Rich Dad Fraud Dad

Even people who know nothing about personal finance or self-development will have heard of "Rich Dad Poor Dad" and its author, Robert Kiyosaki. The enigmatic businessman was the original financial influencer, building a huge and loyal audience decades before the internet made it possible for anyone with a webcam and a Robinhood account to grow a following. However, there are two significant problems: his advice was never that good to begin with, and it has only gotten worse over time. In one of his statements, he mentioned that he is currently $600 million in debt.

0.2 billion. This seminar was free, but the speakers spent most of their time trying to convince us to attend another seminar. I think it cost us about $15,000—$995 for three days of training. You could say something to Robert Kiyosaki.

What would you say? I can't get my $500 back. If you're watching a video like this, then there's a very good chance that you have a better understanding of personal finance, business, and the economy than the average person on the street. Even then, it can be hard to find the answers to simple questions that can have a big impact on your livelihood.

The lack of financial education, combined with the fact that personal finance is often unnecessarily complicated and filled with jargon, creates a significant opportunity for individuals to sell a simple guide on how to solve all money problems. The challenge with these lessons is that it is impossible to create a book, course, YouTube video, or live seminar that appeals to a wide audience while simultaneously addressing each individual member's personal financial situation. Additionally, making constructive financial advice marketable is difficult because, most of the time, it is simply boring. If you want to make substantial income by providing desperately needed financial education, you have two options: create something tailored for a niche group of people that offers unexciting yet productive advice, or make big, exciting promises that appeal to everyone but lack consideration for individual needs.

Kiyosaki is the king of making extremely basic and often questionable financial advice sound profound to a novice audience. Just as, prior to the Civil War, it was illegal to educate a slave, we are not allowed to learn about money in school. It might sound silly to you and me, but there is a large audience for it, especially among those who are down on their luck.

Kiyosaki has made millions of dollars over the past four decades by selling a personal financial strategy that denigrates formal education and stable careers while advocating for a lot of debt, aggressive investments, and entrepreneurship as ways to achieve financial success. Or at least that was his advice before he went off the rails, but we'll get into that later. Kiyosaki is best known for his book, "Rich Dad Poor Dad," but he is an absolutely prolific author, having published no less than 26 individual books, all related to money, real estate, and personal finance. His first book, while not as successful, perfectly encapsulates how he would go on to sell his own brand of financial advice. It's titled, "If You Want to Be Rich and Happy, Don't Go to School."

And as the name suggests, it outlines how a traditional education is designed to direct people into getting traditional jobs that may make them miserable and poor. Now, like all good sales pitches, there is an element of truth to this. Wages haven't kept up with rising asset prices, and the college degree route has only become more expensive and competitive since this book was published. However, it conveniently casts a very wide net over a group of people who either never got a college degree, regret getting their college degree, or are considering whether they should pursue a college degree. The only people who won't find a book like this compelling are those who went to college and turned that into a successful career.

But that doesn't matter because those people don't make for good customers anyway. His much more successful book, *Rich Dad Poor Dad*, takes the same lessons and repackages them into a simple narrative with a more intriguing title. The man has his problems, but he optimized thumbnails and content creation decades before YouTube even existed. So, uh, respect, I guess? Anyway, most of you probably already know the basics of a book if you haven't already.

Read it. He talks about his actual father, his poor dad, who went to school, got a stable job, and tried to stay out of debt, in contrast to his friend's father, who becomes a mentor and is referred to as his rich dad. According to most investigations into the subject, this rich dad never really existed. Now, most exposés on the topic leave it at that, but to be fair to Robert, the made-up character is hardly the smoking gun people think it is. Even if the rich dad was just a figment of Kiyosaki's imagination used as a stand-in for his own advice, that wouldn't matter.

Matter if the advice was good. Now, some of the stuff he teaches is so generic that it's really beyond criticism. Don't go into debt to buy dumb stuff, don't spend money you don't have, accumulate assets not liabilities, and keep track of your money. That's all perfectly reasonable, and if that's all you take away from him, that's fine. But that would be like picking up a personal fitness book from an Olympic athlete to read about the health benefits of drinking water.

It's not wrong, but it's not what the book sells, and that's where his lessons can really hurt people. The most dangerous aspect of Kiyosaki's teachings is how much he advocates for using debt, going so far as to say you can never get rich if you don't master the art of using other people's money. Utilizing leverage to buy a house or even investments can generate huge returns if you really know what you're doing and have the resources in place to manage the risk. Debt can increase your returns, but it also increases the risk. If you take on debt at the wrong time, it can set your financial life back significantly.

Decades, like it would have if you attended his real estate investment seminars in 2007, months before the global financial crisis. If that wasn't bad enough, he also teaches something called the Cashflow Quadrant, which outlines the different ways people can produce an income. There are employees and self-employed people, the "suckers," and then there are investors and business owners, the "winners." According to his books, the difference between a self-employed person and a business owner is that the self-employed person needs to work in their own business to keep it running, whereas a business owner can step away from their business at any time and leave it to employees to handle everything without them.

In addition to leveraging other people's money, Kiyosaki refers to this as using other people's time. This means that any profit from the business is passive income, which is obviously great, but it's incredibly hard for most businesses to get to the scale where they can offload all operations to hired staff while still generating enough profit. For Robert, this didn't matter because countless investigations into his backstory have all found the same thing: he got rich by selling books on how to get rich, not by following the advice in those books. Today, Kiyosaki is a very wealthy man, and he has since made a lot of investments in real estate and reportedly taken on a scary amount of debt.

But that is all a lot easier and safer to do when there are millions of dollars coming in from book sales every year. The thing with this strategy is that it will work for some people, and those individuals are far more likely to publicly sing the praises of Kiyosaki and his teachings than those who leveraged up on a rental property in 2007 and went bankrupt when the market turned against them. People who end up in situations like that are embarrassed and tend to keep quiet, even if the lessons they learned are far more valuable than those of someone who just got lucky on a risky bet. Now, even that wouldn't be worth making a video about. A person becomes rich by giving out questionable, untailored financial advice, and then uses that wealth to justify their strategies.

That's basically half the internet at the time. This point, however, old Bob here doesn't get any special mentions just because he did it first. What warrants further digging, though, is how bad advice is just the first step in the Rich Dad, Poor Dad funnel. One of Kiyosaki's lesser-known books is probably the one that's done the most damage, and it's called *The Business of the 21st Century*.

In it, he makes the same points about moving away from a role where you're working for money and trying to build up investments and businesses that generate passive income. However, the problem is that starting a business is hard. Even if the average person had enough money to open a business for themselves, most fail. The solution that Kiyosaki pitches in the book is to avoid traditional businesses and instead start a network marketing business. If you don't know, network marketing, multi-level marketing, and direct selling are all corporate euphemisms for businesses like Herbalife, Amway, Avon, and Usana.

I'm sure by now you know what these companies are, but if you don't, just think of them as pyramid schemes that are legal thanks to some clever loopholes. These businesses have terrible track records of making money from their members through ridiculously overpriced products. The only thing that keeps people coming back to buy more is the dream these companies sell of making millions of dollars by roping more people into the scheme and becoming an elite member at the top of the pyramid. In his book, Kiyosaki says he isn't directly involved in any particular company, but that's actually a genius move on his part. This book is often given out as required reading to any new people entering the bottom of the pyramid through these companies.

The Rich Dad Poor Dad brand adds an element of legitimacy to a business that people have become very wary of, and by not claiming direct involvement in any particular business, Kiyosaki can sell the book to Amway distributors just as easily as Herbalife distributors. That's where the money actually is in these businesses. According to mandatory disclosures, even the people in the top percentile of these companies make very little money from the bonus structure itself, certainly not enough to live the lavish lifestyle they show off to new recruits. The real money comes from selling books, CDs, and tickets to seminars that promise the secrets to unlocking wealth by running a multi-level marketing company. It's a grift inside a grift, and Kiyosaki has put his hat right in the middle of the scheme with his book.

The ubiquity of this book among multi-level marketing pundits also means that he can charge a lot of money in speaking fees at the conferences these companies hold. You know, when people say "network marketing," it's like they equate it to Ponzi schemes and pyramid schemes. They don't know what they're talking about. Corporate America is a pyramid scheme. It goes like this.

Having arguably the most famous financial guru in the world telling a room full of people they're suckers for having a stable job is a great way to get people to sign up to sell vitamins out of the back of their car. Kiyosaki's business strategy of casting a wide net with his books and then profiting off specific groups doesn't just work on the MLM crowd. In addition to seminars on real estate, which is arguably what he's best known for, he's also started claiming to be an expert on cryptocurrency, precious metals, and dropshipping. Basically, if there's a market for selling advice on sketchy businesses with promises of riches, Kiyosaki will be there with a seminar to sell. Now, just for a bit of fun, it's worth looking at the absolutely wild ways in which he tries to build authority in these spaces.

When a market is oversaturated with people trying to sell a course, it takes some crazy sound bites to stand out. For crypto, it was the prediction that Bitcoin will hit $10 million, and for precious metals, it was the claim that he owned the biggest gold mine in America. I bought the biggest gold mine in America last year, last July. It's in Utah. So, you're literally mining your own gold?

Amen. So, this was just, like, verifiably untrue? According to the firm global data, the biggest gold mine in the USA is the Carlin Mine, which is in Nevada. It's owned primarily by the Newmont Corporation, and Kiyosaki is not listed on company filings as a major shareholder, although it's possible he's a minor non-listed shareholder. On his website, he clarifies that he actually has an interest in an ex-copper mine that he and his team have prospected to contain 2.9 million ounces of gold.

If this is true, it would be a major discovery, to be sure, but it would still only represent around two years' production of the largest gold mine in America. That's still impressive, but it doesn’t sell as well to his target audience. In the same article, he talked about why he's buying gold, and the headline issue is that he doesn't trust academic elites at the Fed. It’s a popular and almost understandable sentiment, but curiously, the only way you can buy his courses or attend his seminars is by paying with that "dirty" academic elite paper money, which he claims is completely worthless.