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Like his friend and sporadic co-author Donald Trump, Robert Kiyosaki uses a harsh stance to separate wealthy wealth builders from less successful ones, and tag as “losers” those whose investing methods differ from traditional ones (or his own).
For Kiyosaki, it’s about making your money do the heavy lifting by focusing on items that contribute to long-term financial growth, like real estate. Other commodities, including gold, silver and cryptocurrencies, are given priority over typical 401(k) and IRA investments, consumer goods and depreciating assets.
This is what Kiyosaki said “losers” do with their money.
Choosing a Non-Traditional Investment Path
one in Youtube videoKiyosaki took a trip down memory lane and revisited the teachings of his books in light of recent investment trends like Bitcoin. With his chairman being involved in crypto, Kiyosaki is behind the idea, as long as your wealth-building investments pay for it.
Kiyosaki said, “Or I could tell you go to school, get a job, pay your taxes, work hard, save money and put your money in a 401(k).” “That’s what every loser does. Loser, loser, loser. Or they buy themselves a big house and they call it an asset, when it’s really a liability. Or a Ferrari or a Lamborghini or a Rolls-Royce and they call it an asset. It’s a liability. That’s why they’re losers.”
Of course, a home is an asset, but for Kiyosaki, a mortgage and all the expenses that come with owning a home (insurance, maintenance, taxes) make it a liability. Most people sell their homes or hold on to them sooner or longer than originally planned, making it an illiquid asset. It does not necessarily generate income and you should not rely on it to fund your retirement.
Giving importance to cash flow more than pay cheque.
True assets include rental properties that generate positive cash flow, businesses, stocks that pay dividends and intellectual property that generate royalties. To achieve financial freedom, Kiyosaki believes that the goal of a winning investor is to create a passive income stream that ultimately exceeds their expenses.
Kiyosaki has been accused of being overly simplistic, but there is no point complicating the fact that assets put money in your pocket, liabilities take money out. And it’s okay to cut back on expenses, but focusing on increasing your income means you ultimately won’t have to worry as much about meeting your expenses.
Whether or not you agree with Kiyosaki’s methods – critics point to his tumultuous bankruptcy history and his use of debt and aggressive investment strategies considered risky by some – the fundamental shift in mindset from consumer to investor is valuable advice.
If you choose to “go to school, get a job, pay your taxes, work hard, save money, and put your money in a 401(k),” you will be considered a loser by Kiyosaki, according to one of his facebook post. It’s a tough love approach, but without investing in wealth-producing assets, you’re definitely limiting your potential by relying solely on a job for income.