Book Review: "Rich Dad's Increase Your Financial IQ" by Robert Kiyosaki

"Increase Your Financial IQ" is Robert Kiyosaki's latest personal financial book. In case you haven't heard of Kiyosaki or his Rich Dad series, he has authored 18 motivational/finance books and other material that have reportedly sold a combined 26 million copies. At the core of Kiyosaki's teachings is the belief that one must have "financial literacy" to obtaining wealth and that the time that one spends learning about finances is the best investment one can make. Most importantly he believes that personal wealth accrues to those who are either business owners or investors receiving passive income so the objective of those who desire increased wealth is to become one of these. Given the immense popularity of the series, it is clear that Kiyosaki has hit a chord.

The book is structured around five principals or what Kiyosaki calls "Financial IQs":

#1 Making more money #2 Protecting your money #3 Budgeting your money #4 Leveraging your money #5 Improving your financial information

Each is explained in detail with numerous first person examples from Kiyosaki's life. The book is exceptionally easy to read and despite the somewhat controversial (or more accurately purposely provocative) statements sprinkled throughout the book, it is at its most basic level all common sense. Selecting investments that have lower tax rates and using leverage to increase returns are two examples.

According to Wikipedia, Kiyosaki's books and teachings have been criticized for focusing on anecdotes and containing little in the way of concrete advice on how readers should proceed. Kiyosaki has responded that his material is meant to be more of a motivational tool to get readers thinking about money, rather than a step-by-step guide to wealth. As long as readers keep this in mind, then "Increase Your Financial IQ" is an excellent tool for motivating those to rethink their financial constraints. However, as with any financial book, readers need to understand the limits of any "one size fits all" financial program. And this is especially true for one that maintains that "Work hard, save money, get out of debt, live below your means, and invest in a well-diversified portfolio of mutual funds" is bad advice.

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Update: The publishers of Kiyosaki's book supplied us with this financial quiz