Rich Dad, Poor Dad is a provocative book. Like The Four Hour Work Week, it presents a compelling (some might say simplified) capitalist philosophy in an attempt to challenge certain opposing values, beliefs, and assumptions.
Kiyosaki sets up a neat dichotomy: rich vs poor. He outlines how the rich own assets and create money passively, versus the poor who spend money and trade their labor for yet more spending money.
Just this morning, a week after reading the book, I finally grasped some implications of this seemingly obvious framework. My take-away is that it’s really useful to categorize people, for instance into “decision-makers”, “workers”, and “experts”. These kinds of labels naturally occur whenever sufficiently many people gather, collaborating and transacting in order to do things.
Decision-makers are the rich, the owners. They deploy capital and political influence to initiate action. They are the final say, the evaluator, the judge and jury and executioner. They have complete autonomy and freedom, up to the limit of their resources.
You’re a decision-maker when you buy a hamburger. You decided to deploy some of your bank account to a vendor, and now you own that hamburger in exchange. You’re the decision-maker because you can do whatever you want with the hamburger. I’m the owner and decision-maker of this blog. The school board is the decision-maker for the neighborhood school. And so on.
Workers are the poor, the value-producing “slaves”. They deploy their time, energy, and effort to complete tasks. When they are employed by other people, they receive compensation in the form of wages. Generally, the relationship between input and output is linear. Workers have skills and build resumes, careers. They don’t have as much freedom because they don’t make the decisions, at least when they’re in working mode.
You’re a worker, obviously, when you go to work for a boss (yes, Uber is a boss). You’re also a worker when you go to the gym, or when you grill hamburgers for your family. You’re producing value for someone else to consume, and you don’t have ownership over that work—it vanishes—unless you consider the strengthening of your interpersonal relationships that you receive in return. I’m a worker when I write blog posts.
Experts are information aggregators. They are artists, craftspeople, folks who have internal ownership over their expertise. They are a specialist in an applied and/or theoretical niche. They observe and inform and consult when participating in projects. In the pure Kiyosaki framework, experts are probably some combination of rich/poor, owner/laborer, decision-maker/worker.
You’re an expert when you recommend your favorite local hamburger joint to friends. You’re an expert when you tell the decision-making brain that carbohydrates and animal-based protein are the best thing for you to eat right now. I’m an expert when I suggest a blog topic or a better sentence structure, when I answer other folks’ questions about my blog or blogging in general (that doesn’t happen yet :).
So why is this breakdown useful?
The big-picture answer has to do with money, this sytem we have involving a universal good. You probably interact with money every day, possibly without thinking about it too much. The main thing is people have diverse experiences and preferences through time, and currency is one essential fiber stitching together this landscape. The breakdown helps us understand how we, as individuals and organizations and societies, interact with money.
As evaluators of information and action-initiators, decision-makers do best when they have a complete picture, simplified into a comprehensible and actionable form. With the complexity of a decision sorted out and reasoned through, decision-makers can be objective in their evaluations and actions.
As the decision-maker for your own little kingdom of 1, this categorization scheme may come in handy. Perhaps you’re re-evaluating your free-time activities and hobbies, your career or finances, your relationships, your diet. Or perhaps you just want to understand the role well enough to play it.