Earlier this week, Amy posted a letter from parents whose college- age kids had no idea how well-off they were–that, basically, they’d never have to work. The parents wanted advice about how to teach their kids to work hard and be self-sufficient, but also to understand and live well with the blessing and responsibility of a huge financial boon headed their way.
In general, I thought Amy’s response was good. Key quote:
“Talking about wealth is like talking about sex; this should not be one conversation but part of an ongoing education.”
This makes good sense to me. In both cases, it’s not enough to find a quiet moment, dump the facts in the kids’ lap, and wrap up with, “OK, so that’s it. Enjoy! Be careful!”
On the one hand, I commend these parents for taking care in raising their sons–teaching and allowing them to build their identities, values, and relationships in something other than richie-richness. On the other hand, now that the kids are grown, sticking to a gradual revelation plan seems a bit futile….slapping a bandaid on their concerns, rather than really addressing them.
For example, the parents expressed the fear that, “We have all seen wealth ruin people — especially young people.” But it seems that the answer is not necessarily (as they suggest), “taking steps to ensure that they don’t come into huge sums of money suddenly,” but rather teaching them–by example, mostly–how to understand their assets and use them appropriately. Helping their sons understand and make the most of their (future) wealth (just as they would help them understand and make the most of their educations, their relationships–their lives!) seems like a more productive solution than just trying to lock down how much money comes into their hands at any given time. It’s the parents’ money and its their right to control it, of course! But if they want their wealth to pass to their children eventually, and want that to be a blessing and not a curse for all involved, I agree with Amy that the education needs to begin now.
To this end, Amy recommended a book to these parents, “Rich Dad Poor Dad: What the Rich Teach Their Kids About Money — That the Poor and Middle Class Do Not!” by Robert T. Kiyosaki (1997, Business Plus). Amy recommends books all the time, and that’s cool–assuming that she’s vetted them first. I was unfamiliar with this title, so (naturally), Googled it. The related Wikipedia article hinted at a bit more controversy than is raised by your average self-help book, I suspect:
“John T. Reed, an outspoken critic of Robert Kiyosaki, says, “Rich Dad, Poor Dad contains much wrong advice, much bad advice, some dangerous advice, and virtually no good advice.” He also states, “Rich Dad, Poor Dad is one of the dumbest financial advice books I have ever read. It contains many factual errors and numerous extremely unlikely accounts of events that supposedly occurred.” Kiyosaki has provided a rebuttal to some of Reed’s statements. Slate reviewer Rob Walker called the book full of nonsense, and said that Kiyosaki’s claims were often vague, the narrative “fablelike”, and that much of the book was “self help boilerplate”, noting the predictable common features of such books were present in Rich Dad, Poor Dad. He also criticizes Kiyosaki’s conclusions about Americans, American culture, and Kiyosaki’s methods….In 2007, Lechter sued Kiyosaki, alleging numerous instances of financial misconduct. The suit was settled for an undisclosed sum over a year later.“
I’m not familiar with this John T. Reed fellow (seems that he’s also a self-publishing financial guru, so presumably we should take his critique of Kiyosaki with a grain of salt). And certainly Kiyosaki and Lechter are not the first professional partners to end their business associate in court. As hinted in the featured quotes above, the review of this book published in Slate is also quite harsh.
Of course, all books–perhaps especially the effective ones–garner both praise and criticism. This book has been trashed by a number of different sources–some less reputable than others. That doesn’t mean Amy didn’t find it useful, or indeed that it might not be useful to these parents. But when the briefest, shallowest search on a book title turns up this much bad press, I think we need a little more justification for the rec than simply that Amy “picked it up.”