7 Ways ‘Rich Dad’ Robert Kiyosaki Says You’re Wasting Money

©Robert Kiyosaki

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Japanese-American businessman and “Rich Dad Poor Dad” author Robert Kiyosaki has a lot to say about a lot of things. Aside from writing dozens of books — including the “Rich Dad” series and two co-authored with Donald Trump — the popular advisor uses seminars and his Rich Dad website to dole out wealth building and asset management strategies for those yearning to start earning money through income streams that passively work without much toil or day-to-day attention.

Like his occasional co-author Trump, Kiyosaki loves to differentiate between “winners” and “losers,” with the winners knowing how to generate cash flow and build their wealth passively, and the losers destined to blindly follow outdated strategies of working jobs and socking money away in savings accounts. In a futile attempt to grow their wealth, members of the latter category ultimately waste their time and their money and squander their opportunities to learn while they invest. “The losers in life think they have all the answers,” said Kiyosaki. “They can’t learn because they’re too busy telling everyone what they know.”

Here’s seven surefire ways to waste your money, according to Robert Kiyosaki.

7 Ways Robert Kiyosaki Says You’re Wasting Money

1. Traditional Saving Instead of Investing

It goes without saying that saving money is better than spending it haphazardly, but investing your money is considered wise spending, according to Kiyosaki. Kiyosaki would take it further and say that with every dollar you save in a regular savings account, you miss an opportunity to invest.

2. Liabilities Instead of Cash Flow Assets

When you invest, you should be concentrating on acquiring assets that generate cash flow rather than accumulating liabilities. Kiyosaki’s investment strategy includes assets like real estate, gold and other physical commodities. Although it’s not as simple as it sounds, as you learn more about investing, your focus will veer toward items that contribute to long-term financial growth and away from excessive consumer goods — “the allure of flashy logos and designer labels” — and depreciating assets.

3. Investing in College Instead of Educating Yourself

Kiyosaki believes in the power of financial education — but you don’t have to enroll in a business program at college to get it. Investing in personal development, courses and books that can enhance your financial knowledge is never a wasteful expense. To Kiyosaki, it’s as important as paying down debt.

“Our minds are our greatest assets, and I recommend that in addition to paying down debt they set aside some money for books or classes on topics that interest them such as investing, real estate, the economy and business,” said Kiyosaki. “These small investments now will pay dividends for years to come and can deliver a better long-term return than aggressively paying down debt.”

4. Taking on Worthless Debt Instead of Using it to Acquire Assets

Taking on excessive debt on non-appreciating assets will cost you dearly. There are good kinds of debt, according to Kiyosaki. Using debt strategically to acquire income-generating assets, build a cash flow system and make passive money will get you on your way to building healthy wealth.

5. Relying on a Single Income Instead of Diversifying Earning Streams

For Kiyosaki, cash flow and passive income are the keys to building wealth. Relying solely on job earnings for income may limit financial growth. Kiyosaki encourages diversifying income sources, such as investing in real estate, starting a side business and even borrowing from friends or using debt to create a more resilient financial portfolio. Continuously working long hours without building scalable income sources can be seen as a waste of time and potential financial growth.

6. Taking Irrational Chances Instead of Calculated Risks

“Losers let the fear of losing money keep them from making money,” said Kiyosaki. Kiyosaki isn’t unnecessarily risky, but rather he encourages taking financial risks if they are based on sound fundamental learning and planning. By cultivating an entrepreneurial mindset and building a constant cash flow supply, you’ll be in a better position to take risks. A lack of understanding may limit your financial growth and making excuses to avoid investing can result in missed opportunities and unfulfilled goals.

7. Winging It Instead of Making Acquisition and Management Goals

Speaking of goals, Kiyosaki may deal in generalities, not budgeting or having a clear understanding of where your money is going can lead to wasteful spending. Writing on the Rich Man site, Kirosaki’s former partner, Kim, said that moving from “depending on a job for your livelihood to controlling your financial destiny is to set goals like a pro.”

As the Rich Dad Personal Finance Team explained, “Each year, Robert sets goals as to how many new assets he wants to purchase.”

“It’s important to note, he doesn’t make goals to make more money. He doesn’t spend his time looking for a better, higher-paying job. He knows that if the focus is on finding high-quality assets, the money will come — and for many years, even after the work of acquiring our assets is done.”

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