He has been accused of hypocrisy, labelled a quasi-politician and branded as dangerously addicted to conventional wisdom. But Robert Kiyosaki remains a money publishing machine, whose book Rich Dad, Poor Dad sold hundreds of thousands of copies. He talks to Zoe Baird about his latest iteration on the theme - Rich Kid, Smart Kid.
Your books fly off the shelves. What's the secret?
Kiyosaki: A lot of people talk about the plight of the poor when it comes to money, and there's a lot of advice about money for the middle class - work hard and save money and that stuff. But that's not what the rich do. The rich do almost everything the opposite of what the middle class does. So I took what the rich do and made it simple enough for the average person to understand.
Do investment brokers have a vested interest in not getting your message out there?
Kiyosaki: That's a tough question! In America I think they're giving a lot of bad advice. But they have to give out that advice. If a person doesn't have much sophistication, you can't give them too sophisticated a strategy. Buy and hold, invest for the long term, buy the dips, diversify your account - very bad strategies from my perspective as a professional investor. But for the average investor it's good advice.
The sophisticated investor knows that markets run in three different directions. So a sophisticated investor has three different strategies, depending upon the market trends. The average investor only has a bull market strategy. So when the market trend reverses and starts going down, "buy and hold" turns to "buy and lose". Now that the market's down 50 per cent, the average guy is hoping it goes back up. But it probably won't go up for seven to 10 years. They're not going to get their money back. And most people will just sit there because they don't want to admit they made a mistake.
Why would a businessperson read your books?
Kiyosaki: How long does it take to save a million dollars? It takes most people a lifetime. How long does it take to borrow a million dollars? About 20 minutes. If you know what good debt and bad debt is, you can use that debt to make you rich. Saving money doesn't take much skill. The basic financial skill is to build and read a financial statement. Your financials are like a report card. They give you feedback as to the relativity of your financial IQ. If you're an idiot, the bank's not going to give you any money. But if you're smart, the banker wants to lend you as much as possible.
Can we learn this stuff?
Kiyosaki: I had to learn it. They say nine out of 10 businesses will fail.
I failed twice in business. It was a good experience. It built character. But I don't recommend it!
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