About a month ago I read the book “Rich Dad, Poor Dad” by Robert Kiyosaki. I read it partly because I feel like I have been in a financial rut lately and want to be more of a Rich Dad. My wife read the book a few years ago and recommended it. We talked about some of the things she took away after reading the book and those things stuck with me. When I read the book, however, I had completely different impressions than my wife. I guess that’s how perspective and context work: two people can read the same story and learn completely different lessons from it.
One thing that impressed me particularly was a story he told about a young lady who is a novelist in Singapore. She had written some books, but apparently they were not selling very well. She met with Robert and wanted to know some of the secrets of his success. He recommended to her that she take some sales courses. You know the kind – full page ads in the newspaper held at the local downtown hotel with some famous politician or sports figure to draw in the marks. The young lady was very offended – she had a master’s degree in creative literature and thought that stuff was beneath her. She wanted to focus on her writing craft. That was his suggestion but she couldn’t swallow it. I can relate to her reaction. I am kind of a snob about what I do (software engineering), and have worked hard to become good at it for decades. I don’t like salespeople in general and am usually skeptical about sales claims, having been burned a few times. However, I think his suggestion in general was a good one: if you want to learn how to do something, you need to devote some time and educate yourself and then actually try some things out.
One of the main points in his book is that if you want to be the Rich Dad, you need to increase your “financial IQ”, which just means you need to educate yourself about investing and personal finance. I thought about this for a long time. I am a busy person and love to read, but I am pretty selective in my reading – I don’t like to waste time with books where I’m not learning something useful or important. Life is short and there are too many good books to waste time on bad ones. Should I take time and educate myself about investments and personal finance? I guess I have had the attitude that since I have no formal training in investing, I would just leave it to the experts (Realtors, Mutual fund managers, brokers) and not waste any time on it myself. However, after I thought about it for a while, I realized that I have made most investment decisions myself with little or no help – I manage our IRAs, our kids college funds, and we have not used a realtor to buy or sell our own house for many years. So far we have done pretty well with most of those investment decisions, but we could probably do better. I decided that even though investment/finance books are not that interesting to me, it is important enough to me to spend a year or two and get some education and try some things out. Maybe the results will give me more free time down the road to do other things that I really care about, or if I am not very successful, maybe I can pass along the “don’t do this, it doesn’t work” information to my kids.
I sat down to figure out which books to read next. I looked at a lot of user reviews on investment books at amazon.com. Ironically, his advice on increasing your financial IQ led me to the conclusion that his books are not the best ones to read if you really want to learn the nuts and bolts of investing. They are more of the “big picture” and motivational books just to get you going. But I digress.
The main point of this post is that with a new year, many of us are setting new goals and making new resolutions. I guess one of my resolutions is to learn something new and useful each year – to help my family and others. For me, this year it will be learning about investing.