Robert Kiyosaki’s finest (and worst) recommendations on constructing wealth

Robert Kiyosaki revealed his seminal private finance tome, Wealthy Dad Poor Dad, in 1997. Over 20 years later, the e book continues to grace top-10 lists throughout the net. It seems first on GoodReads’ private finance class, and BooksRun ranks it first amongst its monetary literature suggestions. As of this text’s final replace, it’s additionally the #2 best-selling private finance e book on Amazon. 

The e book recounts classes in monetary literacy that Kiyosaki realized throughout his youth from the 2 fathers in his life — his personal, who labored onerous however remained poor, and his finest good friend’s, an entrepreneur who constructed wealth by means of a collection of sensible monetary strikes. The e book’s not-so-subtle subtitle is What the Wealthy Train Their Children About Cash That the Poor and Center Class Do Not!

In response to Kiyosaki, “A person can be highly educated, professionally successful, and financially illiterate.” He units out to appropriate this by instructing readers profit from the cash they earn from work — by placing it to work for them. 

Regardless of the e book’s widespread success, it’s additionally acquired its justifiable share of criticism — as has Kiyosaki, whose profession has included a number of failed companies and bankruptcies, and whose licensed programs and seminars have left many paying prospects feeling ripped off and even intimidated. 

Some have even questioned whether or not the “rich dad” in Kiyosaki’s supposedly non-fictional assortment of monetary parables ever existed. 

So, given the longstanding success of the e book — and the appreciable controversy surrounding its writer — are the teachings in Kiyosaki’s Wealthy Dad Poor Dad good ones? 

Properly, some are, and a few aren’t. Like many self-help “gurus,” Kiyosaki’s work is half repackaged frequent sense and half upsell grift, with lots of his books, merchandise, and programs serving partly as a gross sales pitch for an additional, costlier step into his monetary schooling ecosystem.

In brief, studying Wealthy Dad Poor Dad isn’t going to vary your monetary state of affairs, however Kiyosaki clearly is aware of a factor or two about cash, and his best-selling e book does include some actionable items of legitimate monetary knowledge. 

The issue is that, inside his broader good concepts, he smuggles plenty of questionable ones, inviting abnormal working-class individuals to take dangers that merely aren’t prone to lead to a better internet value. 

Right here, we dig into Wealthy Dad Poor Dad, mining it for nuggets of non-public finance gold, and throwing out the tailings (i.e., doubtlessly doubtful recommendation) alongside the best way. 

Robert Kiyosaki’s finest and worst private finance recommendation 

One of many important ideas Kiyosaki touches on many times is the significance of understanding the distinction between property and liabilities with regards to spending cash. 

Good tip: Spend your cash on income-generating property — not liabilities

Kiyosaki preaches that wealth constructing is extra about how a lot you retain than how a lot you earn, and in that, he’s completely proper. You possibly can’t spend your manner into wealth except the stuff you purchase make you cash.  

He emphasises the significance of utilizing what cash you do must develop your wealth, explaining that each greenback may be spent both on an asset (one thing you personal that makes you cash) or a legal responsibility (one thing that prices you cash and/or loses worth over time). “Buying or building assets that deliver cash flow is putting your money to work for you,” he explains.  

“Rich people acquire assets. The poor and middle class acquire liabilities that they think are assets.” On this quote, Kiyosaki highlights the truth that middle-class working people are likely to “feel” richer as soon as they’ve earned sufficient to have the ability to purchase a home or a automobile, however that these kinds of purchases aren’t actually property—they price cash to personal and preserve, and in lots of instances, they depreciate in worth over time. 

“Often,” he explains, “the more money you make, the more money you spend; that’s why more money doesn’t make you rich – assets make you rich.”

A real asset, he argues, is one thing that grows in worth over time, growing one’s wealth and offering passive earnings. Probably the most standard property on this class is an effective inventory. 

Good tip: Purchase shares 

To this finish, Kiyosaki advises investing in shares, which is basically a good suggestion if finished sensibly. Proudly owning shares, particularly people who pay dividends (periodic money funds to shareholders), is an effective way to spend cash with out shedding it, primarily investing within the asset column of your individual stability sheet. 

Single shares are dangerous, nonetheless. A person firm’s share worth can fall drastically on a dime, which is why dollar-cost averaging right into a dividend-focused ETF alongside a benchmark index ETF and maybe a bond market ETF is an effective way to diversify, handle threat, and generate long-term capital positive factors and earnings with a number of easy, automated investments.

Sadly, that’s not precisely what Kiyosaki recommends to his readers, who’re largely abnormal working people attempting to attain monetary safety whereas holding down a job. 

Unhealthy tip: Decide investments strategically relatively than diversifying 

In his dialogue of investing in Wealthy Dad Poor Dad, Kiyosaki states, “It is not gambling if you know what you’re doing. It is gambling if you’re just throwing money into a deal and praying.”

On the subject of the inventory market, this isn’t good recommendation. Shopping for particular person shares is akin to playing, and for many working individuals, it’s not normally a good suggestion. Whereas sustaining a “for-fun” portfolio by means of which you guess on particular person shares with a small quantity of “fun money” every month may be an fascinating and academic passion, the overwhelming majority of a mean particular person’s funding financial savings could be far safer in a handful of low-fee, diversified ETFs designed to climate market chaos, handle threat, and ship affordable capital positive factors and earnings over the long run. 

In response to a 2025 report from S&P World, “65% of all active large-cap U.S. equity funds underperformed the S&P 500” in 2024. Over longer time horizons, this quantity is even increased. 

In different phrases, even skilled buyers who research shares and analyze the marketplace for a residing are likely to underperform towards index funds, demonstrating that a flair for finance and the flexibility to observe shares full-time are not any match for a well-diversified portfolio of index funds and different ETFs held over the long run.  

Kiyosaki tells readers that, “The problem with ‘secure’ investments is that they are often sanitized, that is, made so safe that the gains are less.” And whereas sure, appropriately betting on a inventory’s short-term worth strikes can produce outsized positive factors, risking your financial savings on a hunch is akin to taking part in a on line casino recreation. Even if you happen to come out on high as soon as, the home is ultimately going to take your entire cash if you happen to hold taking part in. 

Unhealthy tip: Put money into actual property & begin companies 

Kiyosaki additionally contains rental properties and small companies in his “income-generating assets” class, which is one other space the place his recommendation turns into doubtful. Extraordinary working people who try to purchase and handle income-generating properties or begin worthwhile companies are taking an enormous threat and are statistically unlikely to succeed. 

Shopping for, sustaining, and renting out actual property isn’t any straightforward feat. Doing so is way much less passive than Kiyosaki would have you ever consider, and it’s definitely not the kind of factor a mean particular person with out expertise ought to try to do whereas sustaining a separate profession. Actual property is extremely speculative, and managing a rental property is basically a full-time job. 

Beginning a enterprise can be a number of work, and about half of recent companies fail inside 5 years, in accordance with the Bureau of Labor Statistics.

When Kiyosaki says, “It’s not how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for,” he’s not unsuitable, however any prudent monetary advisor would inform a working particular person trying to construct wealth to stay with inventory and bond ETFs relatively than risking their monetary footing by leaping into entrepreneurship or actual property funding. 

Good tip: Pay your self first

Kiyosaki advises working people to “pay themselves first” by investing a portion of their earnings from every paycheck instantly earlier than spending any of it, which is an excellent option to automate wealth constructing (if, as talked about above, it’s invested correctly in diversified fairness and bond funds). “The philosophy of the rich and the poor is this: the rich invest their money and spend what is left. The poor spend their money and invest what is left.”

Probably the greatest methods to do that is thru an employer-sponsored 401(okay) or Roth 401(okay), through which a proportion of every paycheck is robotically diverted right into a tax-advantaged retirement account, by means of which it’s invested in low-cost ETFs. Many employers even match contributions as much as a sure proportion of every paycheck (usually 2–5%), primarily offering free funding capital for workers’ retirement financial savings.

Opting into this kind of program by contributing the utmost your employer will match (or extra) is one thing just about each monetary advisor would suggest. 

Curiously, nonetheless, discovering a stable job that gives a 401(okay) match is just not one thing Kiyosaki focuses on. 

Unhealthy tip: Don’t assume an excessive amount of about your job

Curiously, Kiyosaki’s monetary recommendation doesn’t place a number of significance on profession decisions. He doesn’t advise readers to prioritize asking for raises, chasing higher-paying jobs, or residing frugally to save cash, calling {that a} “middle-class survival strategy.” 

He encourages readers to “work to learn, not to earn,” advising them to decide on jobs in fields like gross sales that may present expertise that would come in useful in future ventures to allow them to ultimately escape the “rat race.”

And whereas that sounds good on paper, it might be overly optimistic for working-class individuals with restricted choices, restricted earnings, and payments to pay.

Scott Galloway, one other monetary influencer, disagrees, calling the American company the “greatest wealth-generator in history.” Galloway encourages his listeners to keep away from the kinds of dangerous upstart concepts inspired by Kiyosaki, advising them as an alternative that securing a good job with a well-established firm is likely one of the finest methods to get wealthy slowly. 

A giant a part of why this works higher comes all the way down to worker advantages. First, with employer-sponsored healthcare, a medical emergency is way much less prone to bankrupt you, and second, the flexibility to contribute to a tax-advantaged retirement account with employer matching is likely one of the finest and best really passive earnings streams you may get. 

To get wealthy, you first have to turn out to be financially safe, and touchdown a job that gives safe advantages and leaves you adequate earnings after bills to begin passively investing is likely one of the finest methods to construct that basis. 

A few of Kiyosaki’s recommendation — together with urging working-class people to take out high-interest loans to fund dangerous actual property and enterprise ventures — is harmful.

Fb

Unhealthy tip: Take monetary dangers and use leverage

Kiyosaki, not like most different pop finance heads, is an enormous “spend money to make money” proponent. In a 2025 Fb submit, he urges his followers to tackle debt so as to fund the purchases of “income-producing assets like real estate, businesses, and investments.” 

On this obscure crucial, he recklessly advises his working-class viewers to tackle high-interest debt, implying that with a mortgage or two, anybody can construct a passive earnings machine by beginning companies and shopping for actual property — two ventures that, as mentioned above, are much more sophisticated than they sound, require an excessive amount of work and a spotlight, and are much less prone to reliably generate earnings than passive investments in diversified fairness funds. 

Again in 2010, Kiyosaki licensed his title and model to third-party firms that offered actual property seminars encouraging this precise kind of ill-advised monetary habits, utilizing high-pressure gross sales ways and intimidation to stress paying attendees into spending cash they didn’t have on doubtful actual property investments and extra programs. A CBC investigation into the state of affairs introduced hidden cameras to one in all these seminars and later confronted Kiyosaki about it, including to the controversy surrounding the person behind the “Rich Dad” empire. 

The takeaway

General, Kiyosaki’s “good” recommendation boils all the way down to frequent sense: Turn out to be financially literate, and, earlier than spending your earnings, pay your self first by investing a few of every paycheck in a portfolio of income-generating property. 

His dangerous recommendation? Just about every part else. If a motivational speaker tells you to overlook about your job, take out loans, begin a enterprise, purchase actual property, and attempt to turn out to be a landlord in a single day … run. They don’t have your finest pursuits in thoughts.