Dave Ramsey vs Robert Kiyosaki – Who Should You Listen To?

Dave Ramsey vs Robert Kiyosaki – Who Should You Listen To?

If you’ve been following this blog for awhile then you’re aware that we used the Dave Ramsey’s Baby Steps to become consumer debt free after racking up close to $300K in student loans.

The financial principles he teaches are important, but mainly for the average person. But with anything I read or people I listen to, I also form my own opinions (especially the older I get).


The first 5-7 years after training I’ll admit that I followed Dave Ramsey’s advice exclusively. And I still to this day recommend those starting out read his Total Money Makeover book.

I’m going to dive into his specific recommendations shortly but also wanted to compare him to another popular financial guru, Robert Kiyosaki.

Mr. Kiyosaki is the author of Rich Dad Poor Dad and CashFlow Quadrant.


Kiyosaki’s strategy is polar opposite of Dave’s. Where Dave is anti-debt, Kiyosaki is all for it when used wisely to build wealth.

  • Which person/strategy is right for you?
  • Is one person right and the other wrong?

Let’s break down each one’s point of view regarding finances and then you’ll be able to decide which is the best for you.

Dave Ramsey vs Robert Kiyosaki

Dave Ramsey’s Principles

If you don’t know much about Dave Ramsey then listen to a few callers on his radio show and you’ll soon realize who he’s dealing with. The majority of the people he talks to are in pretty bad financial shape.

At first I didn’t understand why he ALWAYS recommends that people cut up their credit cards and only use debit cards. But the more I listened to the caller’s stories, the quicker I knew why.

I once heard someone ask him what they should do as no matter what they tried with money, they stayed broke. Long story short, they had a lot of bad debt such as $48K on their trailer, $25K on a used car, had $12K of credit card debt but were clueless in where to start cleaning up their mess.

As you can see, these folks need MAJOR help.

In my mind, when I first started practicing, I felt I was like some of his callers. They were messed up with debt and I had much debt so hey, we were the same.

After a few years of making a decent income, digging out of debt and investing along the way, the light bulb went off. I thought, “Hey Jeff, you’re not in such a bad position after all.”

But as a loyal Dave follower, I stuck with his seven baby steps (especially the debt snowball) until I realized that I needed more to do after establishing a debt-free lifestyle (I’ll discuss that shortly).

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Here’s the basics that Dave’s teaching involves:

#1 Get on a budget

Dave states that if you don’t know about your financial situation, then who does? We’ve never had a set budget mainly due to our frugality.

But we did revert to a VERY strict one during the pandemic as dentistry in Louisiana was basically shut down for two months.

The amazing part of getting on the COVID-19 budget was just how little we needed to live on plus how much wasteful spending we’ve been doing for years.

I’m going to have to side with Dave on this one. No matter your income, a good thing to do is operate on a budget.

#2 Live frugally

Dave has now started to focus on teaching debt-free folks how to become millionaires.

He often quotes the book, The Millionaire Next Door. And one of the main traits of all “average” millionaires is frugality.

Dave states that, “Being frugal is a must if you want to have a seven-figure net worth.”

I have no issue living frugally but I also believe that you don’t have to be frugal in order to build wealth or find financial peace.

If you’re a high income earner with common sense, you should be able live life like you want (frugally or not) and still get rich.

#3 Cut up the cards

As previously mentioned, Dave’s message is targeted to the general public that usually have a poor credit score and lack a college education.

Research shows that over 40% of Americans can’t cover a $400 emergency.

It’s safe to say that a lot of people lack financial literacy so the idea of cutting of credit cards is good advice.

Occasionally someone will ask about using credit cards to get “reward points” and Dave usually shoots them down with saying that “he’s NEVER heard of someone reaching financial freedom on credit card points.”

Here’s my thoughts on this. As a periodontist and practice owner, we have certain supplies we HAVE to order monthly in order to operate. These are needed no matter if we use a debit or credit card. My thinking is if I have to order them then at least get some type of rewards (credit card points). But if you’re the person that has trouble paying bills and can’t pay off your credit card each month then go with Dave’s advice.

#4 Emergency fund

Dave recommends starting off by saving $1,000 in an account that is earmarked for emergencies only.

This amount is a decent goal for most as it’s enough to give some peace of mind without feeling overwhelmed.

The COVID-19 pandemic taught many people exactly WHY an emergency fund is needed. Dave recommends bumping up the emergency fund to cover 3-6 months of expenses after getting out of debt.

#5 Get out of debt

After listening to Dave’s show, it certainly doesn’t take long to hear his stance on debt. He despises it and often quotes Proverbs 22:7 – “The rich rule over the poor, and the borrower is slave to the lender.”

His failure (bankruptcy) in the past was the catalyst to his fresh start in becoming debt-free including the home mortgage.

He understands what it feels like to be up to your eyeballs in payments wondering how and where to start the process of paying them off.

This is one of the main differences of Dave Ramsey vs Robert Kiyosaki.

#6 Invest in a retirement account

Dave suggests investing 15% of your household income into Roth IRA’s and pre-tax retirement plans or at least enough to get an employer match.

He recommends mutual funds and one of the biggest debates that comes up is that he tells folks they can expect to earn an average of 12%.

I used to invest in Vanguard Index funds until I found real estate syndications yet those kinds of returns.

Maybe Dave knows something that I don’t?

Robert Kiyosaki’s Principles

When I first began educating myself about rental property, I decided to attend a handful of live events including Freedom Founders which mainly focuses on dentists.

That meeting, and a handful of others, helped me realize that I needed to set specific goals about what I wanted out of pursuing passive income.

I quickly realized that I did NOT want a second job (dentistry is enough!). So that scratched the thought of becoming an active investor which would have involved becoming a landlord, locating properties, maintaining them, finding tenants, etc.

One of the issues that was holding me back was that Dave’s principles were ingrained in my head, “don’t acquire more debt.” But I had to keep an open mind so I began reading books and came across Robert Kiyosaki, author of the great book Rich Dad Poor Dad.

When I started learning his financial advice, I quickly realized that there was someone out there teaching the exact opposite of Dave.

But when I initially started reading books that taught the opposite of what Dave teaches, I began suffering from selective distortion.

Selective distortion

Selective distortion involves the tendency to interpret information in a way that will support what someone already believes.

For me, when I first began to come across views that went against what Dave taught, I immediately felt they were wrong.

This is selective distortion at work. Sometimes this makes people think that who they listen to or support is the ONLY way and everyone else is inferior.

Have you ever suffered from this? Most have.

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Here’s the basics that Kiyosaki’s teaching involves:

#1 Focus on assets, not liabilities

At lunch recently, the topic of money was discussed as our 16 year old is working full time during the summer break. When I asked both him and his 14 year old brother about how people become wealthy, the 14 year old stated that we should buy stuff that makes us money and not stuff that takes money away.

He gets it more than most adults! This is one of the main focuses of Kiyosaki’s teachings as well.

In Rich Dad Poor Dad, he states “You must know the difference between an asset and a liability, and buy assets. If you want to be rich, this is all you need to know. It is rule number one. It is the only rule.

#2 Start a business

Kiyosaki is all about becoming an entrepreneur. There are many advantages to owning your own business including working on your own terms and using tax advantages that you couldn’t otherwise as an employee.

He learned this from his “rich dad” that owned a construction company whereas his real dad or “poor dad” was an employee.

#3 Use debt wisely

Quite possibly the biggest difference of Dave Ramsey vs Robert Kiyosaki has to do with use of debt.

While they both agree that we should avoid consumer debt (credit cars, cars, boats, etc.), Kiyosaki recommends that good debt is OK if used wisely.

He goes on to say that we should only consider using this “good” debt after we’ve received enough financial education to prove we know what we’re doing.

I couldn’t agree more especially when it comes to investing in rental properties. Just because you have a medical or dental degree, doesn’t automatically guarantee success in unchartered territories regarding investing.

#4 Learn from your mistakes

Look, we ALL make mistakes. I make them on a weekly basis. Just ask my wife!

Mistakes act as a guide in life to keep you pointed in the right direction.

For instance, I thought I knew what I was doing when I first started investing in real estate. A deal fell through that showed me that I had no business being involved as I was clueless at that time in my career.

I used to pick out deals to invest in similar to shopping online. The ones with the best looking pictures and supposedly highest returns would win. That’s it. That’s used to be my investing strategy!

That mistake pushed me harder to not only learn for myself but teach others what to avoid.

#5 Forget about home ownership

Kiyosaki and Grant Cardone have a similar stance on home ownership. In my article, Grant Cardone’s 9 Money Rules, rule #4 was:

Rent and lease, don’t own.

Neither agree that having money sitting “dormant” in a home does any good. Their thinking is that if you have $300,000 in home equity paying 3.5% or even worse, a paid for house paying nothing, then deploy that into something that is going to pay you.

#6 Use the tax code to your advantage

I rarely hear Dave mention anything regarding taxes. Especially when it comes to investing into assets that can bring you tax advantages.

Kiyosaki, on the other hand, is much different. One of his main driving points for real estate investing is to take advantage of all the tax advantages the IRS gives you.

Here’s What I Recommend

Dave Ramsey vs Robert Kiyosaki – which is best?

Personally, I feel that both are right depending on what stage of life you’re in.

Remember, both of their teaching philosophies are for two dramatically different groups of people.

Stage #1

If you’re fresh out of training with a high debt load and need guidance, Dave’s your guy. Again, he helped us develop a game plan to pay off some $300K of student loan debt.

Also, if you’re the type of person that thinks income = wealth and live ABOVE your means, then again listen to Mr. Ramsey.

Stage #2

Now when you get to the point where you’re consumer debt-free then it’s time to really start building WEALTH.

It’s at this point you should consider listening to Kiyosaki or someone like him.

He’s big into diversification, specifically in assets that provide long-term gains and MOST importantly….CASH FLOW.

What do you think?

Who should you listen to….Dave Ramsey vs Robert Kiyosaki?

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