The best-selling author of Rich Dad, Poor Dad talks about the magic of marketing, and why he won’t return to Hawaii.
From his humble beginnings as a youth in Hilo, Robert Kiyosaki acquired a taste for plate lunches. But sitting in his plush Southwestern-style home in Phoenix, far away from the sizzle of teri beef and kalbi, Kiyosaki can’t remember the last time he actually had one. The truth is, despite having been born and raised in the Islands, the author of the hugely successful book Rich Dad, Poor Dad, and the marketing franchise that he spun off the title, has no desire to return. “I really don’t have any interest in going back to Hawaii, other than passing through,” Kiyosaki says matter-of-factly. “I don’t talk to anybody there, I don’t do any business there, and let’s face it – there are other tropical destinations that have just as beautiful beaches.”
Ouch!The multilevel-marketing community has openly embraced Kiyosaki and his mantra of financial education and self-employment. Kiyosaki has followed his own advice, authoring five best-sellers, including Rich Dad, Poor Dad, a financial-strategies book that spent more than 90 weeks on The New York Times best-seller list. Currently preparing to phase himself out of Cashflow Technologies (the holding company for the Rich Dad brand), while still collecting royalties on its product line – and at the same time attempting to take another company public – Kiyosaki has made a sport of building and selling companies worldwide. THE LOCAL BOY Despite his attitude toward Hawaii, make no mistake about it: Kiyosaki is as local as lau lau. The 55-year-old best-selling author and marketing guru was raised in Hilo, where his tale of Rich Dad, Poor Dad begins. Forced to choose between following in the footsteps of his “poor” father, Ralph Kiyosaki, who was state superintendent of schools in the late 1960s, or adopting the financial strategies of his “rich” dad – the entrepreneurial father of a childhood best friend – Robert opted for the latter and never looked back. “In doing so, I chose not to listen to my poor dad, even though he was the one with all the college degrees,” he writes in Rich Dad, Poor Dad.
Although the book barely touches upon the father-and-son relationship, Kiyosaki doesn’t mince words about his financial beliefs – the spike that slowly wedged the pair farther and farther apart. “He thought that the rich dad was a crook, and that I was going to become a crook with him,” recalls Kiyosaki, the eldest of four children. “He thought I was an idiot, who wouldn’t do it the normal way and get a job.” It was in this manner – openly shunned and criticized by his father – that Kiyosaki continued on his money-making quests through high school and beyond.
Upon graduating from Hilo High School in 1965, Kiyosaki attended the Merchant Marine Academy at King’s Point in New York, where, following graduation, he traveled the world on merchant ships. “I think that’s what really messed me up,” he confesses. “Once I saw the world, it was hard to come back to Hawaii.” He went on to join the U.S. Marine Corps and served in Vietnam as an officer and a helicopter gunship pilot. After returning from war, he held a position briefly at Honolulu-based Xerox Corp., honing his sales technique. In 1977, Kiyosaki really began his career in business.
His first company, which he discusses in his books, brought to market the first surfer-style nylon and Velcro wallets, or “Rippers.” He makes the point that he didn’t know enough about patents and trademarks at the time, and the business eventually folded as a result. However, his venture in wallets certainly whetted Kiyosaki’s entrepreneurial palate, and served as a strong foundation for his increasingly sophisticated sales and marketing techniques.
“No company is going anywhere without sales, and more than anything, Bob definitely knows how to sell,” says Jon Kiyosaki, Robert’s younger brother, who co-founded the company. “Yeah, Bob really knows how to tie products together through merchandising and marketing. From that early on, I always knew he’d go on to be a real success.”
Following the dissolution of Rippers, Kiyosaki began investing in real estate and small-cap stocks, while he “stumbled and bumbled” along, hitting near bankruptcy at one point. “I owed about $750,000 to $850,000,” he says. “Obviously, you can’t pay that kind of money back by getting a job.” So he tried his hand at a variety of entrepreneurial endeavors, none of which were overnight successes.
Then, in 1985, he struck gold. Kiyosaki founded an international education company that taught business and investing to tens of thousands of students throughout the world. The business was an opportunity for him to polish his communication and marketing skills. In 1994, Kiyosaki officially “retired,” and the Rich Dad brand was born.
THE SUCCESS STORY
Upon retirement, Kiyosaki continued his real estate and business investments, and began work on Rich Dad, Poor Dad , which hit bookstores in 1997. Initial marketing for the book met with resistance, for, although Kiyosaki had achieved some recognition overseas, he was still relatively unheard of in the United States. After being turned down by every book publisher he approached, Kiyosaki took matters into his own hands. He printed 1,000 copies himself, and the book became an underground success.
“I was very, very shocked at how well my books sold,” says Kiyosaki, who, to date has sold more than 12 million books (in 29 different languages) under the Rich Dad brand. He admits to not being a great writer – he even flunked English twice in high school – but, he says coyly, “There is a big difference between being a good writer and a best-selling author.” And selling is what Kiyosaki does best. He is so good at it, in fact, that his books caught the attention of Rick Wolff, AOL Time Warner Book Group’s vice president and executive director.
“I noticed that his book kept popping up on best-seller lists around the country, so I called and asked if we could be its publisher,” says Wolff. “At first, he declined. I then asked if we could at least publish Rich Dad as an audiocassette, and we had an audio done within a matter of weeks.” Wolff says Kiyosaki, his wife, Kim, and co-author, Sharon Lechter, were so impressed with how quickly AOL Time Warner moved, that shortly after it became Kiyosaki’s publisher.
That wasn’t the end of it. Kiyosaki has since penned four more best-sellers under the Rich Dad brand. His books and audiocassettes spawned CDs, an additional book series written by his “advisers,” and even television infomercials – all of which coincide with a product that Kiyosaki claims “will set you on a path to financial freedom,” Cashflow 101.
Kiyosaki’s interactive solution for the financially illiterate, Cashflow 101, is the first of two board games designed to educate people about accounting, investing and finance. He is even executing an online version of the vastly popular game, with profits from that venture going toward financing another educational project.
“We’re going to give the children’s version of the board game, Cashflow for Kids, as curriculum throughout the world, for free,” he says, driving home his emphasis on financial literacy. “That way I can bypass some of the school systems that don’t think teaching kids about money is important.
They can’t complain about it being too expensive, either, because it’s free.”
With the completion of that project, along with one more book release in October (Prophecy, which explains why the biggest stock market crash in history is yet to come), and one final infomercial pitching real estate investment advice, Kiyosaki will officially detach himself from Cashflow Technologies. “It’s time for me to phase out and let Rich Dad become a brand instead of my face,” he says of the company that generates him a cool $5 million per year. “Of course, I’ll still earn my royalties through licensing agreements, but it’s time to move on and form another company.”
Kiyosaki says his next endeavor is an effort to take a Chinese gold-mining company – in which he’s already made a $4 million investment – public this year. It is difficult to get much more out of Kiyosaki, who is short on specifics and a master of ambiguity. He makes a loose reference to “being in the oil and gas, silver and gold, real estate, and publishing” industries, but, for the most part, trying to pry any specific information out of the reclusive Kiyosaki is like trying to get a straight answer out of a politician running for office.
For example, on page 89 of Rich Dad, Poor Dad , Kiyosaki clearly “suggests” acquiring (among other things) mutual funds. In his interview with Hawaii Business, however, Kiyosaki says, “Never, ever put your money into a mutual fund – it is the worst possible type of investment.” Additionally, he was once reported to have a net worth (the only time he’s ever provided specifics of his wealth) fluctuating between $50 million to $100 million, “depending on the market that day.” When questioned on the matter, he later dismissed the claim, saying “the reporter asked a silly question … so I gave a silly answer.”
Arguably his biggest adversary, John T. Reed, another nationally acclaimed real estate investment author, has dedicated an entire Web site (www.johntreed.com/Kiyosaki.html) to pointing out Kiyosaki’s inaccuracies. Although much of the content reads like an over-the-top personal vendetta against Kiyosaki, Reed is thorough and has done his homework. “Rich Dad, Poor Dad contains many factual errors and numerous extremely unlikely events that supposedly occurred,” he writes in the site. “Kiyosaki claims to be an experienced millionaire real estate investor, yet the book is full of statements that I would expect only from a rather ignorant … novice investor wannabe.”
In an interview with Hawaii Business, Reed says, “He is good at marketing himself in bogus ways. But I think Kiyosaki’s lifelong pursuit of money and status [is just] an overreaction to insults he received in school.”
Overreaction or not, Kiyosaki’s own comments confirm: His time in Hawaii did, in fact, leave a sour taste in his mouth.
“I left because Hawaii is so anti-entrepreneurial. I got so frustrated with the allowing of government to beat up on small businesses,” says Kiyosaki. “And the people are so complacent.” Kiyosaki says that while his wife would move back to Hawaii in a heartbeat, he is much more content doing business in laissez-faire Arizona. In fact, Kiyosaki says he has no plans for a homecoming, for either business or pleasure.
Kiyosaki says the reason he has no interest in returning to Hawaii is in part due to a cold welcome he once received. “When I do press conferences in Japan and China, 150 reporters show up and I have to have bodyguards at my hotel,” he says. “I did a seminar in Hawaii and one person showed up. I did a book signing, and no one came.”
Amy Pak Soma, who handled marketing and promotions for both events, tells it differently. She says there were actually 20 people that showed up for the seminar, and that it was a good turnout at the time. “I think it’s unfair to make a judgment based on that,” she says. “It was in Hilo, and he was relatively unheard of back then. I’m sure if he came to do a book signing or seminar now, there’d be hordes of people.”
Maybe, maybe not.
The fast-talking marketing marvel has managed to draw almost as many critics as he has supporters. Here in Hawaii, it is no different. Admittedly, Kiyosaki doesn’t keep in touch with anyone from the Aloha State – including his family – and nearly everything about the Islands turns him off. “The government is not pro-business. It punishes the entrepreneur and it’s into just old-boy corruption,” he says. “Voters are extremely passive and the people are so complacent. That’s why the corruption goes rampant. I left because I just got sick and tired of getting beat up by the government. “Did you know that Forbes magazine called Hawaii the ‘People’s Republic of Hawaii’? Because it is so corrupt and socialistic. In Hawaii, they punish entrepreneurs for wanting to start up a business. Business ‘ain’t no big ting, brah,’” he says in a faux-pidgin accent.
Kiyosaki says although he may sound “disconnected,” he is really just concerned. “I get sad, because it’s like they’re really good people, but they live in this little bubble and don’t see what’s going on in the rest of the world.” He says it is hard for him to sit back and witness the lack of entrepreneurial spirit in Hawaii, which, he says stems from a corrupt, lame-duck government. “It’s stuff like that, that makes it really easy for me not to miss Hawaii at all.
“In fact, there really is nothing I miss about Hawaii, because I am always in Fiji, or the Bahamas or South Africa, and their beaches are just as beautiful. And I’m much better off doing business elsewhere, because in Hawaii there is just an overall lack of interest in success and money. People are much more interested in their plate lunches,” he says, pausing before laughing and adding, “Come to think of it, that is the one thing I do miss about Hawaii – the plate lunches.”