Game inventor wins the rat race

CHICAGO — The lesson in real estate investing was about to begin.

“OK, everybody, grab a rat!” announced an organizer who had brought a dozen aspiring property magnates together.

The group, crowded around tables in a Naperville, Ill., sandwich shop, reached for their game markers — little plastic rats — to play Cashflow 101, a board game some devotees credit with changing their lives. The brainchild of investment guru Robert Kiyosaki, author of the extraordinarily popular “Rich Dad, Poor Dad” books, Cashflow 101 has spawned clubs around the world.

Members play regularly, ostensibly learning the accounting principles Kiyosaki insists are the key to shrewd investing, while honing their get-rich-quick fantasies.

Kiyosaki’s Web site lists 1,400 Cashflow-playing clubs around the world, though many more play the game on their own.

“I thought it was the stupidest thing I had ever heard of until I sat down to play it,” said Paul Strauss of Naperville, a full-time real estate investor. “But the game teaches you how to get out of the rat race, and I did.”

The prospect of learning the secret to wealth has unlimited appeal in a culture that has embraced real estate investing as sort of a fiscal sport. Some economists have tied novice speculators to as many as one-fourth of all real estate transactions in 2004.

This has led to boom times for pitchmen of books, videos, seminars, DVDs and trade shows. Among those at the top of that very big heap sits Kiyosaki, who preaches that schools fail to teach financially literacy.

His solution was to create Cashflow 101.

Though it has the usual dice, markers and colorful board, it’s not a typical game — it’s more of a Monopoly on steroids. For one thing, it costs $195, as opposed to the industry average of $15 to $39.

Cashflow also departs from routine games through the detailed accounting each player must keep. The object of the game, like Monopoly, is to make money through investments. But Cashflow 101 players must keep meticulous financial statements, updating them constantly as they flip apartment buildings, negotiate complicated partnerships and juggle debt.

Players move the “rat” around the “rat race” track, a seemingly endless circle of earning a paycheck to cover day-to-day expenses. When investment cash flow exceeds expenses, players can move to another track, where the winner is the first to land on his or her predetermined “dream” — a cabin in Montana, owning a chain of beauty salons, funding AIDS research, etc.

Or, they could be wiped out by a tax audit or divorce.

Kiyosaki, who lives in Phoenix, said one of the attractions of the game is that it’s a safe way to make mistakes. He said he invented it in 1996, after several failed businesses, because he believes financial illiteracy is the downfall of fledgling entrepreneurs.

But he has some detractors.

Financial planners complain that he scorns 401(k) plans, mutual funds and other traditional forms of saving in favor of more risky real estate and franchise endeavors.

Critics say his books are long on platitudes and short on specific investment strategies, beyond developing passive income from real estate and stocks.

As far as his own wealth, Kiyosaki says he earns $300,000 a month in passive investments, mostly commercial real estate.

“That’s not big money — that’s just my investments,” he said. “I earn about $4 million a year (from that), plus I own companies and I own stocks.”