A business model describes the rationale of how an organization creates, delivers, and captures value^[1] (economic, social, or other forms of value). The process of business model construction is part of business strategy.

In theory and practice the term business model is used for a broad range of informal and formal descriptions to represent core aspects of a business, including purpose, offerings, strategies, infrastructure, organizational structures, trading practices, and operational processes and policies. The literature has provided very diverse interpretations and definitions of a business model. A systematic review and analysis of manager responses to a survey defines business models as the design of organizational structures to enact a commercial opportunity^[2]. Further extensions to this design logic emphasize the use of narrative or coherence in business model descriptions as mechanisms by which entrepreneurs create extraordinarily successful growth firms ^[3].

Whenever a business is established, it either explicitly or implicitly employs a particular business model that describes the architecture of the value creation, delivery, and capture mechanisms employed by the business enterprise. The essence of a business model is that it defines the manner by which the business enterprise delivers value to customers, entices customers to pay for value, and converts those payments to profit: it thus reflects management’s hypothesis about what customers want, how they want it, and how an enterprise can organize to best meet those needs, get paid for doing so, and make a profit.^[4]

Business models are used to describe and classify businesses (especially in an entrepreneurial setting), but they are also used by managers inside companies to explore possibilities for future development. Also, well known business models operate as recipes for creative managers.^[5] Business models are also referred to in some instances within the context of accounting for purposes of public reporting.

History[link]

Over the years, business models have become much more sophisticated. The bait and hook business model (also referred to as the "razor and blades business model" or the "tied products business model") was introduced in the early 20th century. This involves offering a basic product at a very low cost, often at a loss (the "bait"), then charging compensatory recurring amounts for refills or associated products or services (the "hook"). Examples include: razor (bait) and blades (hook); cell phones (bait) and air time (hook); computer printers (bait) and ink cartridge refills (hook); and cameras (bait) and prints (hook). An interesting variant of this model is Adobe, a software developer that gives away its document reader free of charge but charges several hundred dollars for its document writer.

In the 1950s, new business models came from McDonald's Restaurants and Toyota. In the 1960s, the innovators were Wal-Mart and Hypermarkets. The 1970s saw new business models from FedEx and Toys R Us; the 1980s from Blockbuster, Home Depot, Intel, and Dell Computer; the 1990s from Southwest Airlines, Netflix, eBay, Amazon.com, and Starbucks.

Today, the type of business models might depend on how technology is used. For example, entrepreneurs on the internet have also created entirely new models that depend entirely on existing or emergent technology. Using technology, businesses can reach a large number of customers with minimal costs.

Business model frameworks[link]

There are various ways to define and conceptualize business models. In the following some of these conceptualizations are introduced.

Business model canvas[link]

Business Model Canvas: Nine business model building blocks, Osterwalder, Pigneur, & al. 2010^[1]

Osterwalder's work ^[1][6] propose a single reference model, called Business Model Canvas based on the similarities of a wide range of business model conceptualizations. It is nowadays one of the most used frameworks for describing the elements of business models.

With this business model design template, an enterprise can easily describe their business model. Aspects of the template are Infrastructure, Offering, Customers, Finances, etc.

Other approaches[link]

• Business reference model

Business reference model is a reference model, concentrating on the architectural aspects of the core business of an enterprise, service organization or government agency.

• Component business model

Technique developed by IBM to model and analyze an enterprise. It is a logical representation or map of business components or "building blocks" and can be depicted on a single page. It can be used to analyze the alignment of enterprise strategy with the organization's capabilities and investments, identify redundant or overlapping business capabilities, etc.

Although Webvan failed in its goal of disintermediating the North American supermarket industry, several supermarket chains (like Safeway Inc.) have launched their own delivery services to target the niche market to which Webvan catered.

• Industrialization of services business model

Business model used in strategic management and services marketing that treats service provision as an industrial process, subject to industrial optimization procedures

Business Modelling[link]

Business Modelling is an important tool to capture, design, innovate and transform the business.^[7] However, in order to transform ones organization and align them to ones business model, a business model should not be seen separately, but in connection with^[8]:

A step-by-step roadmap that describes the synergy and context between Business Model and alignment of Strategy Map, Scorecards, etc. into the organization.

• The main business goals of the organization, e.g. strategic business objectives, critical success factors and key performance indicators, which a holistic business model approach should include.
• The main business Issues/pain points and thereby organizational weakness, which a holistic business model approach should include for they represent the threat to the company’s business model.
• A clear cause and effect linkages between the competencies, desired outcomes and performance measurements e.g. scorecards.
• An emphasis on business model management and thereby a continuous improvement and governance approach to the business model.
• The business maturity level, in order to develop the organization representation of core differentiated and core competitive competencies [linked to strategy], which is a basis for building a business model as they the represent some of the most important sources of uniqueness. These are the things that a company can do uniquely well, and that no-one else can copy quickly enough to affect competition.
• Linkages among competences and competency development.
• The possible value creation and realization of the organization.
• The information flow, and thereby information need for effective and efficient decision making.

Such a holistic approach would help clarify both intent and sources of synergy and disconnect between business model, strategy, scorecards, information, innovation, processes and IT systems. This includes architectural alignment as well as business transformation and value and performance views. Such dialogues allow Executives to use the business model with their business alignment.

Theoretical and empirical insights to business models[link]

Design Logic and Narrative Coherence[link]

Design logic views the business model as an outcome of creating new organizational structures or changing existing structures to pursue a new opportunity. Gerry George and Adam Bock (2011) conducted a comprehensive literature review and surveyed managers to understand how they perceived the components of a business model. In that analysis, these authors show that there is a design logic behind how entrepreneurs and managers perceive and explain their business model. In further extensions to the design logic, George and Bock (2012) use case studies and the IBM survey data on business models in large companies to describe how CEOs and entrepreneurs create narratives or stories in a coherent manner to move the business from one opportunity to another. They also show that when the narrative is incoherent or the components of the story are misaligned that these businesses tend to fail. They recommend ways in which the entrepreneur or CEO can create strong narratives for change.

Business Model 2.0[link]

Chen (2009) pointed out that the business model in the twenty-first century has to take into account the capabilities of Web 2.0, such as collective intelligence, network effects, user generated content, and the possibility of self-improving systems. He suggested that the service industry such as the airline, traffic, transportation, hotel, restaurant, Information and Communications Technology and Online gaming industries will be able to benefit in adopting business models that take into account the characteristics of Web 2.0. He also emphasized that Business Model 2.0 has to take into account not just the technology effect of Web 2.0 but also the networking effect. He gave the example of the success story of Amazon in making huge profits each year by developing a full blown open platform that supports a large and thriving community of companies that re-use Amazon’s On Demand commerce services.^[9]

Complementarities of business models between partnering firms[link]

Studying collaborative research and the accessing of external sources of technology, Hummel et al. (2010) found that in deciding on business partners, it is important to make sure that both parties’ business models are complementary^[10]. For example, they found that it was important to identify the value drivers of potential partners by analyzing their business models, and that it is beneficial to find partner firms that understand key aspects of our own firm’s business model.^[11]

Applications[link]

Malone et al.^[12] at MIT found that some business models, as defined by them, indeed performed better than others in a dataset consisting of the largest U.S. firms, in the period 1998 through 2002, while they did not prove whether the existence of a business model mattered.

The concept of a business model has been incorporated into certain accounting standards. For example, the International Accounting Standards Board (IASB) utilizes an "entity's business model for managing the financial assets" as a criterion for determining whether such assets should be measured at amortized cost or at fair value in its financial instruments accounting standard, IFRS 9.^{[13][14][15][16]} At least two members of the U.S. based Financial Accounting Standards Board (FASB) have expressed the position that the business model of an entity should be used as a criterion for the classification of financial liabilities.^[17] The concept of business model has also been introduced into the accounting of deferred taxes under International Financial Reporting Standards with 2010 amendments to IAS 12 addressing deferred taxes related to investment property.^[18][19][20]

Both IASB and FASB have proposed using the concept of business model in the context of reporting a lessor's lease income and lease expense within their joint project on accounting for leases.^[21][22] The concept has also been proposed as an approach for determining the measurement and classification when accounting for insurance contracts.^[23][24] As a result of the increasing prominence the concept of business model has received in the context of financial reporting, the European Financial Reporting Advisory Group (EFRAG), which advises the European Union on endorsement of financial reporting standards, commenced a project on the "Role of the Business Model in Financial Reporting" in 2011.^[25]

Examples of Business models[link]

In the early history of business models it was very typical to define business model types such as bricks-and-mortar or e-broker. However, these types usually describe only one aspect of the business (most often revenue model). Therefore, more recent literature on business models concentrates on describing business model as a whole instead of one most visible aspect. Following examples provide an overview for various business model types that have been in discussion since the invent of term business model:

• Bricks and clicks business model

Business model by which a company integrates both offline (bricks) and online (clicks) presences. One example of the bricks-and-clicks model is when a chain of stores allows the user to order products online, but lets them pick up their order at a local store.

• Collective business models

Business organization or association typically composed of relatively large numbers of businesses, tradespersons or professionals in the same or related fields of endeavor, which pools resources, shares information or provides other benefits for their members.

• Cutting out the middleman model

The removal of intermediaries in a supply chain: "cutting out the middleman". Instead of going through traditional distribution channels, which had some type of intermediate (such as a distributor, wholesaler, broker, or agent), companies may now deal with every customer directly, for example via the Internet.

• Direct sales model

Direct selling is marketing and selling products to consumers directly, away from a fixed retail location. Sales are typically made through party plan, one to one demonstrations, and other personal contact arrangements. A text book definition is: "The direct personal presentation, demonstration, and sale of products and services to consumers, usually in their homes or at their jobs."^[26]

• Distribution business models, various
• Fee in, free out

Business model which works by charging the first client a fee for a service, while offering that service free of charge to subsequent clients.

• Franchise

Franchising is the practice of using another firm's successful business model. For the franchisor, the franchise is an alternative to building 'chain stores' to distribute goods and avoid investment and liability over a chain. The franchisor's success is the success of the franchisees. The franchisee is said to have a greater incentive than a direct employee because he or she has a direct stake in the business.

• Freemium business model

Business model that works by offering basic Web services, or a basic downloadable digital product, for free, while charging a premium for advanced or special features.^[27]

Other examples of business models are:

• Auction business model
• All-in-one business model
• Chemical Leasing
• Low-cost carrier business model
• Loyalty business models
• Monopolistic business model
• Multi-level marketing business model
• Network effects business model
• Online auction business model
• Online content business model
• Premium business model
• Professional open-source model
• Pyramid scheme business model
• Razor and blades business model
• Servitization of products business model
• Subscription business model

Related concepts[link]

The process of business model design is part of business strategy. The implementation of a company's business model into organisational structures (e.g. organigrams, workflows, human resources) and systems (e.g. information technology architecture, production lines) is part of a company's business operations.

It is important to understand that business modeling commonly refers to business process design at the operational level, whereas business models and business model design refer to defining the business logic of a company at the strategic level.^{[citation needed]}

The brand is a consequence of and has a symbiotic relationship with the business model since the business model determines the brand promise and the brand equity becomes a feature of the model. Managing this is a task of integrated marketing.

The standard terminology and examples of business models do not apply to most nonprofit organizations, since their sources of income are generally not the same as the beneficiaries. The term funding model is generally used instead.^[28]

Business model improvement[link]

As Mark von Rosing defined it^[8], revenue model is one of the three different types of business model innovations and transformations that exist:

Mark von Rosing's Competitive Forces Model.

• Revenue model innovation - Innovate how the company makes money by changing the value proposition (product/service/value mix) and the pricing model.
• Industry model innovation - Redefine an existing industry, move into a new industry or create an entirely new one.
• Enterprise Business model innovation - Innovate the way the organization operates, rethinking the organizational boundaries of what is done in-house and what is done through collaboration and partnering.

During periods of relative stability in the industry landscape, companies can make incremental adjustments to their business model over extended periods of time. They can continue to realize the economic benefits of their existing business model. During periods of extensive industry change, however, companies must choose to either shake up their industries – harness disruptive technologies, go after new customer segments, dislodge competitors – or face their own demise.

Strategic competitiveness and differentiation has been defined in the literature^[29] as an organization’s ability to identify major changes in the external environment, to quickly commit resources and capabilities to new courses of action, and to act promptly when it is time to halt or reverse such capability and resource commitments. In the attached figure " von Rosing's Competitive Forces Model " the different competitive forces impacting the internal and external environment of an organization are illustrated.

Organizations in nearly every industry face the above competitive forces exerted by suppliers, customers, rivals, potential new entrants, complementors, and substitute products. The stronger these competitive forces, the less profitable the industry’s organizations are likely to be.^[30] Where the competitive forces on industry organizations are low, allowing these organizations to be, on average, more profitable than organizations in other industries.

In general, successful companies take advantage from emerging opportunities in the new economic environment by innovating their business model in three ways:

1. Many organizations revisit their enterprise business model during a downturn to reduce cost through new collaboration and partnership models and by reconfiguring the asset mix.
2. Industry leaders with strong financial resources take advantage of the unprecedented industry transformation by introducing alternative industry models and disrupting their competitors.
3. Many also rethink their revenue model and value propositions to respond to a different set of customer behaviors and market requirements.

While any type of business model innovation can lead to success, financial outperformers are more likely to be industry and enterprise business model innovators than revenue model innovators. Business model innovation and transformation is the most prominent, especially during challenging economic times.

Revenue Model Innovation is an important tool to both capture, design, innovate and transform the business.^[29] However in order to transform ones organization and align them to ones revenue model, the needed business model innovation can and should not be seen separately, but as Mark von Rosing has specified, in connection with ^[8]:

A step-by-step roadmap that describes the synergy and context between Revenue Model Innovation and alignment of business innovation into the organization.

• The main business goals of the organization, e.g. strategic business objectives, critical success factors and key performance indicators, which a holistic business model approach should include.
• The main business Issues/pain points and thereby organizational weakness, which a holistic business model approach should include for they represent the threat to the company’s business model.
• A clear cause and effect linkages between the competencies, desired outcomes and performance measurements e.g scorecards.
• An emphasis on business model management and thereby a continuous improvement and governance approach to the business model.
• The business maturity level, in order to develop the organization representation of core differentiated and core competitive competencies [linked to strategy], which is a basis for building a business model as they the represent some of the most important sources of uniqueness. These are the things that a company can do uniquely well, and that no-one else can copy quickly enough to affect competition.
• Linkages among competences and competency development.
• The possible value creation and realization of the organization.
• The information flow, and thereby information need for effective and efficient decision making.

See also[link]

Wikimedia Commons has media related to: Business models

• Business model design
• Business plan
• Business process modeling
• Business reference model
• Business rule
• Competitive advantage
• Core competency
• Growth platforms
• Market forms
• Marketing
• Marketing plan
• Strategic management
• Strategic planning
• Strategy dynamics
• Value migration
• The Design of Business

Further reading[link]

• 'The Business Model: Theoretical Roots, Recent Developments, and Future Research', C. Zott, R. Amit, & L.Massa., WP-862, IESE, June, 2010 - revised September 2010 [http://www.iese.edu/research/pdfs/DI-0862-E.pdf]
• Models of opportunity: How entrepreneurs design firms to achieve the unexpected. George, G., Bock, AJ. Cambridge University Press, 2012, ISBN 978-0-521-17084-0.
• "Special Issue on Business Models" Long Range Planning, vol 43 April 2010, that includes 19 pieces by leading scholars on the nature of business models
• The Role of the Business Model in capturing value from Innovation: Evidence from XEROX Corporation’s Technology Spinoff Companies., H. Chesbrough and R. S. Rosenbloom , Boston, Massachusetts, Harvard Business School, 2002.
• Leading the revolution., G. Hamel, Boston, Harvard Business School Press, 2000.
• Changing Business Models: Surveying the Landscape, J. Linder and S. Cantrell, Accenture Institute for Strategic Change, 2000.
• Developing Business Models for eBusiness., O. Peterovic and C. Kittl et al., International Conference on Electronic Commerce 2001, 2001.
• Place to space: Migrating to eBusiness Models., P. Weill and M. R. Vitale, Boston,Harvard Business School Press, 2001.
• Value-based Requirements Engineering - Exploring Innovative e-Commerce Ideas, J. Gordijn, Amsterdam, Vrije Universiteit, 2002.
• Internet Business Models and Strategies, A. Afuah and C. Tucci, Boston, McGraw Hill, 2003.
• Focus Theme Articles: Business Models for Content Delivery: An Empirical Analysis of the Newspaper and Magazine Industry, Marc Fetscherin and Gerhard Knolmayer, International Journal on Media Management, Volume 6, Issue 1 & 2 September 2004 , pages 4 – 11, September 2004.
• Business Model Generation, A. Osterwalder, Yves Pigneur, Alan Smith, and 470 practitioners from 45 countries, self published, 2009
• Sustaining Digital Resources: An on-the-ground view of projects today, Ithaka, November 2009. Overview of the models being deployed and analysis on the effects of income generation and cost management.

References[link]

A major contributor to this article appears to have a close connection with its subject. It may require cleanup to comply with Wikipedia's content policies, particularly neutral point of view. Please discuss further on the talk page. (April 2012)

This article or section reads like a news release, or is otherwise written in an overly promotional tone. Please help by either rewriting this article from a neutral point of view or by moving this article to Wikinews. When appropriate, blatant advertising may be marked for speedy deletion with {{db-spam}}. (April 2012)

Steve Blank is a Silicon Valley-based retired serial entrepreneur, founding and/or part of 8 startup companies in California’s Silicon Valley. A prolific educator, thought leader and writer on Customer Development for Startups, Blank teaches, refines, writes and blogs on “Customer Development,” a rigorous methodology he developed to bring the “scientific method” to the typically chaotic, seemingly disorganized startup process.^[1]

Now teaching Entrepreneurship at three major Universities and the National Science Foundation Innovation Corps (I-Corps), Blank co-founded his first of eight startups after several years repairing fighter plane electronics in Thailand during the Vietnam War, followed by several years of defense electronics work for U.S. intelligence agencies in “undisclosed locations.”

Blank's first book, "The Four Steps to the Epiphany," detailed the Customer Development process and remains required reading among entrepreneurs, investors, and established companies alike, when the focus is optimizing a startup’s chances for scalability and success. Blank views entrepreneurship as a practice that can be managed rather than purely an art form to be experienced.^[2]

"The Startup Owner’s Manual" was Blank's second book and is a step-by-step guide to building a successful startup, offering practical advice for any startup founder, entrepreneur, investor or educator.

His Customer Development methodology launched the lean startup movement. It is rooted on startups "getting out of the building," talking to customers and using that feedback to develop and refine their product.

Business career[link]

Subsequent to dropping out of the University of Michigan, Steve Blank arrived in Silicon Valley in 1978, as boom times began. His early startups include two semiconductor companies, Zilog and MIPS Computers (now MIPS Technologies); Convergent Technologies; a consulting stint for Pixar; a supercomputer firm, Ardent Computer; peripheral supplier, SuperMac Technologies; a military intelligence systems supplier, ESL; Rocket Science Games.^[3] Steve co-founded startup number eight, E.piphany, in his living room in 1996. After retiring from E.piphany the day before its IPO in September 1999, Blank served on two public boards (Macrovision and Immersion) and several private companies. He continues to selectively invest and advise Silicon Valley startups such as Votizen.

Teaching[link]

After 21 years driving 8 high technology startups, today Steve teaches entrepreneurship to both undergraduate and graduate students at the University of California, Berkeley's Haas School of Business,^[4] Stanford University Graduate School of Engineering,^[5] and a joint MBA class with Berkeley Haas and Columbia Business School.^[6] His “Customer Development” teaching and writing coalesce and codify his experiences and observations of entrepreneurs in action, including his own and those he advises.

In 2009, he earned the Stanford University Undergraduate Teaching Award in Management Science and Engineering. The same year, The San Jose Mercury News listed him as one of the 10 Influencers in Silicon Valley.^[7] In 2010, he was earned the Earl F. Cheit Outstanding Teaching Award at U.C. Berkeley Haas School of Business.^[8]

In January 2011, he launched a new class at Stanford University, The Lean LaunchPad.^[9] It teaches aspiring entrepreneurs all aspects of building a business, including business model design, customer and agile development, and design thinking.^[10] In July 2011, the National Science Foundation adopted the Lean Launchpad as the curriculum for its Innovation-Corps, an incubator for 100 science and engineering teams each year.^[11]

In May 2011, Blank was the commencement speaker at Philadelphia University ^[12]

In 2012, The Harvard Business Review named Blank one of 12 Masters of Innovation in recognition of his work in bringing the “greatest clarity to the field of innovation.”^[13]

Blank has collected an informal history of Silicon Valley, which was presented as a Google TechTalk and a talk at the Computer History Museum called The Secret History of Silicon Valley.^[14][15][16]

Public service[link]

Blank is the past Chairman of Audubon California.^[17] And has been on the board of Peninsula Open Space Trust (POST).^[18] And was a trustee of U.C. Santa Cruz. Blank is currently on the board of the California League of Conservation Voters (CLCV). In 2007 he was appointed to the California Coastal Commission.^[19][20] He has made major gifts to preserve the California Coast, including funding the visitors center at Año Nuevo State Reserve.^[21][22][23]

Books[link]

Blank, Steve (2012). The Startup Owner's Manual. K&S Ranch Press. ISBN 0984999302. 

Blank, Steven Gary. Four Steps to the Epiphany. K&S Ranch Press. 

Blank, Steven Gary. Not All Those Who Wander Are Lost. CafePress.com. 

References[link]

External links[link]

• Steven Gary Blank's blog
• Steve Blank Coastal Commissioner
• Steve Blank Stanford Lecturer
• Steve Blank Haas Lecturer
• Steve Blank's "Secret History of Silicon Valley"
• Steve Blank speaking at Stanford University
• Steve Blank's Customer Development podcast

Robert Toru Kiyosaki (born April 8, 1947) is an American investor, businessman, self-help author, motivational speaker, financial literacy activist, and occasional financial commentator. Kiyosaki is perhaps best known for his Rich Dad Poor Dad series of motivational books and other material published under the Rich Dad brand. He has written over 15 books which have combined sales of over 26 million copies.^[1] Although beginning as a self-publisher, he was subsequently published by Warner Books, a division of Hachette Book Group USA. His new books appear under the Rich Dad Press imprint. Three of his books, Rich Dad Poor Dad, Rich Dad's CASHFLOW Quadrant, and Rich Dad's Guide to Investing, have been on number one on the top 10 best-seller lists simultaneously on The Wall Street Journal, USA Today and the New York Times. Rich Kid Smart Kid was published in 2001, with the intent to help parents teach their children financial concepts. He has created three "Cashflow" board and software games for adults and children and has a series of "Rich Dad" CDs and disks.

As a devout global financial literacy advocate, Kiyosaki has been a staunch proponent of entrepreneurship, business education, investing, and that comprehensive financial literacy concepts should be taught in schools around the world.^[2] Kiyosaki also operates his own blog and maintains a monthly column on Yahoo Finance writing about his latest thoughts on global economics, investing, business, world financial markets, and personal finance.^[3][4]

Life and career[link]

A fourth-generation Japanese American, Kiyosaki was born and raised in Hilo, Hawaii. He is the son of educator Ralph H. Kiyosaki (1919–1991). After graduating from Hilo High School, he attended the U.S. Merchant Marine Academy in New York, graduating with the class of 1969 as a deck officer. He later served in the Marine Corps as a helicopter gunship pilot during the Vietnam War in 1972, where he was awarded the Air Medal.^[5]

Kiyosaki left the Marine Corps in 1975 and got a job selling copy machines for the Xerox Corporation as a salesperson. In 1977, Kiyosaki started a company that brought to market the first nylon and Velcro "surfer" wallets. The company was moderately successful at first but eventually went bankrupt. In the early 1980s, Kiyosaki started a business that licensed T-shirts for Heavy metal rock bands, which was later sold in 1985.^[6]

In 1994, after becoming financially independent through various real estate investments and private business operations, Kiyosaki retired at the age of 47. In 1997, after his short lived retirement, he launched Cashflow Technologies, Inc.^[7] which owns and operates the Rich Dad^[8] and Cashflow^[9] brands.

Personal life[link]

He has been married to wife, Kim, who is an entrepreneur, investor, author, and a motivational speaker. They have been married since 1985. He and Kim have settled in the Scottsdale area in Phoenix, Arizona since 1994. Kiyosaki also has one sister, Emi Kiyosaki, a Tibetan Buddhist nun known by the name Ven. Tenzin Kacho. He has co-authored one book with her called "Rich Brother, Rich Sister".

Business ventures and investments[link]

Aside from operating the Rich Dad Company and Cashflow Technologies, Inc., Kiyosaki continues to operate external business ventures and has continued engaging with various investments since he came out of retirement in 1997.^[10][10]

Mining ventures[link]

Kiyosaki bought a silver mine in South America in 2002, took a gold mining company in China public back in 2002, and took public additional mines from IPOs listed on the Toronto Stock Exchange during the early 2000s. In 2009, Kiyosaki revealed in his book Conspiracy of the Rich that he is currently working on a copper mine that is yet to be taken public once copper prices begin to rise in value.^[11]

Precious metals and coin dealing[link]

Through his teenage years, Kiyosaki dabbled with silver and gold coins as a starting investment during the 1960s. In a July 2005 Yahoo Finance article Kiyosaki states that

If you only have a few dollars, you may want to go to your local coin dealer and buy silver and gold coins as close to the price of gold or silver as possible. I would not invest in 'collectible' precious metal coins unless you really know a good collectible coin from a bad one. For as little as $20 you can buy a few precious metal coins and begin to take steps to prepare for one of the biggest crashes in world history.^[12]

In addition, Kiyosaki states that he is a "gold bug", meaning is that he holds various commodities such as gold and silver to hedge against government misprinting of the U.S. dollar as a fiat currency since the early 1970s when President Richard Nixon took the dollar off the gold standard.^[10]

Real estate acquisitions[link]

Kiyosaki is also an active real estate investor. A large portion of his wealth is concentrated within real estate investing. He has various real estate investments, real estate development ventures, and property management ventures operating around the United States, such as Texas and Oklahoma, particularly in his home state of Arizona, where he lives. Many of his holdings include hotels, golf courses, and large apartment complexes as stated in an interview with The Alex Jones Show back in late 2010.^[13]

Starting with small residential real estate investments back in 1973, Kiyosaki began investing in small condos on the island of Maui, making a small profit from capital gains by the mid 1970's. Kiyosaki starting his own real estate holding company in the 1980s during his tenure with Xerox and continued on with smaller real estate investments after the Savings and loan crisis and the 1986 Tax Reform Act hit the United States in the early 1990s where much foreclosure investment real estate was sold for pennies on the dollar. After progressing with smaller real estate investments, Kiyosaki moved into the commercial real estate business, branching off into semi-large apartment complexes, with a large portion concentrated in Arizona and the Southwestern United States and retired in 1994. Since coming out of retirement in 1997, Kiyosaki still remains involved with the apartment business and stated in an interview with Jason Hartman in 2011 that he owns over 1400 units of apartment houses.^[14][15]

Kiyosaki has been involved with commercial real estate sector such as investing in warehouses, Triple net lease and real estate development ventures around the United States.^[16][17]

Oil wells and natural gas investments[link]

Kiyosaki has stated in a Rich Dad video, several interviews, and a on number of Yahoo Finance articles that he owns oil drilling operations and oil wells around the United States but does not invest in oil company shares such as ExxonMobil or BP.^{[18][19][19][20]}

Solar company[link]

In a 2010 Rich Dad Insiders video, Kiyosaki stated that he also invested in a startup solar company.^[18]

Financial market investments[link]

In his debut book Rich Dad Poor Dad, Kiyosaki mentioned achieving consistent 16% ROI through tax lien certificates.^[21]

Written in a chapter of Rich Dad's Prophecy, Kiyosaki states of having invested in various government tax free bonds such as municipal bonds and municipal mortgage REIT's offered by real estate development companies paying over 12% tax free dividend interest.^[22]

Kiyosaki has also stated in numerous interviews that he does not invest or play the stock market much like the fact that he does not invest in oil company stocks. Instead, Kiyosaki trades stock options, Forex currencies, and other derivatives in the financial markets as stated in a chapter written in his book, Rich Dad's Prophecy and in a 2009 interview with real estate investor John Hartman.^[15]

Kiyosaki has frequently mentioned himself of investing in hedge funds, private placements, and other various funds such as private equity funds typically investments reserved by SEC law only for millionaires or high-income individuals.

Kiyosaki is also involved in the commodity market where he invests in gold and silver commodities as well as gold and silver ETF's, as written in chapter of his 2008 book, "Rich Dads, Increase Your Financial IQ". He stated this for the reason that he uses commodities as a hedge against uncertain economic forces such as inflation and hyperinflation as well as government's mismanagement via printing of the nations currency.^[21]

Teachings[link]

A large part of Kiyosaki's teachings focus on what he calls "financial education" generating passive income by means of investment opportunities, such as real estate investments and businesses, with the ultimate goal of being able to support oneself by such investments alone and thus achieving true financial independence WITHOUT working for a paycheck. In tandem with this, Kiyosaki defines the term "assets" as things that generate cash inflow, such as stock dividends, rental properties, or businesses, and the term "liabilities" as things that use cash, such as houses, cars, and so on. Kiyosaki continuously argues that financial leverage is critically important in becoming rich, despite the inherent financial risks, repercussions, and pitfalls that come with it.

Originally self-published before being picked up commercially to become a best seller, the central concept of the book is an anecdotal comparison of his "two fathers." His "poor dad" was his biological father, who was highly educated and became Superintendent of the Hawaii State Department of Education but was poor. Contrasted with this is his (arguably fictitious, see "Criticism and controversy" section of this article) "rich dad," his best friend's father who became "the richest man in Hawaii" by investing his smaller income into income-producing investments, and was a high school dropout. Its main purpose as a self-help book is to help people rethink their idea of money and especially their concept of themselves as employees who will gain financial rewards from conformity and education.

Kiyosaki uses the "rich dad, poor dad" comparison to illustrate his view that the majority of people are stuck in what he refers to as "the rat race"—living paycheck to paycheck and spending all of their time working to pay bills and other expenses. In his books, Kiyosaki advocates tax-advantaged investment vehicles, such as real estate or businesses, rather than ownership of securities such as stocks. This idea is further developed in his later books and "Rich Dad" became Kiyosaki's personal brand for various publishing ventures.

Kiyosaki continuously stresses financial literacy through the acquisition of he calls "assets" as the means to obtaining wealth. He says that life skills are often best learned through experience and that there are important lessons not taught in school. He says that formal education is primarily for those seeking to be employees or self-employed individuals, and that this is an "Industrial Age idea." And according to Kiyosaki, in order to obtain financial freedom, one must be either a business owner, an investor, or both generating passive income, particularly on a monthly basis.

Kiyosaki often refers to The CASHFLOW Quadrant, a conceptual tool which he developed to categorize the four major ways income is earned. Depicted in a diagram, this concept entails four groupings, split with two crossed lines (one vertical and one horizontal). In each of the four groups there is a letter representing a way in which an individual may earn income. The letters are as follows.

• E: Employee — Working for someone else.
• S: Self-employed or Small business owner — Where a person owns his own job and is his own boss.
• B: Business owner — A person who owns a business to make money; typically where the owner's physical presence is not required.
• I: Investor — Investing money in order to receive a larger income in the future.

For those on the left side of the divide (E and S), Kiyosaki says that they may never obtain true wealth. Conversely, those on the right side of the divide (B and I) are supposedly following the only road to true wealth.

Kiyosaki also classifies the four main "asset" classes as means of gaining wealth.^[23]:

• Businesses: Businesses that generate monthly cash flow that don't require the owners physical presence.
• Real Estate: Real estate such as owning warehouses, small family homes, or apartment houses that generate monthly cash flow.
• Paper Assets: Investments such as stocks, bonds, hedge funds etc.
• Commodities: Gold, silver, iron ore, or copper that are used to hedge government's mismanagement printing of the nations currency.

Games[link]

Kiyosaki also stresses the value of games, particularly Monopoly, as tools for learning basic financial strategies such as "trade four green houses for one red hotel." Kiyosaki has created several games such as Cashflow 101 and Cashflow 202 to reinforce the information in his book.

Media appearances[link]

Several local stations of the Public Broadcasting Service (PBS), including WTTW of Chicago, KAET of Phoenix, KOCE of Orange County, California, WLIW of the New York/New Jersey area, and WGBH of Boston, have featured Kiyosaki with his now cancelled Rich Dad TV series. His latest TV special was a fund-raising drive. During this television special, Rich Dad's Guide to Wealth with Robert Kiyosaki, he provides viewers with financial education, opposing the common notion of getting a college degree and downplaying the importance of attaining academic or professional education.

Kiyosaki has been seen giving financial advice on various network television news channels such as on CNBC, Fox Business, and Bloomberg. He has appeared on various programs such as The Oprah Winfrey Show,^[24] Fox and Friends,^[25][26][27] Larry King Live,^[28] The O'reilly Factor, The Alex Jones Show,^[13] Glenn Beck,^[29] and Your World with Neil Cavuto.^{[25][30][31][32]}

In 2002, a speech given by Kiyosaki became the subject of a CNN story.^[33]

In 2006, Kiyosaki appeared on CNBC, discussing financial issues, answering questions from the audience, and comments by the financial experts werere also invited. In particular, Kiyosaki also filled in a few episodes under the title The Millionaire Inside Debt-Free and The Millionaire Inside: Get Inspired. Other financial experts accompanied Kiyosaki, including David Bach, Jennifer Openshaw, Larry Winget, Keith Ferrazi, and Dr. Laura Morgan Roberts have also been invited to the event.^[34][35]

In 2009, Kiyosaki was featured in a 10 Questions session in Time Magazine.^[36]

Over a number of years, Kiyosaki has repeatedly criticized other financial gurus, particularly the financial teachings of Suze Orman and Jean Chatzky, calling it “bad advice”. Because of this, Orman responded to Kiyosaki's attacks via Twitter and the two engaged in a Twitter war back in March 2010.^[37]

In September 2011, Kiyosaki along with wife Kim were featured on the front cover of JETSET magazine.^[38]

Financial advice[link]

Mutual funds[link]

Kiyosaki wrote in one column that investors in any mutual fund with a 2.5% annual fee would, over a long time period, surrender 80% of the earnings to the fund.^[39] Kiyosaki expanded on his criticism of mutual funds in another column by stating they are for "losers."^[40] Despite the fact that most mutual funds actually charged less than 1.1%.^[41] He has drawn much criticism for comparing investing in mutual funds to playing the lottery, and for discouraging 401(k) investing, contrary to the advice of most professional financial advisers.^[42] In contrast to these statements, Kiyosaki wrote in his book Prophecy that while mutual funds are not great investments, they remain one of the few acceptable investment vehicles available to those who will not educate themselves financially.

Kiyosaki's criticisms are supported by the founder of the mutual fund Vanguard, John C. Bogle. In a Frontline episode titled "401(k)s: The New Retirement Plan, For Better or Worse", Bogle stated that management fees and trading costs gobble up approximately 2.5% of an investor's annual returns and approximately 80% of an investor's long term gains. He says management costs reduce the value of a $1,000 investment over 65 years from approximately $140,000 at 8% compounded annually to a mere $30,000 at 5.5% compounded annually. Bogle's solution is to utilize index funds, which charge as little as 0.09%, to substantially reduce or eliminate management fees.^[43]

Criticism and controversy[link]

Kiyosaki's books and teachings have been criticized for focusing on anecdotes and containing little in the way of concrete advice on how readers should proceed.^[44] Kiyosaki responds that his material is meant to be more of a motivational tool to get readers thinking about money rather than a step-by-step guide to wealth. He also says the books are supposed to be "interesting" to people, which precludes involving a lot of technical material.^[45]

The Canadian Broadcasting Corporation consumer affairs program Marketplace ran an investigative piece on Kiyosaki's questionable business practices on Jan 29, 2010. It includes interviews with Kiyosaki.^[46]

Bibliography[link]

Kiyosaki is best known for his book Rich Dad, Poor Dad. Kiyosaki followed with Rich Dad's CASHFLOW Quadrant and Rich Dad's Guide to Investing. He has now had at least a dozen books published, including:

• If You Want to Be Rich & Happy: Don't Go to School? : Ensuring Lifetime Security for Yourself and Your Children (1992). ISBN 0-944031-38-2.
• Rich Dad Poor Dad - What the Rich Teach Their Kids About Money - That the Poor and Middle Class Do Not! (first published in 1997) Warner Business Books. ISBN 0-446-67745-0.
• CASHFLOW Quadrant: Rich Dad's Guide to Financial Freedom (2000). ISBN 0-446-67747-7.
• Rich Dad's Guide to Investing: What the Rich Invest in, That the Poor and the Middle Class Do Not! (2000). ISBN 0-446-67746-9.
• The Business School for People Who Like Helping People (March, 2001). ISBN 99922-67-42-9 - endorses multi-level marketing
• Rich Dad's Rich Kid, Smart Kid: Giving Your Children a Financial Headstart (2001). ISBN 0-446-67748-5.
• Rich Dad's Retire Young, Retire Rich (2002). ISBN 0-446-67843-0.
• Rich Dad's Prophecy: Why the Biggest Stock Market Crash in History Is Still Coming… and How You Can Prepare Yourself and Profit from It! (2002). Warner Books, Incorporated. ISBN 0-641-62241-4.
• Rich Dad's The Business School: For People Who Like Helping People (2003) ISBN 979-686-729-X.
• Rich Dad’s Success Stories (2003)
• You Can Choose to be Rich (2003) 12-CD Audio series with three books.
• Rich Dad's Who Took My Money?: Why Slow Investors Lose and Fast Money Wins! (2004)ISBN 0-446-69182-8.
• Rich Dad, Poor Dad for Teens: The Secrets About Money—That You Don't Learn in School! (2004) ISBN 0-446-69321-9.
• Rich Dad's Before You Quit Your Job : 10 Real-Life Lessons Every Entrepreneur Should Know About Building a Multimillion-Dollar Business (2005). ISBN 0-446-69637-4.
• Rich Dad's Escape from the Rat Race - Comic for children (2005)
• Why We Want You to Be Rich: Two Men, One Message (2006) co-written with Donald J. Trump ISBN 1-933914-02-5.
• Rich Dad's Increase Your Financial IQ: Get Smarter with Your Money (2008). ISBN 0-446-50936-1.
• Rich Dad's Conspiracy of the Rich: The 8 New Rules of Money (2009). ISBN 0-446-55980-6
• Rich Dad's Rich Brother Rich Sister (2009) co-written with Emi Kiyosaki
• The Real Book of Real Estate: Real Experts. Real Stories. Real Life. (2010). ISBN 1-4587-7250-0.
• An Unfair Advantage: The Power of Financial Education (2011). ISBN 1-61268-010-0.
• Midas Touch: Why Some Entrepreneurs Get Rich And Why Most Don't (2011), co-written with Donald J. Trump ISBN 1-61268-095-X.

Notes[link]

References[link]

External links[link]

	Biography portal
	Business and economics portal

Wikiquote has a collection of quotations related to: Robert Kiyosaki

• Official website
• Hawaii Business Magazine June 2002 cover story on Kiyosaki

Saul J. Berman (born April 30, 1939) is a prominent American scholar and leading Modern Orthodox rabbi.

Rabbi Saul Berman speaking

As a rabbi, scholar, and educator he has made extensive contributions to the intensification of Jewish education for Jewish women on many levels, to the role of social ethics in synagogue life, and to the understanding of the applicability of Jewish Law to contemporary society.

Rabbi Berman was ordained at Yeshiva University, from which he also received his B.A. and his M.H.L. He completed a degree in law, a J.D., at New York University, and an M.A. in Political Science at the University of California, Berkeley, where he studied with David Daube. He spent two years studying mishpat ivri in Israel at Hebrew University of Jerusalem and at Tel Aviv University.

Berman was the rabbi of Congregation Beth Israel (Berkeley, California) from 1963 to 1969, of Young Israel of Brookline from 1969 to 1971, and senior rabbi of Lincoln Square Synagogue in Manhattan, New York from 1984 to 1990.^[1] He has been a professor at Yeshiva University for many years and teaches a seminar at Columbia Law School.

Berman was the founder and director of the defunct Edah organization for the promotion of Modern Orthodoxy. Due to financial constraints, Edah was absorbed into the Yeshivat Chovevei Torah.

He is married to Shellee Berman, they have four children and seven grandchildren, (Shama and Rachel Berman + Shoshana, Adira, Ephraim and Adiv) (Efrath and Gal Levy + Natalie, Gabriel and Abigail) (Akiva) (Esther Golda and Rafi Lefkowitz) From the L.S.S. bulletin July 2011

References[link]

This biographical article about an American rabbi is a stub. You can help Wikipedia by expanding it. v t e