Rich dad, poor dud
As hard as it is to believe these days, I spent most of my early twenties working at a hedge fund in New York. I got there by a process that was circuitous even by my standards: I’d moved to the city after college, hoping to land a job at a newspaper or magazine while writing fiction on the side, but my prospects weren’t great, and I was nearly at the end of the savings that I’d set aside to get me through the summer. When I was invited to interview at a financial firm that actively recruited Ivy League graduates with good grades and no previous experience, I set the letter aside, and I didn’t pick it up again until my other avenues had dried up. But when I decided to give it a shot, I took it seriously. I checked out a guide to hedge funds from the local library in Queens, along with a book on interview questions along the lines of “How many gas stations are in the United States?” It also seemed like a good idea to pick up a recent book on finance, in case my interviewer asked what I’d been reading on the subject. After browsing at the Strand Bookstore, I picked up a promising title that I’d seen mentioned elsewhere, and I read the whole thing in about an hour. I did one interview over the phone, and I did well enough that they asked me to come by the office in person. In the end, I got the job, and it turned out to be the right choice: I learned a lot, saved some money, and made friends who have had an incalculable impact on my life. That’s a story for another time. But I’m lucky that nobody asked me what I’d been reading—and if they had, I’m not sure they would have hired me. Because the book I chose was Robert Kiyosaki’s Rich Dad, Poor Dad.
Even now, almost fifteen years later, it embarrasses me to type this. Kiyosaki has more or less disappeared from the national consciousness, and he’s remembered now, if at all, as a relic of the peculiar financial bubble of the early twenty-first century, just after the tech bust and shortly before the subprime crisis. His books consist of about a paragraph of actual advice—on the level of a personal finance article in Parade magazine—padded out to a couple of hundred pages with platitudes, misleading examples, and sales pitches for other items in his product line. The autobiographical narrative that he provides in Rich Dad, Poor Dad is blatantly fictionalized. (For a more thorough review of Kiyosaki’s evasions, fabrications, and bad ideas, I urge you to check out the comprehensive takedown by real estate guru John T. Reed, which is more than a decade old, but remains one of my favorite things on the Internet.) But the key point about Kiyosaki is that he’s a branding expert masquerading as a real estate and investing authority. His wealth didn’t come from buying, selling, and managing properties, but from hocking his books through organizations like Amway. When he’s pressed for specifics, Kiyosaki, who spends most of his life promoting his own success, suddenly turns coy, and refuses to provide any details on his holdings. He once claimed that his net worth fluctuated between $50 and $100 million, “depending on the day.” And if any of this sounds familiar, you shouldn’t be surprised: Kiyosaki later partnered with Donald Trump on the books Why We Want You to Be Rich and Midas Touch, most of which were devoted to steering readers to network marketing companies. They feel, frankly, like artifacts of a more innocent time.
But what interests me the most now are the reasons why I bought a copy of Kiyosaki’s book in the first place. First, I didn’t know any better. Second, it had been positioned by many reviewers at the time as a legitimate book on personal finance. Both points, I think, are illuminating. I was a smart kid, and I’d graduated with honors from a good college, but I didn’t know the first thing about finance or investing. Over the next few years, I learned a lot, but I still remember how little I understood when I started, and how dependent I was on outside sources, many of them actively misleading, to point me in the right direction. I wasn’t alone, either. Many of my friends in their twenties were freaking out over how unprepared they were to manage their own money. The language of finance seemed too daunting to master, and there was a palpable sense that we were all faking our way into adulthood. At cocktail parties, whenever I had to explain what I did for a living, I’d ask: “Well, do you know what a mutual fund is?” If the answer was yes, I would go on to explain how a hedge fund was different—but the answer was usually no. And I don’t blame anyone for this. There was good advice to be had: I became a regular on the Bogleheads forum, which is still where I’d advise an aspiring investor to poke around first. But you had to seek it out, at a time when a huckster like Kiyosaki was receiving respectful press as long as his books were selling. It was easier to write stories about his run on the bestseller list than to honestly interrogate the statements he was making. People bought Rich Dad, Poor Dad because they heard that other people were buying it, and it’s what finally gave Kiyosaki the wealth that he claimed to have earned. The snake ate its own tail.
And that was the most insidious phenomenon of all. I’ve been thinking about Kiyosaki a lot recently, and not just because the Republican presidential nominee is a self-help financial guru with an unreliable memoir of his own. If Trump and Kiyosaki were drawn to each other, it’s because they were kindred spirits. Like Kiyosaki, Trump appears to have made most of his current wealth from brand extension, licensing, and his work as a television personality on The Apprentice, and he benefited from indulgent media coverage that treated him for years as a property developer rather than as an entertainer. Trump is uncannily adept at promising the world to his followers while refusing to provide any specifics about how his goals could be achieved, which is a skill that he honed as a financial guru: you always tease the reader by hinting at the answers that will be revealed in the next book, class or seminar. And he benefits, above all, from the same lack of basic knowledge—and the hunger for guidance of any kind—that led an intelligent college graduate, on the verge of applying for a position at a global hedge fund, to turn to Kiyosaki as a source of advice. If it weren’t for that fundamental confusion about how economic value is created, Trump wouldn’t be able to sell himself as someone with the business expertise to run the country, or as someone who “brilliantly” used almost a billion dollars of losses in a single year to avoid paying federal income taxes for two decades. And I can’t fault people for wanting to believe him, any more than I can blame them for buying into the seductive, empty pitch that Kiyosaki peddled for years. Because whenever I feel tempted to condescend to Trump’s supporters, I remind myself that I once fell for it, too.