Like many of the TWF readers, I have learned a great deal about personal finance and real estate investing from Robert Kiyosaki. He has been selling his ideas and books for many years and has built his wealth selling ideas about investing.
Kiyosaki and one of his former companies were recently sued by an adult education program producer and promoting for allegedly failing to pay their agreed fee, and Kiyosaki lost the judgment. His company was ordered to pay the Learning Annex and its founder $23,687,957.21.Kiyosaki was unable to pay the $23 million and he declared bankruptcy on behalf of his company that was sued.
Declaring bankruptcy carries a stigma. Some might consider it ironic that a man who talks about financial prowess might end up in a supposedly weak position. For an individual, declaring bankruptcy is an opportunity for new start, but it comes at a price. Bankruptcy stays on your credit report for many years and makes it more difficult to build wealth in the future. And there are certainly people who simply make poor decisions with credit to the point where it becomes overwhelming, and the declare bankruptcy because it’s easier than finding a way to change the situation.
What about Kiyosaki's reputation?
Kiyosaki has inspired many people to look at their finances for the first time, and he has introduced his audience to the idea of building wealth towardsfinancial freedom and has managed to shake off a good portion of criticism over the years.The bankruptcy will not hurt Robert Kiyosaki’s reputation among his fans. If anything will hurt, it’s the possibility that he did not pay his promoter as he agreed to do.He is unlikely to loose any of his fans. That is the the benefit of having a cult-like audience. They ignore anything potentially negative.
While society often judges the compulsive shopper who uses bankruptcy to clear credit card debt as someone who is skirting responsibilities and using the system to their advantage, society tends to praise businesses who use bankruptcy to restructure their corporate debt or to maneuver their strategy to take full advantage of what the law makes available. It’s a double standard; we want individuals to be responsible for their debt, even when faced with difficult circumstances like unforeseen medical bills or a nasty divorce, but we praise Donald Trump’s business acumen despite his four bankruptcies. The individual who files for bankruptcy lives with the negative consequences for years, but the business owners who file for bankruptcy can continue without much damage to their financial reputation.