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A lot of people have been posting and sharing the news of Robert Kiyosaki’s bankruptcy case in Facebook. The news can be found in Forbes.com, Daily Mail and New York Post.

A lot of people are commenting this issue in Facebook. Some are showing their disappointment and some are giving out negative comments. However, I find this issue interesting. I am eager to know why a well-known financial guru will make such decision. It must be something that we don’t know or cannot foresee.

People often say “Never judge a book by its cover”. Hence, instead of commenting anything with just the article titles, I am trying to search and ask for more information.

The word “bankrupt” or “bankruptcy” have been stereotyped negatively. The moment these words go into out mind, most of us will relate to a bad news. However, in corporate world, it can be one of the smartest move.

What’s really happening

As an entrepreneur, Robert Kiyosaki owns several businesses. One of them is Rich Global LLC, which has been filed for corporate bankruptcy. This company is ordered to pay nearly US$24 million to the Learning Annex and its founder and chairman, Bill Zanker.

For the past few years, Kiyosaki was utilizing the Learning Annex platform for several high profile speaking engagements. The U.S. District Court jury ruled Zanker and the Learning Annex were entitled to a certain percentage of the profits from those engagements. “I took Kiyosaki’s brand and made it bigger. The deal was I would get a percentage and he reneged,” Zanker said, “We had a signed letter of intent. The Learning Annex is the greatest promoter. We put his ‘Rich Dad’ brand on a stage. We truly prepared him for great fame and riches. But when it was time for him to pay up, he said no.”

Mike Sullivan, CEO of Kiyosaki’s Rich Dad Co., reported that “Robert and Kim are not paying out of personal assets. We have a few million dollars in this company, but not 16 or 20. I can’t do anything about a $20 million judgment . . . We got hit for what we think is a completely outlandish figure.”

According to him, Robert would not losing any personal assets and he claimed that the judgement is far more than Rich Global LLC’s value. In fact, this bankruptcy is not affecting Robert Kiyosaki’s wealth. Neither his wife, Kim.

The Beauty of LLC (Limited Liability Company)

In Malaysia, Limited Liability Company is known as Sendirian Berhad (Sdn. Bhd.). The beauty of this is that the company and owners (known as shareholders) are having separate entity, unlike Sole Proprietor or Partnership. When a limited liability company goes bankrupt, the assets of the shareholders are not affected.

I personally think that Robert Kiyosaki is taking the most strategic move. Rich Global LLC has been filed bankruptcy. However, Rich Dad Co. is still generating millions. His investment in gold, silver and oil will not be affected too.

Is Robert Kiyosaki a Bankrupt Dad?

Articles are using the term “Bankrupt Dad” to describe Robert Kiyosaki right now. However, I disagree with it.

If today I own a sole proprietor pr partnership business, I am bankrupt if my business goes bankrupt. However, if I own a Limited Liability Company or “Sdn. Bhd.” company and the company is filed for bankruptcy, I am not bankrupt.

So is Robert Kiyosaki bankrupt? The answer is a big NO! So how can he be titled as “Bankrupt Dad”?

The only problem…

In the entrepreneurial world, Kiyosaki’s move makes a lot of sense. However, Learning Annex has been giving him many platforms to brand “Rich Dad”. I am not sure whether US$24 million is a fair value or not, but I personally feel that Learning Annex deserves some monetary returns. Filing bankruptcy is the best move to prevent losing of assets, but it’s somehow way too cruel for the opposing party. It’s all about the matter of integrity.

Recently, a lot of people mentioned about depreciation of Malaysian Ringgit, and many people shared photos about this matter. This drives me to do some simple researches.

To find out whether a currency is depreciating, we can only determine my comparing against other currencies. In general, all paper currencies are fiat currencies and by nature, they’re always falling in value because of federal reserves printing. The only thing we can do is comparing the exchange rate and determine how much other currencies you can buy with your country’s currency.

First of all, let us look at USD.

Starting from March 2012, our currency is depreciating against USD. Despite what are happening in US such as the massive currencies printing, MYR seems depreciating more than USD does.

The next one would be GBP.

Since March 2012 too, MYR was depreciating against GBP but recently because of the crisis happening in Eurozone, the GBP currency is affected and depreciated more as compared with MYR. However, right now, in average, we still buy less of their currencies compare with years before.

EUR is one of the currency that depreciated against MYR, due to the debt crisis in Eurozone.

MYR is appreciating against EUR and it’s believed that the Euro Dollar is going to continue falling. Several news have mentioned that Greece is likely yo quit Eurozone. The economic downturn of the whole Eurozone will affect countries which export goods and services to them.

Have a look at AUD.

MYR is appreciating against AUD during February to May but depreciating against AUD since May 2012.

What about MYR to SGD?

It’s pretty obvious. Malaysian Ringgit is depreciating against most of the currencies. However, what is the main reason that caused MYR to depreciate? Is it because our currency is devaluing more than other currencies do? In certain extents, I believe this is one of the major reasons. Another factor would be the economic growth of Malaysia is slower than countries such as Singapore.

There are also news publication mentioning that Malaysian Ringgit’s depreciation has hit the 14 years lowest.

In my opinion, the next global economic crisis is definitely a currency crisis, whereby people will no longer demand paper fiat currencies because its value is coming all the way down. This will cause deflation because the paper currencies circulating in the market fall tremendously, and we can see the federal reserves will start printing paper currencies and push the market (this is happening is Japan right now!), causing hyperinflation!

Robert Kiyosaki spoke in National Achiever Congress and predicting that there will be a currency collapse in 2016. Right now he’s investing a lot in silver and oil. I always believe that commodities such as gold, silver and oil are good asset class to invest because every time when the value of currencies go down causing inflation, the price of commodities will go up.

I’ve founded Silver4u Malaysia that provide financial education and retailing of physical silver. Investors can now buy and invest silver in Malaysia with us and get prepared for the upcoming currency crisis and hyperinflation!