Robert Kiyosaki Names 3 Income Types That Separate Rich and Poor

Key Takeaways

• Kiyosaki divides income into earned, portfolio and passive categories.
• He associates paychecks with the poor and passive income with the rich.
• U.S. tax treatment depends on the activity and type of income involved.

Three Income Types, According to Kiyosaki

A paycheck, an investment return, and income from a business can have different tax consequences for the person receiving them. In a Sept. 23 post on X, Rich Dad Poor Dad author Robert Kiyosaki used earned, portfolio, and passive income to describe what he sees as a dividing line between poor, middle-class, and rich people.

Kiyosaki associated earned income with wages from a job and portfolio income with the investments held by many middle-class savers. He described passive income as money that comes in without working. The three labels serve his broader argument that learning the language of money can change how people think about work and wealth. Kiyosaki wrote:

“Study, learn the words of money, because the best news is, words are FREE.”

His reference to 401(k)s and individual retirement accounts follows earlier remarks questioning stock-heavy retirement plans. In the latest post, he places savers who use those accounts in his portfolio-income category. A retirement account, however, is a way to hold investments; the account itself is not a separate type of income.