Why They Want You to Be Broke!
December 26, 2006 By Matthew Paulson
Donald Trump and Robert Kiyosaki’s New Book is Not Looking Out for You!
Why would anyone read a book about how to handle money by two people who have both filed bankruptcy? Only people who do so poorly with money, they have to throw their hands up in the air and admit defeat that they cannot pay all of their bills file bankruptcy. Now, there are some perfectly legitimate reasons to file bankruptcy, such as a huge medical debt which could never possibly be repaid, but when people file bankruptcy because their business fails or they spent too much money, chances are you should not be soliciting financial advice from them.
Financial author, Robert Kiyosaki and Donald Trump, CEO of the Trump Organization, have recently written a new book about how you should handle your money. The book, entitled “Why We Want You To Be Rich” is Kiyosaki and Trump’s attempt to get together to write a book about their “financial secrets.” In the book, they offer specific advice on how to invest money and become very wealthy. It sounds great to begin with, but there’s a problem.Both Kiyosaki and Trump’s businesses have filed bankruptcy. Why anyone would accept financial advice from them defies all logic and reason. Taking their financial advice from them would be like taking dieting advice from the 400 pound guy who lives down the street. It’s just not smart! If you’re looking for financial advice on how to become very wealthy, do what millionaires do! There’s a very well written book by Thomas Stanley called The Millionaire Next Door, which will tell you what millionaires do and how their behavior makes them wealthy. The book tells us that millionaires save large percentages of their money, invest it wisely, and spend very little.
Trump and Kiyosaki have another message. They tell us that they have a new way of thinking, which involves defying traditional investment logic. They tell us not to invest in mutual funds and work hard “because that does not make you rich.” They say that investing in mutual funds is playing it safe, and it won’t make you rich.
They tell us that “safe is the enemy of rich.” There is some truth to this, the greater the risk, often the greater potential gain, but they get it wrong because they ignore risk all together-that’s why they filed bankruptcy! When you let too much risk into your life you are asking for trouble. You could put all of your money on black in Vegas, but not many financial counselors will tell you to do that, because there’s too much risk!
You don’t get successful just because you take risk. You get successful because of your passion for the work, the quality of your work, your focus to be successful and your attention to detail. Kiyosaki seems to believe that the only thing you need to be rich is the desire to be rich, and this simply is not true!
This book really does not offer anything new. It’s simply a rehash of Kiyosaki’s previous books and Trump’s view on personal finance, which no one should take seriously. There are plenty of much better books from people who actually have money and have held onto it for a long period of time that will enable to you become very wealthy, but it requires hard work, dedication, and much more. The Millionaire Next Door by Thomas Stanley and The Total Money Makeover by Dave Ramsey would be a good place to start for those who really want to do what it takes to be rich.
Posted in books
content rss
December 27th, 2006 at 1:06 pm
I recently got in a fun debate with Get Rich Slick about this fundamental issue.
You can get somewhat wealthy with the Millionaire Next Door method. I haven’t read the Dave Ramsey book, but everything that I’ve read about seems to be more about the psychology of not having debt than education of good debt vs. bad debt.
Just because these people have filed for bankrupcy doesn’t make them failures or the equivalent of 400 pound fitness/nutrition expert. They both have significant money now and if they wanted to hire me to be their personal assistant at a salary of $1M a year they could (at least Trump could). I don’t know if I could say that for anyone following Ramsey or Stanley. When Trump and Kiyosaki say “rich” they are talking “rich, rich” not 1-2 million dollars.
That said, Trump and Kiyosaki have taken a lot of risk and came out good. For every one of them there are probably a 100 (or more) that lost their life savings. There is still a lot of value in the lessons that they teach. When I read Kiyosaki’s Rich Dad, Poor Dad it wasn’t about the desire to be rich, but more about working hard to learn the math that can make you rich.
In the end, you have to know what kind of risk is right for you to get to where you want to be.
December 28th, 2006 at 12:29 pm
Kiyosaki made the vast majority of his money by selling his books and making public appearances, not by following his own advice.
Trump and Kiyosaki’s methods (the ones they actually used, which may have very little to do with the ones they are recommending) made them wealthy, but are those methods repeatable by anyone, or more than a tiny percentage of those who try them? No.
December 28th, 2006 at 6:55 pm
Careful there! Trump has threatened to sue Rosie O’Donnell for stating that he had filed for bankruptcy. Looking over Trump’s Wikipedia article, it appears that he has not, although some of his business have.
As far as bankruptcy discrediting someone for giving financial advice, I would say that it depends. Depends on whether there was a lesson learned from it, as Dave Ramsey appears to have done.
But I’m not planning to buy Trump and Kiyosaki’s book. Has had other poor reviews, such as being an infomercial for their other products.
December 29th, 2006 at 9:51 am
Dave Ramsey has also declared bankruptcy. He often mentions that fact on his show. You seem to still value his financial advice.
December 29th, 2006 at 10:47 am
Indeed, Dave Ramsey does a great job teaching people and showing them that peronsal finance is more about behavior modification than it is head knowledge.
The difference between Ramsey and Trump & Kiyosaki is that Ramsey actually learned something from his experiences in bankruptcy. He learned that borrowing money is not the way to go, and drastically changed his behavior and is now again very wealthy.
Trump & Kiyosaki still ignore the same risk which got them in financial trouble in the first place, and now they are trying to get others to follow their misbehavior.
December 29th, 2006 at 6:56 pm
Wouldnt having filed for bankruptcy and then going on to become muli-millionaires make them the “model for the swimsuit issue of sports illustrated who at some point weighed 400-pounds?” I am not condoning everything they say or their techniques. But, if we keep an open mind, I am sure there are certain things we can learn from them.
January 3rd, 2007 at 2:12 am
I would like to know what Kiyosaki’s financial position really is. He brags constantly about owning international businesses and mining interests, but there is no record of these holdings. I think that Kiyosaki is like the thousands of other snake-oil salesmen that rake in thousands or millions on books and lectures rather than the the “ideas” put forth in those books and lectures.
January 5th, 2007 at 6:10 pm
I agree that the book is a rehash of all Kiyosaki’s previous books. After the first one or two, they all started to say the same thing.
What I don’t necessarily agree with is your comment about not listening to someone who has previously filed for bankruptcy. It depends on whether they recovered and went on to become rich and successful afterwards.
Your comparison with the 400 pound guy down the street. If you use it in the same context, you say that the 400 pound guy, who is now 140 pounds, is not someone we should listen to on weight loss because he used to obese? Wouldn’t you want to know how he
had such success if you were overweight? So, going back to
Kiyosaki & Trump. Whether you agree or disagree, wouldn’t you
like to know how they did it, particularly as they both appear to be so successful.
April 16th, 2007 at 1:37 am
Rich Dad Affiliate!
You may know about the phenomenal success of Robert Kiyosaki and the Rich Dad® the best-selling books Rich Dad Poor Dad, the Rich Dad Advisor Series, and the newest book, Retire Young Retire Rich.
Additionally Rich Dad offers Audio Sets and the educational games CASHFLOW® 101 & 202 and CASHFLOW® for Kids™.
With the phenomenal success that Rich Dad® is enjoying, we would like you to participate in spreading the message.
Join the Rich Dad Affiliate Program and you can receive generous commissions on the sales you generate through your blog.