Sethi & Kiyosaki Spar on 5 Money Matters

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Ramit Sethi and Robert Kiyosaki are two of America’s best-known personal finance personalities. Kiyosaki parlayed his bestselling book “Rich Dad Poor Dad” into a financial-literacy empire. Sethi built his empire on his I Will Teach You To Be Rich website, which serves as a platform for his financial education courses and springboard for his bestselling books, podcast and popular Netflix series, “How To Get Rich.”

Sethi’s and Kiyosaki’s wealth-building advice overlaps in some respects. But their approaches to financial security are quite different, as Sethi demonstrated in a recent post on his IWT blog. See where their financial advice has intersected, and whether or not the two financial experts have found common ground.

5 Things Ramit Sethi and Robert Kiyosaki Agree On

Both financial pros agree on some points.

Making Your Money Work For You

Kiyosaki wrote in “Rich Dad Poor Dad,” “The Rich do not work for money. They know how to have money work hard for them.”

Sethi agrees that a nine-to-five job isn’t the only way to grow wealth, and it might not even be the best way. Using your income to build a business or invest in appreciating assets puts your money to work for you by generating passive income that keeps growing even if you stop working.

Paying Yourself First

A common theme in Kiyosaki’s book and blog is to pay yourself first by investing in appreciating assets, then pay bills and other expenses. He considers it an exercise in building the self-discipline needed to take control over your money. 

Sethi agrees. “Over time, this habit builds real financial stability, even on a modest income,” he wrote.

Building Wealth vs. the Appearance of Wealth

Kiyosaki believes one thing separating the rich from everyone else is that the rich understand the difference between assets and liabilities. Assets are things that appreciate in value and contribute to wealth, while liabilities lose value and rob you of wealth.

Take a luxury car. It feels like an asset because it gives the appearance of wealth. But it depreciates the moment you buy it and will always be worth less than you paid. 

Sethi calls Kiyosaki’s teachings on assets vs. liabilities a major wake-up call.

Financial Literacy

Kiyosaki and Sethi built their businesses around teaching people how to manage money and grow wealth. Clearly, they agree that financial literacy is the key to financial success.

Challenging Conventional Wisdom

Conventional wisdom is often rooted in misguided beliefs. For example, generations of Americans have been told to get an education to qualify for a high-paying job, then buy a house, then rely on your salary and that house to build wealth. In fact, few people get rich that way. 

Kiyosaki’s advice is to educate yourself about money rather than a job, and use your education and job earnings to create wealth through passive income. Sethi agrees that your job should be a means to an end, not the end goal.

5 Things Ramit Sethi and Robert Kiyosaki Disagree On

These are the areas where Sethi and Kiyosaki disagree.

Risky Investments for Beginners

Sethi takes issue with some of the investment advice Kiyosaki offers in his book and elsewhere. He heavily promotes real estate investing, for example, and touts other complicated investments ill-suited for beginners. 

“Kiyosaki sells these ideas like shortcuts to wealth, but without a solid foundation, they’re actually potential disasters,” Sethi wrote.

Multi-Level Marketing for Developing Sales Skills

Sales is certainly a skill you can use to grow a business and generate wealth, but Sethi disagrees with Kiyosaki’s suggestion that joining a multi-level marketing network is a good way to train. Granted, you’ll learn resilience in the face of rejection, but you’re unlikely to come away with marketable skills because of the predatory and exploitative nature of that business model.

Platitudes vs. Actionable Advice

In Sethi’s view, “Rich Dad Poor Dad” is long on inspiration and encouragement, but short on actionable advice. 

“That’s fine if all you want is a motivational push, but if you’re looking to actually do something with your money, you’ll walk away empty-handed, Sethi noted. Sethi focuses on specific steps people should take to grow wealth.

Condescending Attitude Toward the Poor

Kiyosaki’s book and blog frequently equate poverty with ignorance and lack of motivation, ignoring the many environmental challenges that hold people back. Sethi believes this approach is both unhelpful and “gross.”

Panic Investing

Sethi recognizes Kiyosaki has taken to promoting extreme, conspiratorial views. He frequently warns of an impending market crash and implores investors to stash their money in precious metals, cryptocurrency — and as Sethi mentioned, canned tuna. 

Considering that Kiyosaki’s predictions have had a 100% failure rate over roughly 14 years of such warnings, Sethi is perhaps correct to wonder if Kiyosaki has shifted from helping people build wealth to selling fear.