Having read several of Kiyosaki‘s books and even played his CashFlow game, I came to appreciate the fact that to get ahead financially, you need not only to have a positive difference between the amount of money you earn and the amount of money you spend (George S. Clason’s “The Richest Man in Babylon” illustrates this point), but also to make money work for you rather than force you to work for money.
However, I was bothered by his over-emphasis of real estate deals as a way to have positive cashflow. I also figured out that he sold out when he started advocating MLMs as means of learning how to do business. Now I came upon John T. Reed’s analysis of Robert T. Kiyosaki’s book Rich Dad, Poor Dad, which clarified some things for me. Reed is author-publisher of books on real estate investment and some other subjects. So if one is going to follow him, one had better find a critic of Reed in order to have balance.
Another problem I had with Kiyosaki’s approach was as follows.
His goal is to have passive income larger than all of one’s life expenses. This way one would not have to work a day in the rest of his life. Kiyosaki however overlooks one very important point: the time needed to manage the passive income producing properties, businesses or paper investments.
If you have income from rental houses, but have to work, on the average, 8 hours a day, 5 days a week to manage those properties, then your income is effectively as passive as the one you had from your software development job in that Hi-Tech company which you “retired” from.
What you really want is to have nice income while having to work on managing it only few hours a month. Then you have the rest of the month for yourself. If Kiyosaki’s goal was indeed achievable, then even dead people and “vegetables” would have been able to earn income. In practice, of course, this does not happen. Every form of income needs to be looked after, because market conditions change and eventually that property ceases to produce income.
However nowhere in his books, did I find anything, which addresses this issue of the time needed to manage various kinds of investments.