Want some adventure, intrigue, mystery and buckets of cash?
First, you start with a man that no-one quite knows—an elusive financial patriarch whose mired and fabled realities are uncertain even to this day…
Combine that with varying tales of self-invention and entrepreneurial acrobatics regarding the rise and fall, and rise of his fortunes…
Throw in a few helicopter gunfights (just for good measure)—
And frame it all against the backdrop of a single man’s quest to enlighten millions… to spread financial literacy to the unwashed masses and change the world forever, and you have the backdrop, not for Catching The Wolf of Wallstreet, but the surprisingly true story of Robert Kiyosaki—author of Rich Dad, Poor Dad and one of the most successful financial gurus of all time.
It’s not surprising, then, that he’s also one of the most polarizing figures in the financial media.
But love him or hate him, Kiyosaki has made millions on everything from mining and precious metals, to real estate and newsletter products. He is in many ways already an undisputed success. And he’s created everything from videos and seminars, to board-games like Cashflow 101, to share his secrets and disseminate his iconic financial teachings.
So today, we’re going to take a deeper look at Kiyosaki’s life story, focusing on some of the more critical turning points where his own personal decisions and philosophy made history for himself and millions of others.
We won’t make this an assessment of his books or the concepts that Kiyosaki teaches. Personally, I love his books and board-games, and think he’s done a phenomenal job of bringing financial literacy and basic awareness to people all over the world. Before him, few people took the time to even think about their personal finance, let alone ever conceive of the notion that making, investing and controlling money was well within the grasp of the every-day person.
Having said this though, we’ll leave the in-depth assessment of Kiyosaki’s teachings to the scholars and financial wizards, and instead focus on Kiyosaki the man, his (often contradicting) life story, along with his personal entrepreneurial journey–something that took a lot of time and research to pull together.
That means whether you’re a die-hard Rich Dad fan or an avid hater of Kiyosaki, you’re bound to discover one or two new things about this extraordinary author, entrepreneur, investor and educator.
Pete + the team of writers and researchers
 Born with Something to Prove
Robert Toru Kiyosaki was born a fourth generation Japanese American in Hilo, Hawaii on April 8 1947, just two years after the conclusion of the Second World War. He had two sisters Emi (1948) and Beth (1951), and one brother Jon (1949), all younger.
Being born a Japanese-American just after the war was not an ideal situation for anyone at that time. Just a few years prior (Dec 7, 1941), America suffered a massive surprise attack by the Japanese who heavily attacked Pearl Harbor in Hawaii. As a result, the country began interning Japanese-Americans on the mainland, and some panicked Congressmen went so far as to press for the wholesale deportation of Japanese-Americans from the state of Hawaii. For years following, Japanese-Americans would continue to face discrimination from all directions. This is the type of ‘feeling’ that stays with you for life. It’s why so many of his ilk felt they had something to prove.
It was no surprise then, that young “Bob” Kiyosaki—eager to prove himself—headed straight for the marines after high school in 1965, merchant marines to be specific. Graduating from the Merchant Marine Academy in 1969 as a deck officer, he still had unfinished business with America, especially with its involvement in the Vietnam War (1962–1975).
Dedication and loyalty to your country in the face of adversity is one way in which your central ethics can’t be denied—and being an American fighter pilot in Vietnam cemented his own loyalties and proved to others that he was fiercely American and was prepared to die for his nation.
With three younger siblings—including Emi Kiyosaki, who would grow up to be a Buddhist monk (and would later co-author Rich Brother Rich Sister with Robert in 2009)—Bob had already grown into a leadership role in the family, under the tutelage of his father Ralph H. Kiyosaki (1919–1991) and mother Marjorie O. Kiyosaki (1921–1971).
“As a young kid,” Kiyosaki would later explain, “I really wanted to be rich.”
Robert’s parents were a strong and ethical couple, teaching their children the values of hard work and the importance of education. Ralph—who would eventually come to be known as “Poor Dad” in his son’s books—was by no means a poor man. On the contrary, Bob’s father was a highly successful and relatively self-made man. He’d graduated from Stanford, Chicago and Northwestern Universities one after another, and he’d done it all on a full scholarship. By the time Robert was a young man, his father had become the head of the Education Department for the State of Hawaii, receiving many accolades and awards along the way. And yet, despite this wealth of knowledge and experience, there remained such a contrast between Bob’s two fathers that Ralph would come to be known as Bob’s “Poor Dad.”
And this is the point at which much controversy around Robert Kiyosaki begins. His real dad was not poor. However, neither was he a millionaire property tycoon who could buy and sell hotels and condos at a whim. Who was his ‘Rich Dad’? Was it really the father of the ‘boy next door, Mike’? For every stated ‘fact’ Kiyosaki declares, there seems to be several unanswered questions.
[1965-74] A Leader Is Cultivated…
As a son of two anti-war Peace Corps workers and a worker for what was considered a “non-defense vital industry” (Standard Oil), Kiyosaki was deemed ineligible for the Vietnam War draft. Regardless, after his brother enlisted in the Air Force in 1969, Robert Kiyosaki promptly joined the Marines, and was awarded the Air Medal for ‘courage and devotion to duty in the face of hazardous flying conditions.’
Kiyosaki talks at length about his military career on many platforms—books, radio, television, interviews, magazines—and to the thousands of audiences he has addressed over the years. The points he has in common when recounting his tales are:
• He believes the military taught him discipline, loyalty and respect
• He learned about honour and team spirit
• This was where he finally had his eyes opened with regard to blindly following orders
• This was where he learned to be a man
• Finding his inner convictions and strength stemmed from his life experiences in the military.
His comments and conclusions appear, to all intents and purposes, to be laudable and well worthy of many a life-defining moment. And yet there are plenty of detractors, some of whom also from the military, lay waste not only to Kiyosaki’s statements, but to his awards as well.
Some of the most controversial events revolve around his:
1. Air Medal itself
2. Supposed missing of a boat
3. Interpretations of orders
Point 1: Air Medal
Kiyosaki claims that he received the medal for ‘courage and devotion to duty in the face of hazardous flying conditions.’ Several fellow marines have stated that the award was bestowed upon all of them in recognition for just ‘being in the marines at the time.’
It is unclear too, whether or not Robert actually was a marine. He states, “In 1964, I received two nominations: one to the U.S. Merchant Marine Academy in Kings Point, NY, another to the U.S. Naval Academy in Annapolis, MD. I accepted the Kings Point nomination.” The Merchant Marine Academy was not actually a military institution and trained students on how to operate Marine Vessels for the purposes of fulfilling merchant or business contracts. He was never accepted by the Naval Academy.
Point 2: Supposed missing of a boat
Kiyosaki talks about a life-changing moment where, during his time as a helicopter pilot in Vietnam, he discovers a small boy in his helicopter where he says he “had the right, if not the duty, to shoot and kill him on the spot. This was the code of war we were taught as military officers.” If he had acted upon his interpretation of the code of war, it would have been in direct contravention of the Geneva Convention which prohibits the shooting of a surrendering person. He would have committed murder had he gone ahead. Children were often used by the enemy in Vietnam because of the very fact that they would NOT be harmed. Kiyosaki says further, that instead of pulling the trigger, ” I put my gun away that day forever. I committed myself to finding new ways of doing things, instead of simply responding to what I’d been told to do by a person who supposedly had more authority than I.”
He then said that he failed to turn up to catch his ship because he was too overcome by the experience with the boy. He realized he was his own person and not just a ‘cog in a wheel’ for the use of anyone else in higher authority.
This is a very honorable course of action, one would think. Yet, if he were really to do this, he would have been arrested for desertion. In later years, Kiyosaki comments that actually there were many personnel who missed the boat that day as it left earlier than scheduled.
Point 3: Interpretation of Orders
Kiyosaki is vague about his role in the military, seemingly somewhat confused about the correct way to interpret orders and possibly misleading about his actual role there. Even though the Marine Corps displayed some of Kiyosaki’s comments on their website, claiming him as their own, he was never actually one of them except by accident.
According to John T. Reed (also a real estate guru in his own right and a graduate of West Point Academy): “The Vietnam war was winding down, so the Navy decided they had too many pilots and decided to stop training Kiyosaki and his fight-school classmates to save money. The Marines, on the other hand, still wanted more helicopter pilots. By letting Kiyosaki and his helicopter classmates make a lateral transfer to the Marine Corps, the Marines could save the amount of money the Navy had already spent training them. In other words, to the Marine Corps, Kiyosaki was a pilot trainee who was “on sale” for half price or ‘overstock.'”
Kiyosaki explained that he wanted to become a U.S. Marine Corps helicopter pilot so that he could learn how to lead men. In his own words, he explained that “if you can ask a young man to give his life for his country, you can lead people.”
“I didn’t have to go,” he later explained. “I volunteered not because I liked the war, but because it was the right thing to do… The toughness, the discipline, the training—it carries on, and it made a man out of me.”
EST and Its Influences
After being honorably discharged in June 1974 (because he flew drunk and was machine-gunning animals from his helicopter, Kiyosaki elected not to head straight home, but instead toward the thriving heart of American business—New York City. At the time, Kiyosaki was beginning to embrace new ways of thinking and approaching his problems. He participated in Erhard Seminars Training (EST)—a uniquely insightful and empowering program that worked much better for him than it does for most. It was based on a model devised by Werner Erhard (one of many aliases used by John Rosenberg, a former car salesman. )
It was generally a 3-day program which didn’t allow for bathroom breaks, routinely insulted participants, and then brought them ‘out of their darkness’ to a new life, following EST principles.
In his book, Rich Brother Rich Sister (Vanguard Press, January 5, 2009), Kiyosaki says this of his EST training:
“In March of 1974, I walked into the EST training, and two weeks later, as she had promised, my life changed.
A great deal of the training was about agreements. In other words, do you keep your word? Notice the word, ‘word’ again? Agreements are about keeping your word. When someone says, ‘He is a man of his word,’ it is a very high compliment.
During the training, it became glaringly clear that most of our personal problems begin with our not keeping our agreements, not being true to our words, saying one thing and doing another. That first full day on the simple class agreements was painfully enlightening. It became obvious that much of human misery is a function of broken agreements – not keeping your word, or someone else not keeping theirs.
At last I realized that my misery was caused by my lack of integrity and not keeping my word…
And my ‘changed life’ went well beyond the two weekends I spent in the EST seminar. I realized I had the power to create the best destiny for my life, or the worst. It was my choice.”
[1974-1978] Xerox—the Making of the Salesman
While in New York, he started working as a salesman with an innovative new company called “Xerox.” Kiyosaki certainly did well with Xerox, but it was never a perfect fit for him.
In his own words, “I worked for Xerox for 4 years, and after that I knew I was never going to be a corporate person. It wasn’t my environment.”
But what he did learn was that he was good at selling. He was good at getting along with people. He was good at closing. Now he wanted to do all those things for his own business, instead of for someone else.
Then in 1977, he virtually stumbled upon his first massive success… nylon velcro wallets.
 Kiyosaki “Gets Rich Quick”
His first stroke of genius was inspired by his home of Hawaii—and the hardcore surf culture that permeated the islands. He realized surfers were encumbered with heavy leather wallets that were totally impractical for their surfing pursuits. Velcro had become quite a sensation at the time, and the idea that is now so commonplace, developed into a multimillion-dollar enterprise.
In 1977, with just a few quick straps of velcro and patches of nylon, Robert Kiyosaki managed to invent the first “surfer wallet,” and he brought it to market before anyone else.
“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 to have money work for them.” (Rich Dad, Poor Dad)
But the company was only marginally successful. At the time, he thought that striking it rich was just a simple matter of cutting costs and maximizing profits—the simplest (and often the least reliable) path to business success. But the business soon ran into trouble and he began a poorly thought-out cost-cutting process, eliminating any budget he might have had for intellectual property protection.
Fairly soon there were numerous competitors and copycat products flooding the market. What started out as his great claim to riches and glory quickly became a disaster.
 Hitting Rock Bottom…
Kiyosaki’s next business venture—a company he started in the early ’80s to license T-shirt reproductions for bands like Motley Crue—was equally insightful, but unfortunately equally unsuccessful. After that company went bankrupt in 1985, Kiyosaki hit rock bottom and ended up living with his soon-to-be wife out of the back of their old Toyota.
It was at this point that Kiyosaki started to fall back on his creativity, his ingenuity, and dedication—and resolved to never fail again…
He was 38 at the time… But by the time he was 47, he “retired” a rich man.
Although it’s during this period that the story gets a little hazy, Kiyosaki has been forthcoming with his failures in the wallet and T-shirt business. But the period between 1985 and the release of Rich Dad, Poor Dad around 2000, is a little trickier to piece together.
 Kiyosaki Begins Teaching You About Money…
Now, it seems that during the years since his first EST training 1974, Werner Erhard and the movement wasn’t far from Kiyosaki’s focus.
Kiyosaki ate up every last bit of the training. He became a devout believer in Erhard’s teachings, and subsequently joined one of EST gradutes Marshall Thurber’s ‘Excellerated Business Schools’ team, which ran an “EST-style” seminar on personal finance—“Money & You“.
Graduates of Money & You include one of the world’s leading speakers Tony Robbins, one of the world’s leading writers, Jack Canfield, Ben Cohen of Ben and Jerry’s Ice Cream, the founder of Electra Records, Jack Holtzman, and so many others we could go on and on.
In fact it had a resurgence in 2013, and you can hear the founder Marshall Thurber talk about it here:
For Kiyosaki at the time, it was a match made in heaven, becoming “a very, very good student” according to Thurber. So much so, in fact, that he ended up purchasing the Money & You business from Thurber, who was wanting to walk away from the whole thing, long before anyone had ever heard about Rich Dads and Poor Dads.
Back in 1985, with the help of his new wife Kim, Robert Kiyosaki co-founded an international education company, Excellerated Learning Institute, specializing in intense business education courses. The company was an instant success, and along with the help of another past Money & You staffer, a woman named D.C. Cordova, together they expanded the business, bringing Money & You as far afield as Australia, where it found a ready audience that included the Fire Brigade of New South Wales, which sent its managers to take the course.
(However, according to Business Profiles, the business was not established until 1988 in Oregon by Kim Kiyosaki with Robert as the Secretary.)
In the (recent) Excellerated Training Program – Application to Become a Trainer, this is said of Robert Kiyosaki and his time with the program:
Robert Kiyosaki started as a small manufacturer of nylon wallets. Using the insights and techniques he mastered in this program, he become a multi–millionaire and a world–renowned investor and teacher of investment strategies and mindsets. He is a bestselling author and a player in the world financial market. Robert has developed the “Cashflow Game” and has now published the best selling book series: Rich Dad/Poor Dad. Teaching Money & You, leading the Business School for Entrepreneurs, developing the Creating Wealth Program with DC Cordova, leading the Instructors’ Training Program and other Excellerated Programs was the vehicle for his meteoric and financial growth.
Regardless of whether the special had highlighted truth or tabloid sensationalism, the end result was clear. Money & You, as a program, was dead in Australia. Kiyosaki even went so far as to consider filing suit against the Australian Broadcasting Corporation, but reconsidered.
“I definitely thought it was unfair,” he now says. “It was 10% accurate and 90% sensationalized and slanderous.”
 Kiyosaki the Writer Is Born
Kiyosaki was not detered though, and not long after his very first book, If You Want To Be Rich & Happy: Don’t Go to School? was released and set the mold for his future work by flying in the face of conventionally accepted common knowledge and ruffling plenty of feathers.
To this day, the book gets good reviews from readers, though not as salaciously as for Rich Dad, Poor Dad, and continues to sell on Amazon. After this, he decided his knowledge and experience would be well utilized in a board-game scenario where teaching business would be fun, as well as enlightening, educational and of course, profitable to him.
The ‘Author Bio’ section of the book reveals some of Kiyosaki’s early adventures and comments on the business acumen he had accrued over time, adding credibility and experience to the book.
Along with the books and the live events, Robert began to produce his information in the form of VHS-based home-study course such as this excerpt from “How to Be Wealthy in a Changing World:”
Even with the shift away from the Money & You programs, the core element and effectiveness of ‘games‘ never went too far from Kiyosaki’s mind.
 Behind Every Rich Dad … Is a Woman
In 1996, Robert hooked up with Jayne Johnson, goal-setting guru and founder of The Clearing Sight. It was here that he developed the goals and steps needed to produce Cashflow, his internationally acclaimed and best-selling business board-game.
“I wrote the business plan for Rich Dad, Poor Dad and my board game Cashflow at a two-day goal setting workshop with Jayne Johnson in January of 1996. Without Jayne’s goal setting technology, I doubt if Rich Dad, Poor Dad would have become as successful as it is today. That two-day work shop has made me millions of dollars, over and over again.”
The board-game was originally patented in 1996, two years before it was released on January 5, 1998.
Early Sketchs For Cashflow 101 and Original Patent Filings:
Although he had the seeds and plan for the Rich Dad empire, nothing really happened until Robert teamed up with yet another creative woman—Sharon Lechter.
The wife of a technology and patent attorney Michael Lecther, who worked with Kiyosaki on patenting the board-game (as seen in the PDF above), Sharon was brought in touch with Kiyosaki after it became clear that they had relatively similar ideas and completely different skill sets. Kiyosaki has even admitted that he flunked out of high school twice just because “he couldn’t write,” and yet he went on to complete Rich Dad with Sharon’s help.
As soon as Lechter was on board, things started moving quickly for the Kiyosakis. Robert was finally able to turn a disorganized bunch of writings and files on his home computer into the first draft of Rich Dad, Poor Dad, forming the basis of his financial philosophy as we see it today.
Make no mistake, Kiyosaki the public speaker is all Robert Kiyosaki. But Kiyosaki the writer wouldn’t be the voice we know today were it not for Lechter’s assistance. Over the course of 11 years, Sharon assisted Kiyosaki with his publications, amassing a whopping 14 titles under the Rich Dad banner.
• Rich Dad, Poor Dad (1997)
• Rich Dad’s CASHFLOW Quadrant (1998)
• Rich Dad’s Guide to Investing (2000)
• Rich Dad’s Rich Kid Smart Kid (2001)
• Rich Dad’s Retire Young Retire Rich (2001)
• Rich Dad’s Prophecy (2002)
• Rich Dad’s Success Stories (2003)
• Rich Dad’s Guide to Becoming Rich Without Cutting Up Your Credit Cards (2003)
• Rich Dad’s Who Took My Money (2004)
• Rich Dad’s Before You Quit Your Job (2005)
Sharon Lechter as author with co-author Garrett Sutton:
• Rich Dad’s Real Estate Advantages (2006)
Little Brown/Hachette Publishing – Sharon Lechter as co-author with Robert Kiyosaki:
• Rich Dad Poor Dad for Teens (2004)
• Escape the Rat Race (2005)
VideoPlus – Sharon Lechter as co-author with Robert Kiyosaki:
• The Business School For People Who Like Helping People (2001)
Rich Publishing – Donald Trump and Robert Kiyosaki with Sharon Lechter and Meredith McIver as co-authors:
• Why We Want You to be Rich (2006)
• Rich Woman (2006) – Kim Kiyosaki
In the early days with the writing of Rich Dad, Poor Dad, and even with the help of his newfound partner, Kiyosaki was still unable to secure a mainstream publishing deal. Enter stage left – MLM.
 The Multi Levels of Rich Dad’s Empire
Self-publishing seemed to be the only way out of it for them —so they did—but still, who would buy? According to Jeff Parsons:
“The story is that Bill Galvin discovered his book at a carwash in (or about) Houston Texas. At that time, RK could not get his book published and distributed in a more traditional manner. Bill Galvin is a diamond under the Dexter Yager organization for Amway/Quixtar. In fact, I still have an old prospecting tape of a dialogue between Bill Galvin and Robert Kiyosaki. You can have it if you want it. I’m sure you’ll enjoy it. By the way, the tapes he produces for Amway/Quixtar diamonds are also distributed by the 10’s of thousands for which he gets a cut of each $6 tape that costs less than $1 to produce.
Anyway, Bill Galvin distributed RDPD to the “leaders” in his group. Bill and his leaders loved the book, so they contacted RK to buy more. The distribution of motivational tools in the Amway/Quixtar distributor networks is extremely efficient (and profitable for higher ups). His popularity grew quickly as his books were channeled to many thousands of lower level distributors by diamond distributors. Distributors would often buy several to hand out while prospecting new recruits. Not wanting to be left in the dust, other MLM networks picked up on the book and it has spread through their organizations as well. I would guess that the MLM industry was responsible for putting RK on the best seller list.”
According to the Self-Publishing Hall of Fame, however:
“Robert Kiyosaki originally self-published Rich Dad, Poor Dad, written with Sharon Lechter, in 1997 as a $15.95 “brochure” designed to attract customers to his website where he could sell his $195.00 Cashflow board game.
After selling rights to Warner Business Books in 2000 and appearing on Oprah, he sold millions more copies, with the book sitting on the New York Times bestseller list for four years. By New Year’s 2005, the book had sold more than 10 million copies and was the #1 business bestseller for 2004 according to USA Today.”
Kim Kiyosaki puts it yet another way on this video:
“I love RTIR and so does Robert, because when Rich Dad, Poor Dad first came out, we self-published. We printed 1000 copies – and no book store wanted it, no publisher wanted it, no wholesaler wanted it, no distributor wanted it and so we’ve got these 1000 copies and an author in Phoenix said, ‘Oh you’ve got to go put an ad in Radio/TV Interview Report (RTIR) to get started. So we called up and actually Rose was the person that we worked with, this was 10 years ago, so we put an ad in, and within the first few weeks we’ve got calls like from 2-3 top radio stations for interviews with Robert. So Robert goes on St Louis, Mid-West somewhere, but big radio stations and he does this interview on Rich Dad, Poor Dad and the whole Rich Dad philosophy and of course, he says, ‘Available at bookstores everywhere!” And it’s nowhere! And just as a result of those 2 or 3 interviews that came through RTIR, Borders Headquarters, Barnes & Noble Headquarters found us, called us and said ‘We have to have to start carrying your book because we have so many people coming into our stores asking for it. And that really was the first launch of Rich Dad, Poor Dad.”
So that’s at least three different ways in which the book was supposed to have become the rampant best-seller it has turned out to be.
Facing an ever-growing torrent of demand from the network-marketing world, Kiyosaki once again took his book to publishers at the turn of the century—only this time, publishers were eager to work with him. Finally, after years of hard work and trepidation, the first copies of Rich Dad, Poor Dad would start rolling out of Warner Books’ presses on April 1st, 2000.
Living by his Credo
Once again, we won’t spend too much time covering Rich Dad’s themes and methods in today’s piece. But we will point out that—to a greater extent than many celebrities and most financial personalities—Kiyosaki has spent the last decade and a half following his own advice quite religiously.
In the original book, Kiyosaki is mentored by the elusive “Rich Dad” who shows him the incredible world of the super-rich. He shows him how simple barriers—both financial and psychological—keep most people locked into a rat race. Meanwhile, according to Rich Dad, a few clever souls break free and use things like corporate ownership and key investments to make their wealth work harder … pushing themselves further and further away from the Rat Race.
And since the early successes of Rich Dad, Poor Dad, Kiyosaki has done exactly that.
He’s made large investments in a number of private equity opportunities—from an energy startup to oil well operations and gold mines all over the world.
He’s spawned a number of new corporations and entities—each purpose-built to handle single aspects of his ever-expanding business. A business which he’s worked hard to expand on year after year, with constant additions to the Rich Dad series, and plenty more…
[2000 Onwards] But With More Money Comes More Problems…
Losing is something every businessman—even Kiyosaki—has to deal with from time to time. Like, for example, with the recent Learning Annex lawsuit that was widely covered in the media.
The Learning Annex’s lawsuit claimed that Kiyosaki had short-changed them, one of his very earliest backers, to the tune of nearly $24 million.
The legal dispute centered on work Learning Annex, and it’s Chairman Bill Zanker, said it performed in developing a seminar business for Rich Global, along with a share of profits.
Zanker said he met Kiyosaki when the latter was an “unknown author” speaking at “Holiday Inns to groups of 20 or 30 people.” Zanker said he helped promote Kiyosaki “all the way to Madison Square Garden, where he spoke in front of thousands.”
But Zanker said Kiyosaki reneged on the payment agreement.
A jury in July 2011 had awarded $14.6 million in damages to the Learning Annex, but the court granted a new trial. A second jury awarded $15.9 million in April 2012. Zanker noted that the final judgment of nearly $24 million included interest and was more than he sought.
The Rich Global-Learning Annex relationship started back in 2001 when Kiyosaki became a featured speaker at Learning Annex expositions, the companies agreed to “develop and conduct the free seminar business with follow up fee-based courses,” according to court papers.
Rich Global broke off the relationship in 2006, then formed a business relationship with Whitney Education Group to pursue and grow the seminar business. That generated sales of $438 million, of which Rich Global got nearly $45 million in royalties, court documents said.
It was a long-fought court case that ultimately lead to the Chapter 7 bankruptcy of Kiyosaki’s Rich Global LLC.
“In these desperate times, I am again learning how important corporations are to the rich and those planning on becoming rich… Now more than ever, if you have money, people will come after you. I am going through this right now… My rich dad played the game with intelligence and experience. He did it through corporations—the biggest secret of the rich.”
Many in the media were quick to misinterpret this and jump on the bandwagon with headlines like “Bankrupt Dad,” but the reality was quite different. Because by closing that individual corporation, Kiyosaki was able to protect himself and the rest of his assets from the lawsuit’s ruling. In his own words,
“It’s better to be a Rich Dad with a bankrupt corporation than to let [them] destroy you.” Without passing judgment on the morality of either party, it’s hard to dispute that Kiyosaki played the ‘Rich Dad’ in this situation.
And all of this came on the heels of an even bigger media fracas—the Canada’s CBC’s wildly popular coverage of Kiyosaki’s Canadian Seminars released back in 2010, that ironically relates to the aforementioned relationship Kiyosaki started with the Whitney Group.
In this Marketplace expose—which echoed the earlier Australian television segment on Money & You—Kiyosaki was lambasted for the seminars being run on his behalf by a company named Tigrent Learning.
In this case, Kiyosaki took the truth head on, telling reporters that he was “more disturbed than they were,” with their findings, before promising to take measures and fix the problem.
The Breakup with Lechter
In the wake of the Marketplace expose, imagine the global gasp then, when the fortuitous duo of Kiyosaki and Lechter split acrimoniously amidst interesting tensions, with Lechter suing Kiyosaki in 2008, who later settled out of court.[9. http://www.azcentral.com/business/articles/2008/09/04/20080904biz-richdad0904.html]
Allegations Accoring To AZCentral.com
Lechter said in a lawsuit that while Robert Kiyosaki has been the face of the company and appeared on TV programs, she was the one who “refined and created” the original book. She also claims in the suit that Kiyosaki once told staff members she was the only “indispensable” person on the team.
Lechter also alleges that Robert Kiyosaki’s “volatile temper, spurious accusations, foul language and inappropriate behavior” created a hostile work environment for her. The Kiyosakis denied the allegation.
“It is evident that Robert and Kim have executed a plan to willfully destroy the joint venture, while simultaneously and purposely diverting opportunities belonging to the joint venture to one or more entities owned exclusively by them,” Lechter alleges in the suit
Lechter, goes on in the lawsuit to claim she “often rewrote large sections” of other books she and Robert Kiyosaki co-authored. And she alleges that Success Stories, Rich Dad Poor Dad for Teens and Escape From the Rat Race were written with ghost writers. Robert Kiyosaki’s “involvement was limited” even though he is listed as the lead author on the cover of those books, the suit alleges.
Kim Kiyosaki, in responding to the paper’s written questions, said a writer/editor was brought in for Success Stories to organize stories readers sent in after reading Rich Dad Poor Dad. She added that Rich Dad Poor Dad for Teens is based on the original book, and the company hired a cartoonist to work on Escape from the Rat Race.
Lechter also alleges:
– Robert and Kim Kiyosaki manipulated their salaries with Robert’s increasing and Kim’s decreasing for personal tax-planning reasons, and they gave themselves a discretionary bonus of $250,000 each in August, shortly after Lechter left the company.
Kim Kiyosaki wrote that it was not appropriate to discuss company finances or personal taxes, but she added that their pay and bonuses have not varied from what they were historically paid.
– Robert in 2005 demanded that his wife get a 25 percent royalty on all new books even if she didn’t have a role in writing them.
Kim Kiyosaki wrote that she and her husband did not want to get into that issue, but she wrote that the allegation was “petty and hurtful.”
– In February 2007, Robert attended the NBA All-Star game in Las Vegas with a Rich Dad adviser and had the company pay for a private jet and other travel expenses that weekend. Lechter, in an affidavit, cited this as an example of “exorbitant” spending and mismanagement of company funds.
Kim Kiyosaki wrote that the company has an ongoing business relationship with the NBA, which wants to bring financial education to its players.
An NBA spokesman acknowledged that league officials had met with Robert Kiyosaki “but he has not done work for us.”
– The couple has commenced a systematic campaign of mismanagement to suppress the value of the company and one primary goal is to ensure product “housed in Nevada does not sell.”
Even with all these hiccups along the way, the Rich Dad empire marches on…
So Who Is This “Rich Dad” After All?
It’s surprising really, but even now—nearly a decade and a half after Rich Dad, Poor Dad made Kiyosaki a household name—we still don’t know the first thing about Rich Dad‘s elusive identity.
There have been numerous theories and guesses as to who this may be—some have said it was Marshall Thurber, others have thought it may be Ayn Rand. Still others have purported it to be Alan Kimi. Perhaps he’s a fictional amalgamation of ideas as suggested by John T. Reed:
“As to the whereabouts of Rich Dad—at one point, Kiyosaki tells Smart Money that he died in 1992. Poor man.
Later, he says Rich Dad is still alive, but a reclusive invalid. Uh huh. Later, he tells Smart Money that Rich Dad was a composite of several persons.
Finally, he gets angry at Smart Money. “Is Harry Potter real? Why don’t you let Rich Dad be a myth, like Harry Potter?”
That would be fine, Robert, just as soon as you remove Rich Dad from the non-fiction best seller list and go over and compete with Harry Potter on the fiction best-seller list.”
One of the first suspects is the abovementioned Marshall Thurber, one of Kiyosaki’s key mentors through EST training and his early career. Thurber and Rich Dad do at least share a very “contrarian” sort of philosophy on most matters.
This “theory” is also supported by this excerpt from his book, If You Want To Be Rich & Happy:
Another one of the most compelling and convincing of “Rich Dad” theories is that he was really Richard Kimi, father of Kiyosaki’s boyhood friend Alan Kimi, Hawaiian real estate titan and founder of the Sand & Seaside Hotels chain.
Richard Kimi‘s story is just one that makes me go all wide-eyed. Here’s a guy who, at the end of World War II, started an Army Surplus store with his family. When the goods didn’t sell, he and his brothers took the tools and equipment out to build low-rent housing. Over time, he leveraged that low-rent housing into larger and larger real estate investments, eventually owning the massive hotel at the heart of Waikiki.
However, at the time of writing Rich Dad, Poor Dad, Kiyosaki states that Rich Dad was dead, which was then not true. Or did he fabricate this to maintain the family’s privacy, as stated here.
Kiyosaki’s own testament about Rich Dad really only cements this idea:
“And my rich dad did teach me to be a real estate investor playing monopoly. Whereas my poor dad — the school teacher — said, “Put that silly monopoly game away, go back to school, get good grades and get job”. And my rich dad would tell me, “Monopoly is…the formula for great wealth is found in monopoly”. And we all know the formula to play a great game — four green houses, 1 red hotel. And I’m like, “Is that all it takes?” And he says, “Yeah”. So the difference was my rich dad was actually playing monopoly in real life, so I would go with him — starting at the age of 9 — and I actually saw what looked like his ‘green houses’, they weren’t green but he says, “These are my green houses”. Then by the time I was 19 — ten years later — my rich dad bought a major chunk of Waikiki Beach, he had the ‘red hotel’ right in the middle of Waikiki Beach. So in ten years I saw him go from nothing to one of the richest men in Hawaii.”
There are, of course, detractors to Kiyosaki’s story—some who insist that Rich Dad doesn’t exist at all.
Regardless of Rich Dad’s identity, regardless of whether he’s real or not, the fact remains that Kiyosaki has kept it all a secret for ages. Fourteen years of fame and scrutiny, and he hasn’t cracked on this central question of authenticity to his story. So it’s not likely he’ll be putting an end to the mystery anytime soon.
Nor will Rich Dad’s lessons be coming to an end either.
The Bottom Line on Kiyosaki and the Future of Rich Dad
Love him or hate him, Robert Kiyosaki has revolutionized the state of financial literacy and journalism more than any other individual in our lifetime.
And much like Howard Stern—who did the same for talk radio, or Rupert Murdoch—who’s done largely the same for corporate media—there are people who love him and people who hate him.
Howard Stern’s biggest fans might listen for 40 minutes a day—but his biggest critics listen for three hours a day, and then spend just as much time complaining about him.
It’s just a fact of life that innovation can lead to alienation for some.
Kiyosaki’s new way of doing things, his “pop star” approach to financial literacy and financial journalism, his appeal to the lowest common denominator—the “everyman” of personal finance—they’ve raised awareness of personal finance for people all around the world, and yet they don’t sit quite right with everyone, so there’s a backlash.
But to Kiyosaki’s detractors, the idea of raising awareness isn’t quite enough. According to John T, Reed’s hundred-page diatribe on Kiyosaki (which is liberally laced with recommendations and links to his own books and sites), you don’t need Rich Dad to make you think about your finances. “The IRS makes you think about your finances every April 15th. You have to think about your finances whenever you fill out a loan or credit-card application.”
I haven’t seen someone miss the point so profoundly in a long, long time.
When the average person is forced to slog through their taxes or read a credit card application, the last thing they want to think about is their own personal finance, laddering their bond purchases or balancing their stock portfolio. For the most part, we’re all just thinking about getting finished with the application or the tax form, and being done with it.
And therein, to me, lies the key… the most important part of Kiyosaki’s contribution to our financial consciousness—
That Robert Kiyosaki and Rich Dad, Poor Dad have helped us to enjoy and think about finance in a way that only accountants, professionals, and bankers would have in the recent past.
And to me, that’s a contribution that can’t be overstated or overlooked.
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