The headline for this article is controversial. Did this 25-year old financial writer just asked his readers not to listen to the advice of Robert Kiyosaki, the Godfather of investing?
Yes, that’s what I am saying. Robert Kiyosaki, author of the best selling get rich book Rich Dad, Poor Dad have always been seen by his readers as someone who motivates others to think outside of the box when it comes to making money. Kiyosaki has a wealth of methodology when it comes to getting rich. His latest method, which is to declare his private limited company bankrupt when it lost a lawsuit, would probably inspire many to think along the lines of those possibilities.
Some of Kiyosaki’s get rich quick schemes could appear very enticing to many people, even those who think themselves as financially well educated. Take for example, Kiyosaki in his book Rich Dad, Poor Dad suggested the idea of trading “housing option” as an easy way to get rich. The idea of this “housing option” is to simple pay the option fee to purchase a house and then to subsequently sell the house at a higher price before the option expires. A $200,000 house may have an option fee of $2,000 (1%). Kiyosaki’s get rich advice would be to buy the option for $2,000 and then to sell the house at $210,000 hence reaping a very attractive 400% return on the investment.
Many of Kiyosaki’s ideas seldom take into consideration the element of risks. Even if it does, he would usually quickly overshadow it with the enticement of the much greater potential returns that one would be able to enjoy. This is my opinion, is not a good financial education.
Before anyone gets offended with what had just been said of his or her favorite author, let me just say that Kiyosaki does incorporate some useful principles into his books. For example, the concept of passive cashflow is essential for anyone who ever wants to strive to be financially independent. Kiyosaki does bring the point across well in Rich Dad, Poor Dad.
The main differences between the books of Kiyosaki and the articles that you would read at DollarsAndSense are mainly the approach on how we view the topic of money. While Kiyosaki preaches the need to be thinking outside of the box when it comes to making money, we believe it is more important to be reading extensively and to be well educated in order to improve on your knowledge of financial literacy. The writers at Dollars and Sense would always encourage you to read and fully understand any financial decisions that you may have to make. Never ever listen to the opinion of just one person (even if the advice is coming from Dollars and Sense!)
As previously mentioned by my fellow writer in his Two Cent Rant, many young Singaporeans perhaps mistakenly expect one or two textbooks to fit all their needs when it comes to financial education. This unfortunately is not usually the case.
Feel free to drop us a comment or send us an email should you have any questions when it comes to financial literacy and we would be happy to answer them. In the meantime, you can always show us your support by sharing the article and website to someone you know.
We leave you with another interesting article on Mr Kiyosaki: http://www.thesimpledollar.com/2007/01/26/deconstructing-robert-kiyosaki/.
Original photo by Benjamin Lim. Used with permission.
Listen to our podcast, where we have in-depth discussions on finance topics that matter to you.
