Facts are facts: Robert Kiyosaki’s “Rich Dad Poor Dad” has sold over 40 million copies and fundamentally changed how many think about money. But like any financial guru, his advice ranges from brilliant to potentially dangerous.
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Here’s an honest look at his best insights and most problematic recommendations.
5 Best Pieces of Financial Advice From Robert Kiyosaki
These tips are at the top and might be ones you should consider.
Understand the Difference Between Assets and Liabilities
“An asset puts money in my pocket. A liability takes money out of my pocket.” This simple definition cuts through financial jargon and helps people focus on what actually builds wealth versus what drains it.
Why it works: Understanding this difference is key to financial success. Kiyosaki explains that assets, like investments, generate income, while liabilities, like debt, take money away. This framework helps people make better purchasing decisions.
Learn More: Robert Kiyosaki: This Is ‘the Easiest Money Ever’
Focus on Financial Education
“A person can be highly educated, professionally successful, and financially illiterate.” Kiyosaki believes that schools don’t teach money management, leaving even smart professionals struggling financially.
Why it works: It’s true that most of us don’t learn to manage money in school. This explains how “smart professionals” struggle financially their entire lives.
Make Money Work for You, Not the Other Way Around
“The poor and the middle-class work for money. The rich have money work for them.” Instead of just trading time for money, wealthy people invest in assets that generate income.
Why it works: This mindset shift moves people from active income (requiring constant work) to passive income (money working independently).
Pay Yourself First
Kiyosaki acknowledges this is a tough concept but encourages people to buy assets or save money before paying their bills. This ensures you’re consistently building wealth rather than just covering expenses.
Why it works: By consistently setting aside a portion of your income for investments, you ensure that you are steadily building wealth.
Learn First, Then Invest
“Want to lose money fast? Simple: Invest in what you don’t understand.” Kiyosaki warns against investing based on hot tips or trends without understanding the underlying asset.
Why it works: Many people enter the market without a clear understanding of how it works. They may follow advice from friends, social media or financial news without doing their own research.
3 Worst Pieces of Financial Advice From Robert Kiyosaki
These tips are ones you might want to avoid.
All Debt Is ‘Good Debt’ If Used Right
Kiyosaki teaches that thinking you need to get out of debt entirely will keep you poor. He promotes heavy use of leverage without adequately emphasizing the risks.
Why it’s dangerous: You’re relying on the assets you purchase to continue generating income. If they stop doing that for any reason, you’re on the hook for the entire debt payment, which you may not be able to afford.
Extreme Predictions To Drive Investment Decisions
“I strongly believe, by 2035, that one Bitcoin will be over $1 million dollars. Gold will be $30k and silver $3,000 a coin.” He can make extreme predictions about economic collapse to promote his preferred investments.
Why it’s dangerous: It could be argued that Kiyosaki is a marketing expert who uses his X account to keep himself in the news. Boring topics like diversification don’t capture public attention, doomsday predictions do.
Generic Advice Without Specific Implementation
The “Rich Dad” book does a good job challenging conventional thinking of working for salary versus working toward building passive income. Beyond that initial advice, the books can be a bit generic on how to build the actual passive income.
Why it’s dangerous: To build wealth, people need specifics beyond “have good debt” and “make your money work for you.” While simple can be good, often more detailed advice is needed. Kiyosaki also will sometimes advise money-making and investment strategies that are simply too complicated for novices. As with any expert, it’s best to throughly research his advice and seek second opinions before making any big money moves.
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This article originally appeared on GOBankingRates.com: 5 All-Time Best Pieces of Money Advice From Robert Kiyosaki — And 3 of the Worst
