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Celebrity Q&A
Making it to Boardwalk
"Rich Dad" author Robert Kiyosaki believes all of life's (financial) lessons are mirrored by the game of Monopoly.
Celebrity interview

Your best investment: education
 

New York Times best-selling author Robert Kiyosaki, a fourth-generation Japanese-American born and raised in Hawaii, isn't bothered by controversy. Author of several chart-topping books, including one co-authored with billionaire businessman Donald Trump, Kiyosaki pushes financial literacy like it's a lifeline for what ails America. In his opinion, knowledge is money and he believes the divide between the wealthy and the impoverished is a widening gulf.

At a glance:

Kiyosaki believes making money can be as simple as playing a game of Monopoly. He says the formula for winning the game -- four green houses and one big red hotel -- translates to real life prosperity. Rolling the dice in real life takes courage and sense of adventure, but it also leads investors to big pay-offs -- and not in Monopoly money, either.

Criticized for being long on strategy but short on substance, the self-made millionaire shrugs off his detractors in the professional finance community and continues to add to his growing stable of books and converts. Those books, as well as his approach to financial independence, have attracted an enormous following among ordinary people hoping to grab a little of Kiyosaki's white-hot success. And that's fine with Kiyosaki, because that's his intended audience in the first place.

Kiyosaki recently shared his unique take on retirement and other financial matters with Bankrate.

How do rate cuts by the Federal Reserve affect real estate markets around the country?

I don't think they affect real estate, simply because the prime rate is not tied to long-term interest rates. I think it's more an illusion, a smokescreen. It's to let the stock market know that the Fed will play along with stock market investors.

What about all of the people who are on the brink of losing their homes?

I really feel for the poor guys who are going to lose their houses simply because their mortgage broker put them into more house than they could afford. The real problem is we don't have any financial education in our schools, so when a mortgage broker says I can get you 100 percent financing, what they're not telling you is that the mortgage broker makes a higher commission on 100 percent financing than on an 80 percent finance deal. That's why so many people are in trouble. It's a matter of commissions.

Will cuts by the Fed stabilize the housing market?

Absolutely not. I think the wealth effect is in trouble for the next three years maybe. I'm not one who plays appreciation or home equity or things like that, so I think the average American homeowner is in trouble.

Will home prices continue to drop in some markets?

Housing prices are predicated on job growth, so, for example, if you are in Michigan or Wisconsin, you're in trouble. If there are jobs, housing prices may stabilize or plateau, some might go up. But where there's a loss of jobs, which is a ripple effect of this subprime mess, then housing prices will go down. It's not so much a factor of interest rates; it's more job availability or job increases and wages.

Next: "A home in my opinion is not an investment ..."
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