Robert Toru Kiyosaki is an American author, motivational speaker, investor, businessman, and an advocate for financial literacy. He is best known for his Rich Dad Poor Dad book series, which promote financial education and encourage people to gain financial freedom through self-help approaches.
In fact, his teaching about money and financially literacy have increased in popularity, especially among younger people who apparently are more concern about their financial future than the older generation. We can see that Mr Kiyosaki’s board game, Cash Flow 101 is being played by community groups, including the Mensa groups.
In Mr Kiyosaki’s books, he mentioned the story about his rich dad and poor dad. The poor dad is his real father, a Japanese American who was one time the superintendent of education department in the state of Hawaii in US. The rich dad was his best friend, Mike’s father. The man who owned a lot of lands in Hawaii, and was the richest man in Hawaii. Apparently, Mr Kiyosaki disagreed with the poor dad in terms of financial management. He described his own father’s view about money as obsolete, industrial age ideas. The old idea was about gaining financial security through employment, benefits or retirement pensions. He compared that idea with the teaching of his rich dad. According to Mr Kiyosaki, his rich dad taught him about becoming business owner and investor, and advise him against becoming employee for life. Being a business owner in his term means people who form corporations rather than being self employed. he advocates mindset change as the first step to financial freedom. The ideas of the two men form the core discussion points for his deliberations in series of best selling books he has produced.
Perhaps the best known teaching in the Robert Kiyosaki book series is the “Cash Flow Quadrants”. He divided the money activities of the people into four separate quadrants.
The groups on the left side of the quadrants are:
- Employees – people who are having permanent jobs and receive monthly paychecks, e.g. factory workers, engineers, teachers.
- Self-employed – people who rely on their own skills for their businesses, e.g. doctor, lawyers, consultants.
The people of the right side are:
- Business owners – people who own businesses and have other people running for them, e.g. owners of corporations.
- Investors – the capitalists, people who invest their money on other people’s businesses, real estates, stocks and etc.
He suggested that the people on the left side of the quadrants to consider moving to the right side to avoid being “brutalized” in the new information age. In order to do that, these people will need to be psychologically and habitually prepared for the changes. They need financially education in order to make the move successfully. Those were the main essence that he tried to teach in his books and the Cash Flow board games. He gave very practical advice about talking “baby steps” in making the change. He spoken out against people who “hide under the bed” and do nothing when opportunities arise. He also pointed out critical weakness in people who try to be rich but end up being “cheap”, people who try to “keep up with the Joneses”, and people who are “skeptics” or “gamblers”. With detail descriptions about the physiology of different groups of people, Mr Kiyosaki was able to drive home the key message about physiological and emotional preparations to “be rich” rather than to “act rich”. He believes that through mindset changes, one will eventually find his or her own paths to financial freedom.
Although Mr Kiyosaki’s rich dad teaching has gained acceptance all over the English speaking world, his teaching also created controversies and invited criticisms. One of the controversial points he made was that “the school teaches people habits to be poor”. In his argument, he used the examples of rich personalities like Bill Gate, Michael Dell, and Steve Jobs who were school drop-out. His arguments was echoed by other self-made financial experts, such as Marco Robinson. However, the argument may encourage young people to use it as an excuse to drop out of school. Having said that, the argument has its positive effect in challenging the rigid traditional education systems. Our education urgently need to be changed to meet the new information age learning requirements.
Perhaps the most vocal critic against Mr Kiyosaki’s teaching is John T. Reeds. Mr Reeds is another real estate investor and book author that can be considered as the counterpart of Mr Kiyosaki. Mr Reeds have the same knowledge about real estate investment as Mr Kiyosaki, hence he knew how to validate Mr Kiyosaki’s teaching. Obviously, Mr Reeds have doubts over Mr Kiyosaki’s stories about his rich dad, the investment and his experience as an investor. He pointed out that Mr Kiyosaki was more of a salesman and motivational speaker rather than a financial expert. He thought that Mr Kiyosaki earned his wealth through book sales and perhaps multilevel marketing rather than investments.
Perhaps the most controversial of all, was the allegation that Mr Kiyosaki’s rich dad was not real. Mr Kiyosaki has never reveal the identity if his rich dad or his best friend, Mike. Reported, when Mr Kiyosaki was continuously being queried about his rich dad, his response was “Is Harry Potter real? Why don’t you let Rich Dad be a myth, like Harry Potter?”
Nonetheless, in my opinion, regardless of whether he has told the truth or has created fictional stories about his investments and his rich dad, the books still have very high educational value. He put his rich dad’s (or maybe was his own) teaching into philosophical mode rather than laid it as step-by-step guides. In this way, there is more room for imagination. Readers have the chance to create and expand their own ideas based on the foundations suggested by Mr Kiyosaki. I think that is the main feature that makes his books to become long lasting best sellers even after the first book has been published more than 10 years ago.
Robert Kiyosaki used the oriental approach to portrait his thought. For example, the principle of “Yin” and “Yang” to contrast the differences between his poor dad to his rich dad. He used the Chinese word for “risk” (危机) to suggest that in every crisis, there is an opportunity. He did mentioned about learning from failures, hence if you have not succeeded after learning from him, it would mean that you have more to learn, and you can’t blame him for your failure. He smartly put himself in a position that he would not be wrong regardless of the outcomes as we apply his teaching.
If rich dad is actually a fictional character that Mr Kiyosaki made up, then rich dad represents an “imaginary mentor” that comprises the collective wisdoms that Mr Kiyosaki has learned throughout his life. Some of them are old common sense that we tend to ignore most of the time. Even if the character is not real, the wisdom presented were interesting enough for strike our minds and break us free from old thinking. It is up to us to validate Mr Kiyosaki’s teaching and make our own decision. After all, he did mentioned that he operated in grey area, where there is no right or wrong.
Even if you think that all his teaching are untrue, one thing we could still learn from Mr Kiyosaki is on how to tell an interesting story that last for a long time.
Board game for financial literacy: