Like his friend and sporadic co-author Donald Trump, Robert Kiyosaki uses hard lines to separate prosperous wealth builders from the less successful, tagging those whose investing practices differ from the conventional (or his own) as “losers.”
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For Kiyosaki, it’s all about getting your money to do the heavy lifting by concentrating on items that contribute to long-term financial growth, like real estate. Gold, silver and other commodities, including cryptocurrency, are preferred over typical 401(k) and IRA investing, consumer goods and depreciating assets.
Here is exactly what Kiyosaki said “losers” do with their money.
Choosing the Nontraditional Investment Path
In a YouTube video, Kiyosaki took a stroll down memory lane and revisited teachings from his books in the light of more recent investment trends like Bitcoin. With his president going all in on crypto, Kiyosaki is behind the idea, as long as your wealth-building investments pay for it.
“Or I could tell you go to school, get a job, pay your taxes, work hard, save money and put your money in a 401(k),” Kiyosaki said. “That’s what every loser does. Loser, loser, loser. Or they buy themselves a big house and they call it an asset when it’s really a liability. Or a Ferrari or a Lamborghini or a Rolls-Royce and they call it an asset. It’s a liability. That’s why they’re losers.”
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Of course, a house is an asset, but to Kiyosaki, a mortgage and all expenses that go toward owning a home (insurance, maintenance, taxes) make it a liability. Most people sell off or hold onto their homes earlier or longer than they originally plan, making it an illiquid asset. It doesn’t necessarily generate income and you shouldn’t rely on it to be your retirement ace in the hole.
Valuing Cash Flow Over a Paycheck
True assets include rental properties that generate positive cash flow, businesses, stocks that pay dividends and intellectual property that produces royalties. To achieve financial freedom, Kiyosaki believes a winning investor’s goal is to build passive income streams that eventually exceed their expenses.
Kiyosaki has been accused of being too simplistic, but there’s no sense in complicating the fact that assets put money in your pocket, liabilities take money out. And cutting expenses is all fine and good, but focusing on increasing your income means you might not need to worry much about meeting your expenses eventually anyway.
Whether you agree with Kiyosaki’s methods or not — critics point to his bumpy bankruptcy history and his use of debt and aggressive investing strategies are seen as risky by some — the fundamental shift in mindset from consumer to investor is valuable advice.
If you choose to “go to school, get a job, pay your taxes, work hard, save money and put your money in a 401(k),” you’d be considered a loser by Kiyosaki, according to one of his Facebook posts. That’s a tough love approach, but without investing in wealth-generating assets, you’re certainly limiting your potential by relying solely on a job for income.
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This article originally appeared on GOBankingRates.com: Robert Kiyosaki Says This Is What ‘Losers’ Do With Their Money
