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Phoenix's Kiyosaki: Rich
investor, rich author
Bestsellers draw followers
By Dolores Tropiano
The Arizona Republic
April 09, 2002
12:00:00
Walter Ruth was introduced to the books of investor Robert Kiyosaki in
November by a friend who gave him Cashflow Quadrant as a
gift.
After that, he read Retire Young, Retire Rich and
attended one of Kiyosaki's
seminars.
"It was a whole new way of looking at things," the United
Parcel Service account executive said. "I had just never heard the
concepts he was sharing."
Since then, Ruth, 40, has purchased two $200,000 four-plexes.
He bought a new home and rented out his former home, then bought
another house he is renting out.
"He says do the things the rich do and follow the principles
the rich follow, and why not do that?" the Chandler resident and
father of four said.
Ruth joins a fast-growing group of Kiyosaki
followers who have helped the self-made millionaire occupy some of
the most sought-after real estate in the world: the bestseller
lists.
Two of the Phoenix residents' books have been on the New
York Times bestseller lists for paperbacks since March 10.
He also has three books on the Wall Street Journal's
bestseller list.
Not that Kiyosaki is
without his critics, who contend that advice in his books can be
dangerously applied and the books have a get-rich-quick quality
about them.
But Kiyosaki's
success as a writer and investor, according to his books, is
striking. He and his wife, Kim, live in a $3 million home at the
Biltmore Estates.
Those achievements hold a certain irony for a man who was not
exactly a stellar student.
"I flunked out of school twice," said the author of Rich
Dad, Poor Dad: What the Rich Teach Their Kids About Money - That the
Poor and Middle Class Do Not. "I couldn't write, I couldn't
spell."
Kiyosaki wrote
Rich Dad, Poor Dad in 1994 after getting rich by buying and
reselling inexpensive real estate from the Resolution Trust Corp.,
specifically apartment complexes. Before that he had hit financial
bottom and was homeless after a rock and roll merchandising business
in Honolulu closed.
Working from a modest home in Phoenix, he added several
businesses to his plan, including an education company that
protected his profits and assets through corporations. He retired to
a ranch in Bisbee.
"I felt a compelling need to leave a story of how I did it
vs. how a financial planner will tell you to do it. It's a simple
story of how two fathers taught their sons," he said. "My poor dad
said, 'Go to school, get a good job and make money.' My rich dad
taught me how to let the money work for me."
One of the lessons that Kiyosaki learned
from his "rich dad," an unnamed investor whose advice to Kiyosaki is
quoted at length in the books, is that people should develop an
additional source of income for retirement besides their job and
401(k) plan.
In the book, he wrote, "I use two main vehicles to achieve
financial growth: real estate and small stocks."
According to Kiyosaki, his
"poor dad," his real father, was a superintendent of education in
Hawaii. He taught his children to go to school, get a good education
and find a secure job. When he was 52, he was fired. Ralph Kiyosaki went
downhill from there.
"He lost everything," recalled Kiyosaki, 54, a
fourth generation Japanese-American, "and he never recovered."
Jim Dew, president of Dew Wealth Management in Phoenix,
supports the idea of additional revenue sources.
"He (Kiyosaki) talks
about creating a source from which you can live off of so you don't
have to work anymore, an income stream you can turn on," Dew said.
Cosma Pabouctsidis, a marketing manager for a Valley
semiconductor company and former entrepreneur, agreed.
"I think the overall idea of having assets and having them
work for you is fundamental," he said. "I think you can get good
teaching from just that."
But some readers have concerns about Kiyosaki's ideas
about real estate.
"The guy kind of lost me when he was trying to give examples
on how to get rich. It almost sounded like one of those get-rich
schemes on TV. Just the ring of it," Pabouctsidis said.
Dew said, "He talks about real estate being the solution to
all wealth creation or financial independence. It makes it appear in
his books that it is a very simple process to create these
moneymaking machines. But if you don't have the expertise in the
investment vehicle you are using to get there, you can get into a
lot of trouble."
Kiyosaki does
disclaim that he does "not recommend anything" he does. "The
examples are just that, examples," he wrote. And he repeatedly
pounds the idea of being financially literate, particularly learning
about investing strategies, the market, tax advantages and law.
He said he stresses the importance of understanding the
difference between liabilities and assets.
As Kiyosaki sees
it, one of the problems in America's debt-ridden society is that
people get a pay raise and then proceed to buy liabilities they
think are assets, such as a bigger house, a boat and a summer home,
all of which throw them into greater financial uncertainty and debt.
He advises people to focus on buying income-generating assets
and keeping liabilities and expenses to a minimum.
Kiyosaki is in
Asia sharing his ideas with others who have put his books on the
bestseller lists. Although he will not reveal his wealth, he says
reports that it is $10 million are "very, very low." In addition to
his Tuscan-style home, he has six cars, including a Porsche
(liabilities). All of them were bought used.
And he is working on his next book, Rich Dad's Prophecy,
due out in October.
"I've been rich and I've been poor," Kiyosaki said.
"I am definitely happier when I am rich."
Reach the reporter at dolores.tropiano@arizonarepublic.com
or (602) 444-6876.
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