I'm the first to admit that I've been critical of Robert Kiyosaki at times. But, regardless of some of his business behavior, Kiyosaki has still given us some great investing advice.
Today I wanted to take the time to share with you three pieces of advice that Robert Kiyosaki has recently shared, and highlight why you should heed it.
These pieces of advice have stirred a wide variety of thoughts from people around the globe. Given that Robert Kiyosaki has encouraged many, but still infuriated a few, this isn't a huge surprise. Regardless, let's get to the best investing advice from Robert Kiyosaki and see how it measures up.
Robert Kiyosaki on Getting Started Investing
I'm often asked how to start investing with little or no money. Please hear this as this is the hardest thing for people to understand: you do NOT invest with money! You invest with your mind! No matter what the field, your biggest asset is your mind. Once you have knowledge, you find deals, find your team and use other people’s money. You sell the deal and your team to get investment money.
Robert Kiyosaki shared this advice about four months ago, and it has since been shared 1,000s of times on social media. I find this advice to be extremely similar to what we talk about regularly here on The College Investor: investing in yourself. The sentiment of many of the commenters on social media about this had the similar mindset. However, many were still skeptical — saying things like “easier said than done.”
I think for many, the knowledge is out there, but you have to go find it. Once you do, you can start to understand the principles of investing very easily.
Robert Kiyosaki on Investing Risk
Investing is less risky than being an employee. Skilled investors are in control of their investments; employees are controlled by a boss.
I find this quote to be extremely interesting, because it takes a much different view on investing than people are accustomed to. On the surface, many people look at this as talking about career paths. In fact, I would guess that about 50% of the comments on social media about this quote have to do with career advice. However, I believe that Robert Kiyosaki was going in a different direction, and simply using a metaphor.
He's talking about ownership here — not about the workplace. He says being an owner is less risky than an employee because of the say they have in the direction of the company. Just think: last week we were talking about preparing your portfolio for losing your job, because so many people are struggling to keep their jobs in the workplace.
Compare being an employee with being an investor this year. Employees are worried about their jobs, about cuts to their benefits, and a myriad of other issues. On the other hand, owners (including shareholders) have enjoyed a booming stock market that has increased their wealth tremendously. That's the value of investing, and of being an owner.
Work at a nine-to-five job — but realize that you should be building ownership in something, and not just relying on your company to take care of you.
Robert Kiyosaki on Planning
Investing is a plan, not a product or a procedure.
Finally, my favorite, is this one. Investing is a plan — there is not a “buy this” option to create the perfect portfolio that will guarantee you millions. You just have to create a solid plan, and then work that plan over time. Like we discussed in The Only Thing That Matters In Investing, you just need to build a solid plan:
- Step 1: Understand your risk, reward, and time horizon.
- Step 2: Create an asset allocation that matched your goals (i.e. make the plan).
- Step 3: Rebalance your portfolio to match your changing goals (i.e. work the plan).
Too many people want a simple, “here you go” solution. It just doesn't work that way — everyone is different, and the plan needs to be individualized.
What do you think about Robert Kiyosaki's investing advice? Can you judge his advice separate from his background story? Do you find some of his quotes and advice meaningful regardless? I'd love to know your thoughts, as well as any other quotes from Robert Kiyosaki you enjoy.