Jonathan Clements is a fantastic personal finance writer for the Wall Street Journal ($ subscription only) and has a weekly column called Getting Going. I always look forward to reading his column each Wednesday to see what he has to say.
Imagine my delight to see Clements weigh in on the murky financial reality that exists in the mind of Robert Kiyosaki, author of the popular book Rich Dad Poor Dad and a host of follow-up ramblings. (See my three-part review of Rich Dad Poor Dad for some perspective and context on what you'll read below.)
Clements takes on Kiyosaki's latest goofy tome, Why We Want You to Be Rich, co-authored with Donald Trump. I love the title of Clements's column.
Rich Men, Poor Advice:
Their Book Is Hot, But Their Financial Tips Aren't
Clements gets to the heart of the matter quickly by noting many of the same issues that plague Kiyosaki's other works of fiction.
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The book is rather simplistic and void of details.
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The book offers very little practical or useful advice.
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The book contains many confusing or contradictory statements.
Typical Kiyosaki fare. Nothing new here.
The best part is when Clements quotes Kiyosaki:
"Donald and I can beat Warren's (Warren Buffett's) rate of returns on investment. He may be richer, but we can get richer faster using our own methods and use less money."
That's standard Kiyosaki braggadocio. This guy is so full of himself that he has to go attacking Warren Buffett's proven track record in order to make his unproven track record appear to be good. Clements's response is beautiful.
"If Mr. Trump can earn higher rates of return, why does he rank 94th on Forbes magazine's listing of the 400 richest Americans, with a net worth of $2.9 billion, while Mr. Buffett ranks second with $46 billion?"
Good question. Even more hilarious is that Kiyosaki isn't even on the list, let alone worth anything approaching the bottom of the list. That must really grind at the king of greed and envy. He doesn't even qualify to be part of the club, yet he has the gall to criticize a man at the top.
Clements questioned Kiyosaki about some of his assertions and conflicting statements in the book. Basically, he received many of the standard non-answers, obfuscations, and further contradictions for which Kiyosaki is so famous.
In other words, there's no meat folks. Kiyosaki has produced another batch of simplistic fodder purporting to show the masses how to get rich -- when it's really him that is making all the money from selling books.
Here's one final item that reveals the shallowness of Kiyosaki's advice. Clements cites Kiyosaki's favorite investments as "rental real estate, silver, gold, and oil and gas partnerships." Rental real estate has always been part of Kiyosaki's shtick so no surprise there. What's interesting are those other investments.
You see, in Rich Dad Poor Dad, Kiyosaki NEVER mentions investments in "silver, gold, and oil and gas partnerships." On page 89 of that book he takes great pains to list specific "real assets" that he suggests "you or your children acquire." He then goes on to talk specifically about one of his favorites -- small company startups that he can take public (for which there is no documentation that he ever did). That's it. There's nothing about "silver, gold, and oil and gas partnerships."
Why the shift from the investment advice in Rich Dad Poor Dad? Kiyosaki, lacking any real investing skills, just follows the latest hot invesment fads and trends to make himself sound knowledgeable and look savvy.
In the late 1990's when Rich Dad Poor Dad was originally published, the hot investments were IPOs, especially small startup technology and internet companies. (Remember those days when a company with no profits and a back-of-the-envelope business plan could raise billions overnight?) Silver, gold, oil, and gas were dirt cheap and totally out of favor as investments. Thus, Kiyosaki made a big deal out of what was hot then (small company IPOs) so he could look like a wealthy genius and be hip.
Fast forward to 2006. Silver, gold, oil, and gas have had a tremendous 5 year runup and are the talk of the investing world. Small company IPOs (other than Google) are not exactly in vogue like they were in 1999. Plus we had the great plunge in the NASDAQ from 2000 to 2002 that burst the bubble of many of those once high-flying small company startups. So now Kiyosaki trumpets "silver, gold, and oil and gas partnerships."
Gee, what a forward thinking genius. He follows fads because he is really just a fad himself.
I'm glad to see someone as prominent and respected as Jonathan Clements recognize that there's very little substance behind Kiyosaki's glitz and glitter.
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