We just discussed how financial literacy and financial freedom is now a hot sub-genre for self-help. Of America's personal finance gurus, there are two voices that have arisen: Dave Ramsey and Robert Kiyosaki. In this article, we will discuss Robert Kiyosaki's principles in a closer manner.
This article points out the inconsistencies in Robert Kiyosaki's teachings. A good number of people have also pointed out that he has never disclosed facts about his assets. While people who "walk the talk" are far more credible than those who say one thing and do another, it may be more profitable for us to just take the teachings as they are and weigh whether they are good to integrate into our own financial paradigms or not.
The Good: One thing I got from reading Rich Dad, Poor Dad was the inspiration and the realization that working as an employee may never get me far in life. In fact, it may never get me anywhere near my dreams. Another big thing that I got, reading the book, was how I could transition to my dreams by building passive income, even as I work as an employee. It is a concept that 37 Signals, makers of Basecamp, also echoed in their book, Rework. If you want to get out of the Rat Race, work on your dream projects on the side.
I loved that Rich Dad, Poor Dad sparked in me the idea that I could get rich, if I play my cards right: Work on getting my passive income to a place where it can sustain me and allow me to quit my job. I also like the emphasis on acquiring real estate as a way to graduate from the Rat Race. Real estate could become a retiree's cash cow. For more good points on Robert Kiyosaki's teachings, here is an excellent article by Lazy Man and Money:
Three Things that I Learned From the “Worst” Personal Finance Book
The Bad: It's scary how Kiyosaki endorsed MLM's (Multi Level Marketing) as a way of building passive income. Although some of my very persistent friends have actually gotten financially free thanks to MLM businesses, you have to admit that MLM is NOT for everybody. Also, getting into the real estate business, especially Kiyosaki's advice on flipping real estate deals through mere paper deals and without even fully paying on the properties yet, is a very dangerous piece of advice. While it could work for savvy salesmen or the hustler types, it will not work for the cautious, reticent types. Also, in the US' current economy, most Americans may not be able to benefit from this advice. A shrewd few may be able to leverage this, but this is not for everybody.
Takeaways: Being in the Philippines, I can see two things I would be very able to use from Kiyosaki's teachings: One is to build my passive income portfolio, and the other is that I'm starting to think about the real estate advice, only on a smaller scale. I realized that there are key areas where having a dormitory or rental business would be great for passive income. I'm thinking about investing in a dormitory or apartment complex in the future. One in a school and education hub, and another in a vacation hub. These two areas are sure to have business coming in on a constant basis.
On the whole, I love the energy and the hype that Robert Kiyosaki's Rich Dad, Poor Dad gives its reader. Just take things with a grain of salt, make sure that you apply the principles in a grounded, practical, actionable way, and you're all set!
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