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  • Writer's pictureIshfaaq Peerally

The Truth about Robert Kiyosaki 🤑

The markets $SPX500 open a little higher today, same for our portfolio with big gains from $POLY.L and $SWKS . However, $GME is having another bad day and taking away our gains. The stock is down by more than 13% since the beginning of the year. With lower $OIL prices, our oil stocks $CXO and $PE struggle as well.

I'm sure you have read Rich Dad Poor Dad by Robert Kiyosaki (If you haven't, you should). But how good are his investing advices? Especially when it comes to stock investing.

The Truth about Robert Kiyosaki 🤑

A few years ago, I was reading Rich Dad Poor Dad of Robert Kiyosaki in a train and it changed my life. I made the decision to be a full time entrepreneur and not to continue a career in physics. Recently, I read Cashflow Quadrant, the sequel of Rich Dad Poor Dad and my opinion on Robert Kiyosaki changed.

There's so many things wrong from his teachings especially when it comes to stock investing. First of all, he blames Warren Buffett $BRK.B for the 2008 financial crisis since his firm Moody's $MCO was the one rating the subprime bonds as prime bonds. For someone giving advices about investing, he should know that the world's greatest investor doesn't worry about the day to day operations of his companies.

He is always polarizing the rich vs the poor. There is a conspiracy of the rich to keep poor people poor. It is true that the school system, which was designed by rich industrialists to teach factory workers, doesn't work anymore. But that's because the system is too big and complex and there are so many bureaucrats involved to make changes. There is no conspiracy of the rich to keep anyone poor.

He says that savers are losers. I agree with that. But he equates investing in bonds as saving, which is completely wrong. A bond is a value producing asset with intrinsic value. There are people who have beaten the market by investing mostly in bonds. Saving is keeping your money in cash, which gets eaten up by inflation but with bonds, you can be paid an interest. Instead of saving(or invest in bonds), you should buy gold $GOLD and Bitcoin $BTC because by 2014, gold and Bitcoin will replace the US Dollar. Keep Dreaming!

Robert Kiyosaki sees the stock market as a ponzi scheme and says that you should not invest in a 401K or any other pension funds. It it true that you should be careful with fees, commissions and taxes but the stock market is a winning game and the most appropriate passive income generator for most people. Another bad stock market investing advice is to cut your losses when your stocks are going down. If you believe in a company and its fundamentals, you should be buying more when it goes down. Even in his game Cashflow, he makes the stock market looks like gambling, which, it is not.

The alternative to stock investing and bond investing is real estate and buying a franchise. This may work for some people but not for most. For most people, stock investing is still better. You can invest in stocks and be an employee of someone else but it will be hard to be employed somewhere and run a franchise. There is nothing wrong about being an employee. Not everybody should be entrepreneurs and money is not everything in life. I believe that everybody should aim to reach a level of financial stability but there is no need to aim for big wealth. There are risks involved.

Rich Dad Poor Dad is a great book that everybody should read. Even children can read this book to learn about assets and liabilities. This is an important book to read for anyone but don't try to get investment advices from this book or any of Robert Kiyosaki's books.

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