To this day, I still don’t understand Robert Kiyosaki. He’s the international best selling author who penned, Rich Dad, Poor Dad. That was the 1997 book when Kiyosaki claimed he had access to both a rich father figure and a poor father figure. He decided to follow the rich dad, thus making Kiyosaki rich too. Really? I was born to a poor dad who later became a rich dad and in all honesty, I preferred my poor dad. Poor dad was a fun loving father. Rich dad was a man hell bent on making more and more money regardless of those he had to claw over in order to get that money. Truthfully, who would you choose to be your dad?
Robert Kiyosaki’s latest book, FAKE, is supposed to expose to us how all money is fake, most teachers are fake (because they don’t teach financial literacy to anyone) and how assets, such as owning a home, is fake. These fake lies, according to Kiyosaki, makes the poor and middle classes poorer. Well, if you are poor, how can you get any poorer? The true victim in all of this is the middle class. They are the group that is paying all the taxes so rich monsters like Kiyosaki can get away with not paying any taxes AND the poor classes keep getting more and more benefits (such as free health care, free higher education, free food, home heating and subsidized housing).
If you had to choose between rich and poor, our socialistic society (not the capitalistic pig that Kiyosaki claims he is) gives a ton of benefits to those who are poor. Why then, would anyone want to choose to work hard, struggle and strive to be rich, only to have their hard earned money taken away in taxes and given to the poorer classes? Unless you can achieve extreme wealth, such as the $700million net worth of Robert Kiyosaki, whereby his wealth helps him avoid paying taxes, you’re literally screwed in the current financial environment. Thus the decline of the middle classes.
Eventually the government will run out of its fake, daily printed money and everything will collapse. The poor won’t feel any pain because they are poor. The rich won’t feel any pain either because, hey! they’re rich and cushioned (not with paper money but with gold & silver, the only “money” that Kiyosaki will deal with).
In the book FAKE, all throughout its 461 pages, Robert Kiyosaki keeps saying the same things over and over and over and over again: in 1971, then President Nixon took the U.S. Dollar off the gold standard, making our printed money henceforth, worthless, thus fake. Teachers, financial advisors, our leaders AND our parents know nothing about money. Their old advice of going to college, getting a good job, saving money, get out of debt, invest for the long term and diversify is obsolete. Really? What’s the alternative? Kiyosaki never tells. You have to keep buying his books (25 so far) to find out.
Lastly, because of the 2008 Housing Crisis, Kiyosaki states owning a home is a liability, a fake asset. A home costs you money. Doesn’t give you any money (like rental properties. Kiyosaki owns 6500 rental properties through the world). Never mind that if you hold onto your home long enough, you can sell it at a profit, the first $500,000 of which (per couple) is totally tax free. Doesn’t matter that the real truth of the 2008 housing collapse had to do with complete morons and nincompoops buying homes they couldn’t afford with no money they didn’t have to put down as a deposit and no mortgage income verifications. Everyone thought owning a house was a path to a get-rich-quick scheme. That’s not the fault of quality home ownership. That’s just the greed of an uneducated mass led astray by even more greedier bankers.
Kiyosaki also touts that most pension plans are fake, most Americans (78%) live paycheck to paycheck and Baby Boomers will run out of money in retirement. No they won’t. Not if they purchased a home correctly (20% down, less square footage, remain in the home till retirement with a paid-off mortgage). See above. Retiring with at least $500,000 in equity (that’s a half million dollars people, on a home that you lived in and gave you shelter) may be chump change to the likes of elitist Kiyosaki, but it’s financial freedom to people like you and me.
My paid-off home costs me annually: $5038 in property taxes, $704 in insurance, $1200 in maintenance, $1152 in electricity, $1800 in heating. That comes to an annual total of $9894. That’s $825 a month! Where can I go and live, for that little amount of money? Just to rent an apartment in my area, whether a studio or a one bedroom would cost me anywhere between $1000 and $1200 per month! Most landlords charge for heating ($100 a month) and you still have to pay your own electric bill ($75 a month) and renter’s insurance ($250 per year). You may think the maintenance on an apartment is free, but eventually your landlord will raise your rent so that he/she can meet their own financial requirements by passing the costs onto you. Moving in not an option.
For arguments sake, lets say if I rented, it would cost me $14,350 per year, based on the figures (rent, heat, electricity, insurance) listed above (assuming $1,000 a month rent). That comes to $1196 a month vs the $825 a month if I owned my own home. That’s a savings of $371 a month, $4452 for the year, $133,560 for thirty years of home ownership, providing none of the expenses increased over the thirty years, which we all know is improbable. Not spending $133,560 over the past thirty years loosened up a lot of money for the homeowner vs the renter. At the end of thirty years, the renter has nothing to show for themselves. The home owner, however, if he/she were smart would have an ample savings account (provided they didn’t piddle away the $133,560 in savings) plus they’d have ample equity (if they didn’t stupidly refinance and drain out their equity) to retire comfortably without ever working harder over the last thirty years.
Don’t want to work for thirty years? Want to retire rich at age twenty-nine instead? Do you believe in F.I.R.E.? Financial Independence Retire Early? Here’s what Kevin O’Leary, billionaire star of NBC’s Shark Tank has to say about early retirement:
Do you want to know what’s really wrong with our financial system, here in America? Kiyosaki has the answer to that question right.
It’s the lack of education!
Nobody knows anything about proper money management. It’s not taught in school. It’s figured out by us through trial and error. We have to make mistakes before we can learn. I don’t know about you, but I’d rather learn in a classroom than the real world on how to manage my money. Who wants to suffer failure and loss in order to learn?
Kevin Leary goes further on how he wants to help solve America’s illiteracy when it comes to finances and retirement. Listen and watch:
I study finance from the moment I wake up in the morning till the time I go to bed at night. I am constantly reading what almost everyone has to say about proper money management. You’d think I’d be a billionaire by now but I’m not. That’s because I have no desire to be rich. I don’t like what it takes to make yourself rich. I don’t like rich people nor do I want to associate with rich people. Most of them are not very nice people. I’m not going to buy anyone’s books (I get all my literature for free through my library) nor am I going to attend any of their lectures or retreats.
I prefer the slow and easy way up the ladder. And if that means I have to be a bit poorer, then so it be. There are benefits to being poor in this country. Don’t snub your nose of living with less and below your means. Sometimes living with a little bit less, in smaller digs and with less investments can truly be the financial independence one seeks. I didn’t learn that from a book. I learned that through trial and error.
Respect the dollar, even if it is paper. Figure out what’s important to you and your family. Most times, flying first class isn’t so important or enjoyable as you might think it is. Put blinders on and live your own best life. Not someone else’s. Go to college, but make it a trade school. Plumbers and welders earn way more now than doctors and lawyers. And plumbers and welders are real people. To me. Not elitists. Buy a home but one that’s affordable to you now and forever. There is no reason to upgrade. Every time you reach for a hammer or remodel your kitchen or bathroom, it’s not an expense. You’re making an investment in yourself. Eventually, that precious home is going to reward you for all the hard work you put into it over the years.
Financial pundits claim that you’ll never be rich if all you do is save, save, save. Really? How many of us know stories of the lowly bookkeeper or postal worker who saved their money and died with millions, only to will said funds to someone more deserving? Click here to read the story of the UPS employee, Theodore Johnson, who never earned more than $14,000 a year yet died with a net worth of $70million dollars. He was able to make all that money because he was poor and never taxed. And he bought many, many shares of UPS stock over the years he was employed there. At the time of Johnson’s death, he willed over $36million to various causes, as well as set up educational trust funds for his son and grandchildren.
There’s nothing fake about the life of Theodore Johnson. His story is as real as they can come. Keep reading. Keep learning. And trust yourself. No one can manage your money better than yourself.
Side Note: Here’s an aerial photo of Kiyosaki’s home. One of many, many on planet earth.