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About Robert Kiyosaki
Posted By Jim On 05/30/2013 @ 7:17 am In Personal Finance | 6 Comments
Say the name Robert Kiyosaki and you can generate some pretty strong feelings from people. I can only think of one other person on the Top Money Guru poll  that does that (maybe two). Most people know him from the Rich Dad Poor Dad book (and subsequent books) and know him as a fairly active real estate investor. Some have pointed out some inaccuracies and inconsistencies in his book, his various bankruptcies, and even that he may have made up his Rich Dad (or his Poor Dad, it really depends on who you talk to).
That said, the main idea from the original Rich Dad Poor Dad is a powerful one. The idea is that you should try to own assets that generate passive income, rather than assets that cost you money. He introduces the idea of good debt versus bad debt. Good debt is when you take on debt to buy something that appreciates. A mortgage is good debt. Bad debt is when you take on debt to buy something that depreciates. A car loan is bad debt. There are wrinkles in this, as there is in any financial advice, but the basic idea is sound.
Another core idea in Kiyosaki’s book is the CASHFLOW Quadrant – which is a good way of thinking about income. There are four quadrants – ESBI – representing the four ways of generating income. E stands for employee, which means you generate income by working for someone else. S stands for Self-employed or small business owner, which means you run a business and are your own boss (though some would argue you’re the boss of your clients). B stands for business, which means you own the business and can generate income from it without physical involvement. Finally we have I, which is investor, which means you are investing your funds to receive a larger amount in the future. The actual letters aren’t important but understanding the various ways one can generate income is – it can help you craft a strategy for generating passive income.
Another complaint about Kiyosaki is that his books don’t contain concrete information. Thinking about debt as good and bad might be valuable in a holistic approach to personal finance but it’s not useful if you have a credit card charging you 20% interest and you don’t know how to pay it down. ESBI doesn’t matter if you’re working two retail jobs and can barely make ends meet.
Finally, Kiyosaki is seen as a “guru” much like a real estate guru with seminars and the like. You won’t see Jean Chatzky or Clark Howard throwing several thousand dollar seminars teaching people wealth and sometimes that turns people off.
What do you think about Robert Kiyosaki?
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 Top Money Guru poll: http://www.bargaineering.com/articles/1st-annual-personal-finance-expert-awards.html
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