Many people, including Christian financial advisor David Ramsey, recommend Robert Kiyosaki’s first book, entitled “Rich Dad Poor Dad.” However, along with many recommendations includes reservations concerning some of his teachings, especially those pertaining to debt.
Having read this book, this author disagrees with one concept that Kiyosaki teaches and that is in relationship to homeownership. He teaches that owning one’s own home is a liability and that the individual is better off renting. However, in direct contradiction to this teaching, he teaches that the individual will become wealthy by going into debt and investing in real estate, allowing the rents received from tenants to pay the mortgage, taxes, insurance and other expenses related to real estate. In addition, in most ideal situations, the purchased real estate is supposed to create positive cash flow for the investor.
How can people save money by not owning the place where they live while earning extra money by buying property for other people to live in? This contradiction should serve as a red flag to any reader and belief that he has any real financial wisdom should be skeptical at best. The real problems occur with some of his other financial advice, which falls into the category of illegal and dangerous.
Kiyosaki recommends ways to commit fraud on tax returns by deducting for vacation expenses and cost of health club membership. He also advises people to make friends with people who can give them inside information concerning companies with publicly traded stock: inside trading. He even advises that people employ a weasel clause scheme when making an offer to purchase real estate. The clause refers the offer contingent on the approval of the offer by his partner: a cat.
Some readers feel that all of his books utilize main financial platitudes based on old clichés and illustrated with undocumented or proven examples and stories. In fact, one of his books entitled “Rich Kid Poor Kid” states in very small print that he fictionalized some events in the book, although based upon true stories, for purposes of educational content and impact. It is interesting how fictionalized material can exist on the nonfiction best sellers list.
One would think that it is bad enough that Kiyosaki makes a ridiculous amount of money selling books that, not only have very little useful information, of which none appears original. However, not satisfied with the money made off of this endeavor, he is marketing and presenting conferences that are nothing better than ill-advised seminars on how to go into debt that most people are capable of handling.
One of his recommendations is for the individual or family to secure a $100 thousand line of credit. The debt is supposed to propel the party into realms of unheard of profits, easily justifying going into debt. The problem is that very few people have the financial education and experience necessary to accomplish this task.
The first conference offered has a cost of $500. This seems like a steep price to pay for information that most diligent people can find with proper research. However, the only purpose of this conference is to present an even larger seminar with a price ranging from $12,000 to $45,000. It should not take the individual who has less than average intelligence much effort to figure out who the person is that is going to obtain the most benefit of these outrageously priced conferences and seminars.
Kiyosaki is very secretive concerning his financial portfolio and when he does talk about his financial worth, he is never consistent. He makes many claims concerning buying real estate for very little and selling the same real estate in a short period for a substantially higher price. However, public records fail to validate his claims, making his word, whether written or spoken in an interview, worthless. This author does not even recommend picking up and reading any of his books, even if the price is free.