Why Kiyosaki's "Pay Yourself First" Strategy Works Better Than Saving Money in the US

The Fundamental Flaw in Traditional Savings

For decades, the personal finance establishment has preached the virtues of putting money into savings accounts. But Robert Kiyosaki, author of the bestselling Rich Dad Poor Dad series, has spent years challenging this conventional wisdom. His core argument is deceptively simple: when you leave money in a standard savings account earning minimal interest while inflation erodes its value, you’re essentially losing money—not gaining it.

Consider the math. If your savings account yields 1% annually but inflation sits at 8%, you’re underwater by 7% in real terms. Your purchasing power shrinks month after month, and traditional financial institutions profit from this arrangement while everyday people gradually get poorer. This isn’t pessimism—it’s arithmetic.

The “Pay Yourself First” Philosophy

Kiyosaki’s solution emerged from personal necessity. When he and his wife faced financial hardship, they made a deliberate choice: before paying a single creditor, before covering any expense, they would allocate money to themselves. This wasn’t selfish indulgence—it was survival strategy that became the foundation of wealth building.

This principle led to the development of the 10/10/10 plan, a framework that allocates 30% of your monthly paycheck across three equal categories:

• 10% directed toward investments in income-generating assets
• 10% allocated to charitable giving
• 10% reserved as liquid savings

The psychological shift here matters as much as the numbers. By treating this allocation as a non-negotiable expense rather than discretionary spending, you create a forcing function that guarantees capital availability for wealth generation.

Why Investing Beats Saving

The distinction between saving and investing is where most people’s financial journeys derail. Savers accumulate dollars; investors accumulate assets. Kiyosaki doesn’t shy away from stating the uncomfortable truth directly: “Savers are losers.” The provocation serves a purpose—it disrupts the comfortable narrative that simply putting money away guarantees security.

Investing doesn’t require massive capital commitments or sophistication. You don’t need to purchase multi-unit apartment buildings or go all-in on stock market positions. What matters is taking action—any action—that breaks the cycle of passive money-sitting. Start with $100 if that’s what you have. Invest in one-ounce silver coins as Kiyosaki did, or explore other tangible and financial assets worth researching.

The obstacle isn’t capability; it’s psychology. Most people wait for perfect conditions that never arrive. Meanwhile, inflation compounds their losses daily.

Reframing Financial Advice

Kiyosaki also challenges where people seek financial guidance. Traditional financial planners often function as salespeople first and educators second. They benefit from specific recommendations regardless of whether those recommendations serve your wealth-building goals. Instead, Kiyosaki advocates learning from practitioners—people who’ve already achieved the financial outcomes you’re pursuing—and studying what they actually do rather than what they say.

This approach demands more discipline but delivers superior results. You’re learning principles from proven success rather than theory from interested parties.

What Separates the Rich from Everyone Else

The fundamental dividing line isn’t how much money someone earns. A six-figure salary means nothing if 100% of it flows to expenses and debt. What matters is the percentage of income converted into investments and assets. Two people earning identical salaries can end up in completely different financial positions based solely on what they do with their money after tax day.

Kiyosaki’s message remains consistent: the amount is irrelevant compared to the action. Whether you’re protecting $1,000 or $100,000 for investment, the habits and decisions matter infinitely more than the initial quantity.

Taking the First Step

The framework is straightforward enough that anyone in the US or beyond can implement it immediately. Audit your current paycheck allocation. Commit to the 10/10/10 structure—or create your own variation—but make it systematic and inevitable. Research which assets align with your risk tolerance and knowledge level. Most importantly, begin. Perfect knowledge will never arrive, and waiting guarantees financial mediocrity.

The gap between those building wealth and those remaining trapped in the paycheck-to-paycheck cycle often comes down to a single decision: whether to keep money working against you through inflation, or to put money to work for you through intentional investment. Kiyosaki’s “pay yourself first” principle is ultimately a call to choose your own financial future rather than defaulting into poverty.