Robert Kiyosaki, Author of 'Rich Dad Poor Dad': The Rich Pay Less Tax Through Passive Income
Robert Kiyosaki, author of 'Rich Dad Poor Dad', stated on social media that a person's best asset is free, and the worst liability is also free, both being "words". He quoted a scripture learned in Sunday school, "The Word became flesh and dwelt among us", believing that a person's words ultimately shape who they are.
He identified three major "free liabilities": "I can't afford it", "I'll give it a try", and "Rich people are greedy", calling these the language of the poor. He used himself as an example: as a fourth-generation Japanese American who does not speak Japanese, he would learn the language if he needed to live or do business in Japan. Similarly, the language of the rich is "the language of money".
He categorized income into three types: earned income, portfolio income, and passive income. He stated that the poor go to school, find jobs, and earn wages, chasing earned income, which is the worst type of income and often taxed the highest, while schools teach students to strive for this income; the middle class goes to school, works, and invests in 401(k) or IRA retirement accounts to earn portfolio income, which is usually taxed second highest; the rich pursue passive income that flows in without needing to work, which "often has a tax rate of zero".
He cited Warren Buffett's statement that he pays less tax than his secretary as evidence. This statement comes from Buffett's public remarks in 2007; in 2011, Buffett disclosed in a New York Times op-ed that his federal tax payment for 2010 was about $6.94 million, only 17.4% of his taxable income, while the tax rates for his 20 office employees ranged from 33% to 41%, averaging 36%. The Obama administration subsequently proposed the "Buffett Rule", requiring a minimum tax rate of 30% for those earning over $1 million annually, which was defeated in the Senate in 2012.
The actual structure of the U.S. tax system is: wage income is subject to a maximum federal income tax rate of 37%, plus a combined 15.3% payroll tax for Social Security and Medicare, of which employees bear 7.65%; long-term capital gains and qualified dividends are taxed at 0%, 15%, or 20%, with high-income earners paying an additional 3.8% net investment income tax. Withdrawals from 401(k) and traditional IRAs are taxed at ordinary income tax rates. Real estate investors can deduct rental income with depreciation and defer capital gains tax using 1031 exchanges; assets are revalued for tax basis upon the owner's death, exempting unrealized gains from tax. In the IRS's definition, "passive income" specifically refers to rental and business income without substantial participation, which differs from Kiyosaki's concept.
In terms of market mechanisms, Kiyosaki's audience mainly consists of middle and low-income retail investors, and his content directly guides capital flow towards hard assets. He has repeatedly predicted "the largest crash in history", advising to buy gold, silver, and Bitcoin, with target prices for 2026: Bitcoin at $250,000, Ethereum at $60,000, silver at $100 per ounce, and gold at $27,000 per ounce. The beneficiaries are those holding capital assets who can enjoy low tax rates and deferred taxes, as well as the financial education industry that monetizes through financial literacy courses and content; the pressured group is wage earners whose income comes entirely from salaries and cannot avoid payroll taxes.
The first edition of 'Rich Dad Poor Dad' was published in 1997, and by 2017, it had sold nearly 40 million copies. Kiyosaki claimed in January 2024 that he carries over $1 billion in debt, which he described as "good debt" used to leverage financial assets.
Source: Public Information
ABAB AI Insight
Kiyosaki's business record is far more complex than his philosophy. In 2012, his company Rich Global LLC was ordered to pay $23.7 million to The Learning Annex and its founder, later filing for bankruptcy with liabilities nearing $26 million and assets of only $1.8 million. In 2008, he was sued by Sharon Lechter, co-author of the 'Rich Dad' series, ultimately settling for an undisclosed amount after Lechter sold her shares. His seminars have been investigated by media such as CBC and CBS: in 2010, CBC found courses packaging vacant land as successful investment cases; participants have also filed class-action lawsuits. The "poor dad" in his book is based on his father, Ralph Kiyosaki, who was the head of the Hawaii education system, while the existence of the "rich dad" has long been questioned by critics.
His capital path is essentially "content licensing", rather than "investment returns". The income chain began with his book in 1997 and extended to the Cashflow board game, financial literacy seminars, and brand licensing: the course business of Rich Dad Education is licensed to external training companies, from which he collects licensing fees, and his millions of followers on X are the latest traffic entry in this chain. His claimed asset allocation involves holding apartments, gold, silver, and Bitcoin with substantial borrowing, based on the logic of borrowing dollars and holding hard assets, allowing inflation to repay his debts. This logic works in a low-interest-rate environment, but in a high-interest-rate environment, borrowing costs can directly consume cash flow.
In contrast, Buffett is a counterexample. His low tax rate does not come from "passive income", but from not cashing out: Berkshire Hathaway has not paid dividends since 1967, and stock price appreciation does not generate taxable income unless sold. ProPublica calculated in 2021 that Buffett's "real tax rate" from 2014 to 2018 was only 0.10%. The U.S. financial education industry has a clear lineage: from Napoleon Hill's 'Think and Grow Rich' in 1937, to Kiyosaki advocating "good debt", to Dave Ramsey advocating "total debt-free", with both opposing views selling well simultaneously. The industry is transitioning from books and offline seminars to the social media "financial influencer" stage, where traffic replaces professional qualifications as the new threshold for entry.
The essence is capital concentration, with the mechanism being the asymmetric treatment of labor and capital in the tax system. First, wage income is subject to withholding income tax and payroll taxes at the time of payment, with no deferral space. Second, capital income is taxed on an "realization principle": no tax is due until sold, and when cash is needed, assets can be used as collateral for loans, which are not counted as income; upon death, the tax basis is reset, and the appreciation portion is permanently exempt from tax. This is the common "buy, borrow, die" strategy used by the wealthy in the U.S. Third, Federal Reserve data shows that the top 10% of households in the U.S. hold about 90% of stocks, with tax benefits almost entirely accruing to asset holders. The gap in after-tax returns compounds year by year, naturally concentrating wealth at the capital end.
ABAB News · Law of Cognition
- Wages are taxed on income, while assets are taxed on intent.
- The poor save money to resist inflation, while the rich borrow money to eat inflation.
- The most expensive liability is the phrase you say every day.