Emple Yuck Do

“How to escape your 9-5 job”

“How to quit your 9-5 job?”

“paano yumaman ng walang kahirap hirap?

“Be your own boss”

I hear these statements a lot. I don’t understand why people think having a job is a bad thing. Instead of just accepting that idea I made a little digging. I found out that most of this ideas came from Robert Kiyosaki’s Rich Dad Poor Dad Book.

I know a thing or two about Robert Kiyosaki and today I will share them all with you along with all the facts that I researched.

Robert Kiyosaki is portrayed by many as a financial guru.  His Rich Dad, Poor Dad book made him famous because of the practical advice that he pretended to gain throughout his life.  He talks about life lessons learned, and how that allowed him to do great things in real estate and other ventures. The problem? Prior to his 1997 publication of Rich Dad, Poor Dad, Robert Kiyosaki never had any documentation of the wealth he supposedly amassed according to forbes. There really wasn’t a rich dad, even though his book specifically claims there was one (Smart Money Magazine, February 2003). Robert Kiyosaki wrote and sold his book, which I consider to be honorable.  He then tacked on a class, which was free, which is also honorable.  But then he started preying on his followers.

1. Class #1 – Free Advice
2. Class #2 – Paid Advice, $495
3. Class #3 – Paid Advice $45,000

It is very difficult to find a clear, reliable background on Robert Kiyosaki, but here’s what’s easily verifiable about him. He was involved in several business deals (most notably, nylon Velcro wallets) in the 1970s and 1980s which fell apart, leaving him bankrupt in the mid-1980s. In this timeframe, he became heavily involved with Amway, a multi-level marketing system, and began to cultivate relationships with many of the “top” members. In 1985, Kiyosaki founded Cashflow Technologies, a company that was designed to pitch a series of books and other educational materials that eventually evolved into Rich Dad, Poor Dad. By the mid-1990s, Kiyosaki had self-printed Rich Dad, Poor Dad and it was starting to appear in wide distribution among members of the Amway/Quixtar organization, as individuals higher in the pyramid would recommend it to people further down the chain looking to get ahead. Kiyosaki took these “sales” numbers to major publishing houses and before you know it, Rich Dad showed up on shelves everywhere and spawned an army of similarly-packaged books, board games, and so on. Kiyosaki’s philosophy mostly revolves around generating passive income through investments and continuing to build up these investments until their passive income can support you. In other words, you should seek out and buy investments that can generate income for you. Kiyosaki believes that financial leverage is absolutely vital, and he also eschews education, saying that formal education is primarily for those seeking to be employees or self-employed individuals, who he identifies as people who will never be “rich.”

He often diagrams his philosophy by dividing people into four groups:
Employees, who work for someone else
Self-employed, who are their own bosses
Business owners, who own a “system” of making money
Investors, who invest money to receive a larger payout

Robert Kiyosaki’s business ideas were formed as a result of a number of business failures and one success. The singular success came about as a result of leveraging a product through a pre-existing pyramid marketing organization. Thus, Kiyosaki’s perspective on success revolves around merely leveraging others into making money for you. If you believe that making money is merely leveraging people and things, you are going to fail.Here’s why: Network marketing, which is how Kiyosaki found success, is basically just a form of franchising that has a very low cost of entry. The problem with it is that the only people who are rewarded are effective salesmen. People who get involved in network marketing are quite simply hoping to turn a quick buck without having to invest the time and money to grow a business and also don’t have the initial capital to start a true franchise or an independent business of their own. Are these people you would look to for financial advice?As a result, Kiyosaki basically ignores the concept of risk. In Kiyosaki’s world, there is no risk, or at least it’s not a big enough factor to ever worry about. His books encourage people to start working for themselves, but the individuals who would be attracted to Kiyosaki’s work are individuals who generally don’t have the backbone, the salesmanship, the acumen, or the pre-existing network to make such plans work. People who start their own businesses are taking on a significant amount of risk, and to ignore that risk in your advice is simply giving terrible advice. In no way am I saying that going into business for yourself is a bad choice, but it is a choice that merits some careful planning and analysis and realization of the risks involved. In Kiyosaki’s world, risk is for losers, yet until he came across a preexisting network that he could utilize, he failed time and time again to start his own business. In other words, Kiyosaki’s own background shows the huge flaws in the advice he gives. Do you want to know the straw that broke the camel’s back for me? Kiyosaki changes fundamental parts of his story to fit the situation. For example, he claimed for years that Rich Dad was real in order to get Rich Dad, Poor Dad accepted as nonfiction, but in the February 2003 issue of SmartMoney magazine, Kiyosaki said “Is Harry Potter real? Why don’t you let Rich Dad be a myth, like Harry Potter?” In other words, the entire premise under which Rich Dad, Poor Dad was sold was a complete fabrication. Kiyosaki misrepresents the facts and gives advice that directly contradicts both common sense and his own background.

The advice he gives on how to get rich is very risky. He does not acknowledge that risk, does not warn people that what he advises them could also easily lead them to losing everything they own. He ignores the people who tried his kind of tactics and got burned, he only looks at the few people who took risks and where talented and incredibly lucky and made it.

Here are facts that John T. Reed found out about Robert Kiyosaki:

Law-breaking advice

1. Advocates committing a felony: have rich friends for trading stock based on non-public inside information, he says “That’s what friends are for.”
2. Recommends tax fraud by deducting vacations and health club dues
3. Brags about using a partner weasel clause in which his cat is his partner

Bad liar

1. Can’t keep track of his story
2. Shouts from the rooftops how rich he is, but refuses to disclose real estate portfolio because he “doesn’t want people to know he has money“
3. Apparently lied about going bankrupt in 1985
4. Claimed his net worth is $50-$100 million depending on the day; his Rich Dad Poor Dad coauthor said in court that he only made $9 million
5. His “best teacher ever” changed repeatedly
   1. ’92 – Ralph Kiyosaki (Poor Dad)
   2. ’97 – Rich Dad
   3. ’06 – Buckminster Fuller
6. The blueprint to becoming a “Financial Genius”

‘Poor dad’

The idea behind Kiyosaki’s title is that his real father was upper middle class. He graduated from Stanford, Chicago, and Northwestern Universities, all on full scholarship, ultimately earning a Ph.D. He pursued a career in education and became the head of the education department of the State of Hawaii. He owned the home in which the Kiyosaki family lived. Kiyosaki calls him his “poor dad.”

‘Rich dad’

One day, he asked his father how to make money. His father said he had not made much money and did not know how to make it. He suggested that Robert ask the father of his next-door playmate, Mike. That boy’s father was a successful local businessman. He was also an eighth-grade dropout and ultimately a multimillionaire with a bunch of small businesses like construction, restaurants, and convenience stores. Kiyosaki developed a father-son relationship with the neighbor. That is who he is referring to when he uses the phrase “rich dad.”

One visitor to this site asked me if I was sure “Rich Dad” really exists. No, I’m not. In fact, I now lean to believing that there never was a “Rich Dad,” that Kiyosaki made the whole thing up. If I had written such a book, I would have named him in the book, if only out of gratitude. It is noteworthy that Kiyosaki refuses to identify “Rich Dad” and the Honolulu Star-Bulletin was unable to figure out who it was, in spite of the rather obvious “next-door neighbor Mike whose father owns convenience stores, restaurants, and a construction company” clues. The man was purportedly around 30 to 45 years old in 1955. So he would be 83 to 98 now. How many people on that one street in Honolulu could possibly fit that description?

As I recall, the first convenience store was 7-11 and I believe they became widespread around the 1960s. It’s possible Kiyosaki is using the phrase “convenience store” loosely and really means corner groceries, which did exist in the 1950’s.

But I also find the mix of business unlikely. The guy owns “convenience stores, restaurants, and a construction company.” I guess I can imagine a guy who owns convenience stores and a construction company. It’s odd, but not impossible. However, I have less ability to picture a restaurateur who also owns a construction company. I knew one. His restaurant went out of business. For one thing, the restaurant business is extremely management-intensive. At good restaurants, the owner is usually there almost all of the time. Same is true of construction. Plus restaurateurs that I’ve known are very different kinds of people from construction guys.

Kiyosaki’s real father (“Poor Dad”) was named Ralph Kiyosaki. I encourage readers in Hawaii to try to research Ralph’s home ownership when Kiyosaki was nine years old (1955) and try to figure out which adjacent or nearby homeowner might have been “Rich Dad.” If we can find a person who fits the description, and he is either a public person or dead, I will publish the identity.

A bunch of people have told me “Rich Dad” was a now-dead guy named Kim or Kimi. Fine. Get Kiyosaki to say that. Or get Kim’s surviving relatives, like Kiyosaki’s friend Mike, to say it. A bunch of yahoos on the Internet saying it means nothing. People on the Internet see Elvis at their 7-11.

1992 book versus 1997

In 1992, Kiyosaki wrote a book called If You Want to Be Rich and Happy, Don’t Go To School? It is “dedicated to Ralph H. Kiyosaki, former Superintendent of Education, State of Hawaii, the best teacher I ever had.” This would be “Poor Dad.” But Rich Dad Poor Dad, which came out in 1997, says quite emphatically that Rich Dad was the best teacher he ever had.

So maybe “Rich Dad” was the second best teacher he ever had. No. Actually, the 1992 book also identifies the second best teacher Kiyosaki ever had: F. Marshall Thurber.

OK. So maybe “Rich Dad” was third. No. Kiyosaki’s 1992 book has an unusually long acknowledgment section. It lists 111 people, none of whom appears to be “Rich Dad.” That is, none are singled out except for his “Poor Dad” parents, in-laws, business partner, and editors.

Mind you, according to the 1997 book Rich Dad Poor Dad, “Rich Dad” supposedly became central to Kiyosaki’s life starting in 1955 when he was nine. So where was “Rich Dad” in 1992 when Kiyosaki was so diligent at identifying the people who had been important in his life?

In a 4/18/06 Yahoo! column, Kiyosaki now says the best teacher he ever had was Buckminster Fuller. It would be a bit of an understatement to say that Fuller was not an eighth-grade dropout who owned convenience stores.

“Getch yer programs right here! Ya can’t keep track of Kiyosaki’s best teacher he ever had without a program!”

EST then Money and You

A man who says he has known Kiyosaki since the military in Hawaii says Kiyosaki got his start in the “tell other people how to live their lives” business as a result of taking then becoming a speaker in the Money and You organization.

Money and You was a seminar company started by Marshall Thurber, an est graduate. Est was a notorious seminar company in northern California run by Werner Erhard. Werner Erhard is apparently one of many aliases used by John Paul (Jack) Rosenberg, a Philadelphian who started in life as a car salesman and who then moved through a series of aliases, sales careers, and wives before coming up with the name Erhard and the est seminars. They were famous for not letting participants go to the bathroom and for maddeningly vague advice. For a while, they were going to cure world hunger by getting a lot of people just to think about it.

Money and You was reportedly a useful seminar. Shortly after Kiyosaki went to mainland U.S. from Hawaii to run away with Thurber’s circus, Thurber decided to shut it down. Thurber let Kiyosaki and some other speakers take over the business. They promptly emphasized the Australian and New Zealand markets which have, at times in their history, overvalued products and services from the U.S.

Their run in Australia ended when the Australian equivalent of 60 Minutes did an exposé about Money and You.

Basically, it appears that Kiyosaki is a good salesman, although we sort of have to take his word for it pending confirmation from Xerox. Good salesman is the universal description of all the expensive so-called real estate investment gurus. They are sales guys, not real estate guys. Apparently Kiyosaki is yet another example.

This caller also said that Kiyosaki’s wife Kim appears to be the one who invested in Phoenix real estate. “Bob” appears to be the Ralph Kramden (main character of the Honeymooners TV series) of the family, perennially hatching one-hare-brained get-rich-quick scheme after another (like Kiyosaki’s Money and you, velcro surfer wallets, and Rock T-shirt businesses) while his wife invests in basic stuff. I am not ready to anoint her a financial genius. One would have to inquire as to whether their real estate investments in Phoenix appreciated more than those owned by the average person. Most likely, they made the same return on their properties as Joe and Jean Average Phoenix homeowner. If so, they would be as qualified as Joe and Jean homeowner to write a book about it. As I have said in many articles in my newsletter Real Estate Investor’s Monthly, extraordinary performance in real estate is measured by the degree to which your returns exceed those of ordinary homeowners who claim no expertise. In fact, in most periods since World War II, ordinary homeowners have done great return-wise just because they were in the right place at the right time. On Wall Street, they say that in a bull market, everyone thinks he a genius. And some, like Kiyosaki, who are merely married to people who invested in real estate during a bull market, claim that they (the non-investing spouse) are geniuses as a result.

Reportedly, Kim got the idea to invest in Phoenix real estate from a female fellow employee of Money and You who said the Phoenix market was going to be good. That female Money and You employee is the one who should have written us a book on real estate investment. She may be the brains of the outfit if Kim did not add any value to her advice. (Actually, the employee probably was just guessing and her having guessed right is meaningless. In fact, predicting market-wide appreciation in real estate values is impossible to do. Decisions can only be evaluated based on what the decision-maker knew at the time, not on results. You can get good results from bad decisions, e.g., a winning lottery ticket; and vice versa, e.g., attempting a 25-yard field goal that goes wide right when you are down by two points with three seconds left in the game.)

If Kiyosaki claims to be a competent real estate investor, he needs to show addresses of properties he bought that reveal greater returns on those properties than were earned on similar properties at the same time by persons who claim no extraordinary expertise. I suspect an examination of properties he or his wife owned will show that he earned that same returns as local homeowners and that the only thing extraordinary about his purchases is that he had a large amount of book royalties to use to buy them.

The guy who called me has the impression that Kiyosaki’s tortured psyche and insecurities stem from growing up as an obese kid in Hilo in the 1950s. Since he did not know Kiyosaki until the military, that information must have come from Kiyosaki.

20/20 investigation of Kiyosaki

ABC 20/20 did a program about Kiyosaki who has now written 18 books. You can read their story about it at http://abcnews.go.com/2020/story?id=1982669&page=1. The date on the Internet story is May 19, 2006 so the story must have been aired on 20/20 around then. Basically, they gave three people $1,000 each and told them to try to start a business that would show a profit within 20 days. One lost all he money. Another made zero. The third made $243.

Kiyosaki was brought in to coach them and to advise them during the 20 days. Based on the article, it sounds like about all he did was whine about the three would-be entrepreneurs, the short time frame, and so forth. He also pronounced their failures a success—typical Kiyosaki logic—because they learned from them. The ABC 20/20 story ends with,

“Which begs the question: Does anyone really need 18 books to learn to fail?”

Obviously, Kiyosaki has sold 26 million books on the promise that they would help you succeed. Then, when people who have been personally coached by him fail, he blames them and, like the Queen in Alice in Wonderland, declares their failures to be successes.

Kiyosaki sued by co-author Sharon Lechter. Kung nabasa ninyo ang book ni Robert malamang kilala ninyo and co-author nito na si Sharon Lechter. Sharon Lechter, Kiyosaki’s co-author of Rich Dad, Poor Dad, sued him in Clark County, NV (Civil Case #07-A-549886-C). It was filed on 10/12/07.

As I read more of his other books published under the Rich Dad brand, I started realizing that the core concept is pretty much the same, just served in different flavors. Intention seemed to be selling more books and collecting bigger checks than helping people.