Robert Kiyosaki is a financial self-help author and motivational speaker. Following are some of the things he teaches in his various publications and presentation.

Education

In his words,

"Education is more important today than ever before. But we need to teach people to think a little further than just looking for a secure job and expecting the company or the government to look after them once their working days are through. That is an 'Industrial Age' idea, and we aren't there anymore. The rules have changed." –Direct quote from Robert Kiyosaki 2000 Cashflow Quadrant

“The main reason people struggle financially is because they spent years in school but learned nothing about money. The result is people learn to work for money...but never learn how to have money work for them,” says Kiyosaki.[1]

Kiyosaki says that life skills are often best learned through experience and that there are important lessons not taught in school. He says that formal education is primarily for those seeking to be employees or self-employed individuals. And according to Kiyosaki, in order to obtain financial freedom, one must be either a business owner or an investor, generating passive income. In effect, Kiyosaki stresses what he calls "financial education" as a means to obtaining wealth.

Wealth through passive income

According to Kiyosaki, wealth is measured as the number of days the income from your assets will sustain you, and financial independence is achieved when your monthly income from assets exceeds your monthly expenses. He equates this point with "true wealth".

Assets Vs. Liabilities

One of the basic points Kiyosaki writes and talks about is to think of an asset as something that puts money in your pocket and a liability as something that takes money out of it.

He states that contrary to popular belief, a property is an asset only if its rental income exceeds the costs of ownership (mortgage payments, taxes, maintenance, etc.). Otherwise it is a liability and only makes money for a bank. Even after the mortgage is paid off, the home is still a liability because of expenses such as rates (taxes) and maintenance.

The Cashflow Quadrant

"The Cashflow Quadrant" is the name Kiyosaki gives to his proposed system in which all the money in the world is earned. It is outlined in the diagram.

The diagram consists of four groupings, split with two lines (one vertical and one horizontal). In each of the four groups there is a letter representing a way in which an individual may earn income. The letters are as follows.

• E: Employee – Working for someone else
• S: Self-employed or Small business owner – Where a person owns his own job and is his own boss.
• B: Business owner – Where a person owns a "system" of making money, rather than a job to make him money.
• I: Investor – Spending money in order to receive a larger payout in return.

Kiyosaki says that those on the left side of the diagram never obtain true wealth while those on the right are on the road to true wealth (see the "Wealth Through Passive Income" section of this article).

Leverage

“‘Cashflow’ is the most important word in the world of money,” begins Kiyosaki. “The second most important word is ‘leverage.’ Leverage is the reason some people become rich, and others do not. Because leverage is power, some use it, some abuse it, and others fear it. The reason less than 5% of all Americans are rich is because only 5% know how to use the power of leverage.”

“True leverage is the ability to do more and more with less and less,” says Kiyosaki. “Here’s a suggestion. Get a clean sheet of paper and begin to write your answers to this question. How can I do what I do for more people, with less work, and for a better price? Rich Dad called this ‘the million dollar question.’” –Robert Kiyosaki 2002 Retire Young, Retire Rich

His primary examples of using leverage are in utilizing “OPM” (Other People’s Money) and “OPT” (Other People’s Time).

Debt

“There is good debt and bad debt. Good debt makes you rich, and bad debt makes you poor.” –Robert Kiyosaki.

Kiyosaki agrees with most, in that he dislikes consumer debt. However, he says that a “sophisticated investor” knows that debt is not always a bad thing to have. In other words, when debt produces profitable assets, it may be a good debt to have. Meaning, debt taking money out of your pocket is justified if it enables you to put a greater amount of money into your pocket. For example, if you take out a mortgage loan on a house, you are in debt to the bank; but this debt is justified by your ability to own the property and produce income from it, so long as that income exceeds your expenses.

“One of the most recognized forms of leverage is borrowing money. Today, we are aware of the severe problem of people abusing this powerful form of leverage. Many people now fear this form of leverage, saying ‘cut up your credit cards, pay off your mortgage, and get out of debt.’ My rich dad would chuckle and say ‘Cutting up my credit cards won’t make me rich. Cutting up my credit cards only makes me miserable.’” –Robert Kiyosaki 2002 Retire Young, Retire Rich

Spending habits

No one disputes that the rich buy "income-producing assets." Kiyosaki argues that the poor buy worthless items that they think are assets, which clearly do not earn anything and may have no market value.

Kiyosaki says the rich think differently in how they define simple words like assets and wealth and how they fund their luxuries. He explains that he defines an asset as any item which produces income (such as rental property, stocks or bonds) and a liability as anything which produces expense (such as one's own home and car).

Risk-taking

Kiyosaki advocates risk-taking and often stresses the importance of "having guts" to take risk.

Many wealthy men such as Robert Kiyosaki and Donald Trump stress this lesson. They say risk is necessary to yielding high gains on investments. Kiyosaki also points out that risk may be calculated, so as to minimize the danger of failure.

Dealing with failure

Kiyosaki says mistakes and failure are to be expected and to be learned from.

“…the worst thing that happened at school was that they taught me not to make a mistake,”, says Kiyosaki in an audio recording called “It’s Easy To Be Rich,” an adaptation to the board game “Cashflow 101.” He continues, “Now if you don’t make a mistake, that means you’re always afraid of trying something new. And the way a human being is designed to learn is by making mistakes.”

Repetition

Kiyosaki makes constant use of repetition. He feels that in order for an important idea to sink in, one should normally have to consider it again and again. This style is apparent throughout his publicized material. It is a style which is opposed by some of his critics. (see “Criticism And Controversy” section of this article)

Association

“Birds of a feather flock together” is a small lesson of Kiyosaki’s. This opinion of his was mentioned in the audio companion to his board game “Cashflow 101.” It is an old saying that in this context is meant to imply that, if you want to be and think a certain way (i.e. financially educated and wealthy), you should associate with others who either are this way or also intend to be. For instance, spending time with business owners or investors might give you support to be one yourself. He implies that those who are merely employees or self employed individuals may hinder your progress by offering discouragement and bad advice.

Consultation

Kiyosaki says that “free advice is often the worst advice,” meaning that many people will offer you advice, but only a few will offer good advice. And although he recognizes that good advice may sometimes come freely, he suggests that paying an experienced, competent professional to share his opinions and advice with you is often a smart thing to do. For instance, consulting a CPA or attorney is smart.