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Is Robert Kiyosaki a Fraud? Examining the Evidence

Rich Dad, Poor Dad was one of the first books I ever read on finances.

I figured out about the book through a network marketing business I was involved with, though that didn’t really end well.Robert Kiyosaki

I enjoyed the book.

I felt like it changed my mindset – mostly the way I thought about money and college, but a few years later, I started to notice that Robert had his fair share of naysayers.

Most successful people do, so I didn’t think much of it, but then I read that he may be a fraud.

Furthermore, I learned that he may not practice what he preaches and that’s a big deal to me.

If I’m going to learn from someone, I want to make sure they have achieved the results I am looking for; otherwise, I’ll go find someone who has.

That’s when I decided to do my own research.

Here’s what I learned…

Robert Kiyosaki’s Bankruptcy

If you’ve read his books, you know that Robert started a nylon Velcro wallet company in the 1970’s.Robert Kiyosaki’s Bankruptcy

His company fell apart, leaving him bankrupt, mostly due to overseas competition putting him out of business.

He then decided to join his competitors and work together, which ultimately brought his business back to life for a while, but it still ended up going south.

Bankruptcy didn’t leave Roberts’s life after that.

In 2012, his company Rich Global LLC filed for bankruptcy, after having to pay a sum of $24 million to a company called Learning Annex for using their platform for speaking engagements.

Robert was still sitting pretty after this last bankruptcy, reportedly having a net worth of around $80 million.

I’m not making any judgments about this, since I don’t really know the back story, but I can see how it would seem fishy.

Here’s what Robert said about it himself: 

“Robert and [wife] Kim are not paying out of personal assets. We have a few million dollars in this company, but not 16 or 20.
I can’t do anything about a $20 million judgment . . . We got hit for what we think is a completely outlandish figure.”The ability to make money and he apparently has an effective mindset

So you can see that bankruptcy is not new to him and it might not be the last time he has to file for it, but does that make him a fraud?

I guess that depends on what the word “fraud” means to you, but there is more to the story.

Before we go on, I think it’s important to point out that Kiyosaki has been a millionaire a few times.

He filed for bankruptcy, lost it all, then came back to being a millionaire.

So that shows he has the ability to make money and he apparently has an effective mindset.

Let’s talk about some more of the things he is considered a fraud for…

Kiyosaki, Amway and Rich Dad, Poor Dad

Robert was involved with a company called Amway.

My short-lived time in network marketing was actually with a company that basically evolved from Amway, so I don’t hold them in very high regard, but for now, this is about facts, not my opinion.Rich Dad, Poor Dad

Like I said, I first figured out about Rich Dad, Poor Dad from this MLM I was involved in.

Later I learned that Robert had self-published this book years earlier and it became quite popular in the MLM/network marketing world.

The large sales numbers he was able to achieve lead to a deal with a publisher and the rest is history.

Now Rich Dad, Poor Dad has sold millions of copies to date.

In his book The Cashflow Quadrant, he refers to four groups of people: the employed, the self-employed, investors and business owners.

This is a common diagram for MLMs to refer to, since they are building a business and it’s easy to show that on the Cashflow Quadrant.

Kiyosaki is pretty set on the idea that to build wealth, you’ve got to be a business owner and/or an investor.

I agree that it takes investing, but I also know you can become wealthy as an employee or being self-employed.

However, I do understand the idea behind his mindset.

Is Robert Kiyosaki a Fraud?

After the brief information I just laid out, it’s difficult to fully determine that he is or isn’t a fraud; however, there is another way to look at this: “what can we learn from him?”.

He obviously knows how to make money. 

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He obviously has a mindset that has taken him from failure to success multiple times.

His books are quite helpful, which is why I included a couple in my top 75 personal finance book list.

I think it’s important to know the background and a few things about the people we listen to, but ultimately, Robert does practice what he preaches for the most part.

Sure, he may not be 100% legitimate, but that doesn’t mean you can’t learn from him.

You can learn from anyone.

Take the good with the bad.

Eat the fish and spit out the bones.

However you want to word it, take knowledge away from everything. Take knowledge away from everything

You should be reading his books for wealth-building information, not moral guidance.

I’ll tell you right now, a lot of people think Robert Kiyosaki is a complete scam.

I’m pretty sure some people believe he is Satan himself with how they talk about him.

I don’t believe that.

I think he is someone who can teach us a few things and he is also someone who has some junk in his past.

I’m pretty sure we all have some junk in our past.

Usually the more successful one is, the more junk they have.

Robert is no different.



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About

Kalen Bruce of MoneyMiniBlog.com.au is passionate about helping you master your finances and maximize your productivity. He defies millennial laws by having no debt and four children. You can get his two ebooks, plus two personal finance classics (for free) at MoneyMiniBlog.com.au/free-moneyminibook


'Is Robert Kiyosaki a Fraud? Examining the Evidence' have 10 comments

  1. Avatar for Property Update

    October 27, 2015 @ 12:35 pm Becca Jane

    I’m loving his books at the moment – you have to fall to learn to walk. Most that think he’s a fraud I would expect are too scared to try so they will always crawl.

    Reply

    • Avatar for Property Update

      October 27, 2015 @ 3:27 pm Michael Yardney

      Becca – Like you I’ve learned a lot from him and every successful person I know has had flaiures (Boy have I!)
      I have no issue with this and you can learn much more form these and how they handled them as you can from their sucesses.
      However RK has been a doomsayer for the last 8 years and I disagree with him on this

      Reply

  2. Avatar for Property Update

    October 27, 2015 @ 9:48 pm steve

    I payed $100 bucks to see him on stage at Sydneys darling harbour years ago as i was a big fan of his book rich dad Poor dad
    Pretty much the whole 2 hours he was selling his books,board games,3 day events etc
    He is so full of crap a born salesman the night was never to teach anyone but only one
    Objective to sell his products and paint himself as a successful guru
    All of the 10 people in the audience i had spoken to all felt the same
    I left with them 10 mins before the end as i couldnt stand to hear another product launch
    I lost a lot of respect for him that night
    But on a positive note for Robert, he made a bunch of money, the place was packed and 20 deep
    with people wanting to buy his products

    I

    Reply

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    October 30, 2015 @ 11:15 am Judith

    The reason I am upset with RK is his doomsaying ( as Michael says). The 1st I heard was in 2003 when Australian houses were going to fall 30 – 40% according to RK. Good friends of ours sold all their portfolio and we sensed this was so wrong. This nonsense talk has happened many times over the last few years. Yes, some areas ride the property cycle but good solid middle of the road properties do not fluctuate to this degree. It is a gross generalisation that hooks some people into a false belief.

    Reply

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      October 30, 2015 @ 12:38 pm Bryden

      I kind of agree with Michael and Kalen on this issue. It became painfully obvious to us on the birth of our first child (funnily enough). We had about 18 different nurses administering to us and our son over the 6 days we spent in hospital and each one had a diffent opinion on what and how to do various things. By day six we formulated the mantra of “Listen to everything they have to say, and then make up your own mind”.
      I have found that this approach really should apply to almost every learning exercise (such as property educators) where you cant follow what they say blindly, and you need to do your own due diligence and checks and balances.
      I recently watched a Mark Rolton (the option king) presentation about making money from property options. It seems pretty straight forward from listening to the pitch, but you generally can’t viably do them in Victoria as you get charged stamp-duty on the property transaction and the put&call option transfer (at the value of the property, not the amount you are paid for the option transfer). So, for the most part they don’t stack up in Victoria – and is a good example of blind faith vs doing your own checks and balances.

      Reply

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    October 31, 2015 @ 3:28 pm Phil

    My understanding is that the rich dad poor dad story is basically fiction. Kiyosaki has apparently been pretty evasive in respect of revealing who “rich dad” is. Nevertheless, in making a success out of those books/games/speaking tours he has done one of the things that he espouses. Create multiple streams of passive income.

    Reply

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      October 31, 2015 @ 4:17 pm Michael Yardney

      yes Phil – he’s somebody’s Rich Dad now – and I have no issue with that

      Reply

  5. Avatar for Property Update

    November 3, 2015 @ 10:03 pm PeteM

    It’s often said “those that cannot do – teach” which is probably the most fitting in this case. Kiyosaki knows how to promote, inspire, excite and perhaps most importantly close the sale. Credit where credits due, give the man a stage and he could probably sell anything to anyone – whether it works or not.

    Reply

  6. Avatar for Property Update

    December 16, 2016 @ 6:06 am Bill

    Be careful of his mentor training sessions. They are run by 3rd party companies that have a license to use his name. A slick salesman from the US will spend a good deal of time on the phone with you then make you pay a large sum. I was nearly caught up in this and pulled out before putting a cent down. Research everything before you commit. Dig deeper that the glossy brochures.

    Reply


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