Book Review: Unfair Advantage by Robert T. Kiyosaki

To succeed in today’s rapidly evolving business climate, you too must adapt. In his book Unfair Advantage (2011), Robert T. Kiyosaki emphasizes the need to abandon conventional paths to financial success in favor of innovative approaches that can set you free.

Only things that directly or indirectly increase your income are assets, so it’s important to do your research before investing money in anything. If you take the time to educate yourself financially, you’ll be in a much stronger position than most of your peers. Kiyosaki shows his readers how to become richer in the midst of economic difficulties.

You may be wondering if you should read the book. This book review will tell you what important lessons you can learn from this book so you can decide if it is worth your time.

At the end of this book review, I’ll also tell you the best way to get rich by reading and writing

Without further ado, let’s get started. 

Lesson 1: You can learn how to avoid taxes with financial knowledge.

Unfair as they may be, taxes can be avoided entirely by acquiring a sufficient degree of financial knowledge. By doing so, you give yourself an unfair advantage. Taxes are one way people get ripped off because they are conditioned to do what the government wants.

It is no secret that employees, self-employed and small businesses (the E and S quadrants) pay the highest taxes because they do not have the financial knowledge to properly manage their income and expenses. The reason is that they remit funds to other countries. Financial aid recipients in quadrants B and I have the lowest tax burden. Companies and investors on a larger scale have access to significant cash reserves.

Who you are as a person is more important than what you do for a living. The best thing you can do for your tax situation if you belong to the E quadrant is to defer paying taxes by contributing to a retirement account such as IRA or 401(k).

To maximize your income while reducing your expenses, aim for locations in the preferred quadrants. If you are in the S quadrant, you need to start planning your exit to the B quadrant immediately. If you want to make the most of your new quadrant, the first thing you should do is train yourself to value independence over security.

It is also wise to change who you spend your time with. Friendships are usually formed between those who are in the same quadrant as their owner. You should team up with other entrepreneurs if you want to rise in their ranks. If you want to meet new people, you do not have to abandon your old friends.

Because of the three different types of income, there are three different tax regimes. Earned or ordinary income comes first and is subject to the highest tax rates. This is something to avoid. Second, you can earn money from your investments, which is taxed more favorably, and third, you can earn money through passive methods, which is the real goal. In some cases, you can be exempt from tax liability.

Avoid retirement plans at all costs. The reason is that the government will tax your entire nest egg once you retire. If you invest in a 401(k) plan or similar plan, you will be subject to the highest possible tax rate. When you choose a retirement plan, you also give up much of the control over your finances and your taxes.

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Lesson 2: You should use debt to buy assets.

When President Richard Nixon abandoned the U.S. dollar’s gold standard in 1971, the dollar was no longer legal tender. As a result, people’s savings lost value and debt increased. The best way for the financially illiterate to take advantage of this is to buy gold and silver. On the other hand, if you take the time to educate yourself about personal finance, you can essentially create your own money. Although it may sound counterintuitive, debt can be used to finance the purchase of tangible assets.

Financial institutions value borrowers more than savers. This is because they’ve to compensate savers with interest, but charge borrowers high interest rates. They should use debt to acquire assets rather than liabilities. Infinite profit should be another goal. If you don’t spend the money you get back, it’s like getting something for nothing. When you get your money back, look for new investment opportunities. Invest your debt in things that will make you money in the long run.

Long-term real estate investors can take advantage of depreciation, which is provided by the government. This is a tax write-off. To qualify, you can either use your own funds or funds borrowed from a financial institution. Another tax-free option in real estate is reinvesting the proceeds from the sale of one property into the purchase of another. These rules apply only to investors in real estate, not speculators.

Using OPM (other people’s money) is the ultimate key to entering the I-Quadrant. In this scenario, you not only get your original investment back, but you also get to keep the asset, make a profit, and potentially reduce your taxable income.

Lesson 3: A job is anything but secure.

Financially illiterate people take low-paying jobs because they mistakenly believe that they guarantee financial stability. Today, however, jobs are anything but secure. Wages in the United States are too high compared to those in other countries, and technology is displacing workers. The amount you have to pay in taxes alone is enough to keep you from a regular job for good.

Forget it; trying to save money at a time when governments are actively devaluing the currency is a contradiction in terms. Likewise, there is no such thing as a safe investment. Only by investing wisely can you ensure that your money is safe. When the purchasing power of the dollar goes down, gold and silver go up in value.

Fair stocks are another contradiction in terms. Simply put, not all stocks are equal. There are three types of shareholders: Common, preferred and selling shareholders. They seek to participate in the sale of shares. They own a significant portion of a company’s stock. As a result, mutual funds are neither trustworthy nor balanced, but rather biased. When it comes to paying taxes, they are also not competent. However, the B and I areas receive financial support from them.

Another oxymoron is the idea of being debt-free. The national debt remains even if all private debts are paid off. The United States and other major economies have accumulated significant debt because their expenditures exceed their revenues.

Generally, the more you know about managing money, the safer you are. Mastering a variety of asset classes will give you the most leverage over your portfolio.

Selling a business is the first type of asset. Second, there is real estate, where you can profit from mortgages and property taxes. In third place are paper assets, which do not give you much power. Commodities, which are fourth, require the least knowledge of financial markets, but the value of gold and silver still fluctuates. If you want to succeed academically, you need to focus on the subject area that excites you the most.

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Lesson 4: People who work for money can’t survive today. 

Compared to the last decades, it is much more difficult for today’s working class to make ends meet. Although they try very hard, they cannot get out of the rat race of work, debt, taxes and price increases. A second possibility is that they simply stop trying because they expect their income to be confiscated by the state.

The wealthy, however, are immune to such fluctuations because they do not have to work for their income, but because they have assets that generate income regardless of the state of the economy. These resources, such as oil, must be essential to global functioning. If you do not like one of them, look around until you find it.

Most of the time, the poor think only about their bills. They survive each day by doing the bare minimum. For the middle class, their focus is on their liabilities. Their goal is to raise their standard of living, so they spend more money on things like bigger homes, luxurious cars, and fancier vacations.

They also tend to rely on others to manage their financial affairs. Rich people have clear priorities: their possessions. If they focus all their attention on their assets, their expenses and debts will take care of themselves. A rich, financially literate person will invest their money in a new asset that will cover the cost of a new car.

They will abide by one of the three “Laws of Compensation.” The first law states that giving goes before receiving. For example, if Kim were to house more people, she would make more money.

The second rule of thumb says that you should practice giving more. The skills you learn in a traditional classroom are invaluable when it comes to taking care of your own loved ones. To achieve your goals, you must learn to share with more than just your family and friends. When you make life easier for others, you receive preferential treatment legally and fiscally.

The third law states that a person’s financial success is directly proportional to their level of education. Education is no substitute for experience. Taking a few courses and then declaring yourself educated is not enough. To learn something, you have to do something with it. Education, and especially financial education, is a journey.

In the beginning, your efforts will bear little fruit, but in the long run, you can make a fortune with minimal effort.

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Unfair Advantage Quotes

“In 2010, Stanford University published a warning stating that CalPERs and CalSTRS, the University of California Retirement System, are collectively unfunded by $500 billion dollars and have engaged in overly risky investments.”


“The coming crisis will not be the real estate bankruptcies. The next debt crisis will be defaults on student loans.”


“Before describing what I believe financial education is, I need to point out the differences between education and training.”


“In many schools, school administrators are proud to say they have financial education in their schools. In reality, it is financial training, not financial education.”


“This is not financial education. This is financial training, the same training that Pavlov used on his dogs and that advertisers use to sell cigarettes, antacids, and insurance.”


“Just show me the money.”

View our larger collection of the best Unfair Advantage quotes

About The Author

Robert T. Kiyosaki is a businessman and educator. He is best known for his best-selling Rich Dad, Poor Dad financial how-to books. Rich Global LLC, his company, declared bankruptcy in 2012.

Kiyosaki’s financial advice frequently contradicts conventional wisdom, and it has been widely criticized as inaccurate and self-serving.

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