Why The Rich Are Getting Richer book reviewTitle: Why The Rich Are Getting Richer

Originally Published: 2018

Author: Robert Kiyosaki

TDB Rating



What would you do with a financial windfall of $10,000? In his latest book, Why the Rich Are Getting Richer, Robert Kiyosaki contends that real-life financial experiences are the only way you’ll know the answer to that question. Attending a thousand lectures delivered by prestigious professors is no replacement for firsthand experience.

Kiyosaki’s newest book promotes an anti-institutional rewiring of the financial brain. Forget everything your parents, teachers, and financial advisors have told you. Kiyosaki is here to tell you how to use debt as a wealth-building tool and that savers are losers.

About the Author

Robert Kiyosaki is an American businessman, author, and public speaker. Kiyosaki is the founder of Rich Global LLC and the Rich Dad Company. He has written numerous books on contrarian personal finance methods. Kiyosaki’s top selling book, Rich Dad Poor Dad became an instant sensation in 1997 and has led to the lucrative branding of the Rich Dad name.

Key Concepts

Kiyosaki has written numerous financial self-help books. Throughout Why the Rich are Getting Richer, Kiyosaki constantly refers back to his past proprietary concepts from past works so it helps to be familiar with those basic concepts. The most crucial of those concepts is what Kiyosaki has termed the Cash Flow Quadrant.

The Cash Flow Quadrant contains the four main forms of vocation.

  • E: This is typically an employee working for a small or large business. Most of their financial growth comes through employment where they trade their time for money. In most cases, this individual’s best tool to accumulate wealth that doesn’t require a direct exchange of time for money comes in the form of their 401k. 
  • S: Described as the most difficult quadrant, an S individual works for themselves. With enough success an S worker can grow their business and graduate to the B quadrant where they’re able to leverage their ownership into growth that is built upon the efforts of others.
  • B: A system that is largely self-sufficient. To become a B member, your business must be able to sustain itself without your firsthand labor.
  • I: An investor’s income is the ultimate level of passive income. If placed in the right investment vehicles, members of the I Quadrant can use existing assets to build substantial wealth.

Kiyosaki looks fondly upon the B and I quadrants because they allow your money and assets to work for you. He views the E and S quadrants less favorably as they involve an exchange of time for money.

A Brief Summary

Money in our society has changed and devolved over the years. Since 1971 the dollar is no longer backed by gold. Like numerous other countries we’ve resorted to fiat currency. Rather than working for money we ought to work at transitioning our money into a business or investment with intrinsic value. A task easier said than done in a society that teaches its citizens nothing about the process.

Society tells us that becoming a high-ranking employee is prestigious. Society says that paying our taxes is patriotic. Finally, society directs us to save money, avoid debt, and eventually retire on our diversified portfolio. According to Kiyosaki, this is poisonous misinformation.

Here’s what Kiyosaki has to say about those so-called misnomers: Being an employee means your time will never belong to you. Protecting the majority of your income from taxes is patriotic. And using debt to your advantage creates prosperity that a wavering stock market cannot match.

In Kiyosaki’s view, money is a game where the rules benefit folks in the B and I category. B and I members serve as partners of the government. And when you aid the government, there are hefty tax benefits as your reward. Business owners and investors create jobs, which is something the government needs help with. Employees merely create a paycheck and perform a micro-service.

Becoming a master of the B and I category is all about utilizing debt to your advantage. Kiyosaki points out that the true cost of down payments made with cash is the pretax ordinary income. On the flip side, the tax implications of securing a loan are nil. Furthermore, debt allows you to expand your empire while covering interest payments with cash flow created by real estate. What about the taxes on the appreciation of your assets? Rather than realizing a capital gain with the sale of a property Kiyosaki takes out equity loans. Again, this expands his empire and doesn’t create a taxable event.

To dismiss opportunities linked to debt is to dismiss open doors leading to financial independence. Debt can be a dangerous tool and requires the utmost care and education. Kiyosaki recommends his vast library of seminars and real estate courses to prepare you for this journey. Once you have the tools to begin working towards the B or I Quadrants, your security and well-being will be changed forever.

Kiyosaki Controversy

The majority of Kiyosaki’s wealth was created after publishing Rich Dad Poor Dad. Critics of the Kiyosaki method point out that his history is representative of numerous failures and one success with a MLM firm. Despite that success, there’s little to no evidence that Kiyosaki had vast reserves of wealth prior to his career as a writer. It may be troubling to some readers that the real estate guru earns the majority of his income from books, seminars, and merchandise, rather than passive and “phantom” real estate income.

Rich Dad seminars have an unsavory reputation for offering very little education. Instead, many attendees report an atmosphere of high pressure sales tactics. The licensed instructors reportedly use these tactics to encourage the audience to spend money on more expensive training classes. The more comprehensive classes contain additional controversy with their content. Business practices such as these raise the question of whether or not Kiyosaki’s books are as well intended as he claims.

My Rating

Why the Rich Are Getting Richer contains some insightful contrarian messages. At minimum, the book offers value by providing a unique perspective on wealth-building. But the advice must be absorbed with great care as Kiyosaki mixes plenty of poor advice in with the good.

Kiyosaki refers to debt as a potential wealth-building tool without acknowledging its many pitfalls. He casually presumes that real estate cash flow can reliably cover interest payments. Kiyosaki covets asset-depreciating tax breaks without mentioning lofty renovation costs that may dwarf the write-off. He recommends borrowing against equity without warning against the many scenarios where that approach simply isn’t advisable. Finally, he makes assumptions about the stock market that are unsupported by historical data, but fall in line with more current events.

I rate the book a modest 2 ½ stars. Kiyosaki provides scores of high-quality historical finance information and his uniquely controversial perspective. However, Kiyosaki too often provides shaky advice that seems to be aimed at funneling readers into his unsavory educational and merchandise-based money grab.

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