Real Estate Investor Magazine South Africa July 2018 | Page 64

INVESTOR INTELLIGENCE
R
Robert Kiyosaki
Shares Life-
Changing Insights
to Make You Richer
The biggest investor
lie: “this time it will
be different”
obert Kiyosaki is the author of the world’s #1 person-
al finance book, Rich Dad, Poor Dad. He has built a
legacy of content and knowledge of simplifying ideas
around complex issues on money and investing. He shares
his knowledge of challenging conventional money wisdom
through the Rich Dad book series; Cash flow board games,
live talks, seminars, video training, webinars and podcasts.
REIM has interviewed Robert Kiyosaki on more than five
occasions over the years on the latest updates on real estate,
money, business and the world of investing. His frequent visits
to South Africa are to educate entrepreneurs, business people
and the general public to share his latest insights and ideas on
money, business and investing.
Robert wrote the book Rich Dad, Poor Dad in 1997 and
subsequently changed conventional financial education. One
of the things he challenged was that your house is not an
asset and along came the subprime crash 2008, proving his
point. He challenged the thinking that savers are in fact losers
and investors are winners and the need to discover how debt
makes the rich richer. Today, with technology and globaliza-
tion replacing jobs, the need to get proper financial education
is critical.
Poor man’s thinking is thinking that the government will
look after you - instead, we need to take action ourselves to
succeed. Kiyosaki says he does not participate in the traditional
investing game. His biggest criticism is against the conven-
tional financial services industry that sells products such as
retirement annuities, mutual funds, stocks and shares, deriv-
atives, exchange traded funds (ETF’s), cryptocurrencies and
bonds. He believes that these aforementioned vehicles are
some of the worst investments you can put your money into.
Many people are attracting to investing into cryptocurren-
cies such as bitcoin and ethereum because of quick returns.
While he says that private money in crypto might be a good
idea, the downside is that it is highly volatile because there
is so much speculative money from the stimulus. The goal is
to get investors properly educated, since the wrong decisions
contaminate the entire world economy. He says that most of
those people are drinking the kool-aid.
“Drinking the Kool-Aid” is an expression commonly used
in the United States that refers to a person who believes in a
possibly doomed or dangerous idea because of perceived po-
tential high rewards. The phrase often carries a negative con-
notation.
Kiyosaki says we need to understand the fundamentals of
investing and that all markets always go up and will always go
down. The biggest lie that people are told is that their invest-
ments will continue to keep going up and that this time it will
be different. It must be built on educating yourself, as I don’t
need your help to lose my money. He says the world’s biggest
crash is coming and is an opportunity to capitalize on if you
know how. He says you must get optimistic about the bubble
and the crash and identify opportunities.
Kiyosaki says that some of the best investments are real es-
tate, gold, silver and ‘dry powder’. Real estate is one of the
best investments because you can leverage finance, the income
generating ability, deductions & tax breaks. Real estate comes
from the word ‘royal’ as kings own all land in their kingdoms.
Only with real estate you can generate serious cash flow im-
mediately after investing, instantly build long-term equity and
increase your net worth and start in your spare time with little
or no money.
He also favours gold, which is stored in private vaults out-
side of banks. In addition money or ‘dry powder’ holdings in
cash reserves and liquid assets such as money market funds set
aside for investment purposes is necessary.
‘Dry powder’ is a slang term referring to marketable securi-
ties that are highly liquid and considered cash-like. ‘Dry pow-
der’ can also refer to cash reserves kept on hand by a company,
venture capital firm or indivi dual to cover future obligations,
purchase assets or make acquisitions.
Kiyosaki’s new book, Fake money, Fake teachers, Fake as-
sets: How lies are making the poor and middle class poorer
is all about the future of money. He says that there are three
types of money: God’s money, government’s money and peo-
ple’s money. God’s money is gold & silver that will be here
forever. Government’s money, which is currency such as print-
ed money like the Dollar, Rand, Yen, Euro, Peso. Fake money,
such as the US dollar, has lost 95% of its value since 1991.
People’s money is cyber currency built on the Blockchain tech-
nology such as Bitcoin, Ethereum, and Ripple.
Kiyosaki’s advice for those starting out is to educate them-
selves first and to start small. Get a coach or mentor to avoid
costly mistakes. Follow someone who has already been success-
ful & learn from their mistakes. Understand that flipping prop-
erties for capital gains is a ‘Ponzi Scheme’ as you end up paying
high taxes. Capital gains investors are getting hammered  as
taxes are your highest expenses, while cash flow investors are
winning. We have two things available to us: time and money,
the competition is our future and we have to create it.
KEY BUSINESS SUCCESS PRINCIPLES FOR ENTREPRENEURS
The rule of entrepreneurship is to stay in business - cash flow is always king.
Understand the difference between Innovation & Entrepreneurship: 
Innovation is the action or process of using imagination to create an idea or product and making it real.
Entrepreneurship is the action of monetizing innovation - your ideas or somebody else’s ideas. 
Diversity within your own business - Launch 10 different initiatives at one time.
ROBERT KIYOSAKI WILL BE LIVE IN SOUTH AFRICA ON 28 & 29 JULY 2018. FOR BOOKINGS
GO TO WWW.REIMAG.CO.ZA
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JULY/AUGUST 2018 SA Real Estate Investor Magazine