Posted on: Sunday, July 6, 2003
'Rich Dad' author sells hope
By Deborah Adamson
Advertiser Staff Writer
The Big Island native is a best-selling personal finance author whose message has resonated with millions of people: You can escape your tedious 9-to-5 job and achieve financial freedom by educating yourself to start a business or invest in real estate.
Kiyosaki's has sold more than 13 million copies of his book, "Rich Dad Poor Dad," and spawned a mini-industry that includes half a dozen books, board games, TV infomercials, audio cassettes and live seminars.
Five of his six books have landed on the New York Times Bestseller list. Last fall, he took his road show to Madison Square Garden, long an arena for rock stars and marquee sporting events. This week he returns to Hawai'i to lead $49-a-ticket seminars on O'ahu and Maui.
The Kiyosaki juggernaut hit a bump earlier this year when SmartMoney, a magazine published by Dow Jones and Hearst, ran an eight-page article that questioned his veracity on several topics, including whether there ever was a "rich dad," the focal character of his book.
"When you really dig into Kiyosaki's message, there is shockingly little substance at its core," the magazine said. "Some of his advice ... is just plain goofy and even flawed."
The magazine questioned Kiyosaki's claim that he sometimes starts companies and then takes them public. It said he pointed to Yamana Resources, a gold exploration company, as an example of that, but the company's CEO says Kiyosaki's only connection was that Kiyosaki owned shares in a company Yamana bought.
Kiyosaki called the magazine story "a pack of lies."
He sees his detractors as missing the point of his message, which is to teach people to think about money in new ways. Accumulate assets, those that put money in your pocket, and minimize liabilities, those that take money out. A house purchased with a loan is a liability unless it's a rental property. Debt that buys you property with positive cash flow is good debt. These are things people need to know, he said.
"People lack basic financial education," Kiyosaki said in a phone interview from his home in Phoenix, Ariz. "Get financially educated so people won't steal your money."
Kiyosaki counsels audiences to avoid putting savings in stock mutual funds. He urges them to think beyond the traditional path of "work hard, join the union, save money and retire" if they seek financial freedom.
He compares the fortunes of his mentor, the "rich dad," a friend's father who started businesses and owned property, and his own "poor dad," who clung to his job and ended up living on Social Security. His dad was Ralph Kiyosaki, a former Department of Education official who ran for lieutenant governor as a Republican in 1970.
Asked whether the "rich dad" really existed, Kiyosaki said there was one original "rich dad," but his books draw on lessons from several "rich dad" mentors in his life, including some who were women.
Kiyosaki says he left Hawai'i to seek better business opportunities on the Mainland and criticizes the state for being anti-business. "Your tax laws are prohibitive for entrepreneurs," he said. "Hawai'i's market doesn't excite me."
But it did entice him to schedule a three-hour seminar for Thursday at the Hawai'i Convention Center in Honolulu and another one for Saturday at the Hyatt Regency in Lahaina, Maui.
Nationwide, small groups have sprung up to follow the "Rich Dad Poor Dad" philosophy and play its financial Cash Flow board games, a Monopoly-like game with sophisticated twists.
John T. Reed, a California real estate author and critic, says Kiyosaki makes entrepreneurship and real estate ownership seem too easy when it can be fraught with risk.
"Kiyosaki is sending you to a minefield," he said. "He tells you it's a primrose path so he can get your $20 and live in his mansion."
Kiyosaki's company said Reed just wants to gain attention by attacking well-known personalities. Reed said he doesn't get any money for his efforts and receives hate mail about every other day for his criticism of Kiyosaki.
But he persists because "I don't like to see all these people getting ripped off."
Reach Deborah Adamson at firstname.lastname@example.org or 525-8088.