Robert Kiyosaki is a renowned figure known for revolutionizing the way individuals perceive money. He is a successful entrepreneur, real estate investor, author, and motivational speaker. Robert has gained prominence for his expertise in financial management and strategic real estate investments. He is the founder of Rich Global LLC and the Rich Dad Company, a private financial education firm that delivers personal finance and business instruction through books and videos. He is also the author of the bestselling book, “Rich Dad Poor Dad,” which has remained a widely acclaimed book on personal finance.
Robert Kiyosaki was raised in Hilo, Hawaii, and grew up with two father figures as described in his book – Rich Dad, Poor Dad – one affluent (rich dad) and one financially challenged (poor dad). His biological parents were both educators, while his friend’s father, a successful businessman he refers to as his ‘rich dad,’ provided him with guidance and imparted financial knowledge to the young boy. Robert always exhibited a keen interest in financial matters and seized every opportunity to gain further understanding from his rich dad, even as a child.
He says, “When I was young, my poor dad consistently advised me that the most efficacious path to success was to acquire higher education, positing that it was the best means of obtaining a desirable occupation. However, despite his extensive education, he frequently complained about financial difficulties and dissatisfaction with his career. In contrast, although lacking a formal degree, my rich dad succeeded in building a prosperous real estate empire.”
However, Robert eventually gave in to his parent’s wishes and completed his studies at the Kings Point Merchant Marine Academy in New York. He then decided to serve in the United States Marine Corps as a helicopter pilot during the Vietnam War. Reflecting on his experience, he says, “In my four years of military school education, I learned how to lead. The first thing they teach you is, What’s the mission? It’s the most important thing for any military officer. The next two things are, Can you take orders? Can you give orders? In other words, can you follow, and will other people follow you? That was impeccable discipline.”
Upon his return from Vietnam, Robert received a job offer from United Airlines. He recounts, “My poor dad viewed the opportunity with enthusiasm and encouraged me to accept the role, while my ‘rich dad’ counseled against it. I had to exercise independent judgment, and if I had accepted the position, I would likely have been impacted by the current wave of layoffs in the airline industry.”
Robert then joined Xerox; he adds, “Not because I like Xerox but because I had to learn how to sell. Communication is probably one of the top skills of an entrepreneur. Can you sell? Can you raise capital? So that’s why I went to work for Xerox. And then I just kept raising capital for corporations, my businesses, startups, and things like this.”
When he was in his 20s, he recalls, “I was a joke around Honolulu because I was the biggest failure they knew. I started in Nylon and took it internationally, but we couldn’t keep up with the demand. And that failed, so I went into the Rock and Roll business and the bands like Duran Duran, The Police, Van Halen, and Boy George. I was manufacturing licensed merchandising products for these rock bands. Then MTV hit, and we made money again, but the thing got too big; success will kill you if you can’t keep up with it.” It got to a point where Robert faced significant financial difficulties and even lived out of his car.
However, in 1997, he finally turned things around and got his first break as an author with his book “Rich Dad, Poor Dad.” The book is based on his upbringing and the lessons that Robert learned from these two contrasting figures, his ‘poor dad’ and ‘rich dad.’
Based on his Rich Dad’s teachings, Robert also ventured into real estate, which has played a significant role in his financial success. He says, “Real estate investors, much like fishermen, have tales of seizing opportunities others overlooked.” Robert and his wife, Kim, discovered such an opportunity in a dilapidated mountain cabin in Pennsylvania, eventually turning him into an ardent real estate investor. While vacationing in the area, the couple applied their ‘100:10:3:1 method,’ which involves viewing potential properties for sale in the vicinity. They chanced upon the cabin listed for an unexpectedly low price of $43,000.
The cabin’s low price point was due to a water shortage problem caused by an unreliable well. However, after consulting a well expert and installing a holding tank, the Kiyosaki’s resolved the issue and sold the cabin for a $37,000 profit. This experience reinforced the Kiyosakis’ belief in the potential of undervalued properties and the rewards that can be reaped through creative problem-solving.
Robert then went on to generate substantial wealth by investing in properties, which he flipped for a profit. He is now one of the leading real estate moguls, with an alleged portfolio of over 8,000 development projects and investment properties globally.
Robert believes real estate is one of the best investments to future proof oneself against recessions. Talking about the upcoming recession, he says, “I think crashes are wonderful things. So about two years ago, I started selling my non-performing properties.” He continued, “I went back into cash, gold, and silver, and I’m waiting for the next crash right now. So when it happened in 2008, I was already out. I was already selling my non-performing properties. By the time 2008 hit, I was in a position to go out and pick up people whose debt-to-equity structures and their management were weak. So we picked up so many great properties after the crash.”
Inflations also provide excellent opportunities for investors, according to Robert. He says the best way to build wealth during this period is:
- Invest in B-Class apartment buildings that are safe, clean, and affordable for people who work.
- Target areas with a strong job market. He says, “We own apartment houses in Texas and Oklahoma where there are jobs in the oil industry. We own nothing in Detroit, where jobs are leaving, and real estate values are dropping.”
- Seek out properties where there are natural or government constraints. “We own apartments where there is a no-growth boundary around the city. In other words, the city cannot spread out any farther,” Robert adds
- Build a solid reputation as a reliable real estate operator. He says, “This gives us credibility as good operators, even in a bad market. Great deals come to us because the banks trust us and send us deals for which other investors can’t get the financing.”
- The key is staying with what you know. Robert adds, “We do not invest in office buildings or shopping centers. That is not the business we are in.”
In conclusion, talking about the immense opportunity the industry has to offer, he says, “Real estate investing, even on a very small scale, remains a tried and true means of building an individual’s cash flow and wealth.”