John T. Reed's review of Rich Dad, Poor Dad! - Posted by John

Real Estate Investing Real Estate Gurus
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Posted by Robert Biddle on January 18, 2000 at 15:51:48:

I forgot to add a few things.

1st. I completely agree that owning a home is MUCH better than renting (God forbid). The point I was trying to clear up is that whether you rent a place to live or own a place to live (That produces no income) either way it costs you money out of pocket each month.

Again, I would never make the argument that owning a home is no better than renting, it certainly is.

But, the book is simply trying to change the thoughts of people that automatically think that just because somthing has a value (or equity) it’s a good thing to be spending your hard earned dollars on. The book is discouraging people from spending $500/month on a car payment thinking that this is an “Asset” or buying as big a house as one can possibly afford because it’s an “Investment/Asset”. While the house will certainly have a value, and that value will most likely increase, that fact is that the payments have a deffinate negative effect on your cash flow.

Rob

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John T. Reed’s review of Rich Dad, Poor Dad! - Posted by John

Posted by John on January 17, 2000 at 21:00:59:

Just finished John T. Reed’s review of Robert Kiyosaki’s book “Rich Dad, Poor Dad” and I have only one word for it,
BRUTAL!! He’s pretty rough on the author but some of his points I feel are valid. I was wondering if anyone here has read the book and the review and what there comment’s are regarding both.

Thanks,
John

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Re: SOUR GRAPES REED ! Harvard! - Posted by Nathan Hill

Posted by Nathan Hill on January 20, 2000 at 23:27:52:

Reading Reed’s comments once again displayed his tendency to get too emotionally bias againts many so called “gurus”. Isn’t it ironic that his negative tirade often involves most of the “gurus” who happen to be more popular than himself. He uses his website as a bully pulpit to belittle the likes of LeGrand, Kaiser, A.D. Kessler, Robert Allen, Carlton Sheets, Joe Kaiser, Kiyosaki, and even this Website that we are all posting on.

I guess he could not handle the emotional toll of someone who was virtually unknown to him, come out of nowhere; and be all over CNN, Business Week, Wall Street Journal and many of the mainstream financial media. While Reed spent hours typing his sour grapes criticism of Kiyosaki who he boldly declared " the Worst Financial Book ever written, financial readers from the United States, Europe, and Asia were busy buying, reading, and enjoying Rich Dad, Poor Dad & making it a Best Seller !

Now you tell me who’s a Winner & has Positive Mental Attitude.

Sorry Reed, it took a Japanese-American from a regular college to be proclaimed as a National Best Seller as opposed to a Harvard Educated guy who thinks way too much of himself.

I guess Bob Kiyosaki rub you the wrong way by proclaiming that having the best education does not guarantee financial success in life.

Yes Reed, from Michael Dell, Bill Gates, Henry Ford, Thomas Edison, to several of the most prominent Real Estate Self made Billionaires of Asia like Tan Yu of Taiwan, Lucio Tan & Henry Sy of the Philippines, to Mohad Mahatmir of Malaysia, they all have one thing in common, NO COLLEGE DEGREE ! In fact, Edison, Ford, Yu, and Tan all never made it to High School.

So please, don’t take it personally!

Just be thankful that you made it okay in life!

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Truly amazing… - Posted by Matthew Chan

Posted by Matthew Chan on January 18, 2000 at 16:55:39:

It truly amazes me the time and effort that Reed puts into “policing” everybody. That “review” of Robert Kiyosaki’s book, Rich Dad Poor Dad simply astounds me.

Look at how Reed’s so-called “review” goes, quote after quote, page after page, and (of course) his opinions on every component of it. The time he spent on trying to tear R.K. piece-by-piece (borrowed from Rob-FL) must have taken hours.

First of all, let’s see if we can’t shed some light from a different angle on this.

  1. I am fairly certain RD,PD (Rich Dad, Poor Dad), while an informative book, was never meant to be a tax book, real estate book, or an autobiography. He was covering some 6 basic concepts using his life stories and experiences as examples. Trying to treat RD, PD as anything else but a general book is unreasonable and certainly out of context.

  2. Who has ever lived a perfect life free from mistakes, bad assumptions, character flaws, judgement errors, etc? No One! All this criticism about his Merchant Marine days and how stupid he was to pursue his education through enlisting is a bit over-critical. Kiyosaki, as a young adult, had his own assumptions and views at the time. Right or wrong, those were his choices in life. It shouldn’t change the fact he went and learned some life lessons.

  3. While I do not have a personal friendship or relationship with the Kiyosaki’s, I have had a little bit of quiet time at a couple of events to have a short one-on-one to get a “feel” of them as people. They seem to be “normal people” who chose a different, and what some would say, riskier lifestyle. They have had their ups and downs but seem to have come out on top. The point I am trying to make is that there is far more to their stories than what has been written in all 3 of Kiyosaki’s book. As I said, those books are not autobiographies.

  4. Even without ever meeting them, anyone can buy their tape sets and listen to them. There is one set in particular which was apparently taped live a few years back which (I believe) pre-dates the release of RD, PD. The personal anecdotes, commentary, etc. in the tapes gives a lot more “meat” to the small comments made in RD, PD and Cashflow Quadrant. As a matter of fact, I would venture to say that RD, PD and Cashflow Quadrant is the tip of the proverbial iceberg. Simply, there are a lot of untold stories, explanations, circumstances, etc. that Reed assumes are non-existent.

  5. Kiyosaki has said many things, explanations, and made comments about things that don’t show up in the books or tapes either. He has openly admitted to making big mistakes, failed, made bad decisions, losing his business, being upset/frustrated/angered, etc. He has openly admitted not being a specialist at hardly anything. He is dependent on others expertise such as CPA’s, attorneys, brokers, etc. In effect, he is a gutsy, persistent, “big picture”, “learns from his mistakes” type of guy that puts people together. That was a big lesson he learned from his “rich dad”. The funny thing is, you don’t have to “be rich”, to have that. How many of us hire specialists to repair our cars & homes, do taxes, legal papers, bookkeeping, go to doctors, etc? Get my meaning? But do we know how to “orchestrate” them to succeed in our own lives?

  6. This little debate on whether your house is an asset or liability is a bit of semantics. If memory serves, he has taken some creative liberties to redefine the word “asset” normally associated in the field of banking and accounting. He admits to that to illustrate a point. That point being that (for most people) your house/residence consumes cash and doesn’t produce cash. Therefore, not to keep sinking unlimited money into it when some of it can be better redirected elsewhere.

It is interesting to note that at one time Reed had no clue who Kiyosaki was and wrote little but his audience did. Now that Kiyosaki has been on Business Week, CNN, USA Today, Wall Street Journal, radio shows, conventions, etc. , he now decides to proclaim RD, PD, the “worst financial book” he has ever read.

Funny how he doesn’t devote a whole page to the other people he praises or criticizes except for Carleton Sheets whom everyone knows. I am guessing you have to really hit it big for him to do sucn an “extensive review” on you.

People can either appreciate the lessons taught in RD, PD or use it for fuel in the fireplace. I prefer the former.

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Re: John T. Reed’s review of Rich Dad, Poor Dad! - Posted by chris

Posted by chris on January 18, 2000 at 07:47:34:

Where is the link at the bottom of Reed’s review linking you to his order page to order his own book on the subject? Maybe he is currently writing it and got ahead of himself by reviewing Kiyosaki’s book before he had his own out to promote.

One other thing missing in his review were his classic “white space” calculations like he pulled on Joe Kaiser.

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Think For Yourself - Posted by JPiper

Posted by JPiper on January 18, 2000 at 06:42:12:

One of the qualities that would stand most people in good stead is the ability to think for themselves. But particularly as a real estate investor this ability is paramount. The ability to look at a situation, analyze it, and draw a conclusion in an unbiased, rational manner is going to have a great deal to do with your success. This is what I really appreciate about John T. Reed?..that he gives us all an opportunity to test our abilities to analyze, size up, and logically arrive at conclusions.

For those of you who have been frequenters of this newsgroup, most of you will know that I am anything but a promoter of John T. Reed. What I am particularly against is Reed?s methods of critiquing authors of books. I found his criticisms to be heavily biased, emotional, and sometimes not based on having read the material. Mr. Reed is what I would call a HATCHET MAN?.he?s out to destroy?.often to build himself up in the process.

I noticed Mr. Reed?s latest HATCHET JOB several weeks ago, thanks to an overlooked post here that referenced it. As I read the critique of Kiyosaki, I found myself agreeing with certain of Mr. Reed?s assertions?.a new experience for me. Rarely have I been in that position. Kiyosaki was never a personal favorite of mine?.although I DID enjoy his talk last year at the convention, and I do feel that his book has value particularly to people new to the financial arena.

HOWEVER, this morning, searching for something to do, I REREAD Reed?s critique. I reread with Kiyosaki?s book in hand, so that I could check for myself Reed?s quotes versus the actual Kiyosaki material. I would encourage those of you who appreciate facts to do the same.

I think what you?ll find is that Reed clearly distorts the information. It?s tricky how he does this. He will quote a sentence as an example?..leaving a part of it out and signified by dots to show that something has been left out. Hmmmmm. Some of those left out parts make a difference! Further, sometimes he quotes up to a point?.then leaves the rest of the thought out?.a thought that may well have changed the meaning of Kiyosaki?s point.

Allow me to give you an example. Reed begins by referring us to the book and quoting Kiyosaki ?On page 172, he says, “I have found the principles of finding value are the same regardless if it’s real estate, stocks,…or a new spouse…”? Interesting quote?.and interestingly enough, definitely self-serving for Reed?s point of view. Reason, he leaves out part of the quote?.that?s what those dots are in his quote. Further, the sentence following this is ?The process is always the same. You need to know what you?re looking for and then go look for it!? Interesting that Kiyosaki is NOT making the point that ?Money is all that matters??..which is Reed?s claim and purpose in using the quote and leaving out the key sentence. Kiyosaki?s point is that there is a process that runs through looking for undervalued real estate, or a new spouse (and a number of other things that Reed leaves out in his quote), and that is to ?know what you?re looking for, and then look for it.? In other words, define your goal, and then begin taking steps toward the goal. A little different than Reed leaves us to believe isn?t it?

One piece of Mr. Reed?s analysis is so offbase it?s hard to believe. He refers us to pages 106 and 107?..the story actually starts on page 105. Again, my suggestion is to read the entire story, not just Reed?s description. Kiyosaki describes a real estate transaction in which he puts up $2K to acquire a property for $20K. He then resells the property for $60K, pulling his $2K out in a processing fee. Reed leaves this small detail out of his story (what a guy). So Kiyosaki does evidently 6 of these transactions, wherein he creates $190K in notes?..no money is in his deals. Reed criticizes this?he says? ?Competent note investors would never agree to such long terms. One expert I consulted called it a “nutty note.”? Reed then consults Bill Mencarow, who tells Reed that these notes are only worth $90K to $120K?.therein marking Kiyosaki?s notes to market. Now let me stop here. Is Mr. Reed nuts??? Is he really telling us that he would not do a deal for no money invested which created notes with a face value of $190K? LOL!!! For those of you who don?t know what LOL means?.that?s me laughing hysterically while I type. Give me a break Mr. Reed?..whether the notes are worth $100K or $190K?.who cares??? Kiyosaki has nothing in the deal! Personally, I?d like to see one of Reed?s deals if he thinks this was a rotten deal?..but I think we?re going to be waiting a while to see that.

Next Reed spends a number of paragraphs talking about all the things that are wrong with Kiyosaki?s deal?.the one that Kiyosaki has no money in. It seems that Kiyosaki is receiving $19K in interest on these notes per year?.and is receiving that in a corporation. Kiyosaki claims to have expenses that offset much of this income. Reed however overlooks (perhaps disbelieves this claim, just like he disbelieved the Merchant Marine claim of attendance) this, and tells us that this was a bad idea too?.that Kiyosaki will be double taxed. This I agree with to an extent?.BUT, it may just be that Kiyosaki has created expenses to offset against this income?and to the extent that he has done so, Mr. Reeds analysis starts to fall short.

Now, before this post gets too long?I?m going to stop. I can tell you that as I read Reed?s analysis, looked at his quotes, read Kiyosaki?s book to verify the quotes?.a pattern started to emerge. Can you guess what the pattern is? Reed?s analysis is at a minimum misleading and unfair. I hesitate to call it more than that?.although some might. But again, read the information for yourself. Don?t do what many do, and simply accept the written word as Gospel?.whether it be by Reed, or by me for that matter.

By the way, some of Reed?s analysis I found to be true. An example of this is the exchange into the limited partnership?..not possible of course. But here?s the thing?.it IS possible to exchange for property to a tenant-in-common interest. This particular structure is one that I was heavily involved in at one time?.and that many people at the time mistakenly referred to as a limited partnership. Whether Kiyosaki has made this particular mistake I can?t say.

Reeds comments regarding the Rolex watch are on target too. It appears that some of the Kiyosaki comments regarding taxes are ill-founded to me. But again, this isn?t that unusual, and perhaps Kiyosaki is one of those who refers his taxes out to his experts. Most of us do that ourselves. If this is the case, then Kiyosaki is guilty of discussing things that he knows little about. I do happen to wonder along with Mr. Reed why Sharon Lechter, CPA and Kiyosaki?s co-author did not catch some of these more obvious tax errors. Perhaps there is an explanation.

My suggestion to those of you who are reading this post, is to read the book and form your own opinion. You don?t need Mr. Reeds opinion in order to know what you think. Draw your conclusions based on fact, not on opinion?.there?s a big difference in the two.

JPiper

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Some good points…and bad - Posted by Emmett-NC

Posted by Emmett-NC on January 18, 2000 at 05:04:32:

When I read the review I was kinda shocked as well. First of all I love RDPD, and the general macroeconomic vision it gave to me and so many other here at CREOnline. Some points of Reed I do agree with:

-The joining the Marines to learn leadership…I am an officer in the Army, and I know for a FACT that pilots do NOT lead troops. They are specialists in their field who have two jobs…fly that aircraft and get lots of sleep to fly that aircraft safely. =) I have been a platoon leader, and executive officer, and have learned MUCH about leading and managing people. Score that one for Reed.

-The part about his childhood. Is Kiyosaki’s quest for wealth a lashing out at his childhood demons who made fun of him? Hmm…one for the shrink’s I think.

-One personal observation Reed does not make is how Kiyosaki does not explain how he was doing SO well in his personal corp to buy his Porche in RDPD…but in Cashflow Quadrant him and his wife were living in his car. Kind of a big time warp with no explanation.

-But ever notice on Reeds site how he basically says "X guru’s stuff sucks…instead read my book…“hyperlink”. Hmm, bashing other gurus for selling books and tapes…and what does he do? F*cking hypocrite.

I look forward to seeing all the other gurus responses to this thread.

Emmett-NC

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Re: John T. Reed’s review of Rich Dad, Poor Dad! - Posted by Rob FL

Posted by Rob FL on January 17, 2000 at 22:03:40:

Some of Reed’s points did open my eyes to a few things. Like talking about the guy who did a 1031 exchange from an individual to a limited partnership. Duh. Of course that is against IRS rulings. Also the thing about working for the merchant marines and making that hefty salary. Hmmm. Is R.K. telling us everything here? Then I realized that R.K. probably didn’t detail all the stories. If we had all the facts as they really happened, maybe these things are all true.

I do disagree with R.K. calling a house a liability and not an asset. Just because you are spending money and not getting income in return for a house doesn’t mean it is not an asset. Everyone has to make some sort of housing payment, be it rent or a mortgage payment or property taxes. If someone is renting for the $700 a month and they can buy a house with a $700 payment, the house is saving you money because of equity buildup and tax deductions. In addition after 29 years how high would your rent payment now be versus a 30 year mortgage. I don’t want to debate this, but common sense tells me that most primary residences are an asset becuase of the fact that everyone must have a shelter. This is very different than a liability like a car or credit card payment which are not required things in order to live a normal life.

One things Reed doesn’t mention is how R.K. uses diagrams to explain basic principles of money. That in itself makes both of R.K.'s books a great buy.

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Re: John T. Reed’s review of Rich Dad, Poor Dad! - Posted by Jim LaVerdi

Posted by Jim LaVerdi on January 17, 2000 at 21:31:28:

Here we go!
Ladies & Gentlemen “Start Your Engines”!

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Re: John T. Reed’s review of Rich Dad, Poor Dad! - Posted by Tom A.

Posted by Tom A. on January 17, 2000 at 21:31:02:

I have read both of his books, “Rich Dad, Poor Dad”, and “Cash Flow Quadrant”. The story when he was a small boy is a little hokey… but the content and message he is trying to get across is priceless. I have given several copies as gifts to friends, and young adult children of friends, and my own daughter as well. I think the concept serves a good lesson for all.

Tom A.

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Re: John T. Reed’s review of Rich Dad, Poor Dad! - Posted by David Alexander

Posted by David Alexander on January 17, 2000 at 21:10:53:

Rich Dad, Poor Dad is a must for every Investor, especially beginning and wiil end up in the same light as the The Richest Man in Babylon.

J. T. Reed’s Review… well what can you say he believes he knows it all and his opinion is the only one, too bad his world is black and white with only his opinion as the one that counts.

He’s basing his opinion as if everyone is a small time Investor like himself and if he cant do it no one can.

David Alexander

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John T. Reed: I do not recommend.(nt) - Posted by chris

Posted by chris on January 18, 2000 at 07:50:55:

nt

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Thanks for the REVIEW! - Posted by don, sdca

Posted by don, sdca on January 18, 2000 at 10:13:37:

Jim,

Thanks again for the time you spend on your responses. We all appreciate your time and knowledge.

It looks like I need to pick-up Rich Dad Poor Dad based on your review (grin)!

Don, sdca

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another good post by JPiper (nt) - Posted by steph in tex

Posted by steph in tex on January 18, 2000 at 07:40:26:

.

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Re: Some good points…and bad - Posted by JPilot

Posted by JPilot on January 21, 2000 at 22:27:44:

A friendly correction from a another Army officer. You will undoubtedly offend a number of pilots with that comment. Pilots ABSOLUTLY DO LEAD TROOPS. Do not score one for Reed in this case. I have served as a platoon leader, and commander in charge of and leading troops in both peacetime and combat. Perhaps not in the true Infantry sense of leading ground troops…but troops are troops.

Much less sleep though when functioning in that role though! :slight_smile:

I wholeheartedly agree with your final assessment of Reed! Good post.

jp

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Re: Some good points…and bad - Posted by Rob FL

Posted by Rob FL on January 18, 2000 at 08:53:42:

To fill in a lot of the gaps on Kiyosaki, read his first book “If you want to be rich and happy, don’t go to school.” It really was an amazing book for me. It also shows me that Kiyosaki was a real person with true good feelings towards his “poor” dad. That book really compliments the other two.

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Re: Some good points…and bad - Posted by JPiper

Posted by JPiper on January 18, 2000 at 07:08:59:

Emmett:

You say you ?loved? RDPD, and now you?re shocked after reading Reed?s review. I thought to myself?..it?s too bad that you can have this type of feeling for information that is suddenly taken away by one man?s opinion.

I would say that if the only things that you agree with Reed on are the things contained in your post?..there were very small points. Who cares if Kiyosaki didn?t get ?leadership? training in the military? I respect the fact that he was a helicopter pilot, evidently serving in Vietnam. Leadership or no, this would not have been an easy experience if you know the life expectancy of a helicopter pilot in Vietnam.

Reed makes some psychological assessments about what he reads of Kiyosaki?s youth. Care to know what Reed?s qualifications are for assessing one?s psychology? My guess is that West Point is a little light on heavy psychological analysis.

The fact that Kiyosaki gave no explanation of how he ended up in a car, when he had bought a Porche was explained by Kiyosaki at the last convention?? ?It?s none of your business.??..I believe this is a direct quote. The fact that there is no explanation given doesn?t mean there isn?t one?.it?s just that you don?t know it?.and it has nothing to do with the message in my view.

These were pretty small criticisms Emmett. I didn?t ?love? the book personally, but if I were going to evaluate the book, I would evaluate it?s larger message. Don?t sweat the small stuff.

JPiper

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Re: John T. Reed’s review of Rich Dad, Poor Dad! - Posted by Glenn OH

Posted by Glenn OH on January 18, 2000 at 09:20:22:

I think you missed his point about the house being a liability. It doesn’t produce any income, and does cost money, so it is an expense. I think he said the bit about the house to compare an expensive house vs. a cheaper house, not rent vs. buy. As far as the tax deduction, don’t forget, you have SPEND $.70 per doallar to get the $.30 from the government. Also, appreciation is slower on our houses than on our Lonnie deals, flips, etc. His point is MAKE YOUR MONEY WORK don’t overspend on a luxurious house too early in your investing. This is also a similar point to the book “The Millionaire Next Door”, that the truly wealthy of do not appear to be, and the ones that appear to be, are in the ones with the alligators at the door.

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A Property that has negative cash flow is a liability. - Posted by Robert Biddle

Posted by Robert Biddle on January 17, 2000 at 22:43:51:

(If I responded twice to this it’s because it was’nt showing up on the board)

This book is about how to attain financial freedom.

If you live in a single family home. Bottom line, money goes out of your pocket each month and none comes back in.

Yes you have taxs deductions and equity build up, but whether you call it an asset or a liability does’nt change the fact that you have to PAY OUT each month. That makes it an expense/liability in my book.

L8r,

Rob

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Oops! Sorry…Thought I Was Replying to David…(nt) - Posted by JPiper

Posted by JPiper on January 17, 2000 at 21:36:17:

.