"Rich Dad Poor Dad" by Robert Kiyosaki: Summary and Review

Rich Dad Poor Dad claims that most people stay short of money because nobody taught them how money works. Robert T. Kiyosaki first published the book himself in 1997, with Sharon L. Lechter credited as co-author. A large publisher took it over in 2000, and it became one of the best-selling money books ever written. Its success came from a simple story and a few memorable definitions. It also attacked the usual advice to go to school, get a safe job and save.

This review explains those ideas in Kiyosaki’s own terms. It also explains why critics doubt the story and why some of the advice can hurt you.

Two fathers teach two ways of thinking about money

The book is built around two fathers. The “poor dad” is Kiyosaki’s own father. He is highly educated, works for the state school system in Hawaii, and is always short of money. The “rich dad” is the father of Robert’s best friend Mike. He left school early, owns businesses and property, and becomes one of the richest men in Hawaii.

The two men give opposite advice. The poor dad says that he cannot afford something. The rich dad, Kiyosaki writes, asks how he could afford it. The first sentence ends the thinking, and the second starts it. Kiyosaki uses many pairs like this one. In each pair, the poor dad stands for the thinking of salaried, educated people, and the rich dad stands for the thinking of owners.

You should know one thing before you read further. Kiyosaki has never shown that the rich dad existed as described, and many critics believe he is an invented figure. We return to this question in the section on weaknesses. For now, it is best to read the two fathers as two characters in a teaching story.

“The rich don’t work for money”

The first lesson comes from a story about Robert and Mike at the age of nine. They ask the rich dad to teach them how to become rich. He lets them work in one of his shops on Saturdays for ten cents an hour. After a few weeks he stops paying them at all. Robert is angry and wants to quit. That reaction is exactly what the rich dad wanted to see.

The rich dad then explains what Kiyosaki calls the rat race. Most people, he says, are driven by two feelings: fear of not having money, and desire for the things money buys. So they take a job, earn money, spend it, and need the next pay cheque. When their income rises, their spending rises too. The fear and the desire never stop, so the person never stops running.

The boys then find their own way out. The shop throws away old comic books, and they open a small comic library where other children pay to read. The library earns money while the boys are not there. In the book’s logic, this is the first step from working for money to making money work for you.

“An asset puts money in your pocket”

The second idea is the most famous one in the book. Kiyosaki says that rich people buy assets, and poor and middle-class people buy liabilities that they think are assets. He then gives the rich dad’s definition.

An asset puts money in your pocket. A liability takes money out of your pocket.

This is not the definition an accountant uses. In accounting, an asset is anything you own that has value, such as a house, a car or shares. Kiyosaki looks only at cash flow, which means the money that moves in and out each month. A rented flat that brings in more rent than it costs is an asset in his sense. A new car on a loan is a liability, because it costs money every month and loses value.

The most quoted example is the family home. Kiyosaki argues that your own house is not an asset, because you pay for the mortgage, taxes and repairs, and it brings no money in. He does not say that nobody should own a home. He says that people should not confuse a large home with wealth.

This simple question is the most useful part of the book. It helps you see why a person with a high salary and an expensive lifestyle can still be one bad month away from trouble.

“Mind your own business”: build your asset column

The third lesson is a play on words. Kiyosaki separates your profession from your business. Your profession is the job that pays your salary. Your business, in his sense, is your asset column: the things you own that bring in money. Many people, he says, spend their whole lives building someone else’s business and never start their own.

His advice here is cautious, and it is often misread. He does not tell readers to quit their jobs. He tells them to keep their jobs and to start building assets on the side. He also lists the kinds of assets he means. They include businesses that run without you, shares, bonds and property that earns rent. Royalties from books or music count too. He also says that luxuries should be bought with income from assets, not with salary.

Taxes and corporations favour owners

The fourth lesson is a short history of taxes and an argument for using companies. Kiyosaki says that income taxes were first sold to the public as a tax on the rich. Over time, he argues, they fell mostly on the middle class, because employees are taxed before they see their pay. Owners of companies, he says, can pay many costs before tax and so keep more.

This chapter mixes a real point with a lot of simplification. It is true that tax rules in many countries treat different kinds of income differently. But the details depend on the country and change over time. The book gives no reliable tax guidance, and some of its examples have been criticised as misleading. Read this part as a reason to learn about taxes, not as instructions.

“The rich invent money” and “Work to learn”

The fifth and sixth lessons are about skill and courage. In “The rich invent money”, Kiyosaki argues that financial intelligence lets people see deals that others miss. His examples come from buying property cheaply from people who are forced to sell. He adds that it is often not the smartest people who get ahead, but the boldest.

In “Work to learn, don’t work for money”, he gives career advice. He tells young people to choose jobs for what they will learn, not for the salary. The skills he values most are selling, marketing, managing people, communicating and understanding cash flow. He points out that many specialists earn well but cannot sell or manage, and so they depend on an employer. This lesson holds up better than most of the book, because it is about learning, not about any one investment.

Five obstacles and “pay yourself first”

The second half of the book asks why people who understand all this still do not act. Kiyosaki names five obstacles. They are fear, cynicism, laziness, bad habits and arrogance. Fear of losing money keeps people out of investing. Cynicism, he says, is doubt that never turns into study. Arrogance means thinking that what you do not know is not important.

The best-known habit in this part is pay yourself first. Kiyosaki means that you put money into assets before you pay your other bills. He tells a story of leaving bills unpaid for a while, so that the pressure would push him to find more income. The book ends with a list of practical steps, such as finding mentors, choosing friends carefully and learning one investment method well before trying many.

The general idea is sound: if you invest only what is left at the end of the month, there is often nothing left. But the specific version in the book is risky. Paying bills late can bring fees, damage your credit record and create real stress.

How it differs from other money books

Rich Dad Poor Dad is a story book with a few rules, not a manual. That is what sets it apart from its neighbours.

• Thomas J. Stanley and William D. Danko’s The Millionaire Next Door reached a similar conclusion from survey data: many wealthy people live modestly, and many high earners do not. It is less exciting, but it is based on research.
• Morgan Housel’s The Psychology of Money also argues that behaviour matters more than intelligence. But Housel praises saving, patience and diversification, which Kiyosaki often dismisses. You can read more in our review of The Psychology of Money.
• Kiyosaki’s own Cashflow Quadrant continues the story with a model of four ways to earn income. It explains in more detail why he prefers owners and investors to employees. See our review of Cashflow Quadrant.

What Kiyosaki adds is a set of words that stick: asset and liability in his sense, the rat race, pay yourself first. Many readers say these words were the first that made them think about money at all.

Where it falls short

The book has three serious problems.

The first is the story itself. Kiyosaki has never shown that the rich dad existed as described. For many years he would not say who the man was.

The critic John T. Reed reports that the copyright page of a later Rich Dad book says certain events “have been fictionalized for educational content and impact”. After 2009, some reports linked the figure to a Hawaiian hotel developer, but Kiyosaki has not confirmed it. The poor dad is real: Ralph Kiyosaki, a senior figure in Hawaii’s school system, who ran for lieutenant governor in 1970 and lost.

This matters for how you read the book. If the rich dad is invented, the lessons are Kiyosaki’s own opinions, not the tested wisdom of a successful man.

The second problem is the advice. The definitions are useful, but the book gives almost no help with the hard parts. It does not show how to judge a price or how much debt is safe. It also says little about how to spread risk or how to avoid scams. Its enthusiasm for debt and property can hurt readers who copy it without that knowledge. Paying yourself first by leaving bills unpaid is a clear example of advice that can backfire. Critics such as Reed go further and call much of the book’s advice wrong or dangerous.

The third problem is Kiyosaki’s own record. Critics point out that there is little evidence of large investment success before the book made him rich. His company Rich Global LLC filed for bankruptcy in 2012, after a court ordered it to pay almost 24 million dollars to a seminar company. In early 2024 he said that he carries more than a billion dollars of debt, which he presents as part of his strategy. None of this proves that every idea in the book is wrong. But it means that the author is not proof that the method works.

Which edition to read

The current English paperback is the 25th-anniversary edition from Plata Publishing, published in 2022. The six lessons and the five obstacles are the core of every edition, so an older used copy gives you the same ideas.

The book is short and easy to read in print or as an ebook. It also works well as an audiobook, because it is mostly a story told in simple language. Whatever format you choose, read it with a notebook. Write down each claim about taxes, debt or investing, and check it against a neutral source from your own country before you act on it.