[Music] don't let failure ever stop you you know use your brain use your creativity for example look at SLAC you know that thing came out and that was a complete failure they to try to game the game didn't work but whatever slack was became the success was that was a dialogue on the side of it so that's one of the most important messages I have for entrepreneurs is that failure should inspire you to get smarter and unfortunately our school system says if you if you're fail you're stupid that is not true you know we learn
from our mistakes mistakes are opportunities to get smarter be humble and take a look at something so anyway the cash flow board game just like slack was a failure so I had to write Rich Dad Poor Dad which is a true story about my rich dad and my poor dad and suddenly I went on The Oprah Show and something I became famous it's anyway that's an entrepreneur story that's who I am most of the young people you are age today you know a lot of them might become entrepreneurs the problem with this you have to
understand tax you see this is all over the world very little difference these guys pay 40% of their money in taxes so they make a thousand dollars they're going to spend $40 in taxes these guys that make a thousand dollars they don't pay sixty percent in tax so our schools are teaching entrepreneurship but they're not teaching them tax okay and because they're focusing on income over here is 20 percent in tax so they make a thousand dollars only only two hundred dollars goes to tax and these guys 0 percent so the reason financial education isn't
working in our school systems is they're teaching financial education for these people in these people but to really become rich you have to focus on this side here and that's that there was a very rich dad and the financial and what they're teaching in school right now I'd rather be on this side this is a lot harder but in the long run it's more fun for me on this side here it's it's harder but you're paying tax constantly so these guys here are saying tax too rich well these guys don't pay taxes and and as
strange as that may seem and I'm talking about legal this is all over the world so that's the big difference here one last thing which I think most belittles understand is you know in Rich Dad Poor Dad I wrote about Ray Kroc founder of McDonald's and he was teaching at the University of Texas the MBA program and Ray asks there and most of the MBAs are going to come out here so Ray Kroc asked them it says what business is McDonald's in and everybody yelled and said no now we know you're in hamburgers an array
says no we're not I'm not at McDonald's it's not hamburgers McDonald's is in the business of real estate over here so what you have McDonald's here and the money McDonald's makes buys the real estate and that is my formula this is rich dead I own real estate I don't hang out here I'm glad you guys are here right and we do our best to make sure you're educated and you have your own businesses and things like this here but really the formula I follow personally is McDonald's we have education company that buys real estate which
means we make a lot of money pay zero taxes legally the difference is is when I left my high paint I so I got a job with Xerox so that's the last job I ever had so when you look at the cash flow quadrant here E as the I here I was okay I was making a lot of money at Xerox I went to the Xerox for one thing not the money I worked at Xerox is I had to learn how to sell because entrepreneurs have to learn how to sell so I was preparing for
this quadrant here yeah but I was really preparing for the big business quadrant so I took a job at zero box for 4 years so I was preparing for these two quadrants here so when I talk to young people like you look like you're here in social media you're learning the same thing I was learning at Xerox except you're learning technology wise yeah it's very smart 100% that's exactly what I'm doing here and one thing I actually really do appreciate when I worked at the bank was that we were very sales orientated orientated and that's
all that mattered and I think that's where I got a lot of my sales skills to commit like it was learning and learning how to get rejected and finding a way to not get rejected next time so the lesson to young people is don't take a job for the money take a job for what you're learning yeah so what you mind giving us some of the entities you use sure we have the good the bad and the ugly and on the bad entities would be a sole proprietorship and that's where you do business in your
individual name right there's absolutely no protection here you're all of your assets are exposed to a claim a lot of people have those by default you get into business and if you don't form a corporation you're a sole proprietor and all of your assets are exposed we also have the ugly entities these are the ones we really don't want to get involved with and that would be the general partnership and this is liability times two and I just went down the line there general partnership if you shake hands with someone to get into a business
you have become their partner they can obligate the business and you're personally responsible for what they are there was a company a Lumber Company here in Phoenix and there was two people got together and they shook hands and they formed as a general partnership right one partners daughter ran over somebody and be caught what happened then the other partner was personally responsible for that axe art nurse kid right so that's the ugly way to do business and it can happen with a handshake it's called innocent formation you shake hands with someone you get into business
you're personally responsible not only for your own mistakes but your partner's mistakes so you'll never do business as a general partnership then we have the good entities and the government gives us good ways to do business good ways to protect ourselves and these are LLC's LPS and corporations these are the good ones LLC stands for limited liability company limited partners LP stands for limited partnership and then we have corporations these are the ways you're going to move more of our presence we have different taxation you have a C Corp which is double taxed we have
the S Corp which is a flow-through tax there's only one tax you're gonna work with your CPA on what is best for you in school they compensate for a risk by telling you to memorize the right answer so in other words these kids leave with young people like you leave school think oh if I know the right answers then there's no risk and it drives old guys like me crazy because everybody's talking about Millennials what's wrong with them you know Millennials are the most highly amenities the most highly educated generation in history they have the
cellphone they didn't get educate in school they got educated on social media and cell phones they know all the answers but they're afraid of doing anything yeah you know the biggest complaint about my generation is Millennials know all the answers but they can't do anything the reason they can't do anything is because you might hurt their somebody's feelings you might make a mistake you know this is keeps you guys just trapped in this little box yeah so that's one of the reasons I think millennial money is such an important point here because if you're going
to come into my world old guy's world or the information age you've really got to understand what is risky and what is not risky and in my world if you play it safe that makes you stupid because if you don't take risks you don't get smarter yeah you know so you may know the answer but you can't do anything yeah and one of the best things I had is I went from I went to military school that I went to flight school I had such great teachers you know all of them could fly you know
so my flight instructor could fly what a novel idea you know a flight instructor can fly but when I was in high school most of my teachers were terrified mm-hmm they're all cowards you know job security don't make mistakes just memorize the right answer and you'll be safe and that's why I'm all school teachers heart rich yeah they teach that to your generation yeah and most of them are teaching us things that they don't do on a daily basis like we have entrepreneurship classes oh and they're not entrepreneurs you know so it's it's kind of
frightening when you think we're relying on this school system oh and the fact that they're teaching us so the way to get through college right is practicing all the right answers taking the exam putting in all the right answers when in real life that's the last thing that will ever happen right no like you talk about fake you know this is my book fake here fake money fake teachers fake assets there isn't it's fake money fake teachers and fake assets it's because all has to be fake you have to have fake teachers to understand fake
money they have to have fake assets to buy those stocks bonds and mutual funds bank assets but without fake teachers fake money and you can't do it so that's why I love I love working with on these programs here because if you're going to be successful you've got to take some risk so in my work I work for this you know like I don't need the money yeah but I as my teacher was dr. R Buckminster Fuller and he says I don't work for me I work for everyone and that was one of the biggest
lessons I got from the military and from the military was a very high spiritual and talent that's why your dad and I get along so well because when we went into combat which is a horrible experience of good and bad people enemy and friends you know but we when we climb to our aircraft was a crew of five we became one it is the best feeling as horrible as it is flying into combat because we might not come back but it was the highest feeling of all it was spiritual and I'm afraid it's not just
Millennials as human beings you know well you know is this good is this bad is this the best beat tone shirt that McKenna get at a better price or he's cute or she's cute you know I mean but is there somebody better right yeah I mean that's exactly what's going on see you guys are stuck in your head and I think you should get more into your spirit you know I'm saying what can I do for my help fellow human being yeah what can I do for the environment and I think the biggest secret of
my success is I have all had these we all have some degree of physical things we do emotionally I'm or I'm a basket case a lot of the time you know I get upset I get angry I get sad I get my feelings hurt and I'm always this is good this is bad this is you know you watch politics it's all good and bad as a bunch of BS but what keeps me going is us and it's spiritual yeah it's how can I serve others how can I serve the planet [Music] you [Music]
