Best Financial Advice from Robert Kiyosaki

A few months ago I wrote a piece for a national magazine and was able to "interview" (via email and via their representatives), some of the top names in personal finance today and ask them what their best piece of financial advice was. Here's the response I received from Robert Kiyosaki, author of Rich Dad Poor Dad and Before You Quit Your Job:

The single best piece of advice I can give is this: Be careful what financial advice you listen to. Most financial advice—such as “save money,” “get out of debt,” “invest for the long term” and “diversify”—is fine for the middle class or the poor. It’s not good advice if you want to be rich because it is obsolete advice. For example, in 1971 the U.S. went off the gold standard and the U.S. dollar became a currency and . . . currencies are designed to lose money. That’s why today, “save money” is bad advice. Remember, your mind is your greatest asset, so be careful what you put into it.

FYI, I wasn't 100% digging this advice -- if you know what I mean.

For those of you interested, here's my best piece of financial advice.

Comments

[plonkee]

I guess you feel obliged to post this. I'd hate for some person to read it and think that it actually was good advice.

On the other hand, maybe RK has a point, I'm middle class in both wealth and social standing (British) measures and he does say that I should save money and invest for the long term. What would I know about what is good financial advice for the rich? Maybe the dangerous assumption is assuming that what is good advice for the rich is good advice for those aspiring to be rich? Or maybe not.

[Duane Gran]

Advice needs to fit the circumstances. I'm reminded of my days when I was a competitive cyclist and I thought that I should mimic the training habits of professionals like Lance Armstrong to be more competitive. In retrospect it was counter productive because there are different optimal techniques for the elite and average in nearly every discipline, including building wealth. Most people in the middle class benefit from saving and investing long term and the very wealthy have options that make sense for them, but tend to invoke more than appropriate risk for the middle class if copied. I doubt if Kiyosaki gives this much consideration, but then again he is in the business of broadcasting a one size fits all form of advice.

[db]

I'm taking this one piece of advice from RK. The rest of his advice I'm throwing on the fire for tinder! A pox on RK!

Here's a conundrum. If we ALL become wealthy (say, millionaires) then isn't the millionaire the new middle class?

Here's another thought: What's wrong with being a well-set member of the middle class? aka, how much is enough?

It seems that the optimal condition is to be debt free, have a comfortable amount of financial cushion, and the freedom to pursue whatever work you desire (so there is a degree of financial independence if not total financial independence). It isn't necessarily about becoming filthy rich.

DB

[Suze]

RK always gives out advice that is barely understandable and often confusing. For example: Why are currencies "designed to lose money"? and why is "get out of debt and invest for the long-term" a strategy for poor people? If that were true, they wouldn't be poor.

[Edmund]

That is perhaps the best advice -- be careful not to pollute your mind with bad advices.

Think of the rest of the advice as a *test* for your mind not to be polluted with bad advices ;)

Can't say he didn't warn you.

[Minimum Wage]

I thought your education was your greatest asset.

Hey that reminds me, I spent tens of thousands of dollars on my education. Can I sell it and get some money for it?

[segfault]

I think RK is a con artist. Gives vague, unconventional advice designed to stir up class hostility and makes grandiose, inaccurate claims about his own wealth and success.

[FMF]

MW -- My career is my greatest asset. Does this post say something different?

[Foo]

RK is a joke. Just read any of his articles on Yahoo. Or better yet, just read the comments posted to his articles. Or better still, read the full Wikipedia article on him.

[Ciji]

Edit and filter folks. No ONE person's advice is 100% a perfect fit for ALL financial situations.

RK is definitely not for the risk-adverse. Just as FMF is not geared for the risk-takers. RK's main flaw is that he's trying to paint a billboard-sized dream to postcard sized thinkers...

[FMF]

What, I'm not a risk taker? ;-)

[Lord]

Save not to save but to invest. Turn debt from a liability into an asset. Concentrate your efforts. Like those better?

The millionaire is the new middle class, the result of inflation. How much is enough? Enough for financial independence. A million can provide a $40k income, enough to get by but not really wealthy. The problem with being middle class is they are the ones getting squeezed. Poor is easy, rich is not easy but not that hard, but middle class is difficult. It takes a lifetime.

[Ciji]

FMF,

LOL! You know I love you! :-)

Trust, FMF, you are doing 100% better than 99% of the financial blogs out there. I really dig RK, yet I understand why his advice seems silly to most. It's a VERY different way of thinking about money, and it's highly contrary to popular (and comfortable) beliefs.

[FMF]

Ok, I'm feeling the love now. ;-)

But you're right, I am fairly conservative. That's part of my core beliefs -- that people can grow their net worths and become wealthy by doing the simple, easy, relatively riskless tasks that make up the fundamentals of personal finance. It's worked for me and I know it will work for others.

[Jesse]

I think it's pretty dumb to base your one piece of financial advice on a play on words. Of course when people are advised to "save money" it is understood to mean "invest money" -- not just throw it in a checking account to watch it lose its purchasing power.

I love RK because he really gets me rolling.

[formul8]

"The single best piece of advice I can give is this: Be careful what financial advice you listen to."

Yeah, start with your own advice there, RK...

Incoherant, condescending, hippocritical and dangerous. Typical RK style!