Rich Dad, Poor Dad: My Thoughts on Robert Kiyosaki

For the better part of ten years, Robert Kiyosaki has been at the top of the "wealth creation" industry. Starting with the publication of his book Rich Dad, Poor Dad, he and his associates have built themselves a terrific wealth-creation machine which rakes in millions of dollars every year. Some, however, have accused the man of being a scam, a glorified con-artist who has built a fortune off the backs of gullible individuals. A few of you readers have asked for my take on his books and what he does.

I first came into contact with Kiyosaki's writings back around 2002 while looking for reading material in an airport bookstore. There I had come across his book Retire Young, Retire Rich. Although I personally had no need for such a book, I found the implications of the title to be intriguing and decided that it might make for decent reading while traveling cross-country.

There are aspects of what Kiyosaki does that I quite like and there are aspects which I find a bit distasteful.

The primary focus of Kiyosaki's work is to change the way people look at money. He does this in a way that is written in language that is accessible to just about anyone. More to the point, he helps foster a belief in people that wealth creation is possible regardless of one's station in life if one is simply willing to evaluate the way in which one views the world. As anyone whom regularly reads this blog will readily point out, I believe that this is the single most important step in the process. It's a small step, mind you, and it won't take you far if you don't follow up with additional steps, but the journey of a thousand miles must begin with one step.

I also believe that the ways in which Kiyosaki gets his readers to think about their finances is important. When you have a little of something, like money, you don't have to think about it much. You can leave it in a bank account when you're not using it and pretty much live from paycheck to paycheck. If you want to be wealthy, however, you absolutely must learn to organize your money. You have to keep track of how you spend it, where you put it, and how those places you put it are using it. Kiyosaki is right on the money when he speaks about the need for relying on other people to manage your affairs. While you certainly have to do it all yourself in the very beginning, after a certain point it'll become too much and if you're not careful you will fail. You only have 24 hours in a day. If you're going to devote most of it to learning about and managing your money resources something is going to give. You will fall somewhere else in your life. Hard. Effective individuals know how to delegate certain roles to others so that they can focus their time on offering their primary skill set to others still.

I admit to believing that Kiyosaki's story about having a "Rich Dad" is a fable of sorts not rooted anywhere in reality. While I find him to be extremely bitter, overcritical, and small minded in the broad majority of what he writes, John T. Reed raises valid issues with certain major inconsistencies in Kiyosaki's story. I think Reed's analysis is worth reading, albeit with a heavy dosage of salt. He makes mountains over little matters that he nitpicks and he rightfully comes across as unnecessarily petty and mean. He acts as though he's proven Kiyosaki to be a scam and a con-artist when he's done nothing of the sort.

The fact is that whether "Rich Dad" was real is irrelevant. The lessons are valid. "Rich Dad" serves a two-fold purpose. First, he provides a useful literary device for making information accessible. Second, and more to the point, he makes for a wonderful marketing tool.

My primary complaint about Kiyosaki is that he tells his readers that they can make money in real estate while he minimizes mentioning the fact that he himself makes his money in marketing. I would not say that he avoids this entirely; he does point out in one of his books that he is a "bestselling" author and not necessarily a "best writing" one. He mentions his extensive background in sales and that sales knowledge is essential if you want to be rich. You will note that he does not spend much time actually teaching sales techniques to you through his books, though. This is primarily because he cannot risk his readers figuring out that these are the very techniques he's using on them!

The best information Kiyosaki has to offer is gathered by actually studying the way he presents his materials. The psychology he utilizes. The packaging. The endearing charm. The way he creates needs in your own mind and then offers to sell you solutions. Most of the books aren't about teaching you about real estate or financial planning but rather about establishing the value of himself and his products in your mind. He want to hook you in to sell you more stuff. There is nothing wrong with that; it is, in fact, how you get rich. Study it.

It's that technique which enables him to sell $10k seminars and offer consultations for which he charges thousands upon thousands of dollars. When value is effectively and firmly established in someone's mind, they will pay it. A good salesman will convince a person that it's worth taking certain risks to pay such amounts under the guise that, "The price tag is high but it confirms your commitment!"

I don't do seminars or consultations. I don't particularly enjoy speaking to crowds of people and 99.9% of people out there couldn't pay me enough to make it worth my time to do a personal consultation. I don't even put that on the table. With that said, establish enough value about yourself in the minds of other people and they'll be willing to pay exorbitant amounts of money to learn from you. That's the value of a proper education in marketing principles.

I do find it distasteful, however, when individuals take advantage of desperate people whom are trying to find their way through financial ruts. If you want to help such people, help them for free or for a portion of their profits down the road. If you're going to charge huge chunks of money for your services, make sure that your clientèle has the sort of disposable income to afford such a thing. I don't get the sense that Kiyosaki and the people around him operate according to that particular code of ethics. It's for this reason that my recommendation of Kiyosaki's works is mild at best.

Go to the library and read his books for free. Study the methods he uses rather than the methods he suggests. If you don't have the money, don't get sucked into paying $10k - $45k for seminars on the premise that it's an investment and that you'll reap what you sow tenfold. You won't. You'll gather useful information in such seminars, to be sure, but it's information you could have gotten at a far lower cost. Meanwhile, you will have blown money you could have actually put towards real investments with real returns. If you are going to take the leap of faith and plop down that sort of money to hear someone talk at you for several hours, is it really that much further of a leap to jump in and do the things you already know he is going to tell you to do?