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If you’re a person with any interest at all in business, and you have never heard of Robert Kiyosaki, you’re in a rare minority.
Robert Toru Kiyosaki is an American businessman and author, best known for his Rich Dad Poor Dad series of financial education books. The first of these, Rich Dad Poor Dad (1997), is touted on his website, RichDad.com, as the number one bestselling personal finance book.
The “poor dad” of Kiyosaki’s books was his real-life father, Ralph H. Kiyosaki, who despite having a PhD struggled financially and was unemployed during the latter part of his life.
“Rich dad,” on the other hand, was Kiyosaki’s best-kept secret for years. Robert declined to identify him as one single living person, saying, among other things, that a written agreement kept him from doing so, and once suggesting people treat him like Harry Potter. This didn’t sit well with many of his readers, who concluded Rich Dad was a fictional character, and because of this questioned the soundness of the teachings in Kiyosaki’s books.
It was only in 2016 that Robert revealed Rich Dad as having been Richard Wassman Kimi, a Hawaiian hotelier who died several years before the admission. Kimi’s son Alan confirmed on a radio show with Kiyosaki that a confidentiality agreement necessitated the secrecy.
In his books Kiyosaki would compare the traditional thinking of Poor Dad – who believed in education, higher studies and job security – against Rich Dad’s business savvy and his focus on accumulation of assets and passive income.
The ideas Kiyosaki espouses in his writings and seminars draw a mix of reactions. Some people consider him an absolute genius. Others prefer to cherry-pick his teachings, carefully filtering out the nuggets from the dross. Still others tag him a hypocrite or a danger to the gullible, an unscrupulous peddler of snake oil.
One thing Robert Kiyosaki has been criticized for is his aspersions on education and the educated. He has called college-goers “suckers” and PhD holders “poor, helpless and desperate”, encouraging people to drop out of school and forego higher education, which he believes unnecessary for success.
In Kiyosaki’s world there are four types of people: employees, the self-employed, business owners, and investors. The first two are those who need education and will never achieve financial success.
Business owners, on the other hand, will get ahead because they have what he calls a “system” of making money. Investors, too, will succeed because they need only invest money with the goal of getting a bigger return. The scales of prosperity tip in favor of those with something to leverage.
This is true financial freedom, according to Kiyosaki – supporting oneself purely through investments in businesses, real estate, stocks and commodities, assets that will bring in money. This, he asserts, is where the rich put their resources, while the poor and middle class put money into mortgages, card debt and consumer loans.
In interviews Kiyosaki delivers what looks and sounds like great unconventional wisdom. “Work to learn, don’t work for money.” “Don’t live below your means,” (think of how you can increase your means to buy what you want.) “The most important thing is cash flow.” “The rich don’t pay taxes,” (they do, actually, but at a much lower percentage than the employed ad self-employed.)
Whether all of Kiyosaki’s advice can be trusted, however, is for some a point of contention. There are those who point out that he had no sizable amassment of wealth to show before Rich Dad Poor Dad. Others warn against illegal methods he recommends, such as insider trading, vulture real estate purchases and excessive credit card debt.
Bankruptcy, too, has become a point of some controversy around Kiyosaki. Pre-Rich Dad, he ran a couple of businesses – surfer wallets and T-shirts – that eventually went bankrupt. What made bigger news was the corporate bankruptcy in 2012 of his company Rich Global LLC. Despite how it looks on the record of a financial guru, bankruptcy, in fact, is an escape route he actually proposes should one’s business plans go south.
In defense perhaps of these shortcomings, one can consider the fact that Robert Kiyosaki has gone from failure to success several times in his career. Even with the setback of Rich Global LLC, he is still worth roughly $80 million. If anything, the man knows how to make money.
And where does Kiyosaki currently get his earnings? He owns the Rich Dad Company, a private enterprise that delivers personal finance and business education via books and videos. In an interview with Forbes, he revealed that most of his money comes from franchisees of the Rich Dad seminars. He also created the Cashflow software and board games that educate children and adults on business and finance.
Some of his latest advice for his followers? Don’t save money. The dollar is dying, he believes, and people should spend for future security. Buy gold, silver, Bitcoin. This is in line with his “only rule” for getting and staying rich: ‘…learn the difference between an asset and a liability and buy assets.’