Robert Kiyosaki has a bi-weekly blog at Yahoo! Finance. His latest article, Playing the Mutual Fund Lottery, was posted yesterday. Kiyosaki has made his fame and fortune from his educational book series and his mostly contrarian and sometimes controversial views. Some of his opinions and advice cause people to think outside the box in a good way, but other comments are self serving at best, and potentially dangerous to those who follow his advice without understanding the reasoning behind it.
Quote: “Among other reasons, 401(k)s and IRAs involve putting money into an investment vehicle over which investors have little control. And since most people end up choosing mutual funds as their primary investment within these plans, playing the lottery would be a better way to go.”
Is He Serious? Apparently. Kiyosaki goes on to compare 401k plans and IRAs to “gambling away retirement funds in a government-sponsored game of chance with little to no chance of winning.”
Kiyosaki Rips Tax Advantages of Retirement Plans: He writes that the tax advantages of 401k plans and IRAs are negated because most people using these forms of retirement plans get tax breaks while they are young and in a low tax bracket and trading that for paying the taxes when they are older and in a higher bracket.
This is a blanket statement, and is false under many conditions. I know plenty of people who are in higher tax brackets who use these plans, many people who are nearing retirement age who still invest, and at no time in the article did he mention Roth IRAs or Roth 401k plans that invest post-tax dollars, and will yield tax free dollars in retirement.
Kiyosaki Writes Not to Invest in Mutual Funds Outside of Retirement Plans Either: Why not? because you invest in funds where you have no control over the management, and you have to pay taxes even if the fund decreases in value. He has a point there because when trades are made, the fund is taxed on capital gains. You also do not have control over the fund – short of voting, or not investing in it to begin with. But here, Kiyosaki focuses only on the negative aspects, and likens mutual fund investing to ‘gambling.’
The Rest of the Article: It wasn’t worth reading. I did it. It just wasn’t worth it! 
My advice: When listening to any financial advisor, ask yourself what they are selling. Are they acting in your best interest?
Robert Kiyosaki is a best-selling author of finance and real estate books. He makes a ton of money giving speaches and presentations. He is also a self-proclaimed real estate magnate, and business owner, including gold and silver mines.
His finance articles consistently center around several issues:
- The US dollar is bad; precious metals are good.
- Mutual funds are bad; real estate and precious metals are good
- Saving is bad; go for cash flow (the only example he consistently gives is real estate)
Do your research before you believe the talking heads. 
- All Financial Matters has a similar post – “Let’s Read Some of Robert Kiyosaki’s Drivel.” He has some other great points. I recommend it.
- Read this post about When You Should Play the Lottery.
{ 1 comment… read it below or add one }
I think that Robert Kiyosaki is a fraud that never made any money investing in anything but by selling books, courses, lectures etc. While most of the bloggers out there seem to be influenced by his ranting about “passive income”, overall I think that listening to this guy is detrimental to ones financial health. There’s a good link about him here:
http://www.johntreed.com/Kiyosaki.html