IN the last 3 weeks many people have asked me for my view on Robert Kiyosaki’s concepts. Surely there is a lot of merit in what he says, but there are many limitations too.

Let me see:

1. He underestimates risk, and dramatically underestimates risk.

2. He takes one theory of investing in real estate and makes it look great.

3. He ridicules all other methods of earning money. This is ridiculous – the fact that everybody tries the same model will reduce the returns from that model :). This is what Morgan Stanley calls ‘Convergence of Strategy’ in a well documented research paper.

4. He ridicules all people who are employees and use the 401(k).This is like criticizing about 99% of the people I know. I cannot AFFORD to take such a view. Sure employees do not become super rich. However to use money as a yardstick of success is a STUPID concept. I know of experts who know almost everything in their field – and get invited to Chief Minister’s and Prime Minister’s expert committees – and they earn salaries less than a million rupees.

5. His own strategy could have failed in various markets in India and succeeded in many markets. He does not accept the downside. This is funny I have seen people make big fortunes and make losses too in commodities, real estate, equities, debt, business, etc. Not many middle class people are ready for hardship. Dammit, they do not want it!! 🙂 – who is RK to force it on ALL?

6. I have met many people who have read his book – only 2 concepts stick – real assets and liabilities and the cash quadrant. However I have not met anybody who has paid ‘000 s of $ to attend his seminars.

7. His idea of ‘Cash flow investing’ is similar to ‘Dividend based investing’ which many people born in the decades of 50s, 60s and perhaps ’70s have done. Not sure people born in the ’80s have patience to do it. This is called ageism – like sexism and though I do not like ageism or sexism nor am I sure whether it is correct, I am still saying it….pardon me if it hurts.

more to follow…

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  1. Actually He is good in terms of clearly differentiating what is asset & what is liability (car , home , gadgets )
    rest all is phony

  2. I go with RK arguments he speaks in most of the cases in either
    American or Australian context and it works in their respective
    countries and it works in some parts on India too.
    Leave aside all the Real estate fundas..
    Coming to RK’s-RDPD theme of the book is to Create an Asset which generates cash flow.. In India esp people who are into Multilevel marketing have
    followed his concepts and have become rich..and some are in process of becoming rich— So his Strategy works!!

    Risk : He argues not knowing is Risky–I do go by his words.

    Though I haven’t attended his seminar’s but I do have his tapes
    which is been recorded in one of the seminars and there is group
    in Mumbai which conducts workshop on his teachings using the Cashflow board game–THIS FYI only.

    Earning Salaries isn’t big deal everybody does he raises flag those income which comes as Tax free is area of debate,whereas Salaries comes with Taxes and you get money only after paying taxes(Employees) Pay self first doesn’t work for Employeess…

    Point # 5 would like to understand from you.. from which Quadrant
    do you come from? I mean Employee –Self employed –Business–Investor.

    Point # 3 pl watch Modern times of Charlie chaplin.. RK is Ridiculing Employees for not understanding the difference between employeeship and Entrepnuership..

    Lastly he’s throwing light on Real estate investing which is quite
    easy to understand for laymen..

  3. RK is a big joke, but as usual has a lot of followers. He is typical American – one good idea becomes a book, a training program, a mlm, a television program….and he becomes a billionaire. Just like Pease – motivational speaking is a big business. I believe Navjot Singh Sidhu charges Rs. 1 million a day for Motivational Speaking. MLM is a great mathematical concept where about 9000 people make money if you have about 9,000,000 as members. Not bad. Again a motivational game.

    Some of RKs theories are good, but afterall MLM is a concept which can work FOR EVERYBODY in the world only if we are able to conquesr other planets! For MLM to be successful selling is not enough, you have to get enough salesmen to join. In India MLM is a joke. We have so many MLM companies that a group to tell MLM companies how to do MLM business will be a big money spinner.

  4. I wish Capitalism to be understood before commenting.. Though Essence of Capitalism is largely misunderstood and least understood
    by many.. Ideas are the one which generates money not money by itself. Every generations have Embraced new Ideas.. May be Asians
    largely with Working hands may not buy an Idea from US as they
    are by and large ruling the markets in nook and corner of world..
    but one or other day Reality have to be accepted. One can delay
    the ideas but cannot be avoided..

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