Q: I'm a big fan of Robert Kiyosaki. So why not invest for passive income to create an income stream when you are retired? I'm 51 & my wife is 47 with about $600k in retirement funds. We do not have other investments in the stock market currently; instead we are investing in real estate with a very experienced investor who's mentoring me (retired at 47 off his investments). My goal is to have a six-figure income per year when we retire. Currently have around $45,000 per year so far (11 to 13 percent cash on cash return). Assuming the 4 percent rule you discussed in your last column, isn't $100,000 income like having another $2.5 million in retirement funds?

Matt

A: I can't count myself among the followers of Robert Kiyosaki, author of "Rich Dad Poor Dad," and other bestselling personal finance books, including one he wrote with Donald Trump, "Why We Want You to Be Rich." Kiyosaki isn't a fan of steady savings, retirement savings plans like 401(k)s, diversification and similar strategies for creating a financial safety net over a lifetime, techniques I believe in and write about in this column. Instead, Kiyosaki wants you to be rich, a winner, by taking concentrated risks, mostly in real estate but also starting your own business.

I'm skeptical about any surefire moneymaking formulas, including Kiyosaki's. Remember when high-tech stocks were a surefire investment in the '90s? How about owning multiple homes in the '00s? Diversification pays. So does investing with a healthy margin of safety. A healthy household balance sheet is a personal safety net against trauma and tragedy, but it also lets us pursue intriguing opportunities when they come along, to take risks that might lead to a more satisfying career, to embrace changes in our lives that could lead to greater happiness. Safety and opportunity, like risk and return, are two sides of the margin-of-safety coin.

That said, there is certainly nothing wrong and much right about investing in and running an enterprise. Owning income-producing properties can be a good business and it appears you're doing well at it. Congratulations.

Indeed, one of the lessons from the economic and financial turmoil of the recent past is that most people really can't rely on the onetime holy grail of employment: a steady, good-paying job with full benefits. As Dave Ulrich, professor of business at the University of Michigan, once told me, people instead should "plan for a career mosaic. Careers used to be linear with stages or steps that people could anticipate. Now they are a mosaic where people move into and out of positions and jobs."

That mosaic now includes for many an entrepreneurial venture. It provides another safety net, a small measure of control in an increasingly unstable environment and a diversified source of income. It's also a potential source of income during the traditional retirement years. So, investing for passive income is a good strategy. I would still embrace diversification. As Miguel De Cervantes put it in Don Quixote some 400 years ago, "Don't venture all your eggs in one basket."

Chris Farrell is economics editor for "Marketplace Money." His e-mail is cfarrell@mpr.org.