Rich Farmer - Poor Farmer?

Robert Kiyosaki a well-known American writer, who originally wrote "Rich Dad" became wealthy hunting his entrepreneurial spirit and the Poor Dad, who was highly educated, but due to financial struggle because he lacked the skills to manage his financial affairs.

Apparently, Kiyosaki's first book passed the milestone of five years on the New York Times best sellers list, a distinction shared only by Alex Comfort's "The Joy of Sex", Scott Peck's "The Low Road Less Travelled" and Stephen Covey's "The Seven Habits of Highly Effective People", notwithstanding this, all the other books make for excellent reading, and if you apply some of Kiyosaki's thinking to the farming industry, it's interesting to see that the parallels are all there.

He takes a back handed attitude that "I was never going to be a good employee". I just couldn't kiss enough butt and they weren't going to pay me what I wanted to be paid. It's all very well to say that, what he really did, was to get the entrepreneurial spirit, become self-made and drove his own business.

His next book he says will lift the lid on the western educational conspiracy, on how our schools were designed by the powers that be, to churn out not free- thinking entrepreneurial, soldiers and drone employees and the contention is that he says he can prove it.

His main following in New Zealand, appears to be amongst property investors and he sees property as a haven to park, stabilise and increase gains from entrepreneurial activity. Also he's stated as saying Kiyosaki is all about achieving financial freedom. It's not about money, it's more about being successful enough to have choices and we all know money gives choices.

Having myself read all these book of Kiyosaki, I have in fact applied some of his philosophies in my own business, and I use it when consulting with my clients.

Look at some of the issues. Most of the farmers are already in the property business. They all narrowly own a real estate property and normally want to buy the neighbours. In some of his previous books, he talks about the cash flow quadrant, which is the income to support the debt, farm running costs and your lifestyle.

Too much lifestyle spending will affect your ability to pay the farm running and debt costs, so you need to keep that in check.

The issue around owning assets, particularly farm assets, and real estate for that matter, is that with inflation going on in the world unabated, the value of the asset increases, while the real value of the debt diminishes and the difference between the two is your equity and farmers are able to capitalise on that.

As soon as farmers have enough equity, they can look to buy more land, with more debt from our lending sources. Maybe, they have a 100% finance and they can look at reducing the debt by the sale of spare houses and spare sites to try to get their debt back to a more realistic level. Having financial freedom is a key to anybody's retirement and farming does give you that opportunity.

One of the key issues for farmers is when they sell their farms they must manage their cash and assets very carefully because that's when I see the wheels fall off farmers businesses. They run a farm, make good money, look after their stock, repay the debt then when they sell the farm they end up with a bucket full of cash they are not sure what to do with, and they rely on advisors to tell them what to do with their money. Often they have a vested interest and their financial freedom starts to disappear.


Robert Kioysaki's books make good reading for farmers, and his philosophies could be applied to the farming industry. It is crucial that you manage your cash flow so you can service your debt and you get your logic right, don't borrow too much money too quickly. It also then gives you choices later in life where you are able to have financial freedom and do the things you want to do with your time.

Robert Kiyosaki is a self-made man whose opinion should be moulded with other opinions and other advice in your industry.


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