Rich Dad Poor Dad – Book Review

In a previous article, I mentioned that I would write further about the idea of wealth creation. Understanding some basic principles can literally transform your thinking and set you on your path to creating wealth and, ultimately, financial freedom. I believe that once you remove finance as a daily worry and no longer have to commit so much of your time to employment, that frees up your capacities for other effective work for society at large.

There are some really good books out there, but I wanted to focus on just one today which was really useful for me personally and I know others have also taken great benefit from it. The book is called ‘Rich Dad Poor Dad’ by Robert Kiyosaki, and centres around the author’s experiences of his own father (‘Poor Dad’), a well-educated university professor, versus the experiences of learning from his best friend’s father (‘Rich Dad’), who lacked in academic qualifications but had business nous.

In short, his father (‘Poor Dad’) might have been a well-paid, stable professional, but never truly attained wealth; Rich Dad, however, was wealthy.

I want you to read the book for yourself, but to whet your appetite, I will run through some principles that are mentioned in the book.

1. Making money work for you

There is nothing novel about what Kiyosaki says here; everybody knows that sitting at home and getting passive income is a far better situation than having to work for your money. But what Kiyosaki stresses is the importance of that journey and how you should be very strategic about that journey from employee, to being able to retire because your passive income is greater than your expenses.

He talks about how whether rich or poor, people need to control two emotions: fear and desire. Money is essentially an illusion and fear is what drives us to get out bed and go to work every morning and desire is why we are tempted by pay rises as we desire increasingly ‘expensive toys’ as we go on through life: from sweets, to clothes, to cars, to houses, etc.

To combat this, Rich Dad persuades the young boys (as they are at this point in the book) to stop thinking about wages and start thinking about how they can generate money for themselves. He argues that most people miss opportunities because they seek money and security, but once you get rid of this, you view the world in a different way: full of opportunities.

2. Money management

Again, nothing novel here. Managing money is obviously important. But what many people fail to realise, according to Kiyosaki, is that financially successful people do one thing better: save money. They tend not to spend on luxuries until they can actually afford it. Most middle-class folk, and we see this all the time around us, spend far too much money creating the illusion of wealth, whereas actually they’re just getting by month to month without actually creating wealth because they want the Mercedes on the drive or a Rolex on the wrist.

Kiyosaki breaks it down very simply: assets are things that bring in money, liabilities are things that take money out of your pocket. He stresses how often misunderstood this is by using the example of a house. The house you live in is a liability, not an asset, even though many people define their house as ‘an investment’.

The only things that can be classed as assets are things that actually bring in money: additional rented properties, for instance, are assets. The key, Kiyosaki explains, is to limit your liabilities and grow your assets. He argues that average, middle-class people focus on their wage slips and what they bring in, whilst the rich focus on acquiring and building their portfolio of assets knowing that building passive income is the key to attaining financial freedom.

Financial literacy, or the lack thereof, is what stops them from becoming wealthy. The problem is not that they don’t know how to make money, it’s that they don’t know how to manage money – what to do with money once you make it, how to stop others taking it from you, how to keep it longer, how to make money work for you.

3. Pay yourself first

One of the major differences between Rich Dad and Poor Dad was that Poor Dad would get his monthly salary, pay off the bills, and use the remainder. By contrast, rich Dad would pay himself first, even if that means his bills exceeded the remaining amount.

The idea behind this, according to Rich Dad, is that when you do not have enough money to cover an essential thing like paying bills, this pressure drives your creative genius to inspire ways that will ensure you cover the bill money that month. However, if you pay the essentials first with ease, your genius will not be inspired as you will simply pay yourself whatever the remainder is rather than being forced to come up with more.

Now I’m not saying you should be irresponsible and start telling British Gas or whoever that you’re not paying them this month because you paid yourself first and Kiyosaki said that was a great idea, but the point behind giving yourself that pressure is a sound one to inspire in you some commercial creativity that might just lead to a new business idea or some other income-generating proposition. This is why you often find that entrepreneurs come from financially unstable backgrounds – the pressure inspired them.

4. Being bold

Kiyosaki puts forth the argument that it isn’t smart people who get ahead in the world, it’s bold people.

He uses an example from his own life to paint this picture. He talks about how standard thinking is to save money, put something away every month in a bank account and come back to it in 40 years. Kiyosaki, however, argues that this limits people’s mindsets and ability to take advantage of opportunities.

In the early 90s, the market in Phoenix, Arizona was terrible. But instead of buying property at the estate agents (even though property was massively marked down), he started doing deals at bankruptcy lawyer’s offices or courthouse steps. In this way, he was able to do deals for $75,000 properties at $20,000 or less. He would then sell these on for $60,000. Kiyosaki and his wife managed to do six of these deals, each taking around 5 hours’ work. They created over $190,000 in assets from these deals – how long would they have had to save to achieve that?

5. Work to learn

This is an especially useful chapter in which Kiyosaki outlines that the value of being an employee isn’t in the money, it’s in leveraging the resources of a particular company in order to better yourself. He advocates learning a little about a lot.

For instance, he took a job with Xerox simply because he knew that he was a shy person and Xerox was renowned for having the best sales training programme out there. He ended up becoming one the top sales people in the company and, having gained what he wanted out of the job, left shortly after.

Kiyosaki also took jobs as a construction worker, a bus boy, reservations, marketing, and sat in on meetings (with Rich Dad) with lawyers, bankers, accountants, etc. This was all part of learning a little about a lot so that he could run his companies in the most effective way.


Kiyosaki finishes off the book imploring readers to overcome obstacles like bad habits and arrogance, and how you can get started.

The book is an extremely useful way of starting to think about the world and commercial opportunities differently in order to start creating wealth and I highly recommend the read! You can pick it up fairly cheap new or used at Amazon.

If you have read an interesting book that you would like to do a guest blog on or simply recommend to others, please comment below.

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12 Comments. Leave new

  • Interesting, but what does this still have to do with Islamic Finance?

  • Assalamu alaykum,

    I have read this book and I am currently reading his new book ‘Why the rich are getting richer’ but I feel many of his tips to become richer are haram because they are based on interests and debts. I would appreciate an Islamic perspective of these books to know exactly what is permissible for us as Muslims.

    • Ws,

      Thanks for your commment.

      There are some bits in this book which are obviously haram, things like taking out interest-bearing mortgages on buy-to-lets etc. However, I think it’s fairly straightforward to simply ignore anything which is outright haram and only take from the book the parts which are in line with our beliefs.

      Was there anything in particular you were confused about as to whether it would be haram or halal?

      • Assalamu alaykum,

        I am interested by real estate investments but I do not know what is permissible in his teachings because for example if I want to avoid interests and debts I have to buy a property in full with my own money and then rent it and maybe sell it later if its value is higher. But for the author using my after tax money means losing money because I paid 40% tax on it that’s why he advises debt with a mortgage because it’s tax free.

        What I would love is articles about what is permissible in his teachings for muslims and also advises about Muslim financing trainings to become financially educated.

      • Awab Babikir
        July 8, 2018 12:04 am

        Alsalamu aleykum brother, I’ve read the book as well and I’m curious about the part where he explains that individuals get taxed more and before they recieve their income while corporations get taxed less and only on whatever is left after expenses are deducted. He states a loophole where he chalks down more expenses on his corporations account but uses that money for himself in order to have less money remaining after expenses, hence less taxes. For example he chalks down ‘board meeting in hawaii’ on the account but uses that money for a personal vacation. He also chalks his personal car gas costs under this account. He states that doing this legal, but is it haram? Jazaak Allah

        • Ibrahim Khan
          July 20, 2018 3:45 pm

          To the extent that an activity is legal, it is strictly permissible, but there is also a moral calculus we must run: Is what I am doing in the spirit of the Shariah? The answer isn’t always a straightforward one though I am afraid. What is important is that we engage with the decision though and actually think it through.

  • Mohammad S Rahman
    June 17, 2018 6:06 am

    Think and Grow Rich by Napoleon Hill!

  • I’m really pleased I came across this site.

    I have signed up to your course.

    I have a (unjust) criminal record (you can google my name in the email) which means despite a first class degree I will have great difficulty finding a job.

    I am fortunate, by Allah’s grace, that I live in a freehold property in joint-ownership of my parents and I look after lodgers on their behalf for which I get a stipend in return. I also do some private tutoring in which I have the highest number of five stars on a premiere online tutoring portal.

    For me, getting a proper graduate job is about the status rather than the money. It’s a sign I’m not toxic. That might be a negative impetus I know. I realise there is a sense that most formal employment is actually pointless work for pointless organisations.

    I could get by in my current situation and devote myself to talb al-‘ilm (for example) but something gnaws inside that for the sake of my children I should aim to make more money. Something inside of me says that to be able to pray at the mosque five times a day, read a juz of Qur’an and perform other regular non-obligatory actually means I am a bum, although I don’t have any material want from others.

    I feel like I should clearer financial milestones: become a millionaire by the time I’m 70 (roughly 30 years left) and delineates the steps to that. For most ordinary Muslims like me, their path to Allah is in service to their family.

    I think there is something to be said for our Muslim community in the UK to be completely materially independent from the state. I like the way NZF have effectively created a parallel welfare system. Next step: awqaf.

    May Allah bless you all. Your thoughts, gentlemen?

  • Great review but I don’t see the link behind this and islam, I came to this site solely for that purpose. Please review the book in the light of sharia,


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