Current Features

Neil deGrasse Tyson & the Beauty of Intelligent Design
Reuters on California Student Protests
Obama, Clinton & Argentina: Hacking Off the UK Some More
Whose Aparthied, Again?
Althouse Doesn't Get It
Orwellian Obama
Is the Castro-friendly Cuba policy working?
Women are cleverer than men, says research
Seaworld: "Dining With Shamu"
A World-Historic Find in Jerusalem
"Naïve"
Random Observations

Read the Front Page

Topics

Blogging
Computers and Technology
Conspiracy Theories
Crime and Punishment
Dictatorships
Economics
Education
Election 2008
Entertainment
Europe
Faith and Philosophy
Faith and Politics
Features
France
Fun
General
Genocide
Happy Stuff
Health
History
Honduras
Human Rights
Humor
International
Iraq
Left Versus Right
Libertarians
Life Skills
Media Bias
Personal Notes
Politics
Product Reviews
Quick Alerts
Quixtar
Racism
Reality-Based News
Ron Paul
Science
Science Fiction
Sexuality
Sick & Wrong Department
Society
The Arab Street
The Arts
The Church of Gaia
Travel
Words, Words, Words
Your Money

Archives

March 2010
February 2010
January 2010
December 2009
November 2009
October 2009
September 2009
August 2009
July 2009
June 2009
May 2009
January 2009
December 2008
November 2008
October 2008
September 2008
August 2008
July 2008
June 2008
May 2008
April 2008
March 2008
February 2008
January 2008
December 2007
November 2007
October 2007
September 2007
August 2007
July 2007
June 2007
May 2007
April 2007
March 2007
February 2007
January 2007
December 2006
November 2006
October 2006
September 2006
August 2006
July 2006
June 2006
May 2006
April 2006
March 2006
February 2006
January 2006
December 2005
November 2005
October 2005
September 2005
August 2005
July 2005
June 2005
May 2005
April 2005
March 2005
February 2005
January 2005
December 2004
November 2004
October 2004
September 2004
August 2004
July 2004
June 2004
May 2004
April 2004
March 2004
February 2004
January 2004
December 2003
November 2003
October 2003
September 2003
August 2003
July 2003
June 2003
May 2003
April 2003
March 2003
February 2003
January 2003

Search


The Blogosphere

BitsBlog
Beyond the Rim
Common Sense and Wonder
Dissecting Leftism
Drive-Thru Musings
FunMurphys.com
Investor Blogger
Iowa Geek
La Shawn Barber
The Littlest Apologist
Mark D. Roberts
Muddling Towards Maturity
Quixtar/Amway Infiltrator
Quixtar Blog
Quixtar Sucks
Sinking in Quixand
Zappe Family Blog


Rich Dad, Poor Dad, Liar Dad, Thief

Marc Miyake has lately been discussing Rich Dad, Poor Dad, and points to a number of sources which say or imply author Robert Kiyosaki:

  • Wrote about a fictional, hypothetical "Rich Dad", not a real-life human as one might think after listening to him
  • Doesn't appear to be all that wealthy
  • Seems confused about even the simplest, most basic aspects of money-making and wealth
  • Is instead skilled at building a cult-like following
  • Has written a book with lots of wrong and dangerous financial advice, apparently based on the (correct!) assumption most of his readers won't know any better
  • Has an anti-education bias
  • Writes and talks about wealth in terms more appropriate to leftist revolutionaries
  • Detractors wonder if Kiyosaki is still trying to make up for childhood slights from the wealthy

Here are several jaw-dropping examples from John Reed's website which debunks "Rich Dad, Poor Dad":

Home ownership: This is so basic even I know it! Kiyosaki claims his book will "challenge the belief that your house is an asset" and that "most people work all their lives paying for a home they will never own." Reed responds: "With each payment, their equity increases. Many people pay off their mortgage in full before they die. Almost all thoroughly enjoy their home both during and after the mortgage."

Corporations: Reed relates an incident from Kiyosaki's "Corporation" course, where he brags about the tax advantages of having one of his corporations buy him a $4,000 Rolex watch instead of buying himself. Reed points out that there's no difference here: You pay the same taxes on $4,000 worth of "Rolex" compensation from a company as you would on $4,000 cash. Again, this is a basic even I understand.

Insider trading: Though at points Kiyosaki advises to play by the rules, he says that the rich get that way is through "special rules" just for them (which he will teach us), including insider trading: "The reason you want to have rich friends who are close to the inside is because that is where the money is made. It's made on information. ... the sooner you know, the better your chances are for profits with minimal risk. That is what friends are for."

Need I point out insider trading is illegal, and that is -- in my book anyway -- certainly not what friends are for. Further, it ignores the fact that legitimate companies are more than Ponsy schemes or shell games, but in fact deliver a value and are created through a lot of hard work.

Real Estate: "In real estate, I can go out and in a day come up with four or five great potential deals." Reed counters: "Using the ratio most favorable to Kiyosaki's claim, 50 to 1, his boast means he looks at 200 to 250 properties a day. That's about ten properties per hour or one property every six minutes if he does not sleep or eat. Kind of reminds me of the 20,000 women Wilt Chamberlain claimed to have had sex with -- until somebody ran the daily numbers."

Envy: A lot of his financial advice seems to center around Marxist-style envy: "Most people, working for a paycheck, are making the owner, or the shareholders richer," and "You work for the bank. After taxes your next largest expense is usually your mortgage and credit-card debt." Reed points out that economic activity is not a zero sum game: "You should choose what you do only according to how it relates to your goals. You should not resent others benefiting from your efforts. Indeed, you will prosper most when you help others achieve their goals... Resenting bank profits is childish."

Reed has a wealth of debunking information at his site, and definintely makes an interesting read... though not a crucial one. Seems like a reasonable course of action would just be to stay the heck away from "Rich Dad, Poor Dad", advise those you love to do likewise, and not let it mess with your head so you won't have to ultimately unlearn the various financial "lessons" it will teach you.

Comments

"You should choose what you do only according to how it relates to your goals. You should not resent others benefiting from your efforts. Indeed, you will prosper most when you help others achieve their goals..."

Sounds like a Quixtar IBO talking. Makes sence to me.

Posted by: Simon on April 19, 2004 01:42 PM

Kiyosaki is a total fraud who never made any money at all with investments. Prior to the "Rich Dad" books, he was actually penniless. His sole source of income is his “Rich Dad” franchise, book royalties and seminars. He started out his career by lying about his wealth, now the true believers are willing to throw so much money at him to hear him speak that he now has real wealth, but he knows little in the way of wealth creation itself. If you wanted to read a book about Robert Kiyosaki’s actual wealth creation methods it would be entitled Creating Wealth Through Writing Wealth Creation Books and putting on expensive seminars with a real estate flavor.”

Posted by: John on April 26, 2005 08:22 PM

Sean: You're an utter idiot if that is honestly what you believe. Kiyosaki is a moron and a con-man. He's obviously fools people like you because he knows people like you are too gullible and will justify reading a useless book with comments like that.

-------------

And you need to learn to formulate your arguments.

Posted by: Alex on April 28, 2005 01:01 PM

Jeff writes;

>>>You tried to demonstrate that a house is a liability because you pay property tax on it. That is irrelevant. You also have to pay a tax on your car (license fee). Does that make your car a liability? You pay taxes on your income. Does that mean that earned income is a liability?

Actually, RDPD clearly defines an asset as something that puts money in your pocket and a liability as something that takes money out of your pocket. So, if you live in your house, you pay a mortgage, taxes, etc., it is effectively a liability because the money comes out of your salary to pay this stuff. In other words, the house is costing YOU money.

Whereas if you rent out a house to someone who pays rent, as long as the rental income covers ALL expenses (inc. taxes) plus a little, the house becomes an ASSET, ie. it is making money for you.

In truth, this is a simplification of the situation, as in a balance sheet, a house with a mortgage would be recorded twice, as an Asset and a Liability. Anyway, he makes an interesting point that our passion for buying houses to live in really isn't such a great way to make wealth (except through capital gains) as it produces no regular benefit.

But I do think he makes an interesting point: somethings that we attribute as having asset value aren't really assets at all. A Car is a quickly depreciating asset, and if you are paying car loans, some of the time, the net difference between the value of your car and your outstanding loan may turn it into a clear liability on your personal balance sheet, esp. in the first six months where you haven't paid anything off, and the car has suffered the sharpest decline in its value.

>>>A house is an asset, period.

Another point that RDPD makes is that yes, the house is an asset, but the question is whose? If you buy a house and its price decreases, your mortgage (assuming you have one) shifts into negative equity position, ie. if you sold, you would still have to repay the amount of the loan beyond the sale price of the house. Could it be said to be an asset then?

And if you don't believe, do you honestly think that housing prices will keep heading up as they have been doing so... Mmm...

Does this clarify things a little?

What I admire is RDPD's ability to string simple observations out to a whole book! That's quite an achievement. I did enjoy playing the game, though it is pricy.

Kenneth

Posted by: Kenneth on May 1, 2005 10:01 AM

Kenneth wrote,

Actually, RDPD clearly defines an asset as something that puts money in your pocket and a liability as something that takes money out of your pocket. So, if you live in your house, you pay a mortgage, taxes, etc., it is effectively a liability because the money comes out of your salary to pay this stuff. In other words, the house is costing YOU money.

You are confusing a balance sheet with a statement of cash flows. When I said that a house is an asset, that is in reference to a balance sheet where you list "assets" on the left hand side and "liabilities" on the right hand side. The fair market value of your house is an "asset". The remaining mortgage balance on that house is a "liability".

Now let's move on the the cash flow statement. Indeed the mortgage payment, the property taxes, et al are cash outflows. My salary is a cash inflow. As I said in my first post, having too much house is detrimental. It shows up on your statement of cash flows that your are paying too much on a monthly or yearly basis for mortgage, taxes and upkeep.

Anyway, he makes an interesting point that our passion for buying houses to live in really isn't such a great way to make wealth (except through capital gains) as it produces no regular benefit.

I get a great benefit from living in my house. I don't have neighbors right next door to me. I can invite 20 or 30 friends over for a barbecue every summer. I don't have a landlord to tell me what I can and can't do to the place.

Anyway, doesn't Kiyosaki live in a 2 million dollar home with just his wife and no children? If he practiced what he preached, wouldn't he live in one half of a duplex and rent the other half? I'm sure that he gets a benefit from living in his house too and isn't worried about it being an investment or not.

I have read Rich Dad, Poor Dad. I have also read The Millionaire Next Door. After reading TMND, I increased my net worth by $3.99 when I sold RDPD on Half.com.

Posted by: Jeff on May 16, 2005 08:45 AM

one of the defining characteristics of an abusive relationship is excusing the behaviour pattern - "I know he/she hits me, but he/she really does love me"

"I know he lied about Rich Dad, but he really is telling me the truth"

huh

Posted by: on June 4, 2005 07:44 PM

As an IBO in Australia, I have to say that I agree with points on both sides, but the simple fact is, you don't know if you're going to make it unless you try, and it really doesn't cost you much. I still have my corporate job and I'm doing A2K (Aussie's Quixtar) and I'm not doing too bad. Everyone needs to face facts that we're all consumers regardless whether or not we like it. Even if 1 in 1810 of your friends only make $88 or so, they're saving on their monthly expenses anyway and getting $88 they didn't have to work for anymore. Ask anyone if they wanted to get $100 extra for no extra work, of course they'll take it. WOuldn't you?

Posted by: Joe on June 23, 2005 10:00 PM

Tim, you're just playing on human nature and our reactions to failure. You fail at something and accept it, because society says it's acceptable. Don't blame the teacher, blame the student. You don't hear those from highly regarded schools complain about their education don't you? Whether or not they fail ot succeed. You hear that kind of negativity from those who didn't get the opportunity. Here we have a proven education system that is not specific to the business, but for all aspects of life and you're most likely trying to discredit it because you don't understand it, and/or failed at it. Looking to place blame is the first sign of self failure. I can almost bet that you're one of those people that if it wan't reported on CNN it didn't happen.

Imran, you didn't really ask me a question, so I can't give you any advice!

Posted by: Joe on July 7, 2005 04:36 AM

Hi Imran,

First confront a book on grammar and then we'll talk.
"You looks like Quixtar defender." Nice.

You're free to come over to my house this Thursday. I'm having an Amway meeting in my living room. Perhaps you'd be interested in our new shampoo line.

Posted by: eric on July 25, 2005 12:05 AM

I just got done reading "Prophecy" after never reading a RDPD series book. I also don't mean to offend anyone... Keep that in mind.

This issue over whether your personal residence is an asset or a liability is being taken too literally from what I can tell. The benefits discussed (barbeques and hot showers) regarding ones residence do not appear on an asset vs liability breakdown on paper, and that is his only point. By spotlighting this simple fact, he's attempting to challenge the idea of ones personal residence as an investment asset.

The sad truth in America is that many people use the equity (asset) in their home as a major portion of their retirement income. The only problem is that when you retire, you still need a place to live. If you refinance, the payment appears as an expense and the loan amount as the new liability. If you sell and take the cash, you still have to pay for a place to live. Hopefully, it's not a second rate care facility.

If you own real property or a business, you are supposed to generate passive income. If you work for yourself or at a job (professional or otherwise) you are earning your income. If you are earning your income and paying your mortgage, you can't fight the fact that you are paying for the investment - the investment is not paying you.

He's not saying you shouldn't own your personal residence and enjoy it beyond the bottom line. Personally, I enjoy our first home more knowing that it is a liability and not an investment. The fact that I like to have my friends over and cook steaks on the grill makes it more of a liability! If not for my home, where would I ask them to come? Where would I store the grill? Where would I take my shower and have my morning coffee?

Aside from this personal residence business, what other big issues do people have with this guy? He explained in this book that his "Rich Dad" was his best friend's dad - is that not true?

Posted by: Scott on August 2, 2005 11:22 PM

whoa!

wow...see thats why the success are just that everyone else is talking about them...

question...i was wondering if any of these "business opportunities" is junk...

what are you suggestions to make extra money or to simply increase your income?

go back to school? part-time job? or just sit there and be a victim to the economic demands?

any suggestions or alternatives...

?

Posted by: kevinb on September 6, 2005 10:39 PM

Or....do some home work and find something worth while.

47K / year income of an average american family, not bad if you ask me! So shut the hell up about "There's nothing out there". There is a lot.

http://www.business-opportunities.biz/

If you can't find any thing after reading that blog, you should run in special olympics.

Posted by: Imran on September 6, 2005 11:43 PM

"Rich Dad, Poor Dad" makes one become an excited IDIOT!!

Posted by: Wise on September 8, 2005 07:38 PM

Dear all,

I have finally had the chance to read RDPD, and the second book the Cash Flow Quadrant.

I find that a small issue (as some might thing), of thinking of your house as an asset or a liability is still very important. If we look at what is going on right now in the US or the UK (where I live), of so many people borrowing against their home equity and running excessive credit card debt in this ear of cheap money (interest rates are so low by historical standards and the Feds still think they have no inflation and not concerned about inflation in the property market and thus not raising interst rate enough). W

e now have a property inflation and so many people think these prices are lasting and that their retirment is secured by their huuge increase in house prices, but house prices will not go up for ever, and a sudden drop leaves a person with debt which is certain against house prices which are not certain by all means.

The simple concepts that Kiyosaki argues would make people think twice before seeing their house as a last resort.

But the problem soo many people have with Kiyosaki is that they are much too stuck with classic accounting jargon (I have a degree in economics and a graduate degree in Finance), is that an "asset is what you own" anda liability is what you "owe", when I first read RDPD and read what Kiyosaki had to say about that, I was crying, FOUL, an asset is what you own and a liability is what you owe. But that is misleading, this is the accounting that we have always learned at school, but it doesn't tell us the difference between an asset and an income generating asset.

I could by a new car, and that would be an asset, I can still sell it for some money later, but its value declines in time, and I spend maintainance on it, I of course benefit from it, because I can use it to drive anywhere and it saves me time and hassle. However, I can still buy the same car, and make it a cab for hire (in some countries where I lived like Saudi Arabia, you can do that in one day), and then make more money from it.

So, Kiyosaki is not really against the accounting jargon, he is just saying, there is an asset and an income generating asset.

Same thing appliese to a house. I have a place in london, a very small Studio apartment that has cost me GBP90,000 for just a studio apartment, and even in US prices that would be too much for just a Studio. I needed my own place. While the alternative, is that I could have deposited this money in another emerging market, with an exchange rate pigged to the US dollar, making an interst up to 12% on that money, and at the same time opt to pay the rent from this interst and even pocket a difference that would help me spend when I am short on cash.

Again, the flat is an asset, but I could by using another method, pay the rent (not buy the asset, and use the interst made on the money as extra cash), now I bought the flat but I don't have the extra cash, and that is a personal choice that I make because I just wanted to have something on my own, and at the same time be free as some of you have said to do whatever I want in my own place with out the landlord nagging me.

I hope you take Kiyosaki seriously, because even for a guy like me with two relevant degrees from top universities, and work in an international financial institution, I still saw some insight to his book.

Dont' also discount him on the basis that some of his thought are anti market economy or something, he is not. He just says that the modern market economy only cares for one thing, economic growth, so, no one says that the market economy is a fair system, it is just the system that is suppose to give us the best results when it comes to growth or jobs. But if you can position yourself at the better end of the system, there is nothing wrong with that.

Posted by: Mekhalis on September 18, 2005 11:23 PM

Mekhalis,

You are giving Kiyosaki way more credit than he deserves.

Dont' also discount him on the basis that some of his thought are anti market economy or something, he is not. He just says that the modern market economy only cares for one thing, economic growth, so, no one says that the market economy is a fair system, it is just the system that is suppose to give us the best results when it comes to growth or jobs.

Please tell me specifically on which page of which book you got that from. I doubt you will be able to. Kiyosaki's greatest talent is to spout generalized platitudes to which individual readers can apply their own interpretation.

One book tells you to invest as much money as you can in assets. Another book tells you that you should be a business owner in Multi-Level Marketing. A different book tells you that education is not necessary to be successful and doesn't teach you anything about real life. That doesn't seem like a consistent or coherent message to me.

I'll close by pointing out, once again, the quickest way to call B.S. on any of Kiyosaki's teachings. He tells you that your house is not an asset, because it still takes money out of your pocket. Meanwhile, he lives in a giant $3 million dollar house with just his wife. Why then does he have so much of his money tied up in that house? His annual property tax bill, utilities, and association fees could pay for an entirely different house that would be just fine for two people to live in. He could sell the McMansion and put the proceeds into income generating investments. So long as he doesn't take his own advice, neither should anybody else.

Posted by: Jeff on September 21, 2005 01:38 PM

There seems to be a lot of confusion and anger here so I'd like to add my two cents and clear things up if I can.

"You are missing my point. I'm sure his income does cover his expenses. However, his expenses would be much less if he lived in a modest house and then put all that money saved on property taxes, utilities, association fees, insurance, etc into more rental properties."

If you can't enjoy your wealth, why bother becoming rich?

"He just says that the modern market economy only cares for one thing, economic growth, so, no one says that the market economy is a fair system, it is just the system that is suppose to give us the best results when it comes to growth or jobs.

Reply:Please tell me specifically on which page of which book you got that from. I doubt you will be able to."

Its suddenly clear why you don't understand the book, because you must have missed out the part where he's rich dad said "why not own the ladder". You clearly couldn't distinguish between a personal opnion and a quote when merged into one sentence. So let me help you.

Rich dad's quote:the modern market economy only cares for one thing, economic growth."
Mekahlis' Personal opnion:"no one says that the market economy is a fair system, it is just the system that is suppose to give us the best results when it comes to growth or jobs."
I hope this helps :)

As far as the insider outsider trading thing is concerned. I do remember rich dad stating that he couldn't invest with his friend because "it was illegal". There are investments for the rich that the poor are not allowed to invest in. I know this from first hand experience ... well, my dad's, to be more specific.

1. Kiyosaki never lauded MLM, Diane Kennedy did.
2. He also repeatedly stated that he wasn't an accountant.
3. If you really think you can afford a $2 million home by being the best selling authur. Try it.
4. Increase your passive income, so that its greater than your expenses,so you can sleep well at night. That's the moral of his books. Which part didn't you get?

Posted by: on May 25, 2006 08:43 PM

ok..let us read kiyosaki's response to Mr Reed...


here

discussion closed

Posted by: papa on June 5, 2006 11:45 AM

Funny


Posted by: Joecool18 on August 28, 2006 01:17 PM

All I see from those who knock Robert K. is the ability to blame and debunk someone else because of their own personal lack of success. That is pretty sad. Anyone can knock someone down. The truly great men help others rise up. If Roberts program helps even one person get out of the rat race and live a better life, then it is worth it.

Posted by: Scott on February 20, 2007 11:28 AM

Hi there! I ignored the comment rules and reposted a huge chunk of John Reed's criticism of Kiyosaki (the section on 20/20's investigation, which is well worth reading) without any link or attribution. Thus my post was deleted.

Posted by: Joecool18 on March 2, 2007 11:46 AM

Tesh: While I agree with your remarks about RDPD, I've got to take issue with a few others...

Oh, wait, welcome to the freaking U.S. economy. Investors and Wall Street will be the death of us all...

Actually, no: Investors are the people who make new businesses (meaning new products, services, technologies and innovations) possible. They contribute the resources needed for businesses to start and grow.

If my brother-in-law wants to open a hardware store in a remote area which doesn't have one, and I loan him money to do it, that's not a "Ponzi" scheme at all. He uses my money for some part of his business, and exchanges that for a stake in the resulting profits. And the people in the town, if they shop there and make him successful, will be glad they don't have to drive as far to buy hardware. Everybody wins.


The ONLY way to build wealth is to not spend money.

Don't tell Warren Buffet that! He made lots of money by spending it first. Nothing wrong with saving it, but it's also true that sometimes you have to spend some to make more.

For example, you have to build the store building before you can start to make your money back by selling things.


"Savers are losers" seems to be a key of the Rich Dad mantra, or at least the advertisements. Yup, they are losers, but only because the &*$% investors are sucking them dry. Welcome to the new serfdom.

Nobody's being "sucked dry" by investors. Where are you getting such ideas? People who are "savers" MUST also become investors if they want to get wealthier. Otherwise, if you simply bury $10 in the yard, it's only going to be worth $10 (or less) when you dig it up again.

Yet if you INVEST it in something -- that's what a savings account is, whether you know it or not (and also what a municipal bond is, as well as a stock) -- you'll help create new wealth and make everyone a bit richer and better off.

Which is not life's whole goal, but it's certainly a lot better than policies and practices (socialism, social security, pyramid schemes, gambling) which destroy wealth make everyone a bit poorer.

Posted by: Tim (Random Observations) on December 6, 2007 02:13 AM

Tim,

So you help your brother gamble. So Buffet is an extremely canny gambler. At least have the intellectual honesty to call it what it is.

Even so, that's not the real problem, at least not when we're talking about taking reasonable risk in hope of a reasonable reward. Life by its nature has risk, and that's what makes us grow.

No, the problem is usury, usually called "interest". Loans demand that people pay the lender for risk. In other words, you're paying people to gamble. At that point, it's not about providing goods or services to better society. It's about lining the pockets of someone who was already rich, as they demand not only the original amount loaned, but usury on top.

It's even deeper than that, though. Banks today treat usury as money. Credit that has been extended to people is treated as actual money, as we've seen with the CDO weirdness. There's no real value there, just a vapor promise and lots of debt. It's utterly and completely mad, and building an economy on usury and debt is purely idiotic. It is unsustainable.

It's the pipe dream of people to get rich and never have to work. Usury/interest and "investing" do this, but only by letting people hit a critical mass of money that "earns more money" or that "works for you" by leveraging interest. That's the leech part. The investor who lets his portfolio generate his income isn't actually working for anything, he's living off of the work of others. It's the other people, the ones who are actually working, who contribute to society. The investor might seek to salve his conscience by saying his "working money" is helping society, all the while slowly bleeding the actual producers with usury. The investor is not producing anything of value.

Does that always bankrupt the sheep? Nope, but it is effectively an upper class welfare system. People who "live off the government" (working class taxpayers) in the welfare system are denigrated in our society, but somehow, people who "invest smartly" and who live off of the working class are somehow praised. Both welfare systems are corrupt and morally bankrupt.

As for burying money, the only reason it loses value is because of inflation. Inflation happens when the money supply is increased thanks to the Fed, or when banks create vapor money with things like CDOs. Legal tender loses value as the system debases it, not because the work done to earn that money is somehow less valuable.

Working class people work more now than ever, and two incomes are often required to maintain a household in big cities. Their work (the people producing things) isn't less valuable, it's the legal tender that is less valuable. The blame for that lies squarely with the Fed, banks, and investors that demand their slice of the pie without actually doing anything to contribute besides having money in the first place.

You want to praise the small business loan ideal as the hotbed of societal innovation and production? OK, make loans interest free. They still have to be paid back, but without the bloodletting. That can only help the innovation and productivity of the real working class, as they get to spend more money on their production, and less on supporting their benefactors.

Posted by: Tesh on December 11, 2007 12:57 PM

Tesh,

I agree with Ryan's economic comments, so I'll focus on addressing more of the moral implications you raise.


So you help your brother gamble. So Buffet is an extremely canny gambler. At least have the intellectual honesty to call it what it is.

If you want to call the "gambling", then yes, it is. In that relatively mild sense, all of life is a gamble. I gamble every day when I get in the car and go to work: there's a certain likelihood I will be killed, and a certain likelihood I will arrive and earn a day's wage. The same goes with choice of career, employer, or buying insurance.

But most people wouldn't morally equate that (opening a store in this example) with "gambling" in the sense of a form of entertainment which generates no economic value and generally impoverishes most the participants -- as you seem to be doing.

You're welcomed to your views, of course, but I'd just like you to also be intellectually honest about their implications. If starting a business is "gambling" in the way you're using it -- and thus presumably immoral -- then so are activities like skiing, driving, getting married, getting pregnant, etc. And if not, then why are you being so condescending or indignant on this particular point?

Sorry, I just don't buy your implication that risk is inherently immoral. And I doubt any reader here will either. But if I've somehow misunderstood you, you're more than welcomed to clarify.


No, the problem is usury, usually called "interest". Loans demand that people pay the lender for risk.

If "usury" is your core objection, then why you were railing against "investing" before? They're similar in some sense (you hope to make money), but also quite different. If you were really against usury, I would have answered completely differently, as I have mixed feelings about it.

In usury, you lend someone money and they owe you more no matter whether they gained or lost it. In investing, you share in their outcome, and own part of their venture.

By the way, Jesus praised people for investing in the parable of the talents. And he also condemned those who refused to invest. You should let him know about the apparently immoral stance he was advocating -- and warn others about his bad advice, also.


It's even deeper than that, though. Banks today treat usury as money. Credit that has been extended to people is treated as actual money, as we've seen with the CDO weirdness...

There are a number of things about the current system that I'd also disagree with. But I must again note that this a completely different subject than you'd raised.

I don't think, however, that it's insane or wrong to trade IOU notes, which you seem to be objecting to. It's very hard to carry gold or sheep around when shopping, for example. (And the clerks are never sure how many boxes of Kleenex should be exchanged for a particular sheep.) So we all carry paper notes representing a debt instead, which a sensible, not insane, innovation.

The problem most people raise is that those notes aren't backed by anything any more.


It's the pipe dream of people to get rich and never have to work...

Yes, and I spend innumerable pages and paragraphs fighting that same belief.

But I commented because you were railing against INVESTMENT (of all kinds -- not just dodgy ones), which, in general, is nothing like that. When you invest, one person works hard (the one starting the business) and the other, who ALREADY earned money, helps it generate even more wealth.

Generally, there's not many "getting rich and never having to work". Warren Buffet, for example, works every day of his life. He's just very effective at generating value for his customers, and then takes a percentage of that.


The investor might seek to salve his conscience by saying his "working money" is helping society...

Or he might just be one of those stupid saps who follows Jesus, and gets his values from Him.

Why on earth would an investor need to "salve his conscience"? It's a completely moral activity. I'm glad when I invest: I think I'm doing something good. I'd encourage you to do likewise.

[Note to the reader: This is another example of a person arguing as if their opponents secretly agreed with them.]


The investor who lets his portfolio generate his income isn't actually working for anything...

It's true he's not "working" -- in the sense of physical labor (by that token, I don't "work" either), but he is giving something up.

Look, let's say I have ten cars, and I decide to lend them out for a fee. (Or do you object to car and bicycle rental companies also?)

Maybe people rent them to use with their business, or maybe they rent them for pleasure. What I am giving up? I'm giving the use of my cars (or my money, which bought them), and the certainty they will stay in good condition. What might I gain? I might gain a bit more money for my very real sacrifice.

Now try substituting the word "cars" with "thousand dollars". The story don't change, just the object being given up.

So my point is that the person who is investing is indeed giving something up: They're not sure they will get their money back, and they can't enjoy it. They chose not to go on vacation, or buy a better house on the belief that more will be returned eventually.


The investor is not producing anything of value...

Please read the comments rules. My #1 pet peeve is people who refuse to read what I've taken the time to write back to them and think about it. You don't have to agree -- you can counter-argue, object, or drop the topic. But don't go on repeating yourself as though I'd never answered your objection, please.

So, that's a warning.

Again: my brother couldn't have started the hardware store. By helping him with extra money I have sitting around, he gets a store, his family can eat better or send their kids to college, the people in the town get to save time 'cause they now have a local store, and I also get to own a bit of a successful business. Everyone wins, and everyone is wealthier.


Does that always bankrupt the sheep? Nope, but it is effectively an upper class welfare system.

Why is it "welfare"? Welfare is money taken by force from taxpayers and given to rich or poor people. Nobody's money is taken in this scenario. You're simply pretending there's no difference between money redistributed by coercion -- where no wealth was created -- and money gained through completely free uncoerced exchanges which, on average make everyone richer.


People who "live off the government" (working class taxpayers) in the welfare system are denigrated in our society, but somehow, people who "invest smartly" and who live off of the working class are somehow praised.

That's right: because they're completely different. (See previous paragraph.)

I'm trying to help you understand economics, so you can learn about that particular subject before you start condemning others in an area in which you haven't done your basic research.

Also: People who "invest smartly" don't "live off the working class", as you state. In that transaction, both end up wealthier as new wealth is generated. And frequently, these investors are also "working class" people.


As for burying money, the only reason it loses value is because of inflation.

I agree. As I said, I'm not a fan of fiat money either, except in times of crisis, such as war.

But why are you so eager to justify "burying money"? As mentioned, Jesus condemned a man for failing to invest, and burying his money instead, and he wasn't saying that because of "the Fed"! ;-) There must have been some other reason, right?


Working class people work more now than ever...

I'm sorry, but this statement is factually false, here in the West. Have you been living in a closet? People used to work 10 or 12 hours a day, six or seven days a week just to eat. Children used to work as well. For food -- not a new Wii. We are able to work less than ever before, if we'd choose to.

Reading such statements is like taking a person into a lavish banquet, and listening to them rant about how they're more starved than ever before, and how there's nothing to eat.

Have you no gratitude for the wonderful and amazing gifts your creator has given you? You clearly have no idea how fabulously wealthy you are compared to most people in the world today, and most who have ever lived. There are people who would hack off a body part to trade places with you, and the rest of us.

I say this, quite bluntly, to shame you.


... two incomes are often required to maintain a household in big cities.

Two incomes are "required" in many cases because people aren't comfortable living with less, and because we've bought into the idea both people should work. Other have divorced, so both former partners have to work to keep up two residences.

Once, one person stayed at home. You mention inflation: what happens when that person then goes into the work force? What happens to the value of labor when suddenly almost twice as many workers are available?

But things are pretty good, still.


The blame for that lies squarely with the Fed, banks, and investors...

Nope. It mostly comes from people who have bought into the idea they need the next new gadget, and a lot of expensive services.

I agree that the Fed creates inflation. And that's about 3% devaluation each year. That's bad, but not nearly as bad as the ridiculous (and much larger) taxes taken more directly out of your check -- and squandered. If you're mad at the Fed for sucking up 3% of your wealth, shouldn't you be 10 times as made for seeing another 30% of it destroyed pointlessly? (But I see no objections at all to the larger problem in your writings.)

And, as explained, investors create wealth. If you want to understand why the West is wealthy and the rest of the world is poor, THAT -- the wonderful ability to invest -- is huge part of that story.

So please put the blame where it belongs.


A quick clarification comment on the buried money and interest. The "magic" of the system is that money invested brings home friends with it, or that's the plan.

Please clarify. What are "friends" here?

(Bear Stearns Hedge fund much?)

Not sure what this means, in this context, or why hedge funds are allegedly evil in your eyes. A hedge fund is just a way of balancing risks. If you invest in stocks, for example, you might want to buy some bonds, because one goes up with the other goes down. If you invest in a home building company, you might also invest in a place which owns rental units (which makes money during a slowdown in building).

Large companies do this too; that's what "hedge funds" are.


So, an investor's profit from interest either kills the value of other people's money in small increments through inflation, or it directly takes that money from the people who are actually doing the work. It's that simple.

I'm sorry, but this statement isn't even wrong: it's incoherent. Investors don't make money from interest. Lenders make money from interest. Investors make money by receiving dividends (which are portions of profits) or by selling their part ownership of a company to someone else for a profit.

And, as I've explained already, investments don't "kill the value of other people's money" -- they actually generate wealth for all involved by creating real value, not just new paper bills (as the Fed does). You're confusing inflation with wealth production, which are exactly opposite concepts.

In the old days, a dollar bill represented one dollar in silver. Inflation happens when a government prints new bills and dilutes that value. If it prints twice as many, then each bill I hold will only represent half as much silver. Inflation devalues the notes which represent wealth -- it doesn't devalue the wealth itself.

In contrast, when my brother starts his hardware store, he starts by building a new building on what used to be a vacant lot. When he's done, the total value of that building is usually more than the value of the land plus lumber, steel, cement, wiring, and labor.

In that scenario, new value was created. No-one got poorer. Everyone got richer.

An economy works this way: I grow corn, you have trees. We trade, and Bob fashions the trees into tables and chairs (giving up his labor and time) and Camile fashions the corn into bread. We both trade with them too, paying for their labor. Now we all have cornbread, chairs and tables where before, I just had raw corn, you just had a vacant lot full of trees (and were hungry), and Bob and Camile had too much time on their hands and untapped skills, but no food or furniture.

Many people don't understand that in an economy, new wealth is created all the time. It isn't being stolen, it's being created out of the raw materials God gives us all -- our time, labor, intelligence, and the raw materials around us.


And, as a final aside: Where do you get your values? How did you decide, for example, that it was immoral to invest? Who taught you that?

Among my several sources for values, in no particular order, are my philosophical assumptions, the bible, and my observations about what works. When I read the bible, I see that God is very happy with investing (not usury, but investing) and very happy with people who create businesses and create wealth to share -- provided they have their other values straight also.

You seem to echo some of those values, but oppose the bible's teachings on others. (Some comes across as semi-Marxism.) So you have an odd mix, there, and I find it curious and wonder where you're getting this stuff from, what your influences are.

Posted by: Tim (Random Observations) on December 11, 2007 11:12 PM

Contact RK himself:

link

Posted by: Joecool on February 7, 2008 03:10 PM

I can see why people feel the way they do but sucess is the ultimate proof. I first read Rich Dad Poor Dad less than 3 years ago, I have since taken some classes from the company and currently own one 4 million dollar commercial property as well as 6 single family homes. I am not pulling $ from them yet, but I am clearly on my way.

The book, while clearly not fitting our accounting system (as he clearly says) does give very useful definitions and new ways of looking at money and investing that have helped me immensely. Most of the critisism I see here are clearly written by people who are not too familiar with the material.

Kiyosaki 1) is clearly not against home ownership, 2) is correct about the advantages of corporations (I have three of my own now), 3) does not recommend insider trading (that paragraph is so misunderstood that I doubt the poster even read it!), 4) is correct about the abundance of real estate deals (as for the math, notice the word "potential" in the paragraph, of course they dont all work out!!), and 5) is the furthest thing from a left winger!! (See his opinions on tax structure etc.)

Using Reed as your source for all your opinions is obviously faulty, even if none of us are jealous of Robert, Mr. Reed certainly is.

Posted by: Laz on July 28, 2008 04:30 PM

I got ripped off with the Kiyosaki training program. I paid over $4500 upfront on my credit card. I received two over the phone training sessions before an emergency arose with my family, and I could not continue the sessions, which I immediaely informed them about. When I contacted them many months later, I asked for a partial refund because, I certainly did not get anywhere close to $4500 worth of services.

They did indicate that they would give me more sessions, but at the time, I was in a desperate situation and was living through an enormous amount of problems, including losing my home, my business, and facing living on the streets. I told them, I could not do the lessons, that I was losing everything, and that I just needed a refund, something, anything, $1000...$500; please just give me something, so I could get a place to live. I begged them for some type of refund, I was desperate. I told them, that I did not receive the services and I deserved to have some of my $4500 plus back. Over $4500. come on, for two 1 hour phone calls. Give me a break. How can you justify keeping my money. They did!

If they had given me my money back, I probably would have turned around like a fool when I was able and gave it right back to them. But today, I am no longer a fool and I would not give them a dime. I think the man stinks. He doesn't care about people, he only cares about money. He is full of crap, and I bet that most people who have given him money, have not made anything back.

When I signed up for the course... he talked about real estate, and was really negative on the subject of stocks. Well, guess what, real estate stunk for a minute, and he's now selling the concept of stocks. Flow with the wind you pigeon, dropping your crap all over the place as you go.

He has his paid monkeys prancing around stage, but for the average person forking out the dough, I wonder what their actual return is.

If you are one of his flunkies, you will probably post and yell and scream at this, while most of his victims will likely not say anything. Rich Dad.. Poor Dad... Well Mr. Kiyosaki, I don't care how damn many daddies you have, you should have been aborted.

Posted by: JVon on August 24, 2009 11:26 PM

I found this site looking for some information on Robert's legitimacy before I bought his book. Based on my research I would never pay for one of his seminars. Anyway, not sure about Robert, but this site's observation about not getting a tax break for letting your corporation buy the watch is 100% incorrect. If your corporation buys the watch as an expense and you write off that expense as the owner of the corporation then you would absolutely get a tax break. If, on the other hand, you buy it from your paycheck from the corporation then their is no tax break. Just my 2 cents.....

Posted by: Chuck on October 13, 2009 03:23 PM

Hi,

Interesting comments. I've had the experience of reading and owning a few of Kiyosakis books, and actually even attended one of his "free" seminars. Against my better judgement, I ended up being upsold from the free seminar to the 3 day seminar which was $500. I found Kiyosakis books intriguing, albeit short on details (as most have) Certainly, he gets you thinking about money, and this probably isn't a bad thing. I remember reading reed's comments and evaluation of Kiyosakis work and thinking that while some of his arguments certainly had merit, I personally didn't have such strong feelings about it. At the end of the day, Kiyosaki believes in the product he's selling -> himself! And he has done quite well with it. My concern really only surfaced after attending his 3 day seminar. The following is a recount of my experience. Draw from it what conclusions you will...

The first day and a half of the seminar was spent teaching you how to obtain credit, and fast! People criticize him for lack of specifics: let me tell you this much, there was no lack of specifics on how to get credit, and fast!! Specific cards, phone numbers, and a SCRIPT provided of how to speak to the credit card company to get approved, and get more credit! This was followed by a long shpeel detailing how to transfer balances between credit cards to avoid accruing interest. I was a bit puzzled as to why the credit issue was being hammered home, but I innocently accepted it under the understanding that "ok, they probably just want to tell people how to get access to credit for homes and investments"

Come day two of the seminar; and it became painfully clear. The seminars are a product in and of themselves! They were offering additional courses, which promised to teach you skills related to foreclosure investing, land development, rental properties, etc. etc. Interestingly, I thought that was what my $500 dollars was supposed to get me, but you live and learn I suppose. What really surprised me was the COST of the additional seminars! In the thousands! and then as the ultimate upsell, there was the costa rica package! They were selling land / hotels / apartments or something to that effect in costa rica for the amazingly low price of something like 90,000 dollars (its been a few years, so my memory is a bit hazy). I was flabbergasted! As I sat in that conference room with my girlfriend, we surveyed the audience. I would estimate that roughly between 10-30% were takers of some additional courses, paid for by... you guessed it, their newly approved credit card or higher credit limit obtained yesterday! As it has oft been said (and humorously misspoken by George Bush) fool me once, shame on you, fool me twice shame on me! So I didnt bother attending the 3rd day of classes and decided to enjoy walking around new york instead.

I apologize for the long post - I just wanted to illustrate my experience. In summary, his books are interesting, but buyer beware (as with anything). He is marketing himself and his company, and this is how he makes his money -> telling others how to be rich is how he has accumulated wealth. I admire his marketing savvy, and his business accumen, since he's clearly onto something (or else these blogs and heated debates wouldnt exist) What bugged me was the fact that clearly, some of these people could NOT afford these courses, but were being talked into it by a *very* polished presenter who clearly knew how to sell his product! I saw arguments erupting between couples in the hallway, young adults pressuring their parents to pay for these courses "come on dad it for my future!" and all sorts of concerning things. What bothered me most was that this clearly was not an affluent class of people, and why should it be? Nobody worth anything much would come to a $500 3 day get rich seminar, since they'd be doing whatever it was that made them money instead :) I wrote it off as an interesting learning experience ie -> dont be a sucker again.

In closing, I am not aiming to offend anyone or seem like I am coming down on Kiyosaki. I'll be the first to say I admire his success, his savvy, and his skill set. His methods, however, are a different story. Selling books is one thing, but convincing people who look like they have difficulty making ends meet to buy course packages in the tens of thousands of dollars is wrong, IMO. But its a capitalist society and a democracy, so to each their own :) I paid the $500 not expecting much, and certainly that was the end result.

Best of luck to everyone :)
jaz

Posted by: jaz on December 5, 2009 05:02 PM

I read all the post tonight and then went to one of the links on the Quickstar stuff. I bought and read RDPD, The Cash Flow Quadrant, and The Conspiracy. And listened to the 10 Things Before You Quit Your Job or something like that. And not to brag but to post some credibility, I have a mechanical engineering degree with 10 yrs experience, six sigma, project management, solidworks, cosmosworks designer, finance, business planning, marketing, economics, accounting, management and entrepreneurial certifications. I also have started a consulting practice 3 years ago and am planning to start a software company within a year from now. I also grew up in foster homes so I know what its like to be poor and I also conducted business with the so called head honchos of major corporations and universities. The point is that with my educational background of mathematical, financial, and business skills along with my personal life background of moving from the bottom of maslows heirarchy (maybe I spelled heirarchy wrong so don't come down on me for this as I realized that all those spelling bee's didn't help me as much as I thought they would once I got older and into the real world) of needs to the top of the pyramid, one would think that I might have gained some wisdom along the way and have some credibility that Joe is seeking so dearly.

And this is my critique...take it or leave it.

Mr. Kiosaki left me with a major important concept in each of his materials I went through. In RDPD, I learned how to view a home as a liability vs an asset from the perspective of cash flow. In accounting there is something called an income statement (revenues and expenses), a balance sheet (assets and liabilities), and a cash flow statement (cash in-flows and out-flows). In learning the streets in my youth and trying to survive I have always learned to make a buck stretch. I also used to buy bubble gums for a nickel a piece and sell them for a quarter, buy video games for 3 bucks and sell them for 10 to 20 bucks, do other people's punish work and tape 10 pens at an angle so that I can be more efficient, cut grass, work at grocery stores in my teens, etc. Once I got to college, my mindset shifted to get a job and work for someone else. When I got out, I wondered what am I supposed to do with my newfound engineering knowledge as they just don't teach you all that in school. I figured that my job was to help a company make profit...after all that would be the only way for them to pay me more. I quickly learned that by creating inventions, making companies more streamlined, managing operations, there just was a cap to my income potential despite making companies to achieve several million dollars per year and other things. 3 years ago I read RDPD and despite all the training I received, I never though about passive income so clearly. I always knew it intuitively but it never was laid out so clearly to me as with the house example and assets and liabilities. I have transformed over the years my mindset to move from poor as like what I grew up to a rich mindset whcih is why I make over 100k per year. You might be saying...well thats not rich but it is rich for someone with my background and only 10% of American population makes over this. But rich is relative and I have to say that life is much better and more opportunities are provided as long as we keep our expenses within reason and have ways to generate income through various vehicles such as saving for a year nest egg, paying down bad debts with high interest rates, investing in real estate, businesses, etc. And the second point he made was that wealth is determined by how long you are able to survive on the income you have if you no longer had a job. This is another very important concept. One might have a huge Net Worth on their income statement but not be able to survive very long if they lost their job. So, the 3 things to take away from RDPD is the mind shift, wealth determination, and generating passive income keeping in mind that a house you live in does not create positive cash flow. I am sure Kiosaki knows the fine details of these relationships especially in being that he has gotten extermely wealthy and he tries to keep it simple. I could depict his house example apart and say that it depends on whether the house is actually an asset or a liability due to the balance owed and its current appraised price. Then I could go further and say that it really depends on what you get when you sell it. And I could get deeper than that but really what he is saying is that which is related to the cash flow statement as it not being a positive in-flow of cash and thus an outflow through mortgage, property taxes, etc.

To move onto the cash flow quadrant, I learned more of a transformation mindset (keep in mind that although I achieved a certain level of success and mindshift I am always needing to improve and grow and thus will never know it all and so I continue to look for ways to improve my knowledge and understanding so that I can achieve financial freedom...never having to work again but knowing that my bills are paid and my wife and children and myself are well taken care of financially). In addition I learned that I moved from the E to an S and I invest but I invest in S and my software company I need to move to a B and in order to do that successfully that I need to learn the language and skills of the B and I quadrants. I also need to learn to carefully select a team of people to run my future company and I need to let go of doing everything myself. It teaches the importance of teamwork.

On to the 10 Things Before You Quit Your Job. I teaches the B-I triangle which discusses 10 main things to think about. The most important ones that I remember is the 4 types of thinkers and the 5 jobs of the BI triangle to include...product, legal, systems, communication, and cash flow. He really helps to hone in on the main things one needs to keep in mind to be successful as a BI (Business and Investor) and includes Teamwork, Mission, and Something else that I can't remember on each side of the triangle. Its really good stuff.

Now onto the Conspiracy book. He teaches about inflation and how the US dollar being fiat money and explains the history of all of this. He also talks about Big Cartels controlling everything and if you read up on UCC1 and recapturing your strawman you will clearly understand how this whole system works. And then he discusses about how to beat the system. This is all really good information to know too.

So, with all that said...and having the ability to discern the facts...Mr. Kiosaki is very knowledgeable about many things and gives the financial world a spin from an entrepreneurial mindset. He is a great salesman and marketing guru which is why he is successful in his books and games. I cannot say about the credibility of his stories that he puts all of this financial and business knowledge mixed with. It does seem rather fishy to me too. I have cross checked the years he says in one book to his other books and his different businesses such as the wallet one and his dates and stories line up. I read things from that Reed guy that they are all lies and this wouldn't surprise me but Reed does appear to be using this Kevin Trudeau type tactic to sell his own stuff. Trudeau is a marketing whiz too and he knows how to get people to buy. By using the idea of what someone doesn't want you to know, he draws a lot of attention. And so, because Kiosaki has such widespread controversy, Reed taps into that with his info and then promotes his own products. What a genius too he is and people fall for it. Now Kiosaki maybe a pack of lies about his rich dad and all that but in discerning through all of that I did learn a couple handful of good concepts from his materials and I know those concepts work logically from having enough experiences and seeing where they all apply. He does however make some cliche statements to try to get his point across and cause this mindshift and people are taking it literally because they are trying to disect his information so they can find the key so badly because they want that 3 million mansion and go from rags to riches that they are criticizing his stuff rather than seeing it for what it is. I think Kiosaki understands pyschology very well and is using the power of words to get people over that hump and into the mindset of riches rather than poorness. I could have taken the path to disect this choice of wording and I knew many people would do what I am reading in these blogs because they want that magic potion and he clearly states that he doesn't give the details but I promiss you that he is providing a very important part of the wealth game. As one moves closer to the side of abundance they will be able to see what he is trying to teach more clearly and ignore those other things. Even if he did make his wealth on his books, don't you think that he did something that you so desperately want to figure out so you can have his lifestyle. If all his rich dad stories was a lie, I still know he has qualities and abilities and connections with people, places, and things to make things happen and that is not sheer luck. I don't think he is trying to dupe anyone and if you read the conspiracy book I am surprised they let him get away with putting that information out there on the market because most people don't know how all that works. I am surprised someone hasn't assasanated him for that book. He is really on the common folks side I believe but at the same time he is also looking out for himself as he should. And keep in mind that he himself is not perfect...we all make mistakes in life. The key is to learn from them. If he promotes MLM because he is being greedy at the time or knows something we don't know then he is human. Personally I ran the numbers of MLM and after the 32 sublevel, which doesn't take long due to exponential growth, its darn near impossible for people to make good income. Its the people at the top that make the moula and they need the people at the bottom to support their paycheck which is why they help them so desperately. But it is good sales experience and breaking through your fears of selling and rejection. Lastly, Kiosaki teaches only a few main concepts in his books so that he has more information to write in future books so he makes more money and fills the rest with good story. It keeps the reader interested and drives home the points over and over again. This isn't necessarily a bad thing although I would like more concepts in maybe a few books vs. 18...but then again he is a good salesman, businessman, and marketer and knows what he is doing so he makes more money...and I have no choice but to spend the 300 bucks to acquire all of these concepts over the course of his materials. I simply choose to realize that his stories may be there to better educate me on the concepts that he is trying to drive home and I have the discernment of knowing what to ignore. For those that don't have the discernment, I can clearly see where you are coming from. If he says don't go to school, get a job, and work for someone else...he doesn't mean don't go to school. He means educate yourself through school, reading books, experience, whatever teaches you and learn how to not work so hard for money but rather have money work for you which will provide synergy in your financial life. Just try to get the main concepts because they are very important and useful to getting out of the rat race. I am not totally there but I believe his knowledge will help me to get there faster. I know he says he is not a financial whiz but his previous partner was a CPA and he obviously learned alot along his journey because he does know what he is talking about. In his cash flow quadrant written some time in early 2000 he predicted the market crash to be around 2010 which we are currently experiencing. He isn't pyschic...he just really knows what is going on in the financial realm of government, business, and investing. You can validate my credentials at www.gtcandassociates.com should you want to verify me should anyone have any doubts as that is surely a must. So long and good luck to everyone on their journey to financial independance.

Posted by: Shawn Guillory on January 30, 2010 03:24 AM

To Ryan...I see what you are saying. RK uses phrases like this from a marketing standpoint but when you read his books he clearly explains the importance of education. His point is that he is explaining the absence of the financial education in the system and how one needs to add that to their toolbox of knowledge. You can keep disecting it to find the negative side of things if you choose or you can have the knowledge to GET what he is trying to convey.

To Joecool...RK's system clearly works for himself and works for anyone. An accurate concept always works. The problem is really understanding the concept for most. If you get the concept, then you can apply it to anything without the need for a cookbook spoonfed situation. In acuality, those that profess that if you do exactly what they did then you will be RICH or the ones to watch out for. Everyone's life and financial means is different so there are no cookbook methods. RK's concepts are reality and they are simple. Increase assets that generate cash flow to cover your expenses rather than liabilities that deplete your cashflow. Transform your E mindset to an S mindset then to a B mindset and then to an I mindset. Move from the left side to the right side of the quadrant and you will be free from the ratrace. You will not have to be a slave for money to survive and you will rise in power to enjoy doing the things you want to do when you want to do them because you will have the money to do so. The trick is in the assets vs. liabilities. There are several different ways one can do that and so Kiyosaki provides ideas into some of the ways but he is only one person and does not know all the ways to accomplish that but to use examples that he has done such as 1400 apartment units, a few oil companies, gold and silver, franchising his company, and selling his books and games. He lays out what he has done. If anyone has trouble getting that, I think it is because they are angry with their inability to get out of the rat race and want the answer to be delivered to them verbatim. I know I sure would like that, but that is an impossibility. So, all we can do is remember the key concepts and force ourselves to shift our mindset into being creative in trying to use the resources we have to get to what we want.

Thats all for me on this blog. Good luck to you both.

Posted by: Shawn Guillory on February 2, 2010 09:32 PM

>> Corporations: Reed relates an incident from Kiyosaki's "Corporation" course, where he brags about the tax advantages of having one of his corporations buy him a $4,000 Rolex watch instead of buying himself. Reed points out that there's no difference here: You pay the same taxes on $4,000 worth of "Rolex" compensation from a company as you would on $4,000 cash. Again, this is a basic even I understand.


HA HA I love it. "This is a basic even I understand." ??? You really truly don't! Do you undertand before tax and after tax dollars?

I'm stunned that such a basic book has people so confused. You need a paradox shift quickly! Everyone posting here has read the book for one reason.... they know that what they have been doing dosen't work, and that changing your financial picture is important. I have changed my way of thinking, and for that I am truly greatful. I will see some of you at the top for a glass of champange!! Cheers!

Posted by: Eric on March 2, 2010 11:50 PM

Well, considering I work with people who enjoy solving these types of problems, and that items which are personal for you on I, including yachts and Ferrari's can be a business expense as long as there is the correct intent under the right circumstance.

Why do you want to be like the rest of the people in this world working so hard anyways? I'm happy for the wonderful life you seem to be living, but some people enjoy improving their situation and others around them.

Posted by: Eric on March 7, 2010 06:22 PM

Add your two cents...

The comment rules will apply. Please post only once.

















« Queering the Schools | Front Page | Page Two | Just Plain Ol' Hill »