Quora Answer: Is the Book, “Rich Dad, Poor Dad”, a Worthwhile Book for Investing?

The following is my answer to a Quora question: “Is the book, ‘Rich Dad, Poor Dad’, a worthwhile book for investing?”

As a finance professional, I say this book of full of stupid advice.  The only thing you can take from Robert Toru Kiyosaki is that one of the best ways to make money is to write self-help books, and he did.  He sold tens of millions of copies of the entire series giving bad advice on wealth.

In his book, Kiyosaki also wrote that multi-level marketing is an excellent way to build wealth.  He then set up the “Rich Dad, Poor Dad” product line as just such an MLM.  This is entirely self-serving, and the only person who got rich was Kiyosaki himself.

The books then runs through a litany of nonsense.  For example, he claims that formal education is a waste of money.  This makes sense because only the semi-educated would fall for his con.  He also claims that mutual funds are for “losers”, when they are actually one of the better ways of generating wealth – Warren Edward Buffet did not become one of the wealthiest men in the world selling self-help books.  All his “advice” on derivatives are guaranteed to lose you money since he does not understand how futures contracts work.

Despite all this, the one thing that totally discredits him is the corporate bankruptcy of Rich Global, LLC in 2013.  The company lost a court case on a royalty dispute and was supposed to pay the Learning Annex US$24 million.  For a business with a supposed revenue of US$400 million, this should be a pittance.  When he filed for bankruptcy, it became obvious that he did not even follow the reasonable advice he espoused in his books.  When your entire branding is based on prudent financial management and wealth acquisition, this totally destroyed his credibility.