Rich Dad, Poor Game – trying out Cash Flow 101

If you’re on Facebook, you’ve indubitably been spammed at some point with ads for Robert Kiyosaki’s Rich Dad, Poor Dad line of lectures and products. Starting with the release of its eponymous book in the 90s, the Rich Dad, Poor Dad empire has expanded to include a host of follow-up books, in-person events, recorded lectures, and, bringing us in line with the point of this site, games.
The back story behind the book is actually that Robert started out with a game. He’d designed the game to try and impart his ideas about the philosophy of wealth and how to achieve it in a palatable form that people would enjoy playing. An acquaintance who played the game then suggested that he write a book as well, and the book eventually took the lead in spawning the afore-mentioned empire.
I recently tried Kiyosaki’s game, Cash Flow 101. Click through to the extended entry for some commentary and a review.

If you haven’t read Rich Dad, Poor Dad, I’d recommend finding it at your local library and reading the first chapter – the rest should probably be ignored. In the first chapter, Robert talks about the financial philosophy of his “rich dad” – a friend’s father who served as Robert’s first financial mentor. The rich dad actually had pretty solid ideas, and it’s worth reading about them. The rest of the book devolves into Robert’s incredibly risky and probably borderline illegal real estate and other financial practices, and if you happened to be trying to follow his investment model in, say, 2005 or so, you would have lost a lot of money.
Last week, I finally tried out Cash Flow 101, the game that spawned the empire.
The game itself is pretty expensive if you buy it new – on the logic that it will fundamentally alter your financial outlook and make you rich. I picked it up using some credit at my local used book store instead.
The game is a roll-and-move boardgame where you roll a die, move your piece, then draw a card based on the space you landed on and get a chance to do something based on that card. It’s pretty clear that Robert’s prior game exposure was limited to Monopoly and Life, and this game’s design is directly derived from them.
The game has two movement tracks – the inner “Rat Race” track and the outer “Fast Track.” You win the game by moving from the Rat Race to the Fast Track, and then either getting your income to a certain target amount or landing on your “Dream” space and buying your dream.
As the game begins, you’re randomly assigned a career (our test group got Doctor, Business Manager, Engineer, and Teacher) where each career comes with a salary, monthly expenses, and debts. Each turn you roll a die, move on the track, sometimes collect your salary, then land on Deal, Market, or Doodad spaces – drawing the appropriate card in each space.
Deals let you buy stock, and can let any player sell the stock at the price on the card. They can also be real estate or business opportunities, which let you go into debt to build passive income.
Market cards indicate random shifts in the market, which can impact your ability to sell businesses you own, for example.
Doodads, we are told, are those “things we spend money on, but shouldn’t.” Basically, they’re random expenses you get shackled with.
You can also have kids – randomly, like in Life.
Moving from the Rat Race to the Fast Track requires getting your “Passive Income” to match your expenses. This is the first place that Robert’s (and not his “rich dad’s”) ideas are baked into the game. No amount of salary or stock market gains can do it – you need real estate that you’re renting at a profit, or a business you don’t run directly. In fact, it’s completely okay to go into massive debt to get a little bit more passive income. But don’t worry – you won’t ever have multiple properties go into foreclosure, or find that a property’s passive income has shifted to passive loss.
That’s the second way Robert’s nifty ideas get baked into the game – you can be in massive debt and everything will be hunky dory, because it’s just the passive income that matters.
Once you graduate from the Rat Race, you automagically have your income multiplied by ten (because you’ve “reinvested intelligently” as the game perkily informs you) and then roll-and-move around the Fast Track until you raise your new income by $50,000, which is not hard at all, or land on and buy a “Dream” that you picked at the beginning of the game — my Business Manager picked “Have a park named after you.”
The game itself is tedious and not especially choice-driven. Roll, move, buy properties, buy stocks when they’re super cheap, etc, etc. The only fun part was making up the stories for each character. The Engineer was a nice guy, but kept having kids and buying things like expensive televisions (randomly from Doodad cards, not by player choice) so he was stuck dead in the water. The Doctor almost made it to the Fast Track on the back of massive leveraging – his debt load was enormous when the game ended. The game ended when the Business Manager, who lucked out enough times, hit the fast track, and then we waited for another half an hour or so while the tedious roll-and-move slowly edged her toward a winning income.
Most humorous, at least, was the Teacher. We decided he had terrible risk evaluation skills, as he did the following (all randomly, from Doodad cards):
Was fined for parking in a Handicapped space
Went on expensive vacations
Threw a big wedding for his daughter
Bought a boat
That last one was particularly dire, since the boat cost about seventeen times the poor Teacher’s currently monthly salary. That said, the problem was solved by going even further into debt, which gave Teach the cash to gamble on some stocks and win big!
Cash Flow 101 fails as a game because it is deadly dull, and is worse than the games it cribs off of. It is old technology, and hasn’t even had the benefit of the refinements that Life and Monopoly have both experienced.
It also fails as a teaching tool because the lessons its trying to impart are, in a word, crazy. It doesn’t even really model the ideas its pushing all that well, since you know in advance the range of values for a given asset – the rate of return is written right there on the card! – and that doesn’t really change. There are no down rental markets where suddenly your real estate investment is bleeding you dry. There are no stocks that crash and never recover. It’s all flat or positive, which models nothing in particular.
For people in the typical demographic, I still recommend Ramit Sethi’s site and associated book, I Will Teach You to be Rich. It’s practical and will address your financial needs. Cash Flow 101 is a waste of time – you’ll learn more about likelihoods and markets from playing Poker or Magic.

4 thoughts on “Rich Dad, Poor Game – trying out Cash Flow 101

  1. I have read one of the books and played the game. I certainly agree with your opinion of the game although I thought the book had some valuable lessons. Inspired by the book I tried my hand at being a landlord and failed. I won’t post my sob story about that here since it’s a bit off topic. If anyone reads this post and wants to ask me more about my story just send me an email and I’ll be happy to answer your questions.
    Back to the point of my post: Kiyosaki teaches what you would learn in college accounting courses about balance sheets and income statements. His big twist though is most Americans have the wrong idea about what is an asset and what is a liability. For what it’s worth I agree with his position.
    Cars? They are liabilities. Yes they let you drive to work, but if you lost your job that car payment hurts. Buy a car you can pay all cash instead.

  2. That’s true — the one good point that comes from Kiyosaki’s contribution to the book is the idea that assets are pretty much only “things that make you money.” I think the conventional wisdom that other things (your car, your own home) are “assets” has really screwed a lot of people up.
    That said, I don’t think the game conveys that lesson well at all, either. It tries to make you see that the home you live in is not an asset, but it does so by really misrepresenting how investing in literally anything else works.
    Also, boring game. Ugh. 🙂

  3. The confusion may stem from the fact that many things are assets, but borrowing to acquire them creates liabilities.
    The car is the asset. The car loan is the liability. The house is the asset. The mortgage is the liability. The jewelry is the asset. The credit card debt is the liability.
    Am I missing something here?

  4. I think that’s a reasonable literal assessment, but it does require more care than most people use when thinking about these things. For example, say I have the simple case of a paid-off home — that is an asset with very little associated liability (property taxes, maintenance)…except, it’s not an asset I should include in my financial planning unless I am willing to consider my home as liquid. Most Americans do not buy a home with the thought, “Sure, I can sell this sucker right off if I need cash.” We buy a home to live in, and to be in that neighborhood, etc, etc.
    In contrast, there’s not so much emotional attachment to, say, stocks. You don’t have to say goodbye to your neighbors if you want to liquidate those.
    Of course, most of this is pretty tangential to the game, which pulls the double whammy of (1) assuming you can’t just sell your first home, kill that mortgage, and rent and (2) makes kuh-razy assumptions about debt loading and asset value over time. Also, it commits the worst sin a game can – it’s not fun. 🙂

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