Why, oh why, do I torture myself and bother reading anything by Robert Kiyosaki? I should really know better.
His latest article at Yahoo almost gets it right, except when he gets it wrong.
He argues, quite rightly, that high management fees on many mutual funds cut into earnings in a truly massive way. In the example he gives (which is just a direct quote from John Bogle‘s recent interview on a Frontline episode), 80% of the potential gains are lost by a little 2.5% management fee over a 65 year investment timeline.
But then he goes on to say :
“Occasionally, I will buy a mutual fund. But I’ll never hold it for a long period of time.”
If he believes that they are such poor investments, then why hold them at all, even for a short time? Almost gets it? Scratch that. Kiyosaki is a moron.
He continues his claims that active investors can regularly beat passive investing results (whatever regularly means), which I’d argue isn’t true. But at the very least, Kiyosaki does offer up a little good advice and recommends low fee index funds. Too bad that’s just for us passive investors.
