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[usc_et]

My biggest problem with him is that he was on Public TV (A supposedly credible venue).

When you tell the masses that saving slowly in 401K's is a fools game and start leveraging your money in Real Estate. This put him in the Scam Artist arena for me! - This is not good investing information for the general public. If he was just selling books, it would not bother me so much. When you start appearing on Public TV - Shame on public TV and the 'Dude" doing a 'Public Service'.

I agree that he has no place on Public TV. Still doesn't make him a scam artist. If William O'Neil, founder of Investor's Business Daily and author of several investing books, appeared on Public TV, you may disagree with him. After all, he encourages a system that involves technical analysis and trading of stocks. It has worked very well for him and many of his readers. For others, it does not work, or is not the preferred method of investing. But it doesn't make William O'Neil a scam artist either.

If Kiyosaki is of the opinion that people are better off leveraging their money in real estate, he has the right to sell his opinion if anyone is willing to pay. Oddly enough, many are willing.

If someone wrote a compelling book about the value of variable annuities and whole life insurance, many would disagree. If this writer somehow captured the imagination of millions and became a bestseller, would he be a scam artist? If he directed the readers to a website where those products were sold by him for exorbitant commissions, then perhaps yes. If the author wrote a follow up book which became a best seller, then some tapes which were widely sold, and did seminars for packed houses, not a scam artist. Just a very good marketer with a disagreeable message.

 

[wabmester]

If Kiyosaki is of the opinion that people are better off leveraging their money in real estate, he has the right to sell his opinion if anyone is willing to pay.  Oddly enough, many are willing.

The favorite guy around here is William Bernstein. Smart guy. He sells advice and asset management services to people he persuades to believe in passive index investing. Brilliant -- people pay to have him do nothing or tell them to do nothing.

 

[wabmester]

You know, this discussion has convinced me that new investors need a more balanced information diet.   Like many of you, I try to push Bernstein as a good book because his approach is back-tested.   But wealth comes from a combination of inspiration, perspiration, compounding, and luck.   I don't think one book covers all of those elements very well.

 

[Mr._johngalt]

My biggest problem with him is that he was on Public TV (A supposedly credible venue).

When you tell the masses that saving slowly in 401K's is a fools game and start leveraging your money in Real Estate. This put him in the Scam Artist arena for me!  - This is not good investing information for the general public. If he was just selling books, it would not bother me so much. When you start appearing on Public TV - Shame on public TV and the 'Dude" doing a 'Public Service'.

Who says Public TV is a "credible venue"? Not me!

JG

 

[cube_rat]

Wow, looks like he's even selling "financial coaching" sessions :

http://www.richdad.com/pages/coaching.asp

 

[Mr._johngalt]

USC_ET,

I admit Kiyosaki brings diversity to the finance discussions.  I just think diversity like this can be dangerous. 

My beef with Kiyosaki is that he puts himself out there as an expert.  I personally think he made all his money from selling how-to-get-rich books, tapes, seminars, and board games.  Sure, he's dabbled in real estate and other businesses (if you believe him). 

If you follow his advice, it can be very damaging.  He doesn't know what he is talking about in regards to many financial and business decisions.  I've seen people close to me fall for his "advice", until I showed them the light.  Take, for example, the average person who isn't able to get a good job or make passive investments in the stock market via index funds or the like.  Will this person be successful in running a start-up business or flipping real estate like Kiyosaki advocates?  Probably not.  They'll use up all their credit and savings (if any) on some crazy business or real estate deal.  Then they're broke, looking for the next "financial guru" to get advice on how to get rich quick. 

Kiyosaki's one redeeming quality is that I think he is on to something when he discusses things such as houses and cars as being "liabilities" instead of "assets" (his rationale: cars and houses have carrying costs that are paid by the owner: loan interest, insurance, maintenance, etc. and they don't produce income.  Income production is the defining characteristic of an "asset" in Kiyosaki parlance).  I think of "things" in the same terms.  For items from a car to a toaster oven there is usually a cost to acquire, cost to maintain, cost to insure, cost to operate, cost to store, cost to upgrade, cost to dispose, and the opportunity cost of all these other costs.  This way of looking at "stuff" helps me buy less of it. 

That is pretty much my way of looking at "stuff" also.  Income production being
used to define "asset" is a valuable approach IMHO.  I recall when I was
in the paper business, I used to explain it to my employees like this.........
When most people walked through my factory, they saw machinery,
stacks of paper, supplies, etc.  When I walked through, all of these
things appeared to me as piles of cash, because cash was invested
and eventually would be returned (hopefully).  Not sure of they got the
concept, but it has served me well.

JG

 

[Cut-Throat]

Who says Public TV is a "credible venue"?  Not me!

JG

My point exactly!

 

[laurence]

You know, this discussion has convinced me that new investors need a more balanced information diet. Like many of you, I try to push Bernstein as a good book because his approach is back-tested. But wealth comes from a combination of inspiration, perspiration, compounding, and luck. I don't think one book covers all of those elements very well.

I wholeheartedly agree, that's why I read one of his books, to branch out from the Bernstein crowds thinking, and hear an alternative viewpoint. But half way through it I said, "he keeps telling me how good it's going to be, how many ladies will throw themselves at me and how large my house will be, but he's not saying how!". He starts out with some legit points, then goes off into la-la land. The books are basically sales pamphletes to get you to the meeting, where he makes most of his money. In fact, he never made a fortune in real estate! His first major home purchase was after he started seminars! I'm all for differing viewpoints, but this guy is a scam and a liar. Wab, you have given ten times as much good advice on this board than this guy has given in his lifetime, I garantee it.

But if you know of anyone who differs significantly from Bernstein's viewpoint and you feel is legit, I'd like to read their stuff, believe me.

 

[wabmester]

Hmm, I have visions of the Wab Investment Ranch....

Look around you. On this site, we have people who became wealthy through real estate, their own business, single company stocks, pension, market timing, value investing, LBYM, and long-term buy-and-hold.

Bernstein is a good book for the buy-and-hold strategy.

Maybe others can recommend good books in some of the other categories, including books that are mostly motivational, like I assume Kiyosaki is.

I made most of my money on the entrepreneurial side. I'm not sure there are great books in that realm -- the best teacher is experience. Some schools offer "lab" classes in which you write a biz plan, marketing plan, etc, and actually launch a low-overhead business. I think that should be required for everybody, and even failure will teach you a bunch.

My personal philosophy is to spread your bets around, but betting on yourself gives you the most control over the outcome.

 

[yAyA]

Well, I was one of the suckaz who bought two of his books. YOu would think I would have learned after the first one I find his books boring and he really doesn't say much. The only thing I liked from his book was the "mind your own business" part. I do believe in order to be FIRE, owning some type of business is important. A J.O.B(just over broke) won't do it. I got sucked in cause I saw him on Oprah.

I'm glad Oprah had David Bach on cause he really changed my thinking about money and becoming wealthy. I'll stick with him, Suze Orman, and this board

 

[Mr._johngalt]

Hmm, I have visions of the Wab Investment Ranch....

Look around you.   On this site, we have people who became wealthy through real estate, their own business, single company stocks, pension, market timing, value investing, LBYM, and long-term buy-and-hold.

Bernstein is a good book for the buy-and-hold strategy.

Maybe others can recommend good books in some of the other categories, including books that are mostly motivational, like I assume Kiyosaki is.

I made most of my money on the entrepreneurial side.   I'm not sure there are great books in that realm -- the best teacher is experience.   Some schools offer "lab" classes in which you write a biz plan, marketing plan, etc, and actually launch a low-overhead business.   I think that should be required for everybody, and even failure will teach you a bunch.

My personal philosophy is to spread your bets around, but betting on yourself gives you the most control over the outcome.

Great post! Now that you have brought it up, I "made most of my money
(what little I have) on the entreprenuerial side" also. Without that, the
way I was going as a "salary man", "possum living" might have been my
only ER option. I could have done it, but it would have been
skinny in the extreme.
BTW, some of my biggest earnings years were working for others,
but I never was a LBYM type. Nope, my ER skids were greased
mainly by doing my own thing when the epiphany hit. Interesting.

JG

 

[TargaDave]

I remember glancing at his books in the store and passing on them. I just can't stand that writing style. Too cultish for me. I bought Steve Leeb's book instead, I think it's titled "The Oil Factor". Much more my style of investing education.

Kiyosaki's article did make an OK point (inflation kills old fashioned saving and fiat currencies lead to inflation) but I still don't like the delivery.

 

[Mr._johngalt]

I remember glancing at his books in the store and passing on them. I just can't stand that writing style.  Too cultish for me.  I bought Steve Leeb's book instead, I think it's titled "The Oil Factor".  Much more my style of investing education. 

Kiyosaki's article did make an OK point (inflation kills old fashioned saving and fiat currencies lead to inflation) but I still don't like the  delivery. 

Well, I almost never buy any new books (or magazines or newspapers),
but I too have perused his stuff in bookstores. He makes some good points, but he could have made them much more briefly. OTOH, many many
wildly successful books are similar. Guess it goes back to......................
take a little bit of information and inflate it with words until
you have a book/article/column/etc. It seems to be a successful system.

JG

 

[unclemick]

Hmmm

The epiphany hit me after a layoff at age 49.

Always a salary man - boring as paint drying - DCA to the max into 401k and IRA over a long period of time - all my other 'great' ventures came to about 10-20% of ER stash - sold and consumed the duplex in the stretch.

 

[Sarah in SC]

I learned more from the "Possum Living" book online than from Kiyosagi's books. 

I know some unbelievable stupid people who have blindly followed him into incredible debt.  He's what we call a "slickster". 

But "Possum Living" , now that one just needs a little bit more polish (and maybe just a glossing over of the rabbit skinning process) and I could see it on the front counter at B+N.   
Sarah (who thought WE were frugal!)

 

[wildcat]

I would buy a book called "Uncle Mickisms" by UM2.  Full of his best posts from the ER homepage.

I missed the Oprah vs. Bach (?) showdown...can someone fill me in? Who is Bach?

 

[justin]

If someone wrote a compelling book about the value of variable annuities and whole life insurance, many would disagree. If this writer somehow captured the imagination of millions and became a bestseller, would he be a scam artist? If he directed the readers to a website where those products were sold by him for exorbitant commissions, then perhaps yes. If the author wrote a follow up book which became a best seller, then some tapes which were widely sold, and did seminars for packed houses, not a scam artist. Just a very good marketer with a disagreeable message.

I think $200 for the Cashflow 101 board game is exorbitant. Go to his site richdad.com and see if you think he charges exorbitant prices.

 

[KB]

Wildcat.

David Bach is a writer/speaker who promotes savings. He was on Oprah with his Automatic Millionaire book a year or two ago. He is the one that coined a phrase about the latte factor costing people so much money. If they looked at how much they spent on coffee and skipped buying coffee and started saving that amount, they could really turn their finances around.

http://www.finishrichmedia.com/books/books_sectionhome.php

 

[usc_et]

I think $200 for the Cashflow 101 board game is exorbitant. Go to his site richdad.com and see if you think he charges exorbitant prices.

Good point, and I think Kiyosaki is in a gray area. But I still believe that the difference is that people knowingly and willingly pay for his stuff. Whether you agree with it, think it's crap, or think it's fine for motivation not information, he still needs people to open their wallets and hand over the credit card (surely, they're not using cash).

On David Bach's website listed above by KB, he offers a series of CDs for $100, Seminars and coaching programs without prices listed. Now, by no means to I think David Bach is a scam, and by other's comments, it doesn't sound like others think so either. However, using your book to guide people to a website to sell more merchandise does not in itself make it a scam.

I would never buy the Rich Dad board game. Not for $29.95, and definitely not for $200. That's insane. But people do, and do so willingly. I would also never pay $250 for a portable playstation, or ipod nano, but that is the going rate.

If he is making promises that he doesn't, can't or never intended on delivering on, that's a scam. He makes success in business and real estate sound far easier than it is, but is he promising anything?

I think there are three different categories here, and we are not seeing them all. An author/marketer may be Positive Value: Bernstein, Bach, whomever else you like; Negative Value: Remember Tom Vu? Barry Minkow of ZZZZ Best, Enron's Lay and Skilling; and there is No Value: Kiyosaki, Carleton Sheets, Suze Orman.

 

[wabmester]

OK, I've decided to become an investment guru.   Here's my 10-step plan to becoming a wabillionaire by age 40.

1) Go to college.   Learn whatever you want, but take an econ class and an entrepreneurship class if offered.   If you don't have a passion, develop one.

2) As soon as you get out of school, get a job.   Preferably a job with a pension plan.   The value of a pension is often dismissed, but you should estimate its value as 25 times whatever income it provides.   That's a lot.

3) Work for 8-10 years.   Being an employee sucks, but you need to suck whatever you can out of your employment.   Learn what makes the business tick.  Vest in the pension plan if they have one, otherwise job hop to maximize your salary.

4) While you're working, save like mad.   Max out all of your savings plan, and save some more.   LBYM.   Don't worry about where you invest.   The money you save during this period will dwarf your investment returns, but try to keep it simple.

5) OK, now you are 30 years old or so.   You've accumulated a nice nest egg, but you're not rich.   You have lots of business experience, and perhaps a small pension to boot.   You are almost wise.   Time to shift into calculated risk mode.

6) Quit your job.  Start a business.   You have domain knowledge -- use it.   You have a passion -- follow it.    Allocate up to 20% of your own capital to the business and borrow or beg the rest.

7) If the business doesn't take off in 2 years, abort.   Sell it if there are any assets.   And start another one.  Continue this cycle until your either succeed or hit the age 35.

8 ) OK, you are age 35 now.   You are either well on your way to being a wabillionaire, or just have spent up to 50% of your assets as tuition for the school of hard knocks.   If the latter, go back to work and stick with the pension, LBYM, and index investing.   You probably won't be rich by 40, but you'll be better off than most people.

9) If you've made it in your business, time to diversify for some hypergrowth and asset protection.   Buy a duplex or apartment building, live in one unit, and rent out the rest.   If after a while you decide you don't like being a landlord, sell, and buy a single-family property instead.   Let it simmer for 5 years.

10) OK, now you are 40.   You are wise, you have a pension, you own real estate, and you might have a sucessful business.   Keep at it if you want, or start selling off assets, wind things down, and head to Fiji.

 

[usc_et]

Beautiful. Turn this post into 250 pages, put it on tape in 20 languages, go on a speaking tour, and you're the next Kiyosaki/Orman/Sheets.

 

[wabmester]

Thanks.   And please check out the videos and t-shirts in the lobby on your way out.

Each step in my plan requires a book and video.   And, did I tell you about my upcoming 10-step Wab Diet plan?

You too can become a Wabillionaire.   I guarantee it! (*)





(*) Hey, Binky, did you know that wabillion isn't a real number?   So, what exactly do you think I'm guaranteeing here?

 

[justin]

Beautiful. Turn this post into 250 pages, put it on tape in 20 languages, go on a speaking tour, and you're the next Kiyosaki/Orman/Sheets.

Remove 5 out of the ten steps above (so it is nearly impossible to follow), then do the above and you have Kiyosaki/Sheets.

 

[sgeeeee]

wab, I hate to be the one that tells you . . . but you'll never make anything on this plan. You fail to make the process sound trivial and easy. People aren't going to buy into a get rich scheme that sounds like work. It needs to be more promise, more incomprehensible, and sound less like work. It should sound so easy to do that the average moron thinks they can do it.

For a small fee and a percentage of the proceeds, I would be willing to edit and re-package your plan.

 

[usc_et]

Yea, unfortunately, you lose your best customers before you even get through #1, "Go to college."

Oops, too much work.