the lender of last result if
they're "too big to fail" which just creates more money to deal with the
problem.

Banks are not lending out other people's money, everyone tacitly knows this,
if they were how come when you go to the bank they never say, sorry its out on
loan at the moment? This was the case at historically and banks are still
riding on the fact that people haven't gotten wise to the way it's worked for
centuries now.

There is no lending taking place when bank loans are made.

~~~
tome
Hmm ... are we still on the same page? This is where the discussion started:
[https://news.ycombinator.com/item?id=10995433](https://news.ycombinator.com/item?id=10995433)

You seemed to be claiming that a bank incurs no cost ("no effort") to issue a
loan. Are you sticking to that?

~~~
Kinnard
Yes, we're still on the same page. The Banking system is rapacious and it
should be done away with. Its capital allocative functions have been subverted
by extraction. It's an emergent system so that isn't to imply that the people
who work at banks are rapacious. That would be the fallacy of division:
[https://en.wikipedia.org/wiki/Fallacy_of_division](https://en.wikipedia.org/wiki/Fallacy_of_division)

It is that bad.

------
glossyscr
Many years ago a CEO friend told me about this book. I was an useless office
drone daydreaming the startup dream. I read the book. I was super motivated
for 3-4 days but nothing happened. Nothing. After one week motivation was gone
and I had been an office drone for a decade.

In hindsight: the book is great and the key message is very true. And this
book is a great motivator (three days motivation is better than nothing) but
in my case I needed way more to enter the dark side than reading a self-help
book (which would be another long post).

Life is more complex.

------
MCRed
I read this book, was skeptical given the gungho attitude, so I did some due
diligence: Roberty Kiyosaki claimed to have founded a company that went
public. So I figured Kiyosaki was a rare enough name and searched the SEC
records to find out if this was true. Was unable to find any evidence that he
had taken a company public, and so he lost credibility with me.

You meet really entertaining characters in bars sometimes too. They are fine
for entertainment but don't take them too seriously.

Putting money to work for you is wise, good advice and there are better books
for it. Like "The millionaire next door" and "the wealthy barber" (a little
lite but a good intro) and "Buffetology" and "The dummies guide to REITs" and
the like.

Managing real estate yourself is no small task- you have tenants and a lot of
work to do for them. Putting an agency in between you and the tenants means
you may be giving up a lot of your profits to the agency.

The best thing that happened to me, though was I started reading
[http://mises.org](http://mises.org). There in 2000ish I learned about how the
fed and CRA were going to create a housing bubble. And the consequences of
that. I invested along that thesis in the mid 2000s, getting out of the market
in 2007 when things were too crazy to make sense (missed the top by a year,
but still good timing.)

Macroeconomic understanding (And I don't mean what politicians talk about or
the politically connected people like Paul "we need a housing bubble" Krugman)
has been very profitable for me. More profitable than any stock tip.

Also gained a lot of insight from attending Berkshire Hathaway annual
shareholder meetings, but now I just read the annual reports.

~~~
branchless
Plus in "managing real estate" you are living off the backs of others in a
flawed system. These real-estate "investors" are simply the foot-soldiers of
banks who are creaming off real wealth creation.

You only have to think about it for a moment to realise this. What if everyone
did it? We'd all starve. What if everyone worked hard to gain a skill and then
used it to create wealth? We'd have a great life.

I understand what's happening with land exploitation but I won't join in
because it's disgusting. It's not "just business" as these sorts would say.

~~~
mywittyname
> What if everyone did it? We'd all starve

If everyone did anything other than grow/hunt food, then we'd all starve. The
entire structure of our economy is built are specialization where only a small
fraction of workers produce enough food for the entire population.

~~~
branchless
I knew someone would try to skew this so that's why I specifically categorized
it into "creating wealth" vs "rentier activity". I don't see your point as
valid, of course if we all made kitchenware and nobody made food we'd starve,
that wasn't the point of my post.

~~~
mywittyname
If you knew somebody was going to make that argument, you should have
preemptively addressed it in your origin post.

------
liquidchicken
I've come away from some of these types of books with some good tidbits, but
have a hard time recommending them, especially to a young person. They tend to
be a gateway drug into a culture of "The secret to making money is giving me
some money." that I'm not comfortable with. I'd be far more comfortable
recommending something data driven like "The Millionaire Next Door"
(regardless of how that book is marketed) that highlights things like
frugality, saving, and hard work.

------
jevgeni
Fun fact: in my almost 10 years experience in banking I've never met _anyone_
in the industry, who'd consider the book _not_ a scam.

And you know you're in trouble, if even bankers consider you a scam.

~~~
AjithAntony
Whether the autobiographical bits are true or not, the highlights as presented
by the article are a valuable message for people who didn't already understand
as such.

~~~
jevgeni
A friend of my is a zealous adherent of "Rich Dad, Poor Dad". So much so, that
the first thing he did after saving up enough money on his first real job, was
to follow the book's advice: take out two mortgages and get two apartments.
That was around early 2008. In my opinion that is a very shitty outcome:
you're stuck with real estate in a stagnant market, bogged down by mortgage
payments, and thus totally lacking any professional mobility. Your only choice
is to wait out, rent out what you can, and hope to break even sometime in the
next 20 years.

In my opinion, personal financial stability (and even prosperity) can be
boiled down to a few simple rules:

1\. Earn more money than you lose.

2\. Be very careful with debt.

3\. Take risks, but be very aware of the downsides.

4\. If you have to invest, invest in yourself first (education, connections,
etc.) and in securities second.

------
mataug
How did this get up-voted to the front page ?

------
tome
Reading Rich Dad, Poor Dad represented a paradigm shift for me.

Having been brought up in a middle class, academic family and moving
successfully down an academic track, it opened my eyes to ideas that I
couldn't even have comprehended existed before.

I don't know if the majority of what Robert Kiyosaki sells is bluff and
bluster, but I do know that the foundational message of the book (as told in
the quotes on this blog post) were absolutely revalational to me.

------
sebthomas
I recommend [http://www.theschooloflife.com/shop/how-to-worry-less-
about-...](http://www.theschooloflife.com/shop/how-to-worry-less-about-money-
john-armstrong/)

Similar lessons, less smarmy (own the ladder? dude, stfu).

~~~
meapix
8 pounds less money.

------
sharemywin
entrepreneurship is a 1/0 game generally. Investing everything you have into
something that has a 95% chance of failure is pretty risky. I would argue
putting more than 10-20% of your money into one venture is really risky.

~~~
mywittyname
I disagree. There are lots of tried and true businesses out there which have a
high likelihood of success with some basic research. It's just that a lot of
these markets are cornered, so you probably wouldn't call investing in them
entrepreneurship. Opening a McDonalds or gas station has a pretty high
likelihood of success with enough research. As does real estate.

Trying to invent the next great technology is hard, and you'll probably fail.
But following in the footsteps of others greatly increases you odds of
success.

------
anon4
Isn't he basically preaching a rentier economy? That sort of thing is not
sustainable at scale - at best you can have something like 10% of people
getting rent (leeching off of) the people doing the actual work. Speaking
ethically, this is one of the sleaziest ways you can make money - you're
making your own basic income, except it's 5 times bigger than the income of
the people who actually do the work. You're depriving honest workers of the
fruits of their labour.

People like him are what's wrong with society today and nothing short of a
bloody revolution will set us back on the right path.

~~~
branchless
Yep, he is. The guy is a leech. Another is mr money moustache with his 3 homes
telling us to save by eating oats or whatever. These guys make me sick. I half
agree that we need a revolution, these people can never be persuaded of their
ills they are just horrible people.

~~~
mywittyname
What exactly is your argument here? Why is he a horrible person? Because he
rents houses?

There's nothing inherently exploitative about renting homes. Owning a home in
the US is within the reach of most American families. So lots of people rent
because they chose to. Some people prefer the flexibility to move, don't want
to do maintenance, or prefer to live in higher density areas where personal
homes are less common.

People who rent real estate are just providing a service, and a critical one
at that. If nobody rented places to live, then we'd have a lot of homeless
people in the world.

~~~
branchless
Yes they are horrible and yes they are exploiting people. It's not a service,
they are exploiting the capped supply of a basic need.

The argument about "if nobody rents out" is just wrong. Are they going to
knock the place down if they don't rent? Yes there is a need for rentals but
this should be within a world where we have land value tax so the bulk of the
gain is passed onto the state to reduce labour taxes, reduce land costs and
improve living standards.

These guys are adding nothing, they are taking labour.

The cost of a home is not the cost of the bricks it's the cost of the land in
the main areas with employment prospects.

The USA was originally a land of opportunity. Why? Because you could get hold
of land cheap. You were no longer constrained to near-serfdom by total land
enclosure in Europe. Now here we are back to square one with the rentiers
creaming off labour and books on how to join them.

~~~
mywittyname
> The argument about "if nobody rents out" is just wrong. Are they going to
> knock the place down if they don't rent?

They will construct a building that earns them money. So all those people who
rented the apartments are now homeless and their former homes are now an
office complex, a parking garage, or a CVS.

Net result: land owner makes money (still), but now people are homeless.

> this should be within a world where we have land value tax

We live in a country where property taxes exist. These people (usually) pay
them and it's not cheap. In fact, high property taxes fuel higher property
values in the US.

Also interesting, property taxes are also a form of rent. They are often used
by the local governments to force people off of their land. This is usually
the first step to gentrifying a neighborhood. Rising property taxes cause
property values to rise, creating a property tax feedback loop that forces
people from their homes. This exact thing happened in my home town where
property taxes doubled, then housing values went from $40k to $120k in like
five years, effectively increasing taxes 6-fold in the neighborhood.

> Yes they are horrible and yes they are exploiting people

People need food, clothing and shelter. Companies sell food and clothing and
I'm sure you think that's okay, but a company selling shelter is exploitation?

You are telling me that I'm being exploited because I live in a rental
property. I just don't see it. I gain more value from my place than I lose in
rental fees. Being able to move cheaply and quickly has earned me tens of
thousands of dollars in extra wages and saved me tens of thousands in real
estate transaction fees and maintenance.

Plus, I get to sleep indoors.

> The USA was originally a land of opportunity. Why? Because you could get
> hold of land cheap.

There's cheap land all over the US. Throughout most of the midwest, you can
buy acres and acres of productive, high quality land for <$10k acre. You won't
have neighbors for miles and you'll have to construct your own roads, but it's
out there and abundant, just like it was in the 19th century.

~~~
branchless
I totally disagree and the arguments you are supplying show me you aren't on
the same wavelength, for example citing land outside cities as being cheap or
that most landlords self-build (no). I can't write an essay on this but I
disagree.

------
spdionis
The problem with a lot of such material is that it's very U.S. centric. Being
from Eastern Europe a lot of the advice in the book is not relevant.

The only good take away was the assets vs liability distinction.

------
JazCE
My g/f and her friends got suckered in by this... they were going to the
seminars which then led to currency trading.

I think there might be some good tips in there, but IMO, very few people get
rich from seminars, bar the seminar leader and the company behind it. but at
the end of the day i'm a cynic and quite likely a wage slave for the rest of
my life.

------
Oras
Depends on the perspective you read the book, it could be life changing. While
I disagree with his manners described in the book, I totally agree with the
way he described different mind sets between a business owner and a public
sector employee.

------
GBond
2 books for the HN types (not as self-helpy as the titles make them appear):

\- The Millionaire Fast Lane

\- How To Get Rich (Dennis, not Trump)

