Popularity, therefore Authority?

February 25, 2006 12:52 PM

John T. Reed’s analysis of Robert T. Kiyosaki’s book 'Rich Dad, Poor Dad'. [cache] Kiyosaki has spun a business empire off his book, including follow up publications, TV appearances and columns that make suprisingly broad statements about what's worth doing.
posted by Firas (24 comments total)

Those who can, do....

Seriously though, is anyone surprised when one of these "I'll make you rich" types turns out to be completely FOS?
posted by clubfoote at 12:56 PM on February 25, 2006

uh oh, this is turning into a link and run because the lab's closing a couple hours before I expected, sorry
posted by Firas at 12:57 PM on February 25, 2006

Nice link, Firas. Never heard of John Reed but from his website it looks like he does good work debunking financial hucksters. (Plus he quotes from books like Innumeracy which is a good thing (tm))
posted by storybored at 1:52 PM on February 25, 2006

I once played the Rich Dad, Poor Dad board game at the Rich Dad, Poor Dad offices in Phoenix. My friend and I knew someone that worked there and didn't have to pay any money, but some of the other people were paying some pretty good money to play some silly board game tangentially related to investing (about as closely related as Monopoly). I didn't meet Kiyosaki though.

One woman playing the game told me that she ran a few snow-cone trucks but was looking to invest in chips. I assumed she was intending to expand her menu, but she was actually talking about the semiconductor business.

Anyway, the feeling I get from Kiyosaki is that he's "daring" people to make investments - that it's less about prudent financial decisions and more about wanting a better life for yourself and having the self-esteem to carry it out. This seems to be a common theme amongst the real-estate investment seminar crowd.
posted by mullacc at 1:52 PM on February 25, 2006

That page is ridiculously long. Kiyosaki is no doubt one of the long list of investors who became rich primarily through luck, and one of the long list of exploitative self-help authors whose advice primarily works through the placebo effect. But the author of that page seems to have to have bit of an obsession with Kiyosaki himself.
posted by gsteff at 2:14 PM on February 25, 2006

I think Kiyosaki makes more many off his books than he ever did off any investment.
posted by PenDevil at 3:00 PM on February 25, 2006

I had previously found this site when I googled "kiyosaki and scam". I was pissed that the local pbs station (kteh in san jose) was playing his special about 8 times during their pledge drives (which go on about 40% of the time). It was especially onerous because they were prempting NOVA (which probably partly inspired me to get my Ph.d in chemistry) with his special that recommended that people not get an education. Funny, there are no (relevant) hits for "nova and scam".
posted by 445supermag at 4:33 PM on February 25, 2006

"Kiyosaki is no doubt one of the long list of investors who became rich primarily through luck"

No, that's the point. He isn't even an investor at all. At best, he's an entrepreneur.

If I tried hard to give people good advice, and was outdone by some huckster who gave bad advice and told lies about himself, I might be a bit peeved too.
posted by i_am_joe's_spleen at 5:41 PM on February 25, 2006

This is a great post. There's nothing more annoying than a fake guru whose books you see everywhere. PBS should be ashamed of itself. Then again, practically all of PBS fundraising fodder is shameful sheis
posted by ParisParamus at 5:51 PM on February 25, 2006

I'm bound to take heat for this, but having read Rich Dad, Poor Dad; having played the Cashflow game, and even having attended a seminar (free ticket): I can say Kiyoski is way short on details of how he became wealthy. I left seminar disappointed, albeit with my wallet intact. Some of his ideas / principals were sound, many were not. Kiosaki is a lazy investor- I have little respect for lazy anything.

The Cashflow game, surprisingly, has done some good. Be warned, it seems to have been designed for 12 year olds. You learn to evaluate investment opportunities; it actually seems to help with real life investor decisions. There is a torrent somewhere for anyone interested.
posted by vaportrail at 7:02 PM on February 25, 2006

Why would you take heat for that, vaportrail? That's exactly what the linked article says, except it calls him a lying piece of scum instead of just lazy.
posted by jacalata at 8:38 PM on February 25, 2006

Friends asking me what I think about their new MLM opportunity often promote Kiyosaki's book as some kind of inspirational roadmap. In fact, I have two copies sitting around that were foisted on me by aspiring MLMers. Thanks to Reed, I no longer have to elaborate on the book's contradictory nonsense.
posted by Tubes at 8:57 PM on February 25, 2006

This is quite the detailed rebuttal. He does seem pretty obsessed, but it's a good read. Thanks!
posted by graventy at 9:04 PM on February 25, 2006

rich dad poor dad is a book that i give all my dropout friends. frankly, it inspires them to do SOMETHING with their lives.

It's kind of like giving the bible and religion to somebody to get them on track. I don't want any part of it, but it just might help them to at least FEEL better about themselves, which is part of the placebo effect and has a demonstratable effect.
posted by Milliken at 12:58 AM on February 26, 2006

That was a very enjoyable deconstruction of a bullshit artist. It seems to have grown over time as defenders have raised new points, which are summarily demolished as well.
posted by dhartung at 1:21 AM on February 26, 2006

It's kind of like giving the bible and religion to somebody to get them on track.

An apt comparison. But we all know what religion can do to people. I read Rich Dad at 16 and OMG my life would never be the same! Thank god I found John Reed's page to set me straight or I might have never thought critically about anything again.

Then I got into and out of Christianity, cynical leftism, libertarianism, Hardcore Libertarian Randism, liking Bush, back to libertarianism, misanthropism, and know-it-all-ism (they just keep pulling me back in!). Finally I know the one supreme immutable truth: I don't know a goddamn thing.

Kiyosaki blows. Hard. He's up there with Stalin; luckily he wasn't born in Russia 100 years ago.
posted by MarkO at 8:22 AM on February 26, 2006

rich dad poor dad is a book that i give all my dropout friends. frankly, it inspires them to do SOMETHING with their lives.

Yes, but the point that's raised in this post is why not give them a much better book?
posted by storybored at 9:49 AM on February 26, 2006

John T. Reeds rates the real-estate investment gurus

Kinda like a Consumer Reports for hucksterdom.
posted by storybored at 9:51 AM on February 26, 2006

Cashflow is a pretty good game. The costs and savings are reasonably close to real life (and it's dead easy to play the game using one's real cashflow figures), the risks and rewards kind of mirror real life, and the experience of taking big-ass chances can be eye-opening. It is an opportunity to learn about oneself.

There are some deep flaws in the game: the stock market ceases to work realistically once you've some experience ('cause you know when a given stock is a good or bad risk; this can be ameliorated by remixing the cards every few rounds); and the investment properties are all calculated using tax-deductible mortgages, which isn't necessarily the case in all countries.

All in all, it is a game well worth playing a few times over. It is a great learning opportunity, when approached with the right frame of mind.

The rest of Kiyosaki's stuff sucks shit. The books are especially execrable.
posted by five fresh fish at 10:07 AM on February 26, 2006

In my post-Kiyosaki days, I went to a bookstore and checked out "Rich Dad's Guide to Investing." This tome was 100% bullshit.

Specifically: Two of the riskiest and least-succesful investments you can make in the stock markets are penny-stocks (particularly on Canadian exchanges, where it is estimated that 1-in-10 investors stand a chance at making money), and volatile IPOs. Not surprisingly, Kiyosaki reccomends investing in Canadian penny-stock IPOs.

"You're scum. You're lower than scum. You're the scum they scrape off scum."
posted by MarkO at 12:19 PM on February 26, 2006

Kiyosaki is no doubt one of the long list of investors who became rich primarily through luck, and one of the long list of exploitative self-help authors whose advice primarily works through the placebo effect.

I'm all for people being paid to write fluffy opinion pieces and deliver placebo-ic seminars—the world would be a much duller place if all we had were scholarly essays and board-licensed advisors. If you can cash in on something—anything—and have people wanting to pay you in the process, I say go for it!

So, although the criticisms of Kiyosaki's advice per se might be valid, I wouldn't care too much. My point is that he's established his position via intellectual dishonesty: there was probably no 'rich dad', and rich-dad advice probably didn't make Kiyosaki rich. I'm inclined to deduce that writing about the advice of a fictional rich dad made Kiyosaki rich.

His current 'authority' to write, give speeches, and otherwise give advice, then, is based on his celebrity; his celebrity is based on his writing; part of the appeal of his writing is based on (a) a dishonest account about whether a person existed and (b) a possible lie about his qualification for dispensing 'get-rich advice' (ie., being really rich at the time of writing the book).

Problem (a), one may say, is just a slight intellectual one: if he had spun a clearly hypothetical story about rich dads telling their kids things that poor dads don't, I'd settle this point. In fact I'd point it out as an example of a good writing technique.

Problem (b) concerns me more. Telling people how to get rich, based on being rich, based on telling people how to get rich—that can work if your advice is about how to get rich by coaching people or by giving seminars. If your advice is about investment, I'm afraid it turns from just pyramid-scheme-ish to castle-on-air-ish.

Of course, the more he basis his authority on being writer-and-consultant Kiyosaki rather than being author-of-Rich-Dad-Poor-Dad Kiyosaki, the less of a problem this objection of dishonest claims becomes.

(Note that I'm drawing the above conclusions based on the assumption that Reed's research is valid. Maybe there was a Rich Dad figure, and maybe Kiyosaki was rich when writing Rich Dad, Poor Dad. Then objections to him would be limited to the quality of his advice, which may be shoddy, but hey, he's not the only one out there dispensing shoddy opinions and making a living off of it: turn on the TV any day to see that happening in a gazillion fields of endeavour.)

PS. Comparing a person who may be a bit intellectually dishonest or a bit sloppy in his advice to mass-murdering selfish backstabbers like Stalin is rather extreme.
posted by Firas at 9:14 AM on February 27, 2006

What made Kiyosaki rich was getting his book into the cults of Amway and other MLMs.
posted by five fresh fish at 9:34 AM on February 27, 2006

I just emailed this to John Reed:

"I watched one of his PBS pledge breaks that you mention, and while a couple of things he said were interesting, I knew he was full of it when one of the audience members asked (paraphrase from memory), "How much money do I need to be making in order to start investing in real estate your way?" He then gave about two minutes of anecdotes and ha-ha moments, with no substantial information except for his final sentence, which he delivered very quickly and quietly into the mic after a round of laughter from a joke: "...if you are making less than $500,000 a year, my advice is to start a home business."

Oh really? Fella, if I get up to where I'm earning half a mil a year, I don't think I really NEED to invest in real estate! Although I suppose that would actually be a good time to build a nicely diversified investment portfolio, possibly including income-generating rental properties and real estate. I mean, really, how many Americans actually earn $500,000 per year from their jobs? 1 million? A few hundred thousand? What he said there is that you already have to be financially successful and in fact pretty wealthy to "get rich" his way. Sheesh, that's a gross income of almost $42,000 a month! I only make $70K/year, I can only dream of income like that. I suppose his next advice would be to start an Amway distributorship?? Pfaugh!"

Seriously, that was all I needed to hear. If $500K/yr is his "low number" for where you need to be to start investing in real estate his way, nobody who bought his book can actually do it with any hope of success unless they get wildly lucky, and certainly with no margin of safety.

I have a real "rich dad," actually my uncle, who along with several partners from his job at the power company, was able to get in at the bottom floor during the real estate low point back in the 1970s. They were all very smart, did a ton of research and hard work, started small, and got lucky with a few properties when their neighborhoods gentrified and real estate values boomed again. Even so, he is not rolling in cash, living in a mansion, driving expensive cars, etc. He's just been able to not work much for 20 years or so (after 20 years of hard work at his day job and managing his properties and hunting down deals), he and my aunt live in a very nice home they've owned for 25 years (paid a mortgage out on it in 15), and he's got some really awesome model trains.

Getting rich quick is a matter of luck, and almost never happens. Period. Kiyosaki is a snake-oil salesman.
posted by zoogleplex at 11:31 PM on February 27, 2006

Yeah, I guess I was being too charitable when comparing him with the average pundit. He does seem to base his fortune in seperating the gullible from their cash and selling them dreams in return.
posted by Firas at 11:51 AM on March 1, 2006