A Review of Rich Dad’s Guide to Investing: What the Rich Invest In That The Poor And Middle Class Do Not

After I read and reviewed “Rich Dad, Poor Dad” last week, I was itching to check out “Rich Dad’s Guide To Investing.” I looked it up online and found it to be $30, which I thought was too much. So, I checked out our local bookstores, and found it for $19.99.

Happily, the clerk had an additional coupon he was able to scan for me, so I got the book for just under $15 dollars – a 50% savings. Which, as it turned out, was a nice metaphor for the book itself. I got about 50% of the value out of this book than I did from “Rich Dad, Poor Dad.“

Rich Dad’s Guide to Investing isn’t a bad book, by any means, it’s just that I’m not at a point yet where I can use many of his ideas. So, I cataloged them in my head, and stored them for later. There were four main points near the beginning of the book that I realized I could use and act on now though, and I would love to share those with you today.

Time is Not Money, Money is Time:

Growing up, I have always heard people say “Time is Money” and frankly, I’ve just never been able to swallow it.

Kiyosaki has a different take on things though, he believes that money is time. I am probably taking things a little out of context here, but the point was loud and clear.

If you need to get from LA to New York, you have plenty of options: You can drive, take the bus, or take a plane. Each method of travel involves a different amount of money. You could possibly take the bus for less money ($100 or so) while a flight could cost you as much as $500. Taking the bus could cost you several days of time, but you would save money. Taking the plane would save a lot of time, but it would cost more.

The idea, to me, was simple. When you have more money, you can take advantage of things that save you time. You can outsource, delegate, and generally afford to pay other people to take care of things that take up too much of your time. The more money you have, the more of your own time you can .

Unfortunately, health care works the same way. If you get seriously ill, and you can afford the best treatment, you can possibly yourself more time. If you cannot afford that treatment, or those medicines, then you lose time, and health. Please do not take this statement to mean that I am advocating government managed health care – I am not! I’d far rather have the option to get the best treatment I can afford, than be told what treatment I am going to get whether I like it or not.

This was a pretty new thought for me – the more money you have, the more of your own time you are able to control. That alone is a good enough reason to learn to be wealthy in my book.

Have A Financial Plan – In Fact, Have Three of Them:

Kiyosaki’s “Rich Dad” advised him to create not one but three financial plans.

1) One for comfort
2) One for security
3) One to be rich

His Rich dad told him in no uncertain terms to put the first two plans into action before attempting the third. This involves sitting down, concentrating, and deciding what the words “comfort”, “security” and “rich” mean to you. How much money do you need to be each of those things? What steps do you have to take?

Kiyosaki believes that most people (if they get this far at all) simply aim to be comfortable, or at best, secure. I have to admit that I’m at a point in my life where simply being comfortably wealthy, and secure would be an enormous blessing. I am with Kiyosaki on the third one though, I don’t just want to settle for the first two – but they are the right place to start.

Get A Financial Advisor:

Along with creating those three types of financial plans, Kiyosaki recommends hiring a financial advisor. This is something that I have put off doing for a while now. I’m a bootstrapper, I do things on my own, learn the hard way, and I’m suspicious of new things until I have worked through them and understand them. Even with all those negative traits, I am still going to take Kiyosaki’s advice. I am going to get my plans together, and hire a financial advisor. Why?

Because I don’t know how to manage my own money yet. I’m about as fresh off of the turnip truck as they come. Fresh out of bankruptcy. Fresh out of mismanaging our money so badly that when the medical bills started rolling in, my husband and I simply had no money to pay them. At the time, we made $30,000 dollars together, each working full time.

Things are a little different now. After the bankruptcy, we sought out education, second jobs, and a chance to give ourselves a fresh start. But, guess what happened? We worked like crazy, and still had no money saved. We had no money out there working to earn us more money, so that someday we might have more control over our own time.

Now that we are recovering from the bankruptcy, and ready to begin a new life, we are still working on our financial education. It will probably take us years to get to the point that some of you are already at. Frankly, I don’t want to waste that much time that could be spent investing. Yes, I am going to learn everything I can about finances and money management, and investing – but I’m not there yet.

So, the right thing for me to do is find someone who is there, and let them help me manage my money until I reach that point. Reading the passages in this book that deal with financial advisers really did help me to see that it’s time to go ahead and take that step so that I can focus on the bigger picture.

Teach Your Children To Manage Their Money:

Teaching your children about money is a recurring them in both “Rich Dad, Poor Dad”, and “Rich Dad’s Guide To Investing”.

Kiyosaki points out numerous times that the rich groom their children to manage their money when they are older. Poor and middle class people do not talk about money, especially with their children. He also points out that schools do not teach children to manage money, either. So if the parents are not teaching, and the schools are not teaching, then where are our children supposed to learn?

This is something that I really took to heart. I do not want my children to make the mistakes I did. For a long time I blamed the healthcare system for causing our bankruptcy. But you know what? It had nothing to do with it. Stuff happens.

We were managing our money so badly that if it hadn’t been medical bills, it would have been something else. I was the problem, and I can be the solution.

I think that Rich Dad’s Guide To Investing is a good book, and certainly one that I will continue to refer to and re-read as my own knowledge grows. I think that why I love Kiyosaki’s books so much is because he deals directly with the psychology behind being rich, and being poor.

Before anything can become a reality, we first have to change the way we think. We have to think, dream plan, learn, and practice new habits to truly become different than we are. Kiyosaki’s books do help me to do that, and they have rightfully earned a spot in my library.

As a final note, if you are looking for a book that is going to spell out a simple, concrete method of investing, this isn’t it. Instead it deals much more with how to think and behave, and it helps you create your own guidelines and habits based off of your unique goals.

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