Assets Robert Kiyosaki Says You Should Be Saving (and Why)

Robert Kiyosaki, author of the bestselling book “Rich Dad Poor Dad,” is a controversial figure in the financial world, but his core message about understanding assets and liabilities resonates with many. He emphasizes that true wealth is built by acquiring assets that generate income, not by accumulating liabilities that drain your resources. So, what assets does Kiyosaki recommend saving or prioritizing? Let’s break them down:

1. Financial Literacy (Your Education):

This is the cornerstone of Kiyosaki’s philosophy. He argues that financial intelligence is the most valuable asset you can acquire. This means understanding:

• Accounting: Knowing how to read and understand financial statements (income statement, balance sheet, cash flow statement).
• Investing: Learning about different investment vehicles like stocks, bonds, real estate, and businesses.
• Understanding Markets: Being aware of economic trends, market cycles, and global events that can impact your investments.
• The Law: Knowing how laws and regulations can affect your business and investment decisions.

Why Save It? Financial literacy empowers you to make informed decisions, identify opportunities, avoid scams, and ultimately build wealth effectively. It allows you to distinguish between assets and liabilities and make sound investment choices.

2. Real Estate (Done Right):

Kiyosaki is a huge advocate for real estate investment, but with a crucial caveat: it must generate positive cash flow. He emphasizes that a house you live in is a liability, not an asset, because it takes money out of your pocket each month in the form of mortgage payments, property taxes, insurance, and maintenance.

What Kind of Real Estate?

• Rental Properties: Properties that generate income from rent exceeding expenses.
• Commercial Real Estate: Office buildings, retail spaces, or industrial properties that offer potential for higher cash flow.
• Fixer-Uppers: Properties that can be purchased at a discount, renovated, and then rented or sold for a profit.

Why Save It? Properly managed real estate provides passive income, appreciates in value over time, and offers tax advantages. It’s a tangible asset that can generate long-term wealth.

3. Businesses (That Work For You):

For Kiyosaki, building or acquiring businesses is a key path to financial freedom. He stresses the importance of building a business that can operate without your constant involvement, generating passive income even when you’re not actively working.

Key Considerations:

• Systematization: Create systems and processes that allow your business to function efficiently without you.
• Delegation: Hire competent people and delegate tasks effectively.
• Scalability: Choose a business model that can be easily scaled up to generate more revenue.

Why Save It? A successful business provides potentially unlimited income, creates jobs, and builds wealth through equity. It can be a powerful engine for financial independence.

4. Paper Assets (Stocks, Bonds, Mutual Funds):

While Kiyosaki is more cautious about paper assets than real estate or businesses, he acknowledges their importance in a diversified portfolio. However, he emphasizes the need to understand the market and invest wisely.

Kiyosaki’s Approach:

• Invest for Cash Flow: Look for stocks that pay dividends.
• Understand the Companies: Research the fundamentals of the companies you invest in.
• Be Aware of Risk: Understand the inherent risks of the stock market and manage your portfolio accordingly.

Why Save It? Paper assets offer liquidity, diversification, and the potential for capital appreciation. They can be a valuable part of a well-rounded investment strategy.

5. Commodities (Gold, Silver, Oil):

Kiyosaki is a known advocate for precious metals, particularly gold and silver. He views them as a hedge against inflation and economic uncertainty.

His Rationale:

• Store of Value: Gold and silver have historically maintained their value during economic downturns.
• Limited Supply: The limited supply of these precious metals can drive up prices in times of crisis.
• Inflation Hedge: They tend to hold their value better than fiat currencies during inflationary periods.

Why Save It? Commodities, specifically precious metals, can provide a safe haven for your wealth during times of economic instability.

The Core Message: Shift Your Mindset

Kiyosaki’s advice isn’t just about accumulating assets; it’s about changing your mindset. He encourages people to:

• Take Control of Their Finances: Don’t rely on a job or government for financial security.
• Be Proactive: Seek out opportunities and take calculated risks.
• Continuously Learn: Invest in your financial education to stay ahead of the curve.

Important Considerations:

• Risk Tolerance: Understand your own risk tolerance before investing in any asset.
• Due Diligence: Always do your research and seek professional advice when making investment decisions.
• Diversification: Don’t put all your eggs in one basket. Diversify your investments to mitigate risk.

Robert Kiyosaki’s teachings offer a valuable framework for understanding wealth creation. By focusing on acquiring assets that generate income and prioritizing financial literacy, individuals can take control of their financial futures and build lasting wealth. However, remember to conduct thorough research and seek professional advice before making any investment decisions. His advice can be provocative, but the core message of understanding assets and liabilities is a powerful tool for building financial security.

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