Robert Kiyosaki Rich Dad Poor Dad | Full Audiobook | Financial Literacy For Kids

Rich dad poor dad what the rich teach their kids about money that the poor and middle class do not by robert t kiyosaki to parents everywhere a child's first and most important teachers and to all those who educate influence and lead by example [Music] acknowledgements how does a person say thank you when there are so many people to thank obviously this book is a thank you to my two fathers who were powerful role models and to my mom who taught me love and kindness the person most responsible for this book becoming a reality is my

wife kim my partner in marriage business and in life she makes my life complete introduction rich dad poor dad having two dads offered me the choice of contrasting points of view one of a rich man and one of a poor man i had two fathers a rich one and a poor one was highly educated and intelligent he had a phd and completed four years of undergraduate work in less than two years he then went on to stanford university the university of chicago And northwestern university to do his advanced studies all on full financial scholarships the

other father never finished the eighth grade both men were successful in their careers working hard all their lives both earned substantial incomes yet one always struggled financially the other would become one of the richest men in hawaii one died leaving tens of millions of dollars to his family charities and his church the other left bills to be paid both men were strong charismatic and influential both men offered me advice but they did not advise the same things both men believed strongly in education but did not recommend the same course of study if i had had

only one dad i would have had to accept or reject his advice having two dads offered me the choice of contrasting points of view one of a rich man and one of a poor man instead of simply accepting or rejecting one or the other i found myself thinking more comparing and then choosing for myself the problem was that the rich man was not rich yet and the poor man was not yet poor both were just starting out on their careers and both were struggling with Money and families but they had very different points of view

about money for example one dad would say the love of money is the root of all evil the other said the lack of money is the root of all evil as a young boy having two strong fathers both influencing me was difficult i wanted to be a good son and listen but the two fathers did not say the same things the contrast in their points of view particularly about money was so extreme that i grew curious and intrigued i began to start thinking for long periods of time about what each was saying much of my

private time was spent reflecting asking myself questions such as why does he say that and then asking the same question of the other dad's statement it would have been much easier to simply say yeah he's right i agree with that or to simply reject the point of view by saying the old man doesn't know what he's talking about instead having two dads whom i loved forced me to think and ultimately choose a way of thinking for myself as a process choosing for myself turned out to be much more valuable in the long run Than simply

accepting or rejecting a single point of view one of the reasons the rich get richer the poor get poorer and the middle class struggles in debt is that the subject of money is taught at home not in school most of us learn about money from our parents so what can poor parents tell their child about money they simply say stay in school and study hard the child may graduate with excellent grades but with a poor person's financial programming and mindset sadly money is not taught in schools schools focus on scholastic and professional skills but not

on financial skills this explains how smart bankers doctors and accountants who earned excellent grades may struggle financially all of their lives our staggering national debt is due in large part to highly educated politicians and government officials making financial decisions with little or no training in the subject of money today i often wonder what will soon happen when we have millions of people who need financial and medical assistance they will be dependent upon their families or the government for financial support what will happen When medicare and social security run out of money how will a nation

survive if teaching children about money continues to be left to parents most of whom will be or already are poor because i had two influential fathers i learned from both of them i had to think about each dad's advice and in doing so i gained valuable insight into the power and effect of one's thoughts on one's life for example one dad had a habit of saying i can't afford it the other dad forbade those words to be used he insisted i ask how can i afford it one is a statement and the other is a

question one lets you off the hook and the other forces you to think my soon to be rich dad would explain that by automatically saying the words i can't afford it your brain stops working by asking the question how can i afford it your brain is put to work he did not mean that you should buy everything you want he was fanatical about exercising your mind the most powerful computer in the world he'd say my brain gets stronger every day because i exercise it the stronger it gets the more money i can make he believed

that automatically saying i can't afford it was a sign of mental laziness Although both dads worked hard i noticed that one dad had a habit of putting his brain to sleep when it came to finances and the other had a habit of exercising his brain the long-term result was that one dad grew stronger financially and the other grew weaker it is not much different from a person who goes to the gym to exercise on a regular basis versus someone who sits on the couch watching television proper physical exercise increases your chances for health and proper

mental exercise increases your chances for wealth my two dads had opposing attitudes and that affected the way they thought one dad thought that the rich should pay more in taxes to take care of those less fortunate the other said taxes punish those who produce and reward those who don't produce one dad recommended study hard so you can find a good company to work for the other recommended study hard so you can find a good company to buy one dad said the reason i'm not rich is because i have you kids the other said the reason

i must be rich Is because i have you kids one encouraged talking about money and business at the dinner table while the other forbade the subject of money to be discussed over a meal one said when it comes to money play it safe don't take risks the other said learn to manage risk one believed our home is our largest investment and our greatest asset the other believed my house is a liability and if your house is your largest investment you're in trouble both dads paid their bills on time yet one paid his bills first while

the other paid his bills last one dad believed in a company or the government taking care of you and your needs he was always concerned about pay raises retirement plans medical benefits sick leave vacation days and other perks he was impressed with two of his uncles who joined the military and earned a retirement and entitlement package for life after 20 years of active service he loved the idea of medical benefits and px privileges the military provided its retirees he also loved the tenure system available through the university the idea of job Protection for life and

job benefits seemed more important at times than the job he would often say i've worked hard for the government and i'm entitled to these benefits the other believed in total financial self-reliance he spoke out against the entitlement mentality and how it created weak and financially needy people he was emphatic about being financially competent one dad struggled to save a few dollars the other created investments one dad taught me how to write an impressive resume so i could find a good job the other taught me how to write strong business and financial plans so i could

create jobs being a product of two strong dads allowed me the luxury of observing the effects different thoughts have on one's life i noticed that people really do shape their lives through their thoughts for example my poor dad always said i'll never be rich and that prophecy became reality my rich dad on the other hand always referred to himself as rich he would say things like i'm a rich man and rich people don't do this even when he was flat broke after a major financial setback he continued to refer to himself as a rich man

He would cover himself by saying there is a difference between being poor and being broke broke is temporary poor is eternal my poor dad would say i'm not interested in money or money doesn't matter my rich dad always said money is power the power of our thoughts may never be measured or appreciated but it became obvious to me as a young boy that it was important to be aware of my thoughts and how i expressed myself i noticed that my poor dad was poor not because of the amount of money he earned which was significant

but because of his thoughts and actions as a young boy having two fathers i became acutely aware of being careful about which thoughts i chose to adopt as my own should i listen to my rich dad or to my poor dad although both men had tremendous respect for education and learning they disagreed about what they thought was important to learn one wanted me to study hard earn a degree and get a good job to earn money he wanted me to study to become a professional an attorney or an accountant and to go to business school

for my mba The other encouraged me to study to be rich to understand how money works and to learn how to have it work for me i don't work for money were words he would repeat over and over money works for me at the age of nine i decided to listen to and learn from my rich dad about money in doing so i chose not to listen to my poor dad even though he was the one with all the college degrees a lesson from robert frost robert frost is my favorite poet although i love many

of his poems my favorite is the road not taken i use its lesson almost daily the road not taken two roads diverged in a yellow wood and sorry i could not travel both and be one traveler long i stood and looked down one as far as i could to where it bent in the undergrowth then took the other as just as fair and having perhaps the better claim because it was grassy and wanted wear though as for that the passing there had worn them really about the same and both that morning equally lay in leaves

no step had trodden black oh i kept the first for another day yet knowing how way leads onto way i doubt it if i should ever come back I shall be telling this with a sigh somewhere ages and ages hence two roads diverged in a wood and i i took the one less traveled by and that has made all the difference and that has made all the difference over the years i have often reflected upon robert frost's poem choosing not to listen to my highly educated dad's advice and attitude about money was a painful decision

but it was a decision that shaped the rest of my life once i made up my mind about whom to listen to my education about money began my rich dad taught me over a period of 30 years until i was 39 years old he stopped once he realized that i knew and fully understood what he had been trying to drum into my often thick skull money is one form of power but what is more powerful is financial education money comes and goes but if you have the education about how money works you gain power over

it and can begin building wealth the reason positive thinking alone does not work is because most people went to school and never learned how money works so they spend their lives working for money Because i was only nine years old when i started the lessons my rich dad taught me were simple and when it was all said and done there were only six main lessons repeated over 30 years this audio book is about those six lessons put as simply as possible just as simply as my rich dad put forth those lessons to me the lessons

are meant not to be answers but guide posts that will assist you and your children to grow wealthier no matter what happens in a world of increasing change and uncertainty chapter one lesson one the rich don't work for money the poor and the middle class work for money the rich have money work for them dad can you tell me how to get rich my dad put down the evening paper why do you want to get rich son because today jimmy's mom drove up in their new cadillac and they were going to their beach house for

the weekend he took three of his friends but mike and i weren't invited they told us we weren't invited because we were poor kids they did my dad asked incredulously yeah they did i replied in a hurt tone my dad silently shook his head pushed his glasses up The bridge of his nose and went back to reading the paper i stood waiting for an answer the year was 1956 i was 9 years old by some twist of fate i attended the same public school where the rich people sent their kids we were primarily a sugar

plantation town the managers of the plantation and the other affluent people such as doctors business owners and bankers sent their children to this elementary school after grade six their children were generally sent off to private schools because my family lived on one side of the street i went to this school had i lived on the other side of the street i would have gone to a different school with kids from families more like mine after grade six these kids and i would go on to the public intermediate in high school there was no private school

for them or for me my dad finally put down the paper i could tell he was thinking well son he began slowly if you want to be rich you have to learn to make money how do i make money i asked well use your head son he said smiling even then i knew that really meant that's all i'm going to tell you or i don't know the answer so don't embarrass me A partnership is formed the next morning i told my best friend mike what my dad had said as best as i could tell mike

and i were the only poor kids in this school mike was also in this school by a twist of fate someone had drawn a jog in the line for the school district and we wound up in school with the rich kids we weren't really poor but we felt as if we were because all the other boys had new baseball gloves new bicycles knew everything mom and dad provided us with the basics like food and shelter and clothes but that was about it my dad used to say if you want something work for it we wanted

things but there was not much work available for nine-year-old boys so what do we do to make money mike asked i don't know i said but do you want to be my partner he agreed and so on that saturday morning mike became my first business partner we spent all morning coming up with ideas on how to make money occasionally we talked about all the cool guys at jimmy's beach house having fun it hurt a little but that hurt was good because it inspired us to keep thinking of a way to make money Finally that afternoon

a bolt of lightning struck it was an idea mike got from a science book he had read excitedly we shook hands and the partnership now had a business for the next several weeks mike and i ran around our neighborhood knocking on doors and asking our neighbors if they would save their toothpaste tubes for us with puzzled looks most adults consented with a smile some asked us what we were doing to which we replied we can't tell you it's a business secret my mom grew distressed as the weeks wore on we had selected a site next

to her washing machine as the place we would stockpile our raw materials in a brown cardboard box that at one time held ketchup bottles our little pile of used toothpaste tubes began to grow finally my mom put her foot down the sight of her neighbor's messy crumpled used toothpaste tubes had gotten to her what are you boys doing she asked and i don't want to hear again that it's a business secret do something with this mess or i'm going to throw it out mike and i pleaded and begged explaining that we would soon have enough

and then we would begin production we informed her That we were waiting on a couple of neighbors to finish their toothpaste so we could have their tubes mom granted us a one-week extension the date to begin production was moved up and the pressure was on my first partnership was already being threatened with an eviction notice by my own mom it became mike's job to tell the neighbors to quickly use up their toothpaste saying their dentist wanted them to brush more often anyway i began to put together the production line one day my dad drove up

with a friend to see two nine-year-old boys in the driveway with a production line operating at full speed there was fine white powder everywhere on a long table were small milk cartons from school and our family's hibachi grill was glowing with red hot coals at maximum heat dad walked up cautiously having to park the car at the base of the driveway since the production line blocked the carport as he and his friend got closer they saw a steel pot sitting on top of the coals in which the toothpaste tubes were being melted down in those

days toothpaste did not come in plastic tubes the tubes were made of lead so once the paint was burned off The tubes were dropped in the small steel pot they melted until they became liquid and with my mom's pot holders we poured the lead through a small hole in the top of the milk cartons the milk cartons were filled with plaster of paris white powder was everywhere in my haste i had knocked the bag over and the entire area looked like it had been hit by a snow storm the milk cartons were the outer containers

for plaster of paris molds my dad and his friend watched as we carefully poured the molten lead through a small hole in the top of the plaster of paris cube careful my dad said i nodded without looking up finally once the pouring was through i put the steel pot down and smiled at my dad what are you boys doing he asked with a cautious smile we're doing what you told me to do we're going to be rich i said yup said mike grinning and nodding his head we're partners and what is in those plaster molds

my dad asked watch i said this should be a good batch with a small hammer i tapped at the seal that divided the cube in half Cautiously i pulled up the top half of the plaster mold and a lead nickel fell out oh my god my dad said you're casting nickels out of lead that's right mike said we're doing as you told us to do we're making money my dad's friend turned and burst into laughter my dad smiled and shook his head along with a fire and a box of spent toothpaste tubes in front of

him were two little boys covered with white dust smiling from ear to ear he asked us to put everything down and sit with him on the front step of our house with a smile he gently explained what the word counterfeiting meant our dreams were dashed you mean this is illegal asked mike in a quivering voice let them go my dad's friends said they might be developing a natural talent my dad glared at him yes it is illegal my dad said gently but you boys have shown great creativity and original thought keep going i'm really proud

of you disappointed mike and i sat in silence for about 20 minutes before we began cleaning up our mess the business was over on opening day Sweeping the powder up i looked at mike and said i guess jimmy and his friends are right we are poor my father was just leaving as i said that boys he said you're only poor if you give up the most important thing is that you did something most people only talk and dream of getting rich you've done something i'm very proud of the two of you i will say it

again keep going don't quit mike and i stood there in silence they were nice words but we still did not know what to do so how come you're not rich dad i asked because i chose to be a school teacher school teachers really don't think about being rich we just like to teach i wish i could help you but i really don't know how to make money mike and i turned and continued our cleanup i know said my dad if you boys want to learn how to be rich don't ask me talk to your dad

mike my dad asked mike with a scrunched up face yeah your dad repeated my dad with a smile your dad and i have the same banker and he raves about your father he's told me several times that your father is brilliant when it comes to making money My dad mike asked again in disbelief then how come we don't have a nice car and a nice house like the rich kids at school a nice car and a nice house don't necessarily mean you're rich or you know how to make money my dad replied jimmy's dad works

for the sugar plantation he's not much different from me he works for a company and i work for the government the company buys the car for him the sugar company is in financial trouble and jimmy's dad may soon have nothing your dad is different mike he seems to be building an empire and i suspect in a few years he will be a very rich man with that mike and i got excited again with new vigor we began cleaning up the mess caused by our now defunct first business as we were cleaning we made plans for

how and when to talk to mike's dad the problem was that mike's dad worked long hours and often did not come home until late his father owned warehouses a construction company a chain of stores and three restaurants it was the restaurants that kept him out late mike caught the bus home after we had finished cleaning up he was going to talk to his dad when he got home that night and asked him if he would Teach us how to become rich mike promised to call as soon as he had talked to his dad even if

it was late the phone rang at 8 30 pm ok i said next saturday i put the phone down mike's dad had agreed to meet with us on saturday i caught the 7 30 am bus to the poor side of town the lessons begin mike and i met with his dad that morning at eight o'clock he was already busy having been at work for more than an hour his construction supervisor was just leaving in his pickup truck as i walked up to his simple small and tidy home mike met me at the door dad's on

the phone and he said to wait on the back porch mike said as he opened the door the old wooden floor creaked as i stepped across the threshold of the aging house there was a cheap mat just inside the door the mat was there to hide the years of wear from countless footsteps that the floor had supported although clean it needed to be replaced i felt claustrophobic as i entered the narrow living room that was filled with old musty overstuffed furniture that today would be collector's items Sitting on the couch were two women both a

little older than my mom across from the women sat a man in workman's clothes he wore khaki slacks and a khaki shirt neatly pressed but without starch and polished work boots he was about 10 years older than my dad they smiled as mike and i walked past them toward the back porch i smiled back shyly who are those people i asked oh they work for my dad the older man runs his warehouses and the women are the managers of the restaurants and as you arrived you saw the construction supervisor who was working on a road

project about 50 miles from here his other supervisor who was building a track of houses left before you got here does this go on all the time i asked not always but quite often said mike smiling as he pulled up a chair to sit down next to me i asked my dad if he would teach us to make money mike said oh and what did he say to that i asked with cautious curiosity well he had a funny look on his face at first and then he said he would make us an offer oh i

said rocking my chair back against the wall i sat there perched on two rear legs of the chair Mike did the same thing do you know what the offer is i asked no but we'll soon find out suddenly mike's dad burst through the rickety screen door and onto the porch mike and i jumped to our feet not out of respect but because we were startled ready boys he asked as he pulled up a chair to sit down with us we nodded our heads as we pulled our chairs away from the wall to sit in front

of him he was a big man about six feet tall and 200 pounds my dad was taller about the same weight and five years older than mike's dad they sort of looked alike though not of the same ethnic makeup maybe their energy was similar mike says you want to learn to make money is that correct robert i nodded my head quickly but with a little trepidation he had a lot of power behind his words and smile okay here's my offer i'll teach you but i won't do it classroom style you work for me i'll teach

you you don't work for me i won't teach you i can teach you faster if you work and i'm wasting my time if you just want to sit and listen like you do in school that's my offer take it or leave it Ah may i ask a question first i asked no take it or leave it i've got too much work to do to waste my time if you can't make up your mind decisively then you'll never learn to make money anyway opportunities come and go being able to know when to make quick decisions is

an important skill you have the opportunity that you asked for school is beginning or it's over in 10 seconds mike's dad said with a teasing smile take it i said take it said mike good said mike's dad mrs martin will be by in 10 minutes after i'm through with her you'll ride with her to my super and you can begin working i'll pay you 10 cents an hour and you'll work three hours every saturday but i have a softball game today i said mike's dad lowered his voice to a stern tone take it or leave

it he said i'll take it i replied choosing to work and learn instead of playing 30 cents later by 9 am that day mike and i were working for mrs martin she was a kind and patient woman she always said that mike and i reminded her of her two grown sons although kind she believed in hard work and kept us moving We spent three hours taking canned goods off the shelves brushing each can with a feather duster to get the dust off and then re-stacking them neatly it was excruciatingly boring work mike's dad whom i

called my rich dad owned nine of these little super rats each with a large parking lot they were the early version of the 7-eleven convenience stores little neighborhood grocery stores where people bought items such as milk bread butter and cigarettes the problem was that this was hawaii before air conditioning was widely used and the stores could not close their doors because of the heat on two sides of the store the doors had to be wide open to the road and parking lot every time a car drove by or pulled into the parking lot dust would

swirl and settle in the store we knew we had a job as long as there was no air conditioning for three weeks mike and i reported to mrs martin and worked our three hours by noon our work was over and she dropped three little dimes in each of our hands now even at the age of 9 in the mid-1950s 30 cents was not too exciting comic books cost 10 cents back then so i usually Spent my money on comic books and went home by wednesday of the fourth week i was ready to quit i had

agreed to work only because i wanted to learn to make money from mike's dad and now i was a slave for 10 cents an hour on top of that i had not seen mike's dad since that first saturday i'm quitting i told mike at lunch time school was boring and now i did not even have my saturdays to look forward to but it was the 30 cents that really got to me this time mike smiled what are you laughing at i asked with anger and frustration dad said this would happen he said to meet with

him when you were ready to quit what i said indignantly he's been waiting for me to get fed up sort of mike said dad's kind of different he doesn't teach like you or dad your mom and dad lecture a lot my dad is quiet and a man of few words you just wait till this saturday i'll tell him you're ready you mean i've been set up no not really but maybe dad will explain on saturday waiting in line on saturday i was ready to face mike's dad even my real dad was angry with him my

real dad the one i called the poor one thought that my rich dad was violating child labor laws And should be investigated my educated poor dad told me to demand what i deserve at least 25 cents an hour my poor dad told me that if i did not get a raise i was to quit immediately you don't need that damn job anyway said my poor dad with indignation at eight o'clock saturday morning i walked through the door of mike's house when mike's dad opened it take a seat and wait in line he said as i

entered he turned and disappeared into his little office next to a bedroom i looked around the room and didn't see mike anywhere feeling awkward i cautiously sat down next to the same two women who were there four weeks earlier they smiled and slid down the couch to make room for me 45 minutes went by and i was steaming the two women had met with him and left 30 minutes earlier an older gentleman was in there for 20 minutes and was also gone the house was empty and here i sat in a musty dark living room

on a beautiful sunny hawaiian day waiting to talk to a cheapskate who exploited children i could hear him rustling around the office talking on the phone and ignoring me i was Ready to walk out but for some reason i stayed finally fifteen minutes later at exactly nine o'clock rich dad walked out of his office said nothing and signaled with his hand for me to enter i understand you want to raise or you're going to quit rich dad said as he swiveled in his office chair well you're not keeping your end of the bargain i blurted

out nearly in tears it was really frightening for me to confront a grown-up you said that you would teach me if i worked for you well i've worked for you i've worked hard i've given up my baseball games to work for you but you haven't kept your word and you haven't taught me anything you are a crook like everyone in town thinks you are you're greedy you want all the money and don't take care of your employees you made me wait and don't show me any respect i'm only a little boy but i deserve to

be treated better rich dad rocked back in his swivel chair hands up to his chin and stared at me not bad he said in less than a month you sound like most of my employees what i asked not understanding what he was saying i continued with my grievance i thought you were going to keep your End of the bargain and teach me instead you want to torture me that's cruel that's really cruel i am teaching you rich dad said quietly what have you taught me nothing i said angrily you haven't even talked to me once

since i agreed to work for peanuts 10 cents an hour i should notify the government about you we have child labor laws you know my dad works for the government you know wow said rich dad now you sound just like most of the people who used to work for me people i've either fired or who have quit so what do you have to say i demanded feeling pretty brave for a little kid you lied to me i've worked for you and you have not kept your word you haven't taught me anything how do you know

that i've not taught you anything asked rich dad calmly well you've never talked to me i've worked for three weeks and you have not taught me anything i said with a pout does teaching mean talking or a lecture rich dad asked well yes i replied that's how they teach you in school he said smiling but that is not how life teaches you and i would say that life is the best teacher of all most of the time life does not talk to you it just sort of pushes you around Each push is life saying wake

up there's something i want you to learn what is this man talking about i asked myself silently life pushing me around was life talking to me now i knew i had to quit my job i was talking to someone who needed to be locked up if you learn life's lessons you will do well if not life will just continue to push you around people do two things some just let life push them around others get angry and push back but they push back against their boss or their job or their husband or wife they do

not know it's life that's pushing i had no idea what he was talking about life pushes all of us around some people give up and others fight a few learn the lesson and move on they welcome life pushing them around to these few people it means they need and want to learn something they learn and move on most quit and a few like you fight rich dad stood and shut the creaky old wooden window that needed repair if you learn this lesson you will grow into a wise wealthy and happy young man if you don't

you will spend your life blaming a job low pay or your boss for your problems you'll live life Always hoping for that big break that will solve all your money problems rich dad looked over at me to see if i was still listening his eyes met mine we stared at each other communicating through our eyes finally i looked away once i had absorbed his message i knew he was right i was blaming him and i did ask to learn i was fighting rich dad continued or if you are the kind of person who has no

guts you just give up every time life pushes you if you're that kind of person you'll live all your life playing it safe doing the right things saving yourself for some event that never happens then you die a boring old man you'll have lots of friends who really like you because you were such a nice hard-working guy but the truth is that you let life push you into submission deep down you were terrified of taking risks you really wanted to win but the fear of losing was greater than the excitement of winning deep inside you

and only you will know you didn't go for it you chose to play it safe our eyes met again you've been pushing me around i asked some people might say that smiled rich dad i would say That i just gave you a taste of life what taste of life i asked still angry but now curious and ready to learn you boys are the first people that have ever asked me to teach them how to make money i have more than 150 employees and not one of them has asked me what i know about money they

ask me for a job and a paycheck but never to teach them about money so most will spend the best years of their lives working for money not really understanding what it is they're working for i sat there listening intently so when mike told me you wanted to learn how to make money i decided to design a course that mirrored real life i could talk until i was blue in the face but you wouldn't hear a thing so i decided to let life push you around a bit so you could hear me that's why i

only paid you 10 cents so what is the lesson i learned from working for only 10 cents an hour i asked that you're cheap and exploit your workers rich dad rocked back and laughed heartily finally he said you'd best change your point of view stop blaming me and thinking i'm the problem if you think i'm the problem then you have to change me if you realize that you're the problem Then you can change yourself learn something and grow wiser most people want everyone else in the world to change but themselves let me tell you it's

easier to change yourself than everyone else i don't understand i said don't blame me for your problems rich dad said growing impatient but you only pay me 10 cents so what are you learning rich dad asked smiling that you're cheap i said with a sly grin see you think i'm the problem said rich dad but you are well keep that attitude and you'll learn nothing keep the attitude that i'm the problem and what choices do you have well if you don't pay me more or show me more respect and teach me i'll quit well put

rich dad said and that's exactly what most people do they quit and go looking for another job a better opportunity and higher pay actually thinking that this will solve the problem in most cases it won't so what should i do i asked just take this measly ten cents an hour and smile rich dad smiled that's what the other people do but that's all they do waiting for a raise thinking that more money will solve their problems most just accept it and Some take a second job working harder but again accepting a small paycheck i sat

staring at the floor beginning to understand the lesson rich dad was presenting i could sense it was a taste of life finally i looked up and asked so what will solve the problem this he said leaning forward in his chair and tapping me gently on the head this stuff between your ears it was at that moment that richted shared the pivotal point of view that separated him from his employees and my poor dad and led him to eventually become one of the richest men in hawaii while my highly educated but poor dad struggled financially all

his life it was a singular point of view that made all the difference over a lifetime rich dad said this point of view over and over which i call lesson number one the poor and the middle class work for money the rich have money work for them on that bright saturday morning i learned a completely different point of view from what i had been taught by my poor dad at the age of nine i understood that both dads wanted me to learn both dads encouraged Me to study but not the same things my highly educated

dad recommended that i do what he did son i want you to study hard get good grades so you can find a safe secure job with a big company and make sure it has excellent benefits my rich dad wanted me to learn how money works so i could make it work for me these lessons i would learn through life with his guidance not because of a classroom my rich dad continued my first lesson i'm glad you got angry about working for 10 cents an hour if you hadn't got angry and had simply accepted it i

would have to tell you that i could not teach you you see true learning takes energy passion and a burning desire anger is a big part of that formula for passion is anger and love combined when it comes to money most people want to play it safe and feel secure so passion does not direct them fear does so is that why they'll take jobs with low pay i asked yes said rich dad some people say i exploit people because i don't pay as much as the sugar plantation or the government i say the people exploit

themselves it's their fear not mine but don't you feel you Should pay them more i asked i don't have to and besides more money will not solve their problems just look at your dad he makes a lot of money and he still can't pay his bills most people given more money only get into more debt so that's why the 10 cents an hour i said smiling it's part of the lesson that's right smiled rich dad you see your dad went to school and got an excellent education so he could get a high paying job but

he still has money problems because he never learned anything about money in school on top of that he believes in working for money and you don't i asked no not really said rich dad if you want to learn to work for money then stay in school that is a great place to learn to do that but if you want to learn how to have money work for you then i will teach you that but only if you want to learn wouldn't everyone want to learn that i asked no said rich dad simply because it's easier

to learn to work for money especially if fear is your primary emotion when the subject of money is discussed i don't understand i said with a frown don't worry about that for now just know that it's fear that keeps most people working at a job The fear of not paying their bills the fear of being fired the fear of not having enough money and the fear of starting over that's the price of studying to learn a profession or trade and then working for money most people become a slave to money and then get angry at

their boss learning to have money work for you is a completely different course of study i asked absolutely rich dad answered absolutely we sat in the silence on that beautiful hawaiian saturday morning my friends had just started their little league baseball game but for some reason i was now thankful i had decided to work for 10 cents an hour i sensed that i was about to learn something my friends wouldn't learn in school ready to learn asked rich dad absolutely i said with a grin i have kept my promise i've been teaching you from afar

my rich dad said at nine years old you've gotten a taste of what it feels like to work for money just multiply your last month by 50 years and you will have an idea of what most people spend their life doing i don't understand i said how did you feel waiting in line to see me wants to get hired And wants to ask for more money terrible i said if you choose to work for money that is what life will be like said rich dad and how did you feel when mrs martin dropped three dimes

in your hand for three hours of work i felt like it wasn't enough it seemed like nothing i was disappointed i said and that is how most employees feel when they look at their paychecks especially after all the tax and other deductions are taken out at least you got 100 percent you mean most workers don't get paid everything i asked with amazement heavens no said rich dad the government always takes its share first how do they do that i asked taxes said rich dad you're taxed when you earn you're taxed when you spend your taxed

when you save your taxed when you die why do people let the government do that to them the rich don't said rich dad with a smile the poor and the middle class do i'll bet you that i earn more than your dad yet he pays more in taxes how can that be i asked at my age that made no sense to me why would someone let the government do that to them rich dad rocked slowly and silently in his chair just looking at me ready To learn he asked i nodded my head slowly as i

said there is a lot to learn learning how to have money work for you is a lifetime study most people go to college for four years and their education ends i already know that my study of money will continue over my lifetime simply because the more i find out the more i find out i need to know most people never study the subject they go to work get their paycheck balance their checkbooks and that's it then they wonder why they have money problems they think that more money will solve the problem and don't realize that

it's their lack of financial education that is the problem so my dad has tax problems because he doesn't understand money i asked confused look said rich dad taxes are just one small section on learning how to have money work for you today i just wanted to find out if you still have the passion to learn about money most people don't they want to go to school learn a profession have fun at their work and earn lots of money one day they wake up with big money problems and then they can't stop working that's The price

of only knowing how to work for money instead of studying how to have money work for you so do you still have the passion to learn asked rich dad i nodded my head good said rich dad now get back to work this time i will pay you nothing what i asked in amazement you heard me nothing you will work the same three hours every saturday but this time you will not be paid 10 cents per hour you said you wanted to learn to not work for money so i'm not going to pay you anything i

couldn't believe what i was hearing i've already had this conversation with mike and he's already working dusting and stacking canned goods for free you better hurry and get back there that's not fair i shouted you've got to pay something you said you wanted to learn if you don't learn this now you'll grow up to be like the two women and the older man sitting in my living room working for money and hoping i don't fire them or like your dad earning lots of money only to be in debt up to his eyeballs hoping more money

will solve the problem if that's what you want i'll go back to our original deal of 10 cents an hour or you can Do what most adults do complain that there is not enough pay quit and go looking for another job but what do i do i asked rich dad tapped me on the head use this he said if you use it well you will soon thank me for giving you an opportunity and you will grow into a rich man i stood there still not believing what a raw deal i was handed i came to

ask for a raise and somehow i was instead working for nothing rich dad tapped me on the head again and said use this now get out of here and get back to work lesson number one the rich don't work for money i didn't tell my poor dad i wasn't being paid he wouldn't have understood and i didn't want to try to explain something i didn't understand myself for three more weeks mike and i worked three hours every saturday for nothing the work didn't bother me and the routine got easier but it was the missed baseball

games and not being able to afford to buy a few comic books that got to me rich dad stopped by at noon on the third week we heard his truck pull up in the parking lot and sputter when the engine was turned off he entered the store and greeted mrs martin with a hug After finding out how things were going in the store he reached into the ice cream freezer pulled out two bars paid for them and signaled to mike and me let's go for a walk boys we crossed the street dodging a few cars

and walked across a large grassy field where a few adults were playing softball sitting down at a lone picnic table he handed mike and me the treats how's it going boys okay mike said i nodded in agreement learn anything yet rich dad asked mike and i looked at each other shrugged our shoulders and shook our heads in unison avoiding one of life's biggest traps well you boys had better start thinking you're staring at one of life's biggest lessons if you learn it you'll enjoy a life of great freedom and security if you don't you'll wind

up like mrs martin and most of the people playing softball in this park they work very hard for little money clinging to the illusion of job security and looking forward to a three-week vacation each year and maybe a skimpy pension after 45 years of service if that excites you i'll give you a raise to 25 cents an hour but these are good Hard-working people are you making fun of them i demanded a smile came over rich dad's face mrs martin is like a mother to me i would never be that cruel i may sound unkind

because i'm doing my best to point something out to the two of you i want to expand your point of view so you can see something most people never have the benefit of seeing because their vision is too narrow most people never see the trap they are in mike and i sat there uncertain of his message he sounded cruel yet we could sense he was trying to drive home a point with a smile rich dad said doesn't that 25 cents an hour sound good doesn't it make your heart beat a little faster i shook my

head no but it really did 25 cents an hour would be big bucks to me okay i'll pay you a dollar an hour rich dad said with a sly grin now my heart started to race my brain was screaming take it take it i could not believe what i was hearing still i said nothing okay two dollars an hour my little brain and heart nearly exploded after all it was 1956 and being paid two dollars an hour would have made me the richest kid in The world i couldn't imagine earning that kind of money i

wanted to say yes i wanted the deal i could picture a new bicycle new baseball glove and the adoration of my friends when i flashed some cash on top of that jimmy and his rich friends could never call me poor again but somehow my mouth stayed shut the ice cream had melted and was running down my hand rich dad was looking at two boys staring back at him eyes wide open and brains empty he was testing us and he knew there was a part of our emotions that wanted to take the deal he understood that

every person has a weak and needy part of their soul that can be bought and he knew that every individual also had a part of their soul that was resilient and could never be bought it was only a question of which one was stronger okay five dollars an hour suddenly i was silent something had changed the offer was too big and ridiculous not many grown-ups in 1956 made more than that but quickly my temptation disappeared and calm set in slowly i turned to my left to look at mike he looked back at me the part

of my soul that was weak and needy Was silenced the part of me that had no price took over i knew mike had gotten to that point too good said rich dad softly most people have a price and they have a price because of human emotions named fear and greed first the fear of being without money motivates us to work hard and then once we get that paycheck greed or desire starts us thinking about all the wonderful things money can buy the pattern is then set what pattern i asked the pattern of get up go

to work pay bills get up go to work pay bills people's lives are forever controlled by two emotions fear and greed offer them more money and they continue the cycle by increasing their spending this is what i call the rat race there is another way mike asked yes said rich dad slowly but only a few people find it and what is that way mike asked that's what i hope you boys will learn as you work and study with me that is why i took away all forms of pay any hints mike asked we are kind

of tired of working hard especially for nothing well the first step is telling the truth said rich dad we haven't been lying i said i did not say You were lying i said to tell the truth rich dad retorted the truth about what i asked how you're feeling rich dad said you don't have to say it to anyone else just admit it to yourself you mean the people in this park the people who work for you mrs martin they don't do that i asked i doubt it said rich dad instead they feel the fear of

not having money they don't confront it logically they react emotionally instead of using their heads rich dad said then they get a few bucks in their hands and again the emotions of joy desire and greed take over and again they react instead of think so their emotions control their brain mike said that's correct said rich dad instead of admitting the truth about how they feel they react to their feelings and fail to think they feel the fear so they go to work hoping that money will soothe the fear but it doesn't it continues to haunt

them and they return to work hoping again that money will calm their fears and again it doesn't fear keeps them in this trap of working earning money working earning money hoping the fear will go away but every day they get up and that old fear wakes up with them For millions of people that old fear keeps them awake all night causing a night of turmoil and worry so they get up and go to work hoping that a paycheck will kill that fear gnawing at their souls money is running their lives and they refuse to tell

the truth about that money is in control of their emotions and their souls rich dad sat quietly letting his words sink in mike and i had heard what he said but didn't understand fully what he was talking about i just knew that i often wondered why grown-ups hurried off to work it did not seem like much fun and they never looked that happy but something kept them going realizing we had absorbed as much as possible of what he was talking about rich dad said i want you boys to avoid that trap that is really what

i want to teach you not just to be rich because being rich does not solve the problem it doesn't i asked surprised no it doesn't let me explain the other emotion desire some call it greed but i prefer desire it's perfectly normal to desire something better prettier more fun or exciting so people also work for money because of desire They desire money for the joy they think it can buy but the joy that money brings is often short-lived and they soon need more money for more joy more pleasure more comfort and more security so they

keep working thinking money will soothe their souls that are troubled by fear and desire but money can't do that even rich people do this mike asked rich people included said rich dad in fact the reason many rich people are rich isn't because of desire but because of fear they believe that money can eliminate the fear of being poor so they amass tons of it only to find the fear gets worse now they fear losing the money i have friends who keep working even though they have plenty i know people who have millions who are more

afraid now than when they were poor they're terrified of losing it all the fears that drove them to get rich got worse that weak and needy part of their soul is actually screaming louder they don't want to lose the big houses the cars and the high life money has bought them they worry about what their friends would say if they lost all their money Many are emotionally desperate and neurotic although they look rich and have more money so is a poor man happier i asked no i don't think so replied rich dad the avoidance of

money is just as psychotic as being attached to money as if on cue the town derelict went past our table stopping by the large rubbish can and rummaging around in it the three of us watched him with great interest when before we probably would have just ignored him rich dad pulled a dollar out of his wallet and gestured to the older man seeing the money the derelict came over immediately took the bill thanked rich dad profusely and hurried off ecstatic with his good fortune he's not much different from most of my employees said rich dad

i've met so many people who say oh i'm not interested in money yet they'll work at a job for eight hours a day that's a denial of truth if they weren't interested in money then why are they working that kind of thinking is probably more psychotic than a person who hoards money as i sat there listening to my rich dad my mind flashed back to the countless times my own dad said i'm not interested in money He said those words often he also covered himself by always saying i work because i love my job so

what do we do i asked not work for money until all traces of fear and greed are gone no that would be a waste of time said rich dad emotions are what make us human the word emotion stands for energy in motion be truthful about your emotions and use your mind and emotions in your favor not against yourself whoa said mike don't worry about what i just said it will make more sense in years to come just be an observer not a reactor to your emotions most people do not know that it's their emotions that

are doing the thinking your emotions are your emotions but you've got to learn to do your own thinking can you give me an example i asked sure replied rich dad when a person says i need to find a job it's most likely an emotion doing the thinking fear of not having money generates that thought but people do need money if they have bills to pay i said sure they do smiled rich dad all i'm saying is that it's fear that is all too often doing the thinking I don't understand said mike for example said rich

dad if the fear of not having enough money arises instead of immediately running out to get a job they instead might ask themselves this question will a job be the best solution to this fear over the long run in my opinion the answer is no a job is really a short-term solution to a long-term problem but my dad is always saying stay in school and get good grades so you can find a safe secure job i interjected somewhat confused yes i understand he says that said rich dad smiling most people recommend that and it's a

good path for most people but people make that recommendation primarily out of fear you mean my dad says that because he's afraid yes said rich dad he's terrified that you won't earn enough money and won't fit into society don't get me wrong he loves you and wants the best for you i too believe an education and a job are important but it won't handle the fear you see that same fear that makes him get up in the morning to earn a few bucks is the fear that is causing him to be so fanatical about your

going to school So what do you recommend i asked i want to teach you to master the power of money instead of being afraid of it they don't teach that in school and if you don't learn it you become a slave to money it was finally making sense he wanted us to widen our views and to see what the mrs martins of this world couldn't see he used examples that sounded cruel at the time but i've never forgotten them my vision widened that day and i began to see the trap that lay ahead for most

people you see we're all employees ultimately we just work at different levels said rich dad i just want you boys to have a chance to avoid the trap caused by those two emotions fear and desire use them in your favor not against you that's what i want to teach you i'm not interested in just teaching you to make a pile of money that won't handle the fear or desire if you don't first handle fear and desire and you get rich you'll only be a highly paid slave so how do we avoid the trap i asked

the main cause of poverty or financial struggle is fear and ignorance not the economy or the government or the rich it's self-inflicted fear and ignorance that Keep people trapped so you boys go to school and get your college degrees and i'll teach you how to stay out of the trap the pieces of the puzzle were appearing my highly educated dad had a great education and a great career but school never told him how to handle money or his fear of it it became clear that i could learn different and important things from two fathers so

you've been talking about the fear of not having money how does the desire for money affect our thinking mike asked how did you feel when i tempted you with a pay raise did you notice your desires rising we nodded our heads by not giving in to your emotions you were able to delay your reactions and think that is important we will always have emotions of fear and greed from here on in it's imperative for you to use those emotions to your advantage and for the long term to not let your emotions control your thinking most

people use fear and greed against themselves that's the start of ignorance most people live their lives chasing paychecks pay raises and job security because of the emotions of desire and fear not really questioning where those emotion driven thoughts are leading them it's just Like the picture of a donkey dragging a cart with its owner dangling a carrot just in front of its nose the donkey's owner may be going where he wants to but the donkey is chasing an illusion tomorrow there will only be another carrot for the donkey you mean the moment i pictured a

new baseball glove candy and toys that's like a carrot to a donkey mike asked yes and as you get older your toys get more expensive a new car a boat and a big house to impress your friends said rich dad with a smile fear pushes you out the door and desire calls to you that's the trap so what's the answer mike asked what intensifies fear and desire is ignorance that is why rich people with lots of money often have more fear the richer they get money is the carrot the illusion if the donkey could see

the whole picture it might rethink its choice to chase the carrot rich dad went on to explain that a human's life is a struggle between ignorance and illumination he explained that once a person stops searching for information and self-knowledge ignorance sets in that struggle is a moment-to-moment decision to learn to open or close One's mind look school is very important you go to school to learn a skill or profession to become a contributing member of society every culture needs teachers doctors mechanics artists cooks business people police officers firefighters and soldiers schools train them so society

can thrive and flourish said rich dad unfortunately for many people school is the end not the beginning there was a long silence rich dad was smiling i didn't comprehend everything he said that day but as with most great teachers his words continued to teach for years i've been a little cruel today said rich dad but i want you to always remember this talk i want you to always think of mrs martin and i want you always to remember that donkey never forget that fear and desire can lead you into life's biggest trap if you're not

aware of them controlling your thinking to spend your life living in fear never exploring your dreams is cruel to work hard for money thinking that it will buy you things that will make you happy is also cruel to wake up in the middle of the night terrified about paying bills is a horrible Way to live to live a life dictated by the size of a paycheck is not really living a life thinking that a job makes you secure is lying to yourself that's cruel and that's the trap i want you to avoid i've seen how

money runs people's lives don't let that happen to you please don't let money run your life a softball rolled under our table rich dad picked it up and threw it back so what does ignorance have to do with greed and fear i asked because it is ignorance about money that causes so much greed and fear said rich dad let me give you some examples a doctor wanting more money to better provide for his family raises his fees by raising his fees it makes health care more expensive for everyone it hurts the poor people the most

so they have worse health than those with money because the doctors raise their fees the attorneys raise their fees because the attorney's fees have gone up school teachers want a raise which raises our taxes and on and on and on soon there will be such a horrifying gap between the rich and the poor that chaos will break out and another great civilization will collapse history proves The great civilizations collapse when the gap between the haves and have-nots is too great sadly america is on that same course because we haven't learned from history we only memorize

historical dates and names not the lesson aren't prices supposed to go up i asked in an educated society with a well-run government prices should actually come down of course that is often only true in theory prices go up because of greed and fear caused by ignorance if schools taught people about money there would be more money and lower prices but schools focus only on teaching people to work for money not how to harness money's power but don't we have business schools mike asked and haven't you encouraged me to go for my mba yes said rich

dad but all too often business schools train employees to become sophisticated bean counters heaven forbid a bean counter takes over a business all they do is look at the numbers fire people and kill the business i know this because i hire bean counters all they think about is cutting costs and raising prices which cause more problems bean counting Is important i wish more people knew it but it too is not the whole picture added rich debt angrily so is there an answer asked mike yes said rich dad learn to use your emotions to think not

think with your emotions when you boys mastered your emotions by agreeing to work for free i knew there was hope when you again resisted your emotions when i tempted you with more money you were again learning to think in spite of being emotionally charged that's the first step why is that step so important i asked well that's up to you to find out if you want to learn i'll take you boys into the briar patch a place almost everyone else avoids if you go with me you'll let go of the idea of working for money

and instead learn to have money work for you and what will we get if we go with you what if we agree to learn from you what will we get i asked the same thing brayer rabbit got said rich dad referring to the classic children's story is there a briar patch i asked yes said rich dad the briar patch is our fear and greed confronting fear weaknesses and neediness by choosing our own thoughts is the way out Choosing our thoughts mike asked puzzled yes choosing what we think rather than reacting to our emotions instead of

just getting up and going to work because not having the money to pay your bills is scaring you ask yourself is working harder at this the best solution to this problem most people are too afraid to rationally think things through and instead run out the door to a job they hate the tar baby is in control that's what i mean by choosing your thoughts and how do we do that mike asked that's what i will teach you i'll teach you to have a choice of thoughts rather than a knee-jerk reaction like gulping down your morning

coffee and running out the door remember what i said before a job is only a short-term solution to a long-term problem most people have only one problem in mind and it's short-term it's the bills at the end of the month the tar baby money controls their lives or should i say the fear and ignorance about money controls it so they do as their parents did they get up every day and go work for money not taking the time to ask the question is there another way their emotions now control their thinking Not their heads can

you tell the difference between emotions thinking and the head thinking mike asked oh yes i hear it all the time said rich dad i hear things like well everyone has to work or the rich are crooks or i'll get another job i deserve this raise you can't push me around or i like this job because it's secure no one asks is there something i'm missing here which would break through the emotional thought and give you time to think clearly as we headed back to the store rich dad explained that the rich really did make money

they did not work for it he went on to explain that when mike and i were casting five cent pieces out of lead thinking we were making money we were very close to thinking the way the rich think the problem was that creating money is legal for the government and banks to do but illegal for us to do there are legal ways to create money from nothing he told us rich dad went on to explain that the rich know that money is an illusion truly like the carrot for the donkey it's only out of fear

and greed that the illusion of money Is held together by billions of people who believe that money is real it's not money is really made up it is only because of the illusion of confidence and the ignorance of the masses that this house of cards stands he talked about the gold standard that america was on and that each dollar bill was actually a silver certificate what concerned him was the rumor that we would someday go off the gold standard and our dollars would no longer be backed by something tangible if that happens boys all hell

will break loose the poor the middle class and the ignorant will have their lives ruined simply because they will continue to believe that money is real and that the company they work for or the government will look after them we really did not understand what he was saying that day but over the years it made more and more sense seeing what others miss as he climbed into his pickup truck outside his convenience store rich dad said keep working boys but the sooner you forget about needing a paycheck the easier your adult life will be keep

using your brain work for free and soon your mind will show you ways of Making money far beyond what i could ever pay you you will see things that other people never see most people never see these opportunities because they're looking for money and security so that's all they get the moment you see one opportunity you'll see them for the rest of your life the moment you do that i'll teach you something else learn this and you'll avoid one of life's biggest traps mike and i picked up our things from the store and waved goodbye

to mrs martin we went back to the park to the same picnic bench and spent several more hours thinking and talking we spent the next week at school thinking and talking too for two more weeks we kept thinking talking and working for free at the end of the second saturday i was again saying goodbye to mrs martin and looking at the comic book stand with a longing gaze the hard thing about not even getting 30 cents every saturday was that i didn't have any money to buy comic books suddenly as mrs martin said goodbye to

mike and me i saw her do something i'd never seen her do before mrs martin was cutting the front page of the comic book in half she kept the top Half of the comic book cover and threw the rest of the book into a large cardboard box when i asked her what she did with the comic books she said i throw them away i give the top half of the cover back to the comic book distributor for credit when he brings in the new comics he's coming in an hour mike and i waited for an

hour soon the distributor arrived and i asked him if we could have the comic books to my delight he said you can have them if you work for this store and do not resell them remember our old business partnership well mike and i revived it using a spare room in mike's basement we began piling hundreds of comic books in that room soon our comic book library was open to the public we hired mike's younger sister who loved to study to be head librarian she charged each child 10 cents admission to the library which was open

from 2 30 pm to 4 30 pm every day after school the customers the children of the neighborhood could read as many comics as they wanted in two hours it was a bargain for them since a comic cost ten cents each and they could read five or six in two hours Mike's sister would check the kids as they left to make sure they weren't borrowing any comic books she also kept the books logging in how many kids showed up each day who they were and any comments they might have mike and i averaged nine dollars

and fifty cents per week over a three month period we paid his sister one dollar a week and allowed her to read the comics for free which she rarely did since she was always studying mike and i kept our agreement by working in the store every saturday and collecting all the comic books from the different stores we kept our agreement to the distributor by not selling any comic books we burned them once they got too tattered we tried opening a branch office but we could never quite find someone as trustworthy and dedicated as mike's sister

at an early age we found out how hard it was to find good staff three months after the library first opened a fight broke out in the room some bullies from another neighborhood pushed their way in and mike's dad suggested we shut down the business so our comic book business shut down and we stopped working on saturdays at the convenience store But rich dad was excited because he had new things he wanted to teach us he was happy because we had learned our first lesson so well we learned to make money work for us by

not getting paid for our work at the store we were forced to use our imaginations to identify an opportunity to make money by starting our own business the comic book library we were in control of our own finances not dependent on an employer the best part was that our business generated money for us even when we weren't physically there our money worked for us instead of paying us money rich dad had given us so much more chapter two lesson two why teach financial literacy it's not how much money you make it's how much money you

keep in 1990 mike took over his father's empire and is in fact doing a better job than his dad did we see each other once or twice a year on the golf course he and his wife are wealthier than you can imagine rich dad's empire is in great hands and mike is now grooming his son to take his place As his dad had groomed us in 1994 i retired at the age of 47 and my wife kim was 37. retirement does not mean not working for us it means that barring unforeseen cataclysmic changes we can

work or not work and our wealth grows automatically staying ahead of inflation our assets are large enough to grow by themselves it's like planting a tree you water it for years and then one day it doesn't need you anymore its roots are implanted deep enough then the tree provides shade for your enjoyment mike chose to run the empire and i chose to retire whenever i speak to groups of people they often ask what i would recommend that they do how do i get started is there a book you would recommend what should i do to

prepare my children what is your secret to success how do i make millions whenever i hear one of these questions i'm reminded of the following story the richest businessman in 1923 a group of our greatest leaders and richest businessmen held a meeting at the edgewater beach hotel in chicago among them were charles schwab head of the largest Independent steel company samuel insult president of the world's largest utility howard hopson head of the largest gas company ivar kruger president of international match company one of the world's largest companies at that time leon frazier president of the

bank of international settlements richard whitney president of the new york stock exchange arthur cotton and jesse livermore two of the biggest stock speculators and albert fall a member of president harding's cabinet 25 years later nine of these titans ended their lives as follows schwab died penniless after living for five years on borrowed money insult died broke in a foreign land and kruger and cotton also died broke hopson went insane whitney and albert fall were released from prison and frazier and livermore committed suicide i doubt if anyone can say what really happened to these men if

you look at the date 1923 it was just before the 1929 market crash and the great depression which i suspect had a great impact on these men and their lives the point is this today we live in times of greater and faster change than These men did i suspect there will be many booms and busts in the coming years that will parallel the ups and downs these men faced i am concerned that too many people are too focused on money and not on their greatest wealth their education if people are prepared to be flexible keep

an open mind and learn they will grow richer and richer despite tough changes if they think money will solve problems they will have a rough ride intelligence solves problems and produces money money without financial intelligence is money soon gone most people fail to realize that in life it's not how much money you make it's how much money you keep we've all heard stories of lottery winners who are poor then suddenly rich and then poor again they win millions yet are soon back where they started or stories of professional athletes who at the age of 24

are earning millions but are sleeping under a bridge 10 years later i remember a story of a young basketball player who a year ago had millions today at just 29 he claims his friends attorney and accountant took his money and he was forced to work at a car wash for minimum wage He was fired from the car wash because he refused to take off his championship ring as he was wiping off the cars his story made national news and he is appealing his termination claiming hardship and discrimination he claims that the ring is all he

has left and if it was stripped away he'll crumble i know so many people who became instant millionaires and while i am glad some people have become richer and richer i caution them that in the long run it's not how much money you make it's how much you keep and how many generations you keep it so when people ask where do i get started or tell me how to get rich quick they often are greatly disappointed with my answer i simply say to them what my rich dad said to me when i was a little

kid if you want to be rich you need to be financially literate that idea was drummed into my head every time we were together as i said my educated dad stressed the importance of reading books while my rich dad stressed the need to master financial literacy if you are going to build the empire state building the first thing you need to do is dig a deep hole and pour a strong foundation if You are going to build a home in the suburbs all you need to do is pour a six inch slab of concrete most

people in their drive to get rich are trying to build an empire state building on a six-inch slab our school system created in the agrarian age still believes in homes with no foundation dirt floors are still the rage so kids graduate from school with virtually no financial foundation one day sleepless and deep in debt in suburbia living the american dream they decide that the answer to their financial problems is to find a way to get rich quick construction on the skyscraper begins it goes up quickly and soon instead of the empire state building we have

the leaning tower of suburbia the sleepless nights return as for mike and me in our adult years both of our choices were possible because we were taught to pour a strong financial foundation when we were just kids accounting is possibly the most confusing boring subject in the world but if you want to be rich long-term it could be the most important subject for rich dad the question was how to take a boring and confusing subject and teach it to kids the Answer he found was to make it simple by teaching it in pictures my rich

dad poured a strong financial foundation for mike and me since we were just kids he created a simple way to teach us for years he only drew pictures and used few words mike and i understood the simple drawings the jargon the movement of money and then in later years rich dad began adding numbers today mike has gone on to master much more complex and sophisticated accounting analysis because he had to in order to run his empire i am not as sophisticated because my empire is smaller yet we come from the same simple foundation over the

following pages we will discuss those same simple line drawings mike's dad created for us though basic those drawings helped guide two little boys in building great sums of wealth on a solid and deep foundation rule number one you must know the difference between an asset and a liability and buy assets if you want to be rich this is all you need to know it is rule number one it is the only rule this may sound absurdly simple but most people have no idea how profound this rule is Most people struggle financially because they do not

know the difference between an asset and a liability rich people acquire assets the poor and middle class acquire liabilities that they think are assets said rich dad when rich dad explained this to mike and me we thought he was kidding here we were nearly teenagers and waiting for the secret to getting rich and this was his answer it was so simple that we stopped for a long time to think about it what is an asset asked mike don't worry right now said rich dad just let the idea sink in if you can comprehend the simplicity

your life will have a plan and be financially easy it is simple that is why the idea is missed you mean all we need to know is what an asset is acquire them and we'll be rich i asked rich dad nodded his head it's that simple if it's that simple how come everyone is not rich i asked rich dad smiled because people do not know the difference between an asset and a liability i remember asking how could adults be so misguided if it is that simple if it is that important why would everyone not want

to find out it took rich dad only a few minutes to explain What assets and liabilities were as an adult i have difficulty explaining it to other adults the simplicity of the idea escapes them because they have been educated differently they were taught by other educated professionals such as bankers accountants real estate agents financial planners and so forth the difficulty comes in asking adults to unlearn or become children again an intelligent adult often feels it is demeaning to pay attention to simplistic definitions rich dad believed in the kiss principle keep it simple stupid or keep

it super simple so he kept it simple for us and that made our financial foundation strong so what causes the confusion how could something so simple be so screwed up why would someone buy an asset that was really a liability the answer is found in basic education we focus on the word literacy and not financial literacy what defines something to be an asset or a liability are not words in fact if you really want to be confused look up the words asset and liability in the dictionary i know the definition may sound good to a

trained accountant but for the average person It makes no sense but we adults are often too proud to admit that something does not make sense to us young boys rich dad said what defines an asset are not words but numbers and if you can't read the numbers you can't tell an asset from a hole in the ground in accounting rich dad would say it's not the numbers but what the numbers are telling you it's just like words it's not the words but the story the words are telling you if you want to be rich you've

got to read and understand numbers if i heard that once i heard it a thousand times from my rich dad and i also heard the rich acquire assets and the poor and middle class acquire liabilities here is how to tell the difference between an asset and a liability most accountants and financial professionals do not agree with the definitions but these simple drawings were the start of strong financial foundations for two young boys an asset is something that puts money in my pocket a liability is something that takes money out of my pocket this is really

all you need to know if you want to be rich simply spend your life buying assets if you want to be poor or Middle class spend your life buying liabilities illiteracy both in words and numbers is the foundation of financial struggle if people are having difficulties financially there is something that they don't understand either in words or numbers the rich are rich because they are more literate in different areas than people who struggle financially so if you want to be rich and maintain your wealth it's important to be financially literate in words as well as

numbers numbers alone mean little just as words out of context mean little it's the story that counts in financial reporting reading numbers is looking for the plot the story of where the cash is flowing in eighty percent of most families the financial story paints a picture of hard work to get ahead however this effort is for not because they spend their lives buying liabilities instead of assets everyone has living expenses the need for food shelter and clothing it is the cash flow that tells the story of how a person handles their money the reason i

started with the story of the richest men in america is to illustrate the flaw in believing that money will solve all problems That is why i cringe whenever i hear people ask me how to get rich quicker or where they should start i often hear i'm in debt so i need to make more money but more money will often not solve the problem in fact it may compound the problem money often makes obvious our tragic human flaws putting a spotlight on what we don't know that is why all too often a person who comes into

a sudden windfall of cash let's say an inheritance a pay raise or lottery winnings soon returns to the same financial mess if not worse than the mess they were in before money only accentuates the cash flow pattern running in your head if your pattern is to spend everything you get most likely an increase in cash will just result in an increase in spending thus the saying a fool and his money is one big party i have said many times that we go to school to gain scholastic and professional skills both of which are important we

learn to make money with our professional skills in the 1960s when i was in high school if someone did well academically people assumed this bright student would go on to Be a medical doctor because it was the profession with the promise of the greatest financial reward today doctors face financial challenges i wouldn't wish on my worst enemy insurance companies taking control of the business managed health care government intervention and malpractice suits today kids want to be famous athletes movie stars rock stars beauty queens or ceos because that is where the fame money and prestige are

that is the reason it is so hard to motivate kids in school today they know that professional success is no longer solely linked to academic success as it once was because students leave school without financial skills millions of educated people pursue their profession successfully but later find themselves struggling financially they work harder but don't get ahead what is missing from their education is not how to make money but how to manage money it's called financial aptitude what you do with the money once you make it how to keep people from taking it from you how

to keep it longer and how to make that money work hard for you most people don't understand why They struggle financially because they don't understand cash flow a person can be highly educated professionally successful and financially illiterate these people often work harder than they need to because they learned how to work hard but not how to have their money work hard for them the story of how the quest for a financial dream turns into a financial nightmare the classic story of hard-working people has set a pattern recently married the happy highly educated young couple moves

into one of their cramped rented apartments immediately they realize that they are saving money because two can live as cheaply as one the problem is the apartment is cramped they decide to save money to buy their dream home so they can have kids they now have two incomes and they begin to focus on their careers their incomes begin to increase as their incomes go up their expenses go up as well the number one expense for most people is taxes many people think it's income tax but for most americans their highest tax is social security as

an employee it appears as if the social security tax combined with the medicare tax rate Is roughly 7.5 percent but it's really 15 since the employer must match the social security amount in essence it is money the employer can't pay you on top of that you still have to pay income tax on the amount deducted from your wages for social security tax income you never received because it went directly to social security through withholding going back to the young couple as a result of their incomes increasing they decide to buy the house of their dreams

once in their house they have a new tax called property tax then they buy a new car new furniture and new appliances to match their new house all of a sudden they wake up and their liabilities column is full of mortgage and credit card debt their liabilities go up they're now trapped in the rat race pretty soon a baby comes along and they work harder the process repeats itself higher incomes cause higher taxes also called bracket creep a credit card comes in the mail they use it it maxes out a loan company calls and says

their greatest asset their home has appreciated in value because their credit is so good the company offers a bill consolidation loan and tells them the intelligent thing to do Is clear off the high interest consumer debt by paying off their credit card and besides interest on their home is a tax deduction they go for it and pay off those high interest credit cards they breathe a sigh of relief their credit cards are paid off they've now folded their consumer debt into their home mortgage their payments go down because they extend their debt over 30 years

it is the smart thing to do their neighbor calls to invite them to go shopping the memorial day sale is on they promise themselves they'll just window shop but they take a credit card just in case i run into this young couple all the time their names change but their financial dilemma is the same they come to one of my talks to hear what i have to say they ask me can you tell us how to make more money they don't understand that their trouble is really how they choose to spend the money they do

have it is caused by financial illiteracy and not understanding the difference between an asset and a liability more money seldom solves someone's money problems intelligence solves problems there is a saying a friend of mine says Over and over to people in debt if you find you have dug yourself into a hole stop digging as a child my dad often told us that the japanese were aware of three powers the power of the sword the jewel and the mirror the sword symbolizes the power of weapons america has spent trillions of dollars on weapons and because of

this is a powerful military presence in the world the jewel symbolizes the power of money there is some degree of truth to the saying remember the golden rule he who has the gold makes the rules the mirror symbolizes the power of self-knowledge this self-knowledge according to japanese legend was the most treasured of the three all too often the poor and middle class allow the power of money to control them by simply getting up and working harder failing to ask themselves if what they do makes sense they shoot themselves in the foot as they leave for

work every morning by not fully understanding money the vast majority of people allow its awesome power to control them if they used the power of the mirror they would have asked themselves does this make sense all too often instead of trusting their inner wisdom That genius inside most people follow the crowd they do things because everybody else does them they conform rather than question often they mindlessly repeat what they have been told diversify your home is an asset your home is your biggest investment you get a tax break for going into greater debt get a

safe job don't make mistakes don't take risks it is said that the fear of public speaking is a fear greater than death for most people according to psychiatrists the fear of public speaking is caused by the fear of ostracism the fear of standing out the fear of criticism the fear of ridicule and the fear of being an outcast the fear of being different prevents most people from seeking new ways to solve their problems that is why my educated dad said the japanese valued the power of the mirror the most for it is only when we

look into it that we find truth fear is the main reason that people say play it safe that goes for anything be it sports relationships careers or money it is that same fear the fear of ostracism that causes people to conform to and not question Commonly accepted opinions or popular trends your home is an asset get a bill consolidation loan and get out of debt work harder it's a promotion someday i'll be a vice president save money when i get a raise i'll buy us a bigger house mutual funds are safe many financial problems are

caused by trying to keep up with the joneses occasionally we all need to look in the mirror and be true to our inner wisdom rather than our fears by the time mike and i were 16 years old we began to have problems in school we were not bad kids we just began to separate from the crowd we worked for mike's dad after school and on weekends mike and i often spent hours after work just sitting at a table with his dad while he held meetings with his bankers attorneys accountants brokers investors managers and employees here

was a man who had left school at 13 who was now directing instructing ordering and asking questions of educated people they came at his back and call and cringed when he didn't approve of them here was a man who had not gone along with the crowd he was a man who did his own thinking and Detested the words we have to do it this way because that's the way everyone else does it he also hated the word can't if you wanted him to do something just say i don't think you can do it mike and

i learned more sitting in on his meetings than we did in all our years of school college included mike's dad was not book smart but he was financially educated and successful as a result he told us over and over again an intelligent person hires people who are more intelligent than he is so mike and i had the benefit of spending hours listening to and learning from intelligent people but because of this mike and i couldn't go along with the standard dogma our teachers preached and that caused problems whenever the teacher said if you don't get

good grades you won't do well in the real world mike and i just raised our eyebrows when we were told to follow set procedures and not deviate from the rules we could see how school discouraged creativity we started to understand why our rich dad told us that schools were designed to produce good employees instead of employers occasionally mike or i would ask our teachers how what we studied Was applicable to the real world or why we never studied money and how it worked to the latter question we often got the answer that money was not

important that if we excelled in our education the money would follow the more we knew about the power of money the more distant we grew from the teachers and our classmates my highly educated dad never pressured me about my grades but we did begin to argue about money by the time i was 16 i probably had a far better foundation with money than both my parents i could keep books i listened to tax accountants corporate attorneys bankers real estate brokers investors and so forth by contrast my dad talked to other teachers one day my dad

told me that our home was his greatest investment a not too pleasant argument took place when i showed him why i thought a house was not a good investment i showed him the ancillary expenses that went along with owning the home a bigger home meant bigger expenses and the cash flow kept going out through the Expense column today people still challenge me on the idea of a house not being an asset i know that for many people it is their dream as well as their largest investment and owning your own home is better than nothing

i simply offer an alternative way of looking at this popular dogma if my wife and i were to buy a bigger flashier house we realize it wouldn't be an asset it would be a liability since it would take money out of our pocket so here is the argument i put forth i really don't expect most people to agree with it because your home is an emotional thing and when it comes to money high emotions tend to lower financial intelligence i know from personal experience that money has a way of making every decision emotional one when

it comes to houses most people work all their lives paying for a home they never own in other words most people buy a new house every few years each time incurring a new 30-year loan to pay off the previous one two even though people receive a tax deduction for interest on mortgage payments they pay for all their other expenses with after tax dollars even after they pay off their mortgage Three my wife's parents were shocked when the property taxes on their home increased to one thousand dollars a month this was after they had retired so

the increase put a strain on their retirement budget and they felt forced to move four houses do not always go up in value i have friends who owe a million dollars for a home that today would sell for far less five the greatest losses of all are those from missed opportunities if all your money is tied up in your house you may be forced to work harder because your money continues blowing out of the expense column instead of adding to the asset column the classic middle class cash flow pattern if a young couple would put

more money into their asset column early on their later years would be easier their assets would have grown and would be available to help cover expenses all too often a house only serves as a vehicle for incurring a home equity loan to pay for mounting expenses in summary the end result in making a decision to own a house that is too expensive in lieu of starting an investment portfolio impacts an individual in at least the following three ways One loss of time during which other assets could have grown in value two loss of additional capital

which could have been invested instead of paying for high maintenance expenses related directly to the home three loss of education too often people count their house and savings and retirement plans as all they have in their asset column because they have no money to invest they simply don't invest this costs them investment experience most never become what the investment world calls a sophisticated investor and the best investments are usually first sold to sophisticated investors who then turn around and sell them to the people playing it safe i am not saying don't buy a house what

i'm saying is that you should understand the difference between an asset and a liability when i want a bigger house i first buy assets that will generate the cash flow to pay for the house my educated dad's personal financial statement best demonstrates the life of someone caught in the rat race his expenses match his income never allowing him enough left over to invest in assets as a result his liabilities are larger than his assets Why the rich get richer a review of my rich dad's financial statement shows why the rich get richer the asset column

generates more than enough income to cover expenses with the balance reinvested into the asset column the asset column continues to grow and therefore the income it produces grows with it the result is that the rich get richer why the middle class struggle the middle class finds itself in a constant state of financial struggle their primary income is through their salary as their wages increase so do their taxes their expenses tend to increase in proportion to their salary increase hence the phrase the rat race they treat their home as their primary asset instead of investing in

income producing assets this pattern of treating your home as an investment and the philosophy that a pay raise means you can buy a larger home or spend more is the foundation of today's debt-ridden society increased spending throws families into greater debt and into more financial uncertainty even though they may be advancing in their jobs and receiving raises on a regular basis This is high risk living caused by weak financial education the massive loss of jobs in recent times proves how shaky the middle class really is financially company pension plans are being replaced by 401k plans

social security is obviously in trouble and can't be relied upon as a source for retirement panic has set in for the middle class today mutual funds are popular because they supposedly represent safety average mutual fund buyers are too busy working to pay taxes and mortgages save for their children's college and pay off credit cards they do not have time to study investing so they rely on the expertise of the manager of a mutual fund also because the mutual fund includes many different types of investments they feel their money is safer because it is diversified this

educated middle class subscribes to the dogma put out by mutual fund brokers and financial planners play it safe avoid risk the real tragedy is that the lack of early financial education is what creates the risk faced by average middle class people the reason they have to play it safe Is because their financial positions are tenuous at best their balance sheets are not balanced instead they are loaded with liabilities and have no real assets to generate income typically their only source of income is their paycheck their livelihood becomes entirely dependent on their employer so when genuine

deals of a lifetime come along these people can't take advantage of them because they're working so hard are taxed to the max and are loaded with debt as i said at the start of this section the most important rule is to know the difference between an asset and a liability once you understand the difference concentrate your efforts on buying income generating assets that's the best way to get started on a path to becoming rich keep doing that and your asset column will grow keep liabilities and expenses down so more money is available to continue pouring

into the asset column soon the asset base will be so deep that you can afford to look at more speculative investments investments that may have returns of one hundred percent to infinity five thousand Dollar investments that are soon turned into one million dollars or more investments that the middle class calls too risky the investment is not risky for the financially literate as an employee who is also a homeowner your working efforts are generally as follows one you work for the company employees make their business owner or the shareholders rich not themselves your efforts and success

will help provide for the owners success and retirement two you work for the government the government takes its share from your paycheck before you even see it by working harder you simply increase the amount of taxes taken by the government most people work from january to may just for the government three you work for the bank after taxes your next largest expense is usually your mortgage and credit card debt the problem with simply working harder is that each of these three levels takes a greater share of your increased efforts you need to learn how to

have your increased efforts benefit you and your family directly once you have decided to concentrate on minding your own business Focusing your efforts on acquiring assets instead of a bigger paycheck how do you set your goals most people must keep their job and rely on their wages to fund their acquisition of assets as their assets grow how do they measure the extent of their success when does someone know that they are rich that they have wealth as well as having my own definitions for assets and liabilities i also have my own definition for wealth actually

i borrowed it from a man named r buckminster fuller some call him a quack and others call him a genius years ago he got architects buzzing because he applied for a patent for something he called a geodesic dome but in the application fuller also said something about wealth it was pretty confusing at first but after reading it it began to make some sense wealth is a person's ability to survive so many number of days forward or if i stopped working today how long could i survive unlike net worth the difference between your assets and liabilities

which is often filled with a person's expense of junk and opinions of what things are worth This definition creates the possibility for developing a truly accurate measurement i could now measure and know where i was in terms of my goal to become financially independent although net worth often includes non-cash producing assets like stuff you bought that now sits in your garage wealth measures how much money your money is making and therefore your financial survivability wealth is the measure of the cash flow from the asset column compared with the expense column let's use an example let's

say i have cash flow from my asset column of one thousand dollars a month and i have monthly expenses of two thousand dollars a month what is my wealth let's go back to buckminster fuller's definition using his definition how many days forward can i survive assuming a 30-day month i have enough cash flow for half a month when i achieve two thousand dollars a month cash flow from my assets then i will be wealthy so while i'm not yet rich i am wealthy i now have income generated from assets each month that fully cover my

monthly expenses if i want to increase my expenses i first must increase my cash flow to maintain this level Of wealth also note that it is at this point that i'm no longer dependent on my wages i have focused on and been successful in building an asset column that has made me financially independent if i quit my job today i would be able to cover my monthly expenses with the cash flow from my assets my next goal would be to have the excess cash flow from my assets reinvested into the asset column the more money

that goes into my asset column the more my asset column grows the more my assets grow the more my cash flow grows and as long as i keep my expenses less than the cash flow from these assets i grow richer with more and more income from sources other than my physical labor as this reinvestment process continues i am well on my way to becoming rich just remember this simple observation the rich buy assets the poor only have expenses the middle class by liabilities they think are assets so how do i start minding my own business

what is the answer listen to the founder of mcdonald's in the next chapter chapter 3 lesson 3 mind your own business the rich focus on their asset columns while everyone else focuses on their income statements In 1974 ray kroc the founder of mcdonald's was asked to speak to the mba class at the university of texas at austin a friend of mine was a student in that mba class after a powerful and inspiring talk the class adjourned and the students asked ray if he would join them at their favorite hangout to have a few beers ray

graciously accepted what business am i in rey asked once the group had all their beers in hand everyone laughed my friend said most of the mba students thought rey was just fooling around no one answered so rey asked again what business do you think i'm in the students laughed again and finally one brave soul yelled out ray who in the world doesn't know that you're in the hamburger business ray chuckled that's what i thought you would say he paused and then quickly added ladies and gentlemen i'm not in the hamburger business my business is real

estate as my friend tells the story ray spent a good amount of time explaining his viewpoint in his business plan ray knew that the primary business focus was to sell hamburger franchises but what he never lost sight of was the Location of each franchise he knew that the land and its location were the most significant factors in the success of each franchise basically the person who bought the franchise was also buying the real estate under the franchise for ray crock's organization today mcdonald's is the largest single owner of real estate in the world owning even

more than the catholic church mcdonald's owns some of the most valuable intersections and street corners in america and around the globe my friend considers this as one of the most important lessons in his life today he owns car washes but his business is the real estate under those car washes the previous chapter presented that most people work for everyone but themselves they work first for the owners of the company then for the government through taxes and finally for the bank that owns their mortgage when i was a young boy we did not have a mcdonald's

nearby yet my rich dad was responsible for teaching mike and me the same lesson that ray kroc talked about at the university of texas it is secret number three of the rich the secret is mind your own business Financial struggle is often directly the result of people working all their lives for someone else many people will simply have nothing at the end of their working days to show for their efforts our current educational system focuses on preparing today's youth to get good jobs by developing scholastic skills their lives will revolve around their wages or as

described earlier their income column many will study further to become engineers scientists cooks police officers artists writers and so on these professional skills allow them to enter the workforce and work for money but there is a big difference between your profession and your business often i ask people what is your business and they will say oh i'm a banker then i ask them if they own the bank and they usually respond no i work there in that instance they have confused their profession with their business their profession may be a banker but they still need

their own business a problem with school is that you often become what you study so if you study cooking you become a chef if you study the law you become an attorney And a study of auto mechanics makes you a mechanic the mistake in becoming what you study is that too many people forget to mind their own business they spend their lives minding someone else's business and making that person rich to become financially secure a person needs to mind their own business your business revolves around your asset column not your income column as stated earlier

the number one rule is to know the difference between an asset and a liability and to buy assets the rich focus on their asset columns while everyone else focuses on their income statements that is why we hear so often i need a raise if only i had a promotion i am going back to school to get more training so i can get a better job i am going to work overtime maybe i can get a second job in some circles these are sensible ideas but you are still not minding your own business these ideas all

still focus on the income column and will only help a person become more financially secure if the additional money is used to purchase income generating assets the primary reason the majority of the poor and middle class are fiscally conservative Which means i can't afford to take risks is that they have no financial foundation they have to cling to their jobs and play it safe when downsizing became the in thing to do millions of workers found out their largest so-called asset their home was eating them alive their asset was costing them money every month their car

another asset was eating them alive the golf clubs in the garage that cost one thousand dollars were not worth one thousand dollars anymore without job security they had nothing to fall back on what they thought were assets could not help them survive in a time of financial crisis i assume most of us have filled out a credit application to buy a house or a car it's always interesting to look at the net worth section because of what accepted banking and accounting practices allow a person to count as assets one day when i wanted a loan

my financial position did not look too good so i added my new golf clubs my art collection books electronics armani suits wrist watches shoes and other personal effects to Boost the number in the asset column but i was turned down because i had too much investment real estate the loan committee didn't like that i made so much money from rent they wanted to know why i did not have a normal job with a salary they did not question the armani suits golf clubs or art collection life is sometimes tough when you do not fit the

standard profile i cringe every time i hear someone say to me that their net worth is a million dollars or one hundred thousand dollars or whatever one of the main reasons net worth is not accurate is simply because the moment you begin selling your assets you are taxed for any gains so many people have put themselves in deep financial trouble when they run short of income to raise cash they sell their assets but their personal assets can generally be sold for only a fraction of the value that is listed on their personal balance sheet or

if there is a gain on the sale of the assets they are taxed on the gain so again the government takes its share thus reducing the amount available to help them out of debt that is why i say someone's net worth is often worth less Than they think start minding your own business keep your daytime job but start buying real assets not liabilities or personal effects that have no real value once you get them home a new car loses nearly 25 percent of the price you pay for it the moment you drive it off the

lot it is not a true asset even if your banker lets you list it as one my four hundred dollar new titanium driver was worth a hundred fifty dollars the moment i teed off keep expenses low reduce liabilities and diligently build a base of solid assets for young people who have not yet left home it is important for parents to teach them the difference between an asset and a liability get them to start building a solid asset column before they leave home get married buy a house have kids and get stuck in a risky financial

position clinging to a job and buying everything on credit i see so many young couples who get married and trapped themselves into a lifestyle that will not let them get out of debt for most of their working years for many people just as the last child leaves home the parents realize they Have not adequately prepared for retirement and they begin to scramble to put some money away then their own parents become ill and they find themselves with new responsibilities so what kind of assets am i suggesting that you or your children acquire in my world

real assets fall into the following categories businesses that do not require my presence i own them but they are managed or run by other people if i have to work there it's not a business it becomes my job stocks bonds income generating real estate notes ious royalties from intellectual property such as music scripts and patents anything else that has value produces income or appreciates and has a ready market as a young boy my educated dad encouraged me to find a safe job but my rich dad encouraged me to begin acquiring assets that i loved if

you don't love it you won't take care of it i collect real estate simply because i love buildings and land i love shopping for them and i could look at them all day long when problems arise the problems aren't so bad that it changes my love for real estate for people who hate real estate they shouldn't buy it i also love stocks of Small companies especially startups because i am an entrepreneur not a corporate person in my early years i worked in large organizations such as standard oil of california the us marine corps and xerox

corporation i enjoyed my time with those organizations and have fond memories but i know deep down i am not a company man i like starting companies not running them so my stock buys are usually of small companies sometimes i even start the company and take it public fortunes are made in new stock issues and i love the game many people are afraid of small cap companies and call them risky and they are but that risk is diminished if you love what the investment is understand it and know the game with small companies my investment strategy

is to be out of the stock in a year on the other hand my real estate strategy is to start small and keep trading up for bigger properties and therefore delay paying taxes on the gain this allows the value to increase dramatically i generally hold real estate less than seven years for years even while i was with the marine corps and xerox i did what my rich dad recommended I kept my day job but i still minded my own business i was active in my asset column trading real estate and small stocks rich dad always

stressed the importance of financial literacy the better i was at understanding the accounting and cash management the better i would be at analyzing investments and eventually starting and building my own company i don't encourage anyone to start a company unless they really want to knowing what i know about running a company i wouldn't wish that task on anyone there are times when people can't find employment and starting the company seems like the best solution but the odds are against success nine out of ten companies fail in five years of those that survive the first five

years nine out of every ten of those eventually fail as well so only if you really have the desire to own your own company do i recommend it otherwise keep your day job and mind your own business when i say mind your own business i mean to build and keep your asset column strong once a dollar goes into it never let it come out Think of it this way once a dollar goes into your asset column it becomes your employee the best thing about money is that it works 24 hours a day and can work

for generations keep your day job be a great hard-working employee but keep building that asset column as your cash flow grows you can indulge in some luxuries an important distinction is that rich people buy luxuries last while the poor and middle class tend to buy luxuries first the poor and the middle class often buy luxury items like big houses diamonds furs jewelry or boats because they want to look rich they look rich but in reality they just get deeper in debt on credit the old money people the long term rich build their asset column first

then the income generated from the asset column buys their luxuries the poor and middle class buy luxuries with their own sweat blood and children's inheritance a true luxury is a reward for investing in and developing a real asset for example when my wife kim and i had extra money coming from our apartment houses she went out and bought her mercedes it didn't take any extra work or risk on her part because The apartment house bought the car she did however have to wait four years while the real estate investment portfolio grew and began generating enough

extra cash flow to pay for the car but the luxury the mercedes was a true reward because she proved she knew how to grow her asset column that car now means a lot more to her than simply another pretty car it means she used her financial intelligence to afford it instead most people impulsively go out and buy a new car or some other luxury on credit they may feel bored and just want a new toy buying a luxury on credit often causes a person to eventually resent that luxury because the debt becomes a financial burden

after you've taken the time and invested in and built your own business you are now ready to learn the biggest secret of the rich the secret that puts the rich way ahead of the pack chapter 4 lesson 4 the history of taxes and the power of corporations my rich dad just played the game smart and he did it through corporations the biggest secret of the rich i remember in school being told the story of robin hood and his merry men my teacher thought It was a wonderful story of a romantic hero who robbed from the

rich and gave to the poor my rich dad did not see robin hood as a hero he called robin hood a crook robin hood may be long gone but his followers live on i often still hear people say why don't the rich pay for it or the rich should pay more in taxes and give it to the poor it is this robin hood fantasy or taking from the rich to give to the poor that has caused the most pain for the poor and the middle class the reason the middle class is so heavily taxed is

because of the robin hood ideal the reality is that the rich are not taxed it's the middle class who pays for the poor especially the educated upper income middle class again to understand fully how things happen we need to look at the history of taxes although my highly educated dad was an expert on the history of education my rich dad fashioned himself an expert on the history of taxes rich dad explained to mike and me that originally in england and america there were no taxes occasionally there were temporary taxes levied in order to pay for

wars the king or the president Would put the word out and ask everyone to chip in taxes were levied in britain for the fight against napoleon from 1799 to 1816 and in america to pay for the civil war from 1861 to 1865. in 1874 england made income tax a permanent levy on its citizens in 1913 an income tax became permanent in the united states with the adoption of the 16th amendment to the u.s constitution at one time americans were anti-tax it had been the tax on tea that led to the famous tea party in boston

harbor an incident that helped ignite the revolutionary war it took approximately 50 years in both england and the united states to sell the idea of a regular income tax what these historical dates failed to reveal is that both of these taxes were initially levied against only the rich it was this point that rich dad wanted mike and me to understand he explained that the idea of taxes was made popular and accepted by the majority by telling the poor and the middle class that taxes were created only to punish the rich this is how the masses

voted for the law and it became constitutionally legal Although it was intended to punish the rich in reality it wound up punishing the very people who voted for it the poor and middle class once government got a taste of money its appetite grew said rich dad your dad and i are exactly opposite he's a government bureaucrat and i am a capitalist we get paid and our success is measured on opposite behaviors he gets paid to spend money and hire people the more he spends and the more people he hires the larger his organization becomes in

the government a large organization is a respected organization on the other hand within my organization the fewer people i hire and the less money i spend the more i am respected by my investors that's why i don't like government people they have different objectives than most business people as the government grows more and more tax dollars are needed to support it my educated dad sincerely believed that government should help people he loved john f kennedy and especially the idea of the peace corps he loved the idea so much that both he and my mom worked

for the peace corps training volunteers to go to malaysia Thailand and the philippines he always strived for additional grants and budget increases so he could hire more people both in his job with the education department and in the peace corps from the time i was about 10 years old i would hear from my rich dad that government workers were a pack of lazy thieves and for my poor dad i would hear how the rich were greedy crooks who should be made to pay more taxes both sides had valid points it was difficult to go to

work for one of the biggest capitalists in town and come home to a father who was a prominent government leader it was not easy to know which dad to believe yet when you study the history of taxes an interesting perspective emerges as i said the passage of taxes was only possible because the masses believed in the robin hood theory of economics take from the rich and give to everyone else the problem was that the government's appetite for money was so great that taxes soon needed to be levied on the middle class and from there it

kept trickling down however the rich saw an opportunity because they don't play by the same set of rules The rich knew about corporations which became popular in the days of sailing ships the rich created the corporation as a vehicle to limit their risk to the assets of each voyage the rich put their money into a corporation to finance the voyage the corporation would then hire a crew to sail to the new world to look for treasure if the ship was lost the crew lost their lives but the loss to the rich would be limited only

to the money they invested for that particular voyage it is the knowledge of the legal corporate structure that really gives the rich a vast advantage over the poor and middle class having two fathers teaching me one a socialist and the other a capitalist i quickly began to realize that the philosophy of the capitalist made more financial sense to me it seemed to me that the socialists ultimately penalized themselves due to their lack of financial education no matter what the take from the rich crowd came up with the rich always found a way to outsmart them

that is how taxes were eventually levied on the middle class the rich outsmarted the intellectuals solely because they understood the power of money A subject not taught in schools how did the rich outsmart the intellectuals once the take from the rich tax was passed cash started flowing into government coffers initially people were happy money was handed out to government workers and the rich it went to government workers in the form of jobs and pensions and it went to the rich via their factories receiving government contracts the government received a large pool of money but the

problem was the fiscal management of that money the government ideal is to avoid having excess money if you fail to spend your allotted funds you risk losing it in the next budget you would certainly not be recognized for being efficient business people on the other hand are rewarded for having excess money and are applauded for their efficiency as this cycle of growing government spending continued the demand for money increased and the tax the rich idea was adjusted to include lower income levels down to the very people who voted it in the poor and the middle

class true capitalists used their financial knowledge to simply find and escape they headed back to the protection of a corporation But what many people who have never formed a corporation don't know is that a corporation is not really a thing a corporation is merely a file folder with some legal documents in it sitting in some attorney's office and registered with a state government agency it's not a big building or a factory or a group of people a corporation is merely a legal document that creates a legal body without a soul using it the wealth of

the rich was once again protected it was popular because the income tax rate of a corporation is less than the individual income tax rates in addition certain expenses could be paid by a corporation with pre-tax dollars this war between the haves and have-nots has raged for hundreds of years the battle is waged whenever and wherever laws are made and it will go on forever the problem is that the people who lose are the uninformed the ones who get up every day and diligently go to work and pay taxes if they only understood the way the

rich play the game they could play it too then they would be on their way to their own financial independence this is why i cringe Every time i hear a parent advise their children to go to school so they can find a safe secure job an employee with a safe secure job without financial aptitude has no escape average americans today work five to six months for the government just to cover their taxes in my opinion that is simply too long the harder you work the more you pay the government that is why i believe that

the idea of take from the rich backfired on the very people who voted it in every time people try to punish the rich the rich don't simply comply they react they have the money power and intent to change things they don't just sit there and voluntarily pay more taxes instead they search for ways to minimize their tax burden they hire smart attorneys and accountants and persuade politicians to change laws or create legal loopholes they use their resources to affect change the tax code of the united states also allows other ways to reduce taxes most of

these vehicles are available to anyone but it is the rich who find them because they are minding their own business for example 1031 is jargon for section 1031 Of the internal revenue code which allows a seller to delay paying taxes on a piece of real estate that is sold for a capital gain through an exchange for a more expensive piece of real estate real estate is one investment vehicle that has a great tax advantage as long as you keep trading up in value you will not be taxed on the gains until you liquidate people who

don't take advantage of these legal tax savings are missing a great opportunity to build their asset columns the poor and middle class don't have the same resources they sit there and let the government's needles enter their arm and allow the blood donation to begin today i am constantly shocked at the number of people who pay more taxes or take fewer deductions simply because they are afraid of the government i have friends who have had their businesses shut down and destroyed only to find out it was a mistake on the part of the government i realize

all that but the price of working from january to may is a high price to pay for that intimidation my poor dad never fought back my rich dad didn't either he just played the game smarter and he did it through corporations The biggest secret of the rich you may remember the first lesson i learned from my rich dad i was a little boy of nine who had to sit and wait for him to choose to talk to me i sat in his office waiting for him to get to me he was ignoring me on purpose

he wanted me to recognize his power and to desire to have that power for myself one day during all the years i studied and learned from him he always reminded me that knowledge is power and with money comes great power that requires the right knowledge to keep it and make it multiply without that knowledge the world pushes you around rich dad constantly reminded mike and me that the biggest bully was not the boss or the supervisor but the tax man the tax man will always take more if you let him the first lesson of having

money work for you as opposed to you working for money is all about power if you work for money you give the power to your employer if money works for you you keep the power and control it once we had this knowledge of the power of money working for us he wanted us to be financially smart and not let anyone or anything Push us around if you're ignorant it's easy to be bullied if you know what you're talking about you have a fighting chance that is why he paid so much for smart tax accountants and

attorneys it was less expensive to pay them than to pay the government his best lesson to me was be smart and you won't be pushed around as much he knew the law because he was a law-abiding citizen and because it was expensive to not know the law if you know you're right you're not afraid of fighting back even if you are taking on robin hood and his band of merry men my highly educated dad always encouraged me to land a good job with a strong corporation he spoke of the virtues of working your way up

the corporate ladder he didn't understand that by relying solely on a paycheck from a corporate employer i would be a docile cow ready for milking when i told my rich dad of my father's advice he only chuckled why not own the ladder was always said as a young boy i did not understand what rich dad meant by owning my own corporation it was an idea That seemed impossible and intimidating although i was excited by the idea my inexperience wouldn't let me envision the possibility that grown-ups would someday work for a company i would own the

point is that if not for my rich dad i would have probably followed my educated dad's advice it was merely the occasional reminder of my rich dad that kept the idea of owning my own corporation alive and kept me on a different path by the time i was 15 or 16 i knew i wasn't going to continue down the path my educated dad recommended i didn't know how i was going to do it but i was determined not to head in the direction most of my classmates were heading that decision changed my life it was

not until my mid-twenties that my rich dad's advice began to make more sense to me i was just out of the marine corps and working for xerox i was making a lot of money but every time i looked at my paycheck i was disappointed the deductions were so large and the more i worked the greater they became as i became more successful my bosses talked about promotions and raises it was flattering but i could hear my rich dad asking in my ear who are you working for who are you making Rich in 1974 while still

an employee for xerox i formed my first corporation and began minding my own business there were already a few assets in my asset column but now i was determined to focus on making it bigger those paychecks with all the deductions made all the years of my rich dad's advice make total sense i could see the future if i followed my educated dad's advice many employers feel that advising their workers to mind their own business is bad for business but for me focusing on my own business and developing assets made me a better employee because i

now had a purpose i came in early and worked diligently amassing as much money as possible so i could invest in real estate hawaii was just set to boom and there were fortunes to be made the more i realized that we were in the beginning stages of a boom the more xerox machines i sold the more i sold the more money i made and of course the more deductions came out of my paycheck it was inspiring i wanted out of the employee trap so badly that i worked even harder so i could invest more by

1978 i was consistently one of the top five sales people at the company I badly wanted out of the rat race in less than three years i was making more in my real estate holding corporation than i was making at xerox and the money i was making in my asset column in my own corporation was money working for me not me pounding on doors selling copiers my rich dad's advice made much more sense soon the cash flow for my properties were so strong that my company bought me my first porsche my fellow xerox salespeople thought

i was spending my commissions i wasn't i was investing my commissions in assets my money was working hard to make more money each dollar in my asset column was a great employee working hard to make more employees and buy the boss a new porsche with before tax dollars i began to work harder for xerox the plan was working and my porsche was the proof by using the lessons i learned from my rich dad i was able to get out of the proverbial rat race at an early age it was made possible because of the strong

financial knowledge i had acquired through rich dad's lessons without this financial knowledge which i call financial intelligence or financial iq My road to financial independence would have been much more difficult i now teach others in the hope that i may share my knowledge with them i remind people that financial iq is made up of knowledge from four broad areas of expertise one accounting accounting is financial literacy or the ability to read numbers this is a vital skill if you want to build an empire the more money you are responsible for the more accuracy is required

or the house comes tumbling down this is the left brain side or the details financial literacy is the ability to read and understand financial statements which allows you to identify the strengths and weaknesses of any business two investing investing is the science of money making money this involves strategies and formulas which use the creative right-brain side three understanding markets understanding markets is the science of supply and demand you need to know the technical aspects of the market which are emotion driven in addition to the fundamental or economic Aspects of an investment does an investment make

sense or does it not make sense based on current market conditions 4. the law a corporation wrapped around the technical skills of accounting investing and markets can contribute to explosive growth a person who understands the tax advantages and protections provided by a corporation can get rich so much faster than someone who is an employee or a small business sole proprietor it's like the difference between someone walking and someone flying the difference is profound when it comes to long-term wealth tax advantages a corporation can do many things that an employee cannot like pay expenses before paying

taxes that is a whole area of expertise that is very exciting employees earn and get taxed and then try to live on what is left a corporation earns spends everything it can and is taxed on anything that is left it's one of the biggest legal tax loopholes that the rich use they're easy to set up and are not expensive if you own investments that are producing good cash flow for example by owning your own corporation your vacations can be board meetings in hawaii Car payments insurance repairs and health club memberships are company expenses most restaurant

meals are partial expenses and on and on but it's done legally with pre-tax dollars protection from lawsuits we live in a litigious society everybody wants a piece of your action the rich hide much of their wealth using vehicles such as corporations and trusts to protect their assets from creditors when someone sues a wealthy individual they are often met with layers of legal protection and often find that the wealthy person actually owns nothing they control everything but own nothing the poor and middle class try to own everything and lose it to the government or to fellow

citizens who like to sue the rich they learned it from the robin hood story take from the rich and give it to the poor it is not the purpose of this audio book to go into the specifics of owning a corporation but i will say that if you own any kind of legitimate assets i would consider finding out more about the benefits and protection offered by a corporation as soon as possible there are many books written on the subject that will detail the benefits and even walk you through The steps necessary to set up a

corporation garrett sutton's books on corporations provide wonderful insight into the power of personal corporations financial iq is actually the synergy of many skills and talents i would say it is the combination of the four technical skills listed above that make up basic financial intelligence if you aspire to great wealth it is the combination of these skills that will greatly amplify your financial intelligence in summary business owners with corporations one earn two spend three pay taxes employees who work for corporations one earn two pay taxes three spend as part of your overall financial strategy i recommend

that you learn about the protection that legal entities can provide for businesses and assets chapter 5 lesson five the rich invent money often in the real world it's not the smart who get ahead but the bold last night i took a break from writing and watched a tv program on the history of a young man named alexander graham bell bell had just patented his telephone and was having growing pains because the demand for his new invention was so strong needing a bigger Company he then went to the giant at that time western union and asked

them if they would buy his patent and his tiny company he wanted one hundred thousand dollars for the whole package the president of western union scoffed at him and turned him down saying the price was ridiculous the rest is history a multi-billion dollar industry emerged and a t was born the evening news came on right after the story of alexander graham bell on the news was a story of another downsizing at a local company the workers were angry and complained that the company ownership was unfair a terminated manager of about 45 years of age had

his wife and two babies at the plant and was begging the guards to let him talk to the owners to ask if they would reconsider his termination he had just bought a house and was afraid of losing it the camera focused in on his pleading for all the world to see needless to say it held my attention i have been teaching professionally since 1984. it has been a great experience and a rewarding one it is also a disturbing profession for i have taught thousands of individuals And i see one thing in common in all of

us myself included we all have tremendous potential and we all are blessed with gifts yet the one thing that holds all of us back is some degree of self-doubt it is not so much the lack of technical information that holds us back but more the lack of self-confidence some are more affected than others once we leave school most of us know that it is not so much a matter of college degrees or good grades that count in the real world outside of academics something more than just grades is required i have heard it called many

things guts chutzpah balls audacity bravado cunning daring tenacity and brilliance this factor whatever it is labeled ultimately decides one's future much more than school grades do inside each of us is one of these brave brilliant and daring characters there is also the flip side of that character people who could get down on their knees and beg if necessary after a year in vietnam as a marine corps pilot i got to know both of those characters inside of me intimately one is not better than the other yet as a teacher i recognized that it was Excessive

fear and self-doubt that were the greatest detractors of personal genius it broke my heart to see students know the answers yet lack the courage to act on the answer often in the real world it's not the smart who get ahead but the bold in my personal experience your financial genius requires both technical knowledge as well as courage if fear is too strong the genius is suppressed in my classes i strongly urge students to learn to take risks to be bold and to let their genius convert that fear into power and brilliance it works for some

and just terrifies others i have come to realize that for most people when it comes to the subject of money they would rather play it safe i have had to field questions such as why take risks why should i bother developing my financial iq why should i become financially literate and i answer just to have more options there are huge changes up ahead in the coming years there will be more people just like the young inventor alexander graham bell there will be a hundred people like bill gates and hugely successful companies like microsoft created every

year all over the world And there will also be many more bankruptcies layoffs and downsizings so why bother developing your financial iq no one can answer that but you yet i can tell you why i myself do it i do it because it is the most exciting time to be alive i'd rather be welcoming change than dreading change i'd rather be excited about making millions than worrying about not getting a raise this period we are in now is a most exciting time unprecedented in our world's history generations from now people will look back at this

period of time and remark at what an exciting era it must have been it was the death of the old and birth of the new it was full of turmoil and it was exciting so why bother developing your financial iq because if you do you will prosper greatly and if you don't this period of time will be a frightening one it will be a time of watching some people move boldly forward while others cling to worn out life preservers land was wealth 300 years ago so the person who owned the land owned the wealth later

wealth was in factories and production and america rose to dominance the industrialist owned The wealth today wealth is in information and the person who has the most timely information owns the wealth the problem is that information flies around the world at the speed of light the new wealth cannot be contained by boundaries and borders as land and factories were the changes will be faster and more dramatic there will be a dramatic increase in the number of new multi-millionaires there also will be those who are left behind i find so many people struggling today often working

harder simply because they cling to old ideas they want things to be the way they were and they resist change i know people who are losing their jobs or their houses and they blame technology or the economy or their boss sadly they fail to realize that they might be the problem old ideas are their biggest liability it is a liability simply because they fail to realize that while that idea or way of doing something was an asset yesterday yesterday is gone one afternoon i was teaching how to invest using a board game i had invented

cash flow as a teaching tool a friend had brought someone along to attend the class this friend of a friend was recently divorced Had been badly burned in the divorce settlement and was now searching for some answers her friend thought the class might help the game was designed to help people learn how money works in playing the game they learn about the interaction of the income statement with the balance sheet they learn how cash flows between the two and how the road to wealth is through striving to increase your monthly cash flow from the asset

column to the point that it exceeds your monthly expenses once you accomplish this you are able to get out of the rat race and out onto the fast track as i have said some people hate the game some love it and others missed the point this woman missed a valuable opportunity to learn something in the opening round she drew a doodad card with the boat on it at first she was happy oh i've got a boat then as her friend tried to explain how the numbers worked on her income statement and balance sheet she got

frustrated because she had never liked math the rest of her table waited while her friend continued explaining the relationship between the income statement balance sheet and monthly cash flow suddenly When she realized how the numbers worked it dawned on her that her boat was eating her alive later on in the game she was also downsized and had a child it was a horrible game for her after the class her friend came by and told me that she was upset she had come to the class to learn about investing and did not like the idea that

it took so long to play a silly game her friend attempted to tell her to look within herself to see if the game reflected her in any way with that suggestion the woman demanded her money back she said that the very idea that a game could be a reflection of her was ridiculous her money was promptly refunded and she left since 1984 i have made millions simply by doing what the school system does not do in school most teachers lecture i hated lectures as a student i was soon bored and my mind would drift in

1984 i began teaching via games and simulations and i still rely on these tools today i always encourage adult students to look at games as reflecting back to them what they know and what they need to learn most importantly games reflect behavior They are instant feedback systems instead of the teacher lecturing you the game is giving you a personalized lecture one that is custom made just for you the friend of the woman who left later called to give me an update she said her friend was fine and had calmed down in her cooling off period

she could see some slight relationship between the game and her life although she and her husband did not own a boat they did own everything else imaginable she was angry after their divorce both because he had run off with a younger woman and because after 20 years of marriage they had accumulated little in the way of assets there was virtually nothing for them to split their 20 years of married life had been incredible fun but all they had accumulated was a ton of doodads she realized that her anger at doing the numbers the income statement

and balance sheet came from her embarrassment about not understanding them she believed that finances were the man's job she maintained the house and did the entertaining and he handled the finances she was now quite certain that in the last five years of their marriage he had hidden Money from her she was angry at herself for not being more aware of where the money was going as well as for not knowing about the other woman just like a board game the world is always providing us with instant feedback we could learn a lot if we tuned

in more one day not long ago i complained to my wife that the cleaners must have shrunk my pants my wife gently smiled and poked me in the stomach to inform me that the pants had not shrunk something else had expanded me the cash flow game was designed to give every player personal feedback its purpose is to give you options if you draw the boat card and it puts you into debt the question is now what can you do how many different financial options can you come up with that is the purpose of the game

to teach players to think and create new and various financial options thousands of people throughout the world have played this game the players who get out of the rat race the quickest are the people who understand numbers and have creative financial minds they recognize different financial options Rich people are often creative and take calculated risks people who take the longest are people who are not familiar with numbers and often do not understand the power of investing some people playing cash flow gain lots of money in the game but they don't know what to do with

it even though they have money everyone else seems to be getting ahead of them and that is true in real life there are a lot of people who have a lot of money and do not get ahead financially limiting your options is the same as hanging on to old ideas i have a friend from high school who now works at three jobs years ago he was the richest of all my classmates when the local sugar plantation closed the company he worked for went down with the plantation in his mind he had but one option and

that was the old option work hard the problem was that he couldn't find an equivalent job that recognized his seniority from the old company as a result he is overqualified for the jobs he currently has so his salary is lower he now works three jobs to earn enough to survive i have watched people playing cash flow complain that The right opportunity cards are not coming their way so they sit there i know people who do that in real life they wait for the right opportunity i have watched people get the right opportunity card and then

not have enough money then they complained that they would have gotten out of the rat race if they had had more money so they sit there i know people in real life who do that also they see all the great deals but they have no money and i have seen people pull a great opportunity card read it out loud and have no idea that it is a great opportunity they have the money the time is right they have the card but they can't see the opportunity staring them in the face they fail to see how

it fits into their financial plan for escaping the rat race and i know more people like that than all the others combined most people have an opportunity of a lifetime flash right in front of them and they fail to see it a year later they find out about it after everyone else got rich financial intelligence is simply having more options if the opportunities aren't coming your way what else can you do to improve your financial position If an opportunity lands in your lap and you have no money and the bank won't talk to you what

else can you do to get the opportunity to work in your favor if your hunch is wrong and what you've been counting on doesn't happen how can you turn a lemon into millions that is financial intelligence it is not so much what happens but how many different financial solutions you can think of to turn a lemon into millions it is how creative you are in solving financial problems most people only know one solution work hard save and borrow so why would you want to increase your financial intelligence because you want to be the kind of

person who creates your own luck you take whatever happens and make it better few people realize that luck is created just as money is and if you want to be luckier and create money instead of working hard then your financial intelligence is important if you are the kind of person who is waiting for the right thing to happen you might wait for a long time it's like waiting for all the traffic lights to be green for five miles before you'll start your trip as young boys mike and i were constantly told by my rich Dad

that money is not real rich dad occasionally reminded us of how close we came to the secret of money on that first day we got together and began making money out of plaster of paris the poor and middle class work for money he would say the rich make money the more real you think money is the harder you will work for it if you can grasp the idea that money is not real you will grow richer faster what is it was a question mike and i often came back with what is money if it is

not real what we agree it is was all rich dad would say the single most powerful asset we all have is our mind if it is trained well it can create enormous wealth seemingly instantaneously an untrained mind can also create extreme poverty that can crush a family for generations in the information age money is increasing exponentially a few individuals are getting ridiculously rich from nothing just ideas and agreements if you ask many people who trade stocks or other investments for a living they see it done all the time often millions can be made instantaneously from

nothing and by nothing i mean no money was exchanged it is done via agreement a hand signal in a trading pit A blip on a trader's screen in lisbon from a trader's screen in toronto and back to lisbon a call to my broker to buy and a moment later to sell money did not change hands agreements did so why develop your financial genius only you can answer that i can tell you why i have been developing this area of my intelligence i do it because i want to make money fast not because i need to

but because i want to it is a fascinating learning process i develop my financial iq because i want to participate in the fastest game and biggest game in the world and in my own small way i would like to be part of this unprecedented evolution of humanity the era where humans work purely with their minds and not with their bodies besides it is where the action is it is what is happening it's hip it's scary and it's fun that is why i invest in my financial intelligence developing the most powerful asset i have i want

to be with people moving boldly forward i do not want to be with those left behind i will give you a simple example of creating money in the early 1990s the economy of phoenix arizona was horrible i was watching a tv Show when a financial planner came on and began forecasting doom and gloom his advice was to save money put 100 away every month he said in 40 years you will be a multi-millionaire well putting money away every month is a sound idea it is one option the option most people subscribe to the problem is

this it blinds the person to what is really going on it causes them to miss major opportunities for much more significant growth of their money the world is passing them by as i said the economy was terrible at that time for investors this is the perfect market condition a chunk of my money was in the stock market and in apartment houses i was short of cash because people were giving properties away i was buying i was not saving money i was investing kim and i had more than a million dollars in cash working in a

market that was rising fast it was the best opportunity to invest the economy was terrible i just could not pass up these small deals houses that were once one hundred thousand dollars were now seventy five thousand dollars but instead of shopping with local real estate agents i began shopping at the bankruptcy Attorney's office or the courthouse steps in these shopping places a seventy five thousand dollar house could sometimes be bought for twenty thousand dollars or less for two thousand dollars which was loaned to me from a friend for ninety days for two hundred dollars i

gave an attorney a cashier's check as a down payment while the acquisition was being processed i ran an ad advertising a seventy five thousand dollar house for only sixty thousand dollars and no money down the phone rang hard and heavy prospective buyers were screened and once the property was legally mined all the prospective buyers were allowed to look at the house it was a feeding frenzy the house sold in a few minutes i asked for a two thousand five hundred dollar processing fee which they gladly handed over and the escrow and title company took over

from there i returned the two thousand dollars to my friend with an additional two hundred dollars he was happy the home buyer was happy the attorney was happy and i was happy i had sold a house for sixty thousand dollars that cost me twenty thousand dollars the forty thousand dollars Was created for money in my asset column in the form of a promissory note from the buyer total working time five hours so now that you are on your way to becoming more financially literate and skilled at reading numbers i will tell you why this is

an example of money being invented during this depressed market kim and i were able to do six of these simple transactions in our spare time while the bulk of our money was in larger properties and the stock market we were able to create more than one hundred ninety thousand dollars in assets notes at ten percent interest in those six buy create and sell transactions that comes to approximately nineteen thousand dollars a year income much of it sheltered through our private corporation much of that nineteen thousand dollars a year goes to pay for our company cars

gas trips insurance dinners with clients and other things by the time the government gets a chance to tax that income it's been spent on legally allowed pre-tax expenses this was a simple example of how money is invented created and protected using financial intelligence Ask yourself how long would it take to save 190 000 would the bank pay you 10 interest on your money and the promissory note is good for thirty years i hope they never pay me the one hundred ninety thousand dollars i have to pay a tax if they pay me the principal and

besides nineteen thousand dollars paid over thirty years is a little over five hundred thousand dollars in income i have people ask what happens if the person doesn't pay that does happen and it's good news that sixty thousand dollar home could be taken back and resold for seventy thousand dollars and another two thousand five hundred dollars collected as a loan processing fee it would still be a zero down transaction in the mind of the new buyer and the process would go on the first time i sold the house i paid back the two thousand dollars so

technically i have no money in the transaction my return on investment roi is infinity it's an example of no money making a lot of money in the second transaction when resold i would have put Two thousand dollars in my pocket and re-extended the loan to 30 years what would my roi be if i got paid money to make money i do not know but it sure beats saving one hundred dollars a month which actually starts out as 150 dollars because it's after tax income for 40 years earning low interest and again you're taxed on the

interest that is not too intelligent it may be safe but it's not smart a few years later as the phoenix real estate market strengthened those houses we sold for sixty thousand dollars became worth a hundred ten thousand dollars foreclosure opportunities were still available but became rare it cost a valuable asset my time to go out looking for them thousands of buyers were looking for the few available deals the market had changed it was time to move on and look for other opportunities to put in the asset column you cannot do that here that is against

the law you're lying i hear those comments much more often than can you show me how to do that the math is simple you do not need algebra or calculus and the escrow company handles the legal transaction and the servicing of the payments i have no roofs to fix Or toilets to unplug because the owners do that it's their house occasionally someone does not pay and that is wonderful because there are late fees or they move out and the property is sold again the court system handles that and it may not work in your area

the market conditions may be different but the example illustrates how a simple financial process can create hundreds of thousands of dollars with little money and low risk it is an example of money being only an agreement anyone with a high school education can do it yet most people won't most people listen to the standard advice of work hard and save money for about thirty hours of work approximately one hundred ninety thousand dollars was created in the asset column and no taxes were paid which one sounds harder to you one work hard pay fifty percent in

taxes save what is left your savings then earn five percent which is also taxed or two take the time to develop your financial intelligence harness the power of your brain and the asset column if you use option number one be sure to factor in how much time it takes you to save one hundred Ninety thousand 000 time is one of your greatest assets now you may understand why i silently shake my head when i hear parents say my child is doing well in school and receiving a good education it may be good but is it

adequate i know the above investment strategy is a small one it is used to illustrate how small can grow into big again my success reflects the importance of a strong financial foundation which starts with a strong financial education i have said it before but it's worth repeating financial intelligence is made up of these four main technical skills one accounting accounting is financial literacy or the ability to read numbers this is a vital skill if you want to build businesses or investments two investing investing is the science of money making money three understanding markets understanding markets

is the science of supply and demand alexander graham bell gave the market what it wanted so did bill gates a seventy five thousand dollar house offered for sixty thousand dollars that cost twenty thousand dollars was also the result of Seizing an opportunity created by the market somebody was buying and someone was selling four the law the law is the awareness of accounting corporate state and federal regulations i recommend playing by the rules it is this basic foundation or the combination of these skills that is needed to be successful in the pursuit of wealth whether it

be through the buying of small homes apartment buildings companies stocks bonds precious metals baseball cards or the like a few years later the real estate market rebounded and everyone else was getting in the stock market was booming and everyone was getting in the u.s economy was getting back on its feet i began selling and was now traveling to peru norway malaysia and the philippines the investment landscape had changed we were no longer buying real estate now i just watched the values climb inside the asset column and will probably begin selling i suspect that some of

those six little house deals will sell and the forty thousand dollar note will be converted to cash i need to call my accountant to be prepared for cash and seek ways to shelter it the point i would like to Make is that investments come and go the market goes up and comes down economies improve and crash the world is always handing you opportunities of a lifetime every day of your life but all too often we fail to see them but they are there and the more the world changes and the more technology changes the more

opportunities there will be to allow you and your family to be financially secure for generations to come so why bother developing your financial intelligence again only you can answer that i know why i continue to learn and develop i do it because i know there are changes coming i'd rather welcome change than cling to the past i know there will be market booms and market crashes i want to continually develop my financial intelligence because at each market change some people will be on their knees begging for their jobs others meanwhile will take the lemons that

life hands them and we are all handed lemons occasionally and turn them into millions that's financial intelligence i am often asked about the lemons i have turned into millions i hesitate using many more examples Of personal investments because i am afraid it comes across as bragging or tooting my own horn that is not my intention i use the examples only as numerical and chronological illustrations of actual and simple cases i use the examples because i want you to know that it is easy and the more familiar you become with the four pillars of financial intelligence

the easier it becomes personally i use two main vehicles to achieve financial growth real estate and small cap stocks i use real estate as my foundation day in and day out my properties provide cash flow and occasional spurts of growth and value the small cap stocks are used for fast growth i do not recommend anything that i do the examples are just that examples if the opportunity is too complex and i do not understand the investment i don't do it simple math and common sense are all you need to do well financially there are five

reasons for using examples one to inspire people to learn more two to let people know it is easy if the foundation is strong three to show that anyone can achieve great wealth four to show that there are millions of ways to achieve your goals Five to show that it's not rocket science in 1989 i used to jog through a lovely neighborhood in portland oregon it was the suburb that had little gingerbread houses they were small and cute i almost expected to see little red riding hood skipping down the sidewalk on her way to granny's there

were for sale signs everywhere the timber market was terrible the stock market had just crashed and the economy was depressed on one street i noticed a for sale sign that was up longer than most it looked old jogging past it one day i ran into the owner who looked troubled what are you asking for your house i asked the owner turned and smiled weekly make me an offer he said it's been for sale for over a year nobody even comes by anymore to look at it i'll look i said and i bought the house a

half hour later for twenty thousand dollars less than his asking price it was a cute little two-bedroom home with gingerbread trim on all the windows it was light blue with gray accents and had been built in 1930 inside there was a beautiful rock fireplace as well as two tiny bedrooms it was a perfect rental house i gave the owner five thousand dollars down For a forty five thousand dollar house that was really worth sixty five thousand dollars except that no one wanted to buy it the owner moved out in a week happy to be free

and my first tenant moved in a local college professor after the mortgage expenses and management fees were paid i put a little less than 40 dollars in my pocket at the end of each month hardly exciting a year later the depressed oregon real estate market had begun to pick up california investors flush with money from their still booming real estate market were moving north and buying up oregon and washington i sold that little house for ninety five thousand dollars to a young couple from california who thought it was a bargain my capital gains of approximately

forty thousand dollars were placed into a 1031 tax deferred exchange and i went shopping for a place to put my money in about a month i found a 12 unit apartment house right next to the intel plant in beaverton oregon the owners lived in germany had no idea what the place was worth and again just wanted to get out of it i offered two hundred seventy five thousand dollars for a four hundred fifty thousand dollar Building they agreed to three hundred thousand dollars i bought it and held it for two years utilizing the same 1031

exchange process we sold the building for four hundred ninety five thousand dollars and bought a 30 unit apartment building in phoenix arizona we had moved to phoenix by then to get out of the rain and needed to sell anyway like the former oregon market the real estate market in phoenix was depressed the price of the thirty unit apartment building in phoenix was eight hundred seventy five thousand dollars with two hundred twenty five thousand dollars down the cash flow from the thirty units was a little over five thousand dollars a month the arizona market began moving

up and a few years later a colorado investor offered us 1.2 million dollars for the property the point of this example is how a small amount can grow into a large amount again it is a matter of understanding financial statements investment strategies a sense of the market and the laws if people are not versed in these subjects then obviously they must follow standard dogma which is to play it safe diversify and only invest in secure investments The problem with secure investments is that they are often sanitized that is made so safe that the gains are

less most large brokerage houses will not touch speculative transactions in order to protect themselves and their clients and that is a wise policy the really hot deals are not offered to people who are novices often the best deals that make the rich even richer are reserved for those who understand the game it is technically illegal to offer speculative deals to someone who is considered not sophisticated but of course it happens the more sophisticated i get the more opportunities come my way another case for developing your financial intelligence over a lifetime is simply that more opportunities

are presented to you and the greater your financial intelligence the easier it is to tell whether a deal is good it's your intelligence that can spot a bad deal or make a bad deal good the more i learn and there is a lot to learn the more money i make simply because i gain experience and wisdom as the years go on i have friends who are playing it safe working hard at their profession and failing to gain financial wisdom which does Take time to develop my overall philosophy is to plant seeds inside my asset column

that is my formula i start small and plant seeds some grow some don't inside our real estate corporation we have property worth several million dollars it is our own right or real estate investment trust the point i'm making is that most of those millions started out as little five thousand dollar to ten thousand dollar investments all of those down payments were fortunate to catch a fast rising market and increased tax free we traded in and out several times over a number of years we also own a stock portfolio surrounded by a corporation that kim and

i call our personal mutual fund we have friends who deal specifically with investors like us who have extra money each month to invest we buy high risk speculative private companies that are just about to go public on a stock exchange in the united states or canada an example of how fast gains can be made are one hundred thousand shares purchased for twenty five cents each before the company goes public six months later the company Is listed and the one hundred thousand shares now are worth two dollars each if the company is well managed the price

keeps going up and the stock may go to twenty dollars or more per share there are years when our twenty five thousand dollars has gone to a million in less than a year it is not gambling if you know what you're doing it is gambling if you're just throwing money into a deal and praying the idea in anything is to use your technical knowledge wisdom and love of the game to cut the odds down to lower the risk of course there is always risk it is financial intelligence that improves the odds thus what is risky

for one person is less risky to someone else that is the primary reason i constantly encourage people to invest more in their financial education than in stocks real estate or other markets the smarter you are the better chance you have of beating the odds the stock plays i personally invested in were extremely high risk for most people and absolutely not recommended i have been playing that game since 1979 and have paid more than my share in dues But if you will review why investments such as these are high risk for most people you may be

able to set your life up differently so that the ability to take twenty five thousand dollars and turn it into one million dollars in a year is low risk for you as stated earlier nothing i have written is a recommendation it is only used as an example of what is simple and possible what i do is small potatoes in the grand scheme of things yet for the average individual a passive income of more than one hundred thousand dollars a year is nice and not hard to achieve depending on the market and how smart you are

it could be done in five to ten years if you keep your living expenses modest hundred thousand dollars coming in as additional income is pleasant regardless of whether you work you can work if you like or take time off if you choose and use the government tax system in your favor rather than against you my personal basis is real estate i love real estate because it's stable and slow moving i keep the base solid the cash flow is fairly steady and if properly managed has a good chance of increasing in value the beauty of a

Solid base of real estate is that it allows me to take greater risks as i do with speculative stocks if i make great profits in the stock market i pay my capital gains tax on the gain and then reinvest what's left in real estate again further securing my asset foundation a last word on real estate i have traveled all over the world and taught investing in every city i hear people say you cannot buy real estate cheap that is not my experience even in new york or tokyo or just on the outskirts of the city

prime bargains are overlooked by most people in singapore with their high real estate prices there are still bargains to be found within a short driving distance so whenever i hear someone say you can't do that here pointing at me i remind them that maybe the real statement is i don't know how to do that here yet great opportunities are not seen with your eyes they are seen with your mind most people never get wealthy simply because they are not trained financially to recognize opportunities right in front of them i am often asked how do i

start in the final chapter of this audiobook i offer 10 steps that i followed On the road to my financial freedom but always remember to have fun when you learn the rules and the vocabulary of investing and begin to build your asset column i think you'll find that it's as fun a game as you've ever played sometimes you win and sometimes you learn but have fun most people never win because they're more afraid of losing that is why i found school so silly in school we learn that mistakes are bad and we are punished for

making them yet if you look at the way humans are designed to learn we learn by making mistakes we learn to walk by falling down if we never fell down we would never walk the same is true for learning to ride a bike i still have scars on my knees but today i can ride a bike without thinking the same is true for getting rich unfortunately the main reason most people are not rich is because they are terrified of losing winners are not afraid of losing but losers are failure is part of the process of

success people who avoid failure also avoid success i look at money much like my game of tennis i play hard make mistakes correct make more mistakes correct and i get better If i lose the game i reach across the net shake my opponent's hand smile and say see you next there are two kinds of investors one the first and most common type is a person who buys a packaged investment they call a retail outlet such as a real estate company a stock broker or financial planner and they buy something it could be a mutual fund

a right a stock or bond it is a clean and simple way of investing an analogy would be a shopper who goes to a computer store and buys a computer right off the shelf two the second type is an investor who creates investments this investor usually assembles a deal in the same way a person who buys components builds a computer i do not know the first thing about putting components of a computer together but i do know how to put pieces of opportunities together or know people who know how it is this second type of

investor who is the more professional investor sometimes it may take years for all the pieces to come together and sometimes they never do it is the second type of investor that my rich dad encouraged me to be It is important to learn how to put the pieces together because that is where the huge wins reside and sometimes some huge losses if the tide goes against you if you want to be the second type of investor you need to develop three main skills these skills are in addition to those required to become financially intelligent one find

an opportunity that everyone else missed you see with your mind what others miss with their eyes for example a friend bought this run down old house it was spooky to look at everyone wondered why he bought it what he saw that we did not was that the house came with four extra empty lots he discovered that after going to the title company after buying the house he tore the house down and sold the five lots to a builder for three times what he paid for the entire package he made seventy five thousand dollars for two

months of work it's not a lot of money but it sure beats minimum wage and it's not technically difficult two raise money the average person only goes to the bank this second type of investor needs to know how to raise capital and there are many ways that don't require a bank To get started i learned how to buy houses without a bank it was the learned skill of raising money more than the houses themselves that was priceless all too often i hear people say the bank won't lend me money or i don't have the money

to buy it if you want to be a type 2 investor you need to learn how to do that which stops most people in other words a majority of people let their lack of money stop them from making a deal if you can avoid that obstacle you will be millions ahead of those who don't learn those skills there have been many times i have bought a house a stock or an apartment building without a penny in the bank i once bought an apartment house for 1.2 million dollars i did what is called tying it up

with a written contract between seller and buyer i then raised the one hundred thousand dollar deposit which bought me ninety days to raise the rest of the money why did i do it simply because i knew it was worth two million dollars i never raised the money instead the person who put up the one hundred thousand dollars Gave me fifty thousand dollars for finding the deal took over my position and i walked away total working time three days again it's what you know more than what you buy investing is not buying it's more a case

of knowing three organize smart people intelligent people are those who work with or hire a person who is more intelligent than they are when you need advice make sure you choose your advisor wisely there is a lot to learn but the rewards can be astronomical if you do not want to learn those skills then being a type 1 investor is highly recommended it is what you know that is your greatest wealth it is what you do not know that is your greatest risk there is always risk so learn to manage risk instead of avoiding it

chapter six lesson six work to learn don't work for money job security meant everything to my educated dad learning meant everything to my rich dad a few years ago i granted an interview with a newspaper in singapore the young female reporter was on time and the interview got underway immediately we sat in the lobby of a luxurious Hotel sipping coffee and discussing the purpose of my visit to singapore i was to share the platform with zig ziglar he was speaking on motivation and i was speaking on the secrets of the rich someday i would like

to be a best-selling author like you she said i had seen some of the articles she had written for the paper and i was impressed she had a tough clear style of writing her articles held a reader's interest you have a great style i said in reply what holds you back from achieving your dream my work does not seem to go anywhere she said quietly everyone says that my novels are excellent but nothing happens so i keep my job with the paper at least it pays the bills do you have any suggestions yes i do

i said brightly a friend of mine here in singapore runs a school that trains people to sell he runs sales training courses for many of the top corporations here in singapore and i think attending one of his courses would greatly enhance your career she stiffened are you saying i should go to school to learn to sell i nodded you aren't serious are you again i nodded what is wrong with that i was now backpedaling she was offended by something And now i was wishing i had not said anything in my attempt to be helpful i

found myself defending my suggestion i have a master's degree in english literature why would i go to school to learn to be a salesperson i am a professional i went to school to be trained in a profession so i would not have to be a salesperson i hate salespeople all they want is money so tell me why i should study sales she was packing her briefcase the interview was over on the coffee table set a copy of an earlier best-selling book i wrote i picked it up as well as the notes she had jotted down

on her legal pad do you see this i said pointing to her notes she looked down at her notes what she said confused again i pointed deliberately to her notes on her pad she had written robert kiyosaki best selling author it says best-selling author not best writing author i said quietly her eyes widened i am a terrible writer i said you are a great writer i went to sales school you have a master's degree put them together and you get a best-selling author and a best writing author anger flared from her eyes i'll never stoop

so low as to learn how to sell People like you have no business writing i'm a professionally trained writer and you are a salesman it is not fair she fumed she put the rest of her notes away and hurried out through the large glass doors into the humid singapore morning at least she gave me a fair and favorable write-up the next morning the world is filled with smart talented educated and gifted people we meet them every day they are all around us a few days ago my car was not running well i pulled into a

garage and the young mechanic had it fixed in just a few minutes he knew what was wrong by simply listening to the engine i was amazed i am constantly shocked at how little talented people earn i have met brilliant highly educated people who earn less than twenty thousand dollars a year a business consultant who specializes in the medical trade was telling me how many doctors dentists and chiropractors struggle financially all this time i thought that when they graduated the dollars would pour in it was this business consultant who gave me the phrase they are one

skill away from great wealth what this phrase Means is that most people need only to learn and master one more skill and their income would jump exponentially i have mentioned before that financial intelligence is a synergy of accounting investing marketing and law combined those four technical skills and making money with money is easier than most people would believe when it comes to money the only skill most people know is to work hard the classic example of a synergy of skills was that young writer for the newspaper if she diligently learned the skills of sales and

marketing her income would jump dramatically if i were her i would take some courses in advertising copywriting as well as sales then instead of working at the newspaper i would seek a job at an advertising agency even if it were cut and pay she would learn how to communicate in shortcuts that are used in successful advertising she also would spend time learning public relations an important skill she would learn how to get millions in free publicity then at night and on weekends she could be writing her great novel when it was finished she would be

better able to sell her book then in a short while she could be a best-selling author When i came out with my first book if you want to be rich and happy don't go to school a publisher suggested i changed the title to the economics of education i told the publisher that with a title like that i would sell two books one to my family and one to my best friend the problem is that they would expect it for free the obnoxious title if you want to be rich and happy don't go to school was

chosen because we knew it would get tons of publicity i am pro-education and believe in education reform if i were not pro-education why would i continue to press for changing our antiquated educational system so i chose a title that would get me on more tv and radio shows simply because i was willing to be controversial many people thought i was a fruitcake but the book sold and sold when i graduated from the u.s merchant marine academy in 1969 my educated dad was happy standard oil of california had hired me for its oil tanker fleet as

a third mate the pay was low compared with my classmates but it was okay for a first real job after college my starting pay was about forty two thousand dollars A year including overtime and i only had to work for seven months i had five months of vacation if i had wanted to i could have taken the run to vietnam with a subsidiary shipping company and easily doubled my pay instead of taking five months of vacation i had a great career ahead of me yet i resigned after six months with the company and joined the

marine corps to learn how to fly my educated dad was devastated rich dad congratulated me in school and in the workplace the popular opinion is the idea of specialization that is in order to make more money or get promoted you need to specialize that is why medical doctors immediately begin to seek a specialty such as orthopedics or pediatrics the same is true for accountants architects lawyers pilots and others my educated dad believed in the same dogma that is why he was thrilled when he eventually achieved his doctorate he often admitted that schools reward people who

study more and more about less and less rich dad encouraged me to do exactly the opposite you want to know a little about a lot was his suggestion That is why for years i worked in different areas of his companies for a while i worked in his accounting department although i would probably never have been an accountant he wanted me to learn via osmosis rich dad knew i would pick up jargon and a sense of what is important and what is not i also worked as a busboy and construction worker as well as in sales

reservations and marketing he was grooming mike and me that is why he insisted we sit in on the meetings with his bankers lawyers accountants and brokers he wanted us to know a little about every aspect of his empire when i quit my high paying job with standard oil my educated dad had a heart-to-heart talk with me he was bewildered he could not understand my decision to resign from a career that offered high pay great benefits lots of time off and opportunity for promotion when he asked me one evening why did you quit i could not

explain it to him though i tried hard to my logic did not fit his logic the big problem was that my logic was my rich dad's logic job security meant everything to my educated dad learning meant everything to my rich dad Educated dad thought i went to school to learn to be a ship's officer rich dad knew that i went to school to study international trade so as a student i made cargo runs navigating large freighters oil tankers and passenger ships to the far east and the south pacific rich dad emphasized that i should stay

in the pacific instead of taking ships to europe because he knew that the emerging nations were in asia not europe while most of my classmates including mike were partying at their fraternity houses i was studying trade people business styles and cultures in japan taiwan thailand singapore hong kong vietnam korea tahiti samoa and the philippines i was partying also but it was not in any frat house i grew up rapidly educated dad just could not understand why i decided to quit and join the marine corps i told him i wanted to learn to fly but really

i wanted to learn to lead troops rich dad explained to me that the hardest part of running a company is managing people he had spent three years in the army my educated dad was draft exempt rich dad valued learning to lead men into dangerous situations Leadership is what you need to learn next he said if you're not a good leader you'll get shot in the back just like they do in business returning from vietnam in 1973 i resigned my commission even though i loved flying i found a job with xerox corporation i joined it for

one reason and it was not for the benefits i was a shy person and the thought of selling was the most frightening subject in the world xerox has one of the best sales trainings programs in america rich dad was proud of me my educated dad was ashamed being an intellectual he thought that salespeople were below him i worked with xerox for four years until i overcame my fear of knocking on doors and being rejected once i could consistently be in the top five in sales i again resigned and moved on leaving behind another great career

with an excellent company in 1977 i formed my first company rich dad had groomed mike and me to take over companies so i now had to learn to form them and put them together my first product the nylon and velcro wallet was manufactured in the far east and shipped to a warehouse in new york near where I had gone to school my formal education was complete and it was time to test my wings if i failed i would go broke rich dad thought it best to go broke before 30. you still have time to recover

was his advice on the eve of my 30th birthday my first shipment left korea for new york today i still do business internationally and as my rich dad encouraged me to do i keep seeking the emerging nations today my investment company invests in south american countries and asian countries as well as in norway and russia there is an old cliche that goes job is an acronym for just over broke unfortunately i would say that applies to millions of people because school does not think financial intelligence is an intelligence most workers live within their means they

work and they pay bills there is another horrible management theory that goes workers work hard enough to not be fired and owners pay just enough so that workers won't quit and if you look at the pay scales of most companies again i would say there is a degree of truth to that statement the net result is that most workers never get ahead they do what they've been taught to do get A secure job most workers focus on working for pay and benefits that reward them in the short term but are often disastrous in the long

run instead i recommend to young people to seek work for what they will learn more than what they will earn look down the road at what skills they want to acquire before choosing a specific profession and before getting trapped in the rat race once people are trapped in the lifelong process of bill payne they become like those little hamsters running around in those metal wheels their little furry legs are spinning furiously the wheel is turning furiously but come tomorrow morning they'll still be in the same cage great job in the movie jerry maguire starring tom

cruise there are many great one-liners probably the most memorable is show me the money but there is one line i thought most truthful it comes from the scene where tom cruise is leaving the firm he has just been fired and he is asking the entire company who wants to come with me and the whole place is silent and frozen only one woman speaks up and says i'd like to but i'm due for a promotion in three months That statement is probably the most truthful statement in the whole movie it is the type of statement that

people use to keep themselves busy working away to pay bills i know my educated dad looked forward to his pay raise every year and every year he was disappointed so he would go back to school to earn more qualifications so he could get another raise then once again there would be another disappointment the question i often ask people is where is this daily activity taking you just like the little hamster i wonder if people look at where their hard work is taking them what does the future hold in his book the retirement myth craig s

carpel writes i visited the headquarters of a major national pension consulting firm and met with a managing director who specializes in designing lush retirement plans for top management when i asked her what people who don't have corner offices will be able to expect in the way of pension income she said with a confident smile the silver bullet what i asked is the silver bullet she shrugged and said if baby boomers discover they don't Have enough money to live on when they're older they can always blow their brains out carpel goes on to explain the difference

between the old defined benefit retirement plans and the new 401k plans that are riskier it is not a pretty picture for most people working today and that is just for retirement add medical fees and long-term nursing home care and the picture is frightening already many hospitals and countries with socialized medicine need to make tough decisions such as who will live and who will die they make those decisions purely on how much money they have and how old the patients are if the patient is old they often will give the medical care to someone younger the

older poor patient gets put to the back of the line just as the rich can afford better education the rich will be able to keep themselves alive while those who have little wealth will die so i wonder are workers looking into the future or just until their next paycheck never questioning where they are headed when i speak to adults who want to earn more money i always recommend the same thing i suggest taking a long view of their life Instead of simply working for the money and security which i admit are important i suggest they

take a second job that will teach them a second skill often i recommend joining a network marketing company also called multi-level marketing if they want to learn sales skills some of these companies have excellent training programs that help people get over their fear of failure and rejection which are the main reasons people are unsuccessful education is more valuable than money in the long run when i offer this suggestion i often hear in response oh that is too much hassle or i only want to do what i am interested in if they say it's too much

of a hassle i ask so you would rather work all your life giving 50 of what you earned to the government if they tell me i only do what i am interested in i say i'm not interested in going to the gym but i go because i want to feel better and live longer unfortunately there is some truth to the old statement you can't teach an old dog new tricks unless a person is used to changing it's hard to change but for those of you who might be on the fence when it comes to The

idea of working to learn something new i offer this word of encouragement life is much like going to the gym the most painful part is deciding to go once you get past that it's easy there have been many days i have dreaded going to the gym but once i am there and in motion it is a pleasure after the workout is over i am always glad i talked myself into going if you are unwilling to work to learn something new and instead insist on becoming highly specialized within your field make sure the company you work

for is unionized labor unions are designed to protect specialists my educated dad after falling from grace with the governor became the head of the teachers union in hawaii he told me that it was the hardest job he ever held my rich dad on the other hand spent his life doing his best to keep his companies from becoming unionized he was successful although the unions came close bridge dad was always able to fight them off personally i take no sides because i can see the need for and the benefits of both sides if you do a

school recommends become highly specialized then seek union protection for example Had i continued with my flying career i would have sought a company that had a strong pilot's union why because my life would be dedicated to learning a skill that was valuable in only one industry if i were pushed out of that industry my life's skills would not be as valuable to another industry a displaced senior pilot with one hundred thousand hours of heavy airline transport time earning one hundred fifty thousand dollars a year would have a hard time finding an equivalent high paying job

teaching in school skills do not necessarily transfer from industry to industry skills the pilots are paid for in the airline industry are not as important in say the school system the same is true even for doctors today with all the changes in medicine many medical specialists are needing to conform to medical organizations such as hmos school teachers definitely need to be union members today in america the teachers union is the largest and the richest labor union of all the nea the national education association has tremendous political clout teachers need the protection Of their union because

their skills are also of limited value to an industry outside of education so the rule of thumb is highly specialized then unionize it's the smart thing to do when i ask the classes i teach how many of you can cook a better hamburger than mcdonald's almost all the students raise their hands i then ask so if most of you can cook a better hamburger how come mcdonald's makes more money than you the answer is obvious mcdonald's is excellent at business systems the reason so many talented people are poor is because they focus on building a

better hamburger and know little to nothing about business systems a friend of mine in hawaii is a great artist he makes a sizable amount of money one day his mother's attorney called to tell him that she had left him thirty five thousand dollars that is what was left of her estate after the attorney and the government took their shares immediately he saw an opportunity to increase his business by using some of this money to advertise two months later his first four-color full-page ad appeared in an expensive magazine that Targeted the very rich the ad ran

for three months he received no replies from the ad and all of his inheritance is now gone he now wants to sue the magazine for misrepresentation this is a common case of someone who can build a beautiful hamburger but knows little about business when i asked him what he learned his only reply was advertising salespeople are crooks i then asked him if he would be willing to take a course in sales and a course in direct marketing his reply i don't have the time and i don't want to waste my money the world is filled

with talented poor people all too often they're poor or struggle financially or earn less than they are capable of not because of what they know but because of what they do not know they focus on perfecting their skills and building a better hamburger rather than the skills of selling and delivering the hamburger maybe mcdonald's does not make the best hamburger but they are the best at selling and delivering a basic average burger poor dad wanted me to specialize that was his view on how to be paid more Even after being told by the governor of

hawaii that he could no longer work in state government my educated dad continued to encourage me to get specialized educated dad then took up the cause of the teachers union campaigning for further protection and benefits for these highly skilled and educated professionals we argued often but i know he never agreed that over-specialization is what caused the need for union protection he never understood that the more specialized you become the more you are trapped and dependent on that specialty rich dad advised that mike and i groom ourselves many corporations do the same thing they find a

young bright student just out of business school and begin grooming that person to someday take over the company so these bright young employees do not specialize in one department they are moved from department to department to learn all the aspects of business systems the rich often groom their children or the children of others by doing so their children gain an overall knowledge of the operations of the business and how the various departments interrelate For the world war ii generation it was considered bad to skip from company to company today it is considered smart since people

will skip from company to company rather than seek greater specialization and skills why not seek to learn more than to earn in the short term it may earn you less but it will pay dividends in the long term the main management skills needed for success are one management of cash flow two management of systems three management of people the most important specialized skills are sales and marketing the ability to sell to communicate to another human being be it a customer employee boss spouse or child is the base skill of personal success communication skills such as

writing speaking and negotiating are crucial to a life of success these are skills i work on constantly attending courses or buying educational resources to expand my knowledge as i have mentioned my educated dad worked harder and harder the more competent he became he also became more trapped the more specialized he got although his salary went up his choices diminished soon after he was Locked out of government work he found out how vulnerable he really was professionally it is like professional athletes who suddenly are injured or too old to play their once high paying position is

gone and they have limited skills to fall back on i think that is why my educated dad sided so much with the unions after that he realized how much a union would have benefited him rich dad encouraged mike and me to know a little about a lot he encouraged us to work with people smarter than we were and to bring smart people together to work as a team today it would be called a synergy of professional specialties today i meet ex-school teachers earning hundreds of thousands of dollars a year they earn that much because they

have specialized skills in their field as well as other skills they can teach as well as sell and market i know of no other skills to be more important than selling and marketing the skills of selling and marketing are difficult for most people primarily due to their fear of rejection the better you are at communicating negotiating and handling your fear of rejection the easier life is just as i Advise that newspaper writer who wanted to become a best-selling author i advise anyone else today being technically specialized has its strengths as well as its weaknesses i

have friends who are geniuses but they cannot communicate effectively with other human beings and as a result their earnings are pitiful i advise them to just spend a year learning to sell even if they are nothing their communication skills will improve and that is priceless in addition to being good learners sellers and marketers we need to be good teachers as well as good students to be truly rich we need to be able to give as well as to receive in cases of financial or professional struggle there is often a lack of giving and receiving i

know many people who are poor because they are neither good students nor good teachers both of my dads were generous men both made it a practice to give first teaching was one of their ways of giving the more they gave the more they received one glaring difference was in the giving of money my rich dad gave lots of money away he gave to his church to charities and to his foundation he knew That to receive money you had to give money giving money is the secret to most great wealthy families that is why there are

organizations like the rockefeller foundation and the ford foundation these are organizations designed to take their wealth and increase it as well as give it away in perpetuity my educated dad always said when i have some extra money i'll give it the problem was that there was never any extra so he worked harder to draw more money in rather than focus on the most important law of money give and you shall receive instead he believed in receive and then you give in conclusion i became both dads one part of me is a hardcore capitalist who loves

the game of money making money the other part is a socially responsible teacher who is deeply concerned with this ever-widening gap between the haves and have-nots i personally hold the archaic educational system primarily responsible for this growing gap chapter 7 overcoming obstacles the primary difference between a rich person and a poor person is how they manage fear Once people have studied and become financially literate they may still face roadblocks to becoming financially independent there are five main reasons why financially literate people may still not develop abundant asset columns that could produce a large cash flow

the five reasons are one fear two cynicism three laziness four bad habits five arrogance overcoming fear i have never met anyone who really likes losing money and in all my years i have never met a rich person who has never lost money but i have met a lot of poor people who have never lost a dime investing that is the fear of losing money is real everyone has it even the rich but it's not having fear that is the problem it's how you handle fear it's how you handle losing it's how you handle failure that

makes the difference in one's life the primary difference between a rich person and a poor person is how they manage that fear it's okay to be fearful it's okay to be a coward when it comes to money you can still be rich we're all heroes at something and cowards had something else My friend's wife is an emergency room nurse when she sees blood she flies into action when i mention investing she runs away when i see blood i don't run i pass out my rich dad understood phobias about money some people are terrified of snakes

some people are terrified about losing money both are phobias he would say so his solution to the phobia of losing money was this little rhyme if you hate risk and worry start early if you start young it's easier to be rich i won't go into it here but there is a staggering difference between a person who starts investing at age 20 versus age 30. the purchase of manhattan island is said to be one of the greatest bargains of all time new york was purchased for twenty four dollars in trinkets and beads yet if that twenty

four dollars had been invested at eight percent annually that twenty four dollars would have been worth more than twenty eight trillion dollars by nineteen ninety five manhattan could be repurchased with money left over to buy much of los angeles but what if you don't have much time left or would like to retire early how do you handle the fear of losing money My poor dad did nothing he simply avoided the issue refusing to discuss the subject my rich dad on the other hand recommended that i think like a texan i like texas and texans he

used to say in texas everything is bigger when texans win they win big and when they lose it's spectacular they like losing i asked that's not what i'm saying nobody likes losing show me a happy loser and i'll show you a loser said rich dad it's a texan's attitude toward risk reward and failure i'm talking about it's how they handle life they live it big not like most of the people around here living like roaches when it comes to money terrified that someone will shine a light on them and whimpering when the grocery clerk shortchanges

them a quarter rich dad went on what i like best is the texas attitude they're proud when they win and they brag when they lose texans have a saying if you're going to go broke go big you don't want to admit you went broke over a duplex he constantly told mike and me that the greatest reason for lack of financial success was because most people played it too safe People are so afraid of losing that they lose were his words fran tarkenton a one-time great nfl quarterback says it's still another way winning means being unafraid

to lose in my own life i've noticed that winning usually follows losing before i finally learned to ride a bike i first fell down many times i've never met a golfer who has never lost a golf ball i've never met people who have fallen in love who have never had their heart broken and i've never met someone rich who has never lost money so for most people the reason they don't win financially is because the pain of losing money is far greater than the joy of being rich another saying in texas is everyone wants to

go to heaven but no one wants to die most people dream of being rich but are terrified of losing money so they never get to heaven rich dad used to tell mike and me stories about his trips to texas if you really want to learn the attitude of how to handle risk losing and failure go to san antonio and visit the alamo the alamo is a great story of brave people who chose to fight Knowing there was no hope of success they chose to die instead of surrendering it's an inspiring story worthy of study nonetheless

it's still a tragic military defeat they got their butts kicked so how did texans handle failure they still shout remember the alamo mike and i heard this story a lot he always told us this story when he was about to go into a big deal and he was nervous after he had done all his due diligence and it was time to put up or shut up he told us this story every time he was afraid of making a mistake or losing money he told us this story it gave him strength for it reminded him that

he could always turn a financial loss into a financial win rich dad knew that failure would only make him stronger and smarter it's not that he wanted to lose he just knew who he was and how he would take a loss he would take a loss and make it a win that's what made him a winner and others losers it gave him the courage to cross the line when others backed out that's why i like texans so much he would say they took a great failure and turned it into inspiration as well as a tourist

destination that makes them Millions but probably his words that mean the most to me today are these texans don't bury their failures they get inspired by them they take their failures and turn them into rallying cries failure inspires texans to become winners but that formula is not just the formula for texans it is the formula for all winners i've said that falling off my bike was part of learning to ride i remember falling off only made me more determined to learn to ride not less i also said that i have never met a golfer who

has never lost a ball for top professional golfers losing a ball or a tournament provides the inspiration to be better to practice harder to study more that's what makes them better for winners losing inspires them for losers losing defeats them i like to quote john d rockefeller who said i always tried to turn every disaster into an opportunity and being japanese-american i can say this many people say that pearl harbor was an american mistake i say it was a japanese mistake from the movie torah torah torah a somber japanese admiral says to his cheering subordinates

i am afraid we have awakened a sleeping giant Remember pearl harbor became a rallying cry it turned one of america's greatest losses into the reason to win this great defeat gave america strength and america soon emerged as a world power failure inspires winners and failure defeats losers it is the biggest secret of winners it's the secret that losers do not know the greatest secret of winners is that failure inspires winning thus they're not afraid of losing repeating fran tarkenton's quote winning means being unafraid to lose people like fran tarkenton are not afraid of losing because

they know who they are they hate losing so they know that losing will only inspire them to become better there is a big difference between hating losing and being afraid to lose most people are so afraid of losing money that they lose they go broke over a duplex financially they play life too safe and too small they buy big houses and big cars but not big investments the main reason that over ninety percent of the american public struggles financially is because they play not to lose they don't play to win they go to their financial

planners or accountants or stock brokers And buy a balanced portfolio most have lots of cash and cds low yield bonds mutual funds that can be traded within a mutual fund family and a few individual stocks it is a safe and sensible portfolio but it is not a winning portfolio it is a portfolio of someone playing not to lose don't get me wrong it's probably a better portfolio than more than 70 percent of the population has and that's frightening it's a great portfolio for someone who loves safety but playing it safe and balanced on your investment

portfolio is not the way successful investors play the game if you have little money and you want to be rich you must first be focused not balanced if you look at any successful person at the start they were not balanced balanced people go nowhere they stay in one spot to make progress you must first go unbalanced just look at how you make progress walking thomas edison was not balanced he was focused bill gates was not balanced he was focused donald trump is focused george soros is focused george patton did not take his tanks wide he

focused them and blew through the weak spots in the german line the french Went wide with the maginot line and you know what happened to them if you have any desire to be rich you must focus do not do what poor and middle class people do put their few eggs in many baskets put a lot of your eggs in a few baskets and focus follow one course until successful if you hate losing play it safe if losing makes you weak play it safe go with balanced investments if you're over 25 years old and are terrified

of taking risks don't change play it safe but start early start accumulating your nest egg early because it will take time but if you have dreams of freedom of getting out of the rat race the first question to ask yourself is how do i respond to failure if failure inspires you to win maybe you should go for it but only maybe if failure makes you weak or causes you to throw temper tantrums like spoiled brats who call attorneys to file lawsuits every time something doesn't go their way then play it safe keep your daytime job

or buy bonds or mutual funds but remember there is risk in those financial instruments also even though they may appear safe i say all this mentioning Texas and fran tarkinton because stacking the asset column is easy it's really a low aptitude game it doesn't take much education fifth grade math will do but building your asset column is a game in which attitude plays a major role it takes guts patience and a great attitude toward failure losers avoid failing and failure turns losers into winners just remember the alamo overcoming cynicism the sky is falling the sky

is falling most of us know the story of chicken little who ran around warning the barnyard of impending doom we all know people who are that way there's a chicken little inside each of us as i stated earlier the cynic is really a little chicken we all got a little chicken when fear and doubt cloud our thoughts all of us have doubts i'm not smart i'm not good enough so and so is better than me our doubts often paralyze us we play the what if game what if the economy crashes right after i invest what

if i lose control and i can't pay the money back what if things don't go as i planned or we have friends or loved ones who will remind us of our shortcomings they often say What makes you think you can do that if it's such a good idea how come someone else hasn't done it that will never work you don't know what you're talking about these words of doubt often get so loud that we fail to act a horrible feeling builds in our stomach sometimes we can't sleep we fail to move forward so we stay

with what is safe and opportunities pass us by we watch life passing by as we sit immobilized with a cold knot in our body we have all felt this at one time in our lives some more than others peter lynch of fidelity magellan mutual fund fame refers to warnings about the sky falling as noise and we all hear it noise is either created inside our heads or comes from outside often from friends family co-workers and the media lynch recalls the time during the 1950s when the threat of nuclear war was so prevalent in the news

that people began building fallout shelters and storing food and water if they had invested that money wisely in the market instead of building a fallout shelter they'd probably be financially independent today when violence breaks out in a city gun sales go up all over the country A person dies from rare hamburger meat in the state of washington and the arizona health department orders restaurants to have all beef cooked well done a drug company runs a tv commercial in february showing people catching the flu colds go up as well as sales of cold medicine most people

are poor because when it comes to investing the world is filled with chicken littles running around yelling the sky is falling the sky is falling and chicken littles are effective because every one of us is a little chicken it often takes great courage to not let rumors and talk of doom and gloom affect your doubts and fears but a savvy investor knows that the seemingly worst of times is actually the best of times to make money when everyone else is too afraid to act they pull the trigger and are rewarded some time ago a friend

named richard came from boston to visit kim and me in phoenix he was impressed with what we had done through stocks and real estate the phoenix real estate prices were depressed we spent two days showing him what we thought were excellent opportunities for cash flow And capital appreciation kim and i are not real estate agents we are strictly investors after identifying a unit in a resort community we called an agent who sold it to him that afternoon the price was a mere 42 thousand dollars for a two-bedroom townhome similar units were going for sixty five

thousand dollars he had found a bargain excited he bought it and returned to boston two weeks later the agent called to say that our friend had backed out i called immediately to find out why all he said was that he talked to his neighbor and his neighbor told him it was a bad deal he was paying too much i asked richard if his neighbor was an investor richard said he was not when i asked why he listened to him richard got defensive and simply said he wanted to keep looking the real estate market in phoenix

turned and a few years later that little unit was renting for one thousand dollars a month two thousand five hundred dollars in the peak winter months the unit was worth ninety five thousand dollars all richard had to put down was five thousand dollars and he would have had a start at getting out of the rat race today he still has done nothing Richard's backing out did not surprise me it's called buyer's remorse and it affects all of us the little chicken won and a chance at freedom was lost in another example i hold a small

portion of my assets in tax lien certificates instead of cds i earn 16 percent per year on my money which certainly beats the interest rates banks offer on cds the certificates are secured by real estate and enforced by state law which is also better than most banks the formula they're bought on makes them safe they just lack liquidity so i look at them as two to seven year cds almost every time i tell someone that i hold my money this way especially if they have money in cds they will tell me it's risky they tell

me why i should not do it when i ask them where they get their information they say from a friend or an investment magazine they've never done it and they're telling someone who's doing it why they shouldn't the lowest yield i look for is 16 but people who are filled with doubt are willing to accept a far lower return doubt is expensive my point is that it's those doubts and cynicism that keep Most people poor and playing it safe the real world is simply waiting for you to get rich only a person's doubts keep them

poor as i said getting out of the rat race is technically easy it doesn't take much education but those doubts are cripplers for most people cynics never win said rich dad unchecked doubt and fear creates a cynic cynics criticize and winners analyze was another of his favorite sayings rich dad explained that criticism blinded while analysis opened eyes analysis allowed winners to see the critics were blind and to see opportunities that everyone else missed and finding what people miss is key to any success real estate is a powerful investment tool for anyone seeking financial independence or

freedom it is a unique investment tool yet every time i mention real estate as a vehicle i often hear i don't want to fix toilets that's what peter lynch calls noise that's what my rich dad would say is the cynic talking someone who criticizes and does not analyze someone who lets their doubts and fears close their mind instead of open their eyes so when someone says i don't want to fix toilets i want to fire back What makes you think i want to they're saying a toilet is more important than what they want i talk

about freedom from the rat race and they focus on toilets that is the thought pattern that keeps most people poor they criticize instead of analyze i don't once hold the key to your success rich dad would say because i too do not want to fix toilets i shop hard for a property manager who does fix toilets and by finding a great property manager who runs houses or apartments well my cash flow goes up but more importantly a great property manager allows me to buy a lot more real estate since i don't have to fix toilets

a great property manager is key to success in real estate finding a good manager is more important to me than the real estate a great property manager often hears of great deals before real estate agents do which makes them even more valuable that is what rich dad meant by i don't once hold the key to your success because i do not want to fix toilets either i figured out how to buy more real estate and expedite my getting out of the rat race the people who continue to say i don't want to fix toilets often

deny themselves The use of this powerful investment vehicle toilets are more important than their freedom in the stock market i often hear people say i don't want to lose money well what makes them think i or anyone else likes losing money they don't make money because they choose to not lose money instead of analyzing they close their minds to another powerful investment vehicle the stock market i was riding with a friend past our neighborhood gas station he looked up and saw that the price of gas was going up and thus the price of oil my

friend is a worrywart or a chicken little to him the sky is always going to fall and it usually does on him when we got home he showed me all the stats as to why the price of oil was going to go up over the next few years statistics i had never seen before even though i already owned substantial shares of an existing oil company with that information i immediately began looking for and found a new undervalued oil company that was about to find some oil deposits my broker was excited about this new company and

i bought 15 000 shares for 65 cents per share three months later this same friend and i drove By the same gas station and sure enough the price per gallon had gone up nearly 15 percent again the chicken little worried and complained i smiled because a month earlier that little oil company hit oil and those fifteen thousand shares went up to more than three dollars per share since he had first given me the tip and the price of gas will continue to go up if what my friend says is true if most people understood how

a stop worked in stock market investing there would be more people investing to win instead of investing not to lose a stop is simply a computer command that sells your stock automatically if the price begins to drop helping to minimize your losses and maximize some gains it's a great tool for those who are terrified of losing so whenever i hear people focusing on their i don't wants rather than what they do want i know the noise in their head must be loud chicken little has taken over their brain and is yelling the sky is falling

and toilets are breaking so they avoid their don't wants but they pay a huge price they may never get what they want in life instead of analyzing their inner chicken little closes their mind Rich dad gave me a way of looking at chicken little just do what colonel sanders did at the age of 66 he lost his business and began to live on his social security check it wasn't enough he went around the country selling his recipe for fried chicken he was turned down one thousand nine times before someone said yes and he went on

to become a multi-millionaire at an age when most people are quitting he was a brave and tenacious man rich dad said of harlan sanders so when you're in doubt and feeling a little afraid just do what colonel sanders did to his little chicken he fried it overcoming laziness busy people are often the most lazy we have all heard stories of a businessman who works hard to earn money he works hard to be a good provider for his wife and children he spends long hours at the office and brings work home on weekends one day he

comes home to an empty house his wife has left with the kids he knew he and his wife had problems but rather than work to make the relationship strong he stayed busy at work dismayed his performance at work slips and he loses his job today i often meet people who are too busy to take care of their wealth And there are people too busy to take care of their health the cause is the same they're busy and they stay busy as a way of avoiding something they do not want to face nobody has to tell

them deep down they know in fact if you remind them they often respond with anger or irritation if they aren't busy at work or with the kids they're often busy watching tv fishing playing golf or shopping yet deep down they know they are avoiding something important that's the most common form of laziness laziness by staying busy so what is the cure for laziness the answer is a little greed for many of us we were raised thinking of greed or desire as bad greedy people are bad people my mom used to say yet we all have

inside of us this yearning to have nice new or exciting things so to keep that emotion of desire under control often parents find ways of suppressing that desire with guilt you only think about yourself don't you know you have brothers and sisters was one of my mom's favorites you want me to buy you what was a favorite of my dad do you think we're made of money do you think money grows on trees we're not rich people You know it wasn't so much the words but the angry guilt trip that went with the words that

got to me or the reverse guilt trip was the i'm sacrificing my life to buy this for you i'm buying this for you because i never had this advantage when i was a kid i have a neighbor who is stone broke but can't park his car in his garage the garage is filled with toys for his kids those spoiled brats get everything they ask for i don't want them to know the feeling of want are his everyday words he has nothing set aside for their college or his retirement but his kids have every toy ever

made he recently got a new credit card on the mail and took his kids to visit las vegas i'm doing it for the kids he said with great sacrifice rich dad forbade the words i can't afford it in my real home that's all i heard instead rich dad required his children to say how can i afford it he believed that the words i can't afford it shut down your brain it didn't have to think anymore how can i afford it opened up the brain and forced it to think and search for answers but most importantly

he felt the words i can't afford it were a lie and the human spirit knows it The human spirit is very very powerful he would say it knows it can do anything by having a lazy mind that says i can't afford it a war breaks out inside you your spirit is angry and your lazy mind must defend its lie the spirit is screaming come on let's go to the gym and work out and the lazy mind says but i'm tired i worked really hard today or the human spirit says i'm sick and tired of being

poor let's get out there and get rich to which the lazy mind says rich people are greedy besides it's too much bother it's not safe i might lose money i'm working hard enough as it is i've got too much to do at work anyway look at what i have to do tonight my boss wants it finished by morning i can't afford it also causes sadness a helplessness that leads to despondency and often depression how can i afford it opens up possibilities excitement and dreams so rich dad was not so concerned about what we wanted to

buy as long as we understood that how can i afford it creates a stronger mind and a dynamic spirit thus he rarely gave mike or me anything he would instead ask how can you afford it And that included college which we paid for ourselves it was not the goal but the process of attaining the goal that he wanted us to learn the problem i see today is that there are millions of people who feel guilty about their desire or their greed it's old conditioning from their childhood while they desire to have the finer things that

life offers most have been conditioned subconsciously to say i can't have that or i'll never be able to afford that when i decided to exit the rat race it was simply a question of how can i afford to never work again and my mind began to kick out answers and solutions the hardest part was fighting my real parents dogma we can't afford that stop thinking only about yourself why don't you think about others and other similar sentiments designed to instill guilt to suppress my greed so how do you beat laziness once again the answer is

a little greed it's that radio station wiifm which stands for what's in it for me a person needs to sit down and ask what would my life be like if i never had to work again what would i do if i had all the money i needed without That little greed the desire to have something better progress is not made our world progresses because we all desire a better life new inventions are made because we desire something better we go to school and study hard because we want something better so whenever you find yourself avoiding

something you know you should be doing then the only thing to ask yourself is what's in it for me be a little greedy it's the best cure for laziness too much greed however as anything in excess can be is not good but just remember what michael douglas said in the movie wall street greed is good rich dad said it differently guilt is worse than greed for guilt robs the body of its soul i think eleanor roosevelt said it best do what you feel in your heart to be right for you'll be criticized anyway you'll be

damned if you do and damned if you don't overcoming bad habits our lives are a reflection of our habits more than our education after seeing the movie conan the barbarian starring arnold schwarzenegger a friend said i'd love to have a body like schwarzenegger most of the guys nodded in agreement i even heard he was really puny and Skinny at one time another friend added yeah i heard that too another one said i heard he has a habit of working out almost every day in the gym yeah i'll bet he has to now said the group

cynic i'll bet he was born that way besides let's stop talking about arnold and get some beers this is an example of habits controlling behavior i remember asking my rich dad about the habits of the rich instead of answering me outright he wanted me to learn through example as usual when does your dad pay his bills rich dad asked the first of the month i said does he have anything left over he asked very little i said that's the main reason he struggles said rich dad he has bad habits your dad pays everyone else first

he pays himself last but only if he has anything left over which he usually doesn't i said but he has to pay his bills doesn't he you're saying he shouldn't pay his bills of course not said rich dad i firmly believe in paying my bills on time i just pay myself first before i pay even the government but what happens if you don't have enough money i asked what do you do then the same said rich dad i still pay myself first Even if i'm short of money my asset column is far more important to

me than the government but i said don't they come after you yes if you don't pay said rich dad look i did not say not to pay i just said i pay myself first even if i'm short of money but i replied how do you do that it's not how the question is why rich dad said okay why motivation said rich dad who do you think will complain louder if i don't pay them me or my creditors your creditors will definitely scream louder than you i said responding to the obvious you wouldn't say anything if

you didn't pay yourself so you see after paying myself the pressure to pay my taxes and the other creditors is so great that it forces me to seek other forms of income the pressure to pay becomes my motivation i've worked extra jobs started other companies traded in the stock market anything just to make sure those guys don't start yelling at me that pressure made me work harder forced me to think and all in all made me smarter and more active when it comes to money if i had paid myself last i would have felt no

pressure but i'd be broke so it is the fear of the Government or other people you owe money to that motivates you that's right said rich dad you see government bill collectors are big bullies so are bill collectors in general most people give in to those bullies they pay them and never pay themselves you know the story of the 98 pound weakling who gets sand kicked in his face i nodded i see that ad for weight lifting and bodybuilding lessons in the comic books all the time well most people let the bullies kick sand in

their faces i decided to use the fear of the bully to make me stronger others got weaker forcing myself to think about how to make extra money is like going to the gym and working out with weights the more i work my mental money muscles out the stronger i get now i'm not afraid of those bullies i liked what rich dad was saying so if i pay myself first i get financially stronger mentally and fiscally rich dad nodded and if i pay myself last or not at all i get weaker so people like bosses managers

tax collectors bill collectors and landlords push me around all my life just because i don't have good money habits rich dad nodded just like the 98 pound weakling Overcoming arrogance what i know makes me money what i don't know loses me money every time i have been arrogant i have lost money because when i'm arrogant i truly believe that what i don't know is not important rich dad would often tell me i have found that many people use arrogance to try to hide their own ignorance it often happens when i am discussing financial statements with

accountants or even other investors they try to bluster their way through the discussion it is clear to me that they don't know what they're talking about they're not lying but they are not telling the truth there are many people in the world of money finances and investments who have absolutely no idea what they're talking about most people in the money industry are just spouting off sales pitches like used car salesmen when you know you are ignorant in a subject start educating yourself by finding an expert in the field or a book on the subject chapter

8 getting started there is gold everywhere most people are not trained to see it i wish i could say acquiring wealth was easy for me but it wasn't so in response to the question How do i start i offer the thought process i go through on a day-to-day basis it really is easy to find great deals i promise you that it's just like riding a bike after a little wobbling it's a piece of cake but when it comes to money it takes determination to get through the wobbling that's a personal thing to find million dollar

deals of a lifetime requires us to call on our financial genius i believe that each of us has a financial genius within us the problem is that our financial genius lies asleep waiting to be called upon it lies asleep because our culture has educated us into believing that the love of money is the root of all evil it has encouraged us to learn a profession so we can work for money but failed to teach us how to have money work for us it taught us not to worry about our financial future because our company or

the government would take care of us when our working days are over however it is our children educated in the same school system who will end up paying for this absence of financial education the message is still to work hard earn money and spend it and when we run short we can always borrow more Unfortunately ninety percent of the western world subscribes to the above dogma simply because it's easier to find a job and work for money if you are not one of the masses i offer you the following 10 steps to awaken your financial

genius i simply offer you the steps i have personally followed if you want to follow some of them great if you don't make up your own your financial genius is smart enough to develop its own list while in peru i asked a gold miner of 45 years how he was so confident about finding a gold mine he replied there is gold everywhere most people are not trained to see it and i would say that is true in real estate i can go out and in a day come up with four or five great potential deals

while the average person will go out and find nothing even looking in the same neighborhood the reason is that they have not taken the time to develop their financial genius i offer you the following 10 steps as a process to develop your god-given powers powers over which only you have control one find a reason greater than reality the power of spirit if you ask most people if They would like to be rich or financially free they would say yes but then reality sets in the road seems too long with too many hills to climb it's

easier to just work for money and hand the excess over to your broker i once met a young woman who had dreams of swimming for the us olympic team the reality was that she had to get up every morning at four o'clock to swim for three hours before going to school she did not party with her friends on saturday night she had to study and keep her grades up just like everyone else when i asked her what fueled her superhuman ambition and sacrifice she simply said i do it for myself and the people i love

it's love that gets me over the hurdles and sacrifices a reason or a purpose is a combination of wants and don't wants when people ask me what my reason for wanting to be rich is i tell them that it is a combination of deep emotional wants and don't wants i will list a few first the don't wants for they create the wants i don't want to work all my life i don't want what my parents aspired for which was job security and a house in the suburbs I don't like being an employee i hated that

my dad always missed my football games because he was so busy working on his career i hated it when my dad worked hard all his life and the government took most of what he worked for at his death he could not even pass on what he worked so hard for when he died the rich don't do that they work hard and pass it on to their children now the once i want to be free to travel the world and live in the lifestyle i love i want to be young when i do this i want

to simply be free i want control over my time and my life i want money to work for me those are my deep-seated emotional reasons what are yours if they are not strong enough then the reality of the road ahead may be greater than your reasons i have lost money and been set back many times but it was the deep emotional reasons that kept me standing up and going forward i wanted to be free by age 40 but it took me until i was 47 with many learning experiences along the way as i said i

wish i could say it was easy it wasn't but it wasn't that hard either i've learned that without a strong reason or purpose anything in life is hard If you do not have a strong reason there is no sense listening further it will sound like too much work two make daily choices the power of choice choice is the main reason people want to live in a free country we want the power to choose financially with every dollar we get in our hands we hold the power to choose our future to be rich poor or middle

class our spending habits reflect who we are poor people simply have poor spending habits the benefit i had as a boy was that i loved playing monopoly constantly nobody told me monopoly was only for kids so i just kept playing the game as an adult i also had a rich dad who pointed out to me the difference between an asset and a liability so a long time ago as a little boy i chose to be rich and i knew that all i had to do was learn to acquire assets real assets my best friend mike

had an asset column handed to him but he still had to choose to learn to keep it many rich families lose their assets in the next generation Simply because there was no one trained to be a good steward over their assets most people choose not to be rich for ninety percent of the population being rich is too much of a hassle so they invent sayings that go i'm not interested in money i'll never be rich i don't have to worry i'm still young when i make some money then i'll think about my future my husband

or wife handles the finances the problem with those statements is that they rob the person who chooses to think such thoughts of two things one is time which is your most precious asset the second is learning having no money should not be an excuse to not learn but that is a choice we all make daily the choice of what we do with our time our money and what we put in our heads that is the power of choice all of us have choice i just choose to be rich and i make that choice every day

invest first in education in reality the only real asset you have is your mind the most powerful tool we have dominion over each of us has the choice of what we put in our brain once we're old enough you can watch tv read golf magazines or go to ceramics class or a class on financial planning you choose Most people simply buy investments rather than first investing in learning about investing a friend of mine recently had her apartment burglarized the thieves took her electronics and left all the books and we all have that same choice 90

percent of the population buys tv sets and only about 10 percent buy business books so what do i do i go to seminars i like it when they are at least two days long because i like to immerse myself in a subject in 1973 i was watching this guy on tv who was advertising a three-day seminar on how to buy real estate for nothing down i spent 385 dollars and that course has made me at least two million dollars if not more but more importantly it bought me life i don't have to work for the

rest of my life because of that one course i go to at least two such courses every year i love cds and audio books the reason i can easily review what i just heard i was listening to an investor say something i completely disagreed with instead of becoming arrogant and critical i simply listened to that five-minute stretch at least twenty times maybe more but suddenly by keeping my mind open i understood why he said what he said it Was like magic i felt like i had a window into the mind of one of the greatest

investors of our time i gained tremendous insight into the vast resources of his education and experience the net result i still have the old way i used to think and i now have a new way of looking at the same problem or situation i have two ways to analyze a problem or trend and that is priceless today i often say how would donald trump do this or warren buffett or george soros the only way i can access their vast mental power is to be humble enough to read or listen to what they have to say

arrogant or critical people are often people with low self-esteem who are afraid of taking risks that's because if you learn something new you are then required to make mistakes in order to fully understand what you have learned if you have listened this far arrogance is not one of your problems arrogant people rarely read or listen to experts why should they they are the center of the universe there are so many intelligent people who argue or defend when a new idea clashes with the way they think in this case their so-called intelligence combined with arrogance equals

Ignorance each of us knows people who are highly educated or believe they are smart but their balance sheet pains a different picture a truly intelligent person welcomes new ideas for new ideas can add to the synergy of other accumulated ideas listening is more important than talking if that were not true god would not have given us two ears and only one mouth too many people think with their mouth instead of listening in order to absorb new ideas and possibilities they argue instead of asking questions i take a long view on my wealth i do not

subscribe to the get rich quick mentality most lottery players or casino gamblers have i may go in and out of stocks but i am long on education if you want to fly an airplane i advise taking lessons first i am always shocked at people who buy stocks or real estate but never invest in their greatest asset their mind just because you bought a house or two does not make you an expert at real estate three choose friends carefully the power of association first of all i do not choose my friends by their financial statements i

have friends Who have actually taken a vow of poverty as well as friends who earn millions every year the point is that i learn from all of them now i will admit that there are people i have actually sought out because they had money but i was not after their money i was seeking their knowledge in some cases these people who had money have become dear friends i've noticed that my friends with money talk about money they don't do it to brag they're interested in the subject so i learn from them and they learn from

me my friends who are in dire financial straits do not like talking about money business or investing they often think it rude or unintellectual so i also learned from my friends who struggle financially i find out what not to do i have several friends who have generated over a billion dollars in their short lifetimes the three of them report the same phenomenon their friends who have no money have never come to them to ask them how they did it but they do come asking for one of two things or both a loan or a job

warning don't listen to poor or frightened people i have such friends and while i love them dearly They are the chicken littles of life to them when it comes to money especially investments it's always the sky is falling the sky is falling they can always tell you why something won't work the problem is that people listen to them but people who blindly accept doom and gloom information are also chicken littles as that old saying goes birds of a feather flock together if you watch business channels on tv they often have a panel of so-called experts

one expert will say the market is going to crash and the other will say it's going to boom if you're smart you listen to both keep your mind open because both have valid points unfortunately most poor people listen to chicken little i have had many close friends try to talk me out of a deal or an investment not long ago a friend told me he was excited because he found a six percent certificate of deposit i told him i earned sixteen percent from the state government the next day he sent me an article about why

my investment was dangerous i have received sixteen percent for years now and he still receives six percent i would say that one of the hardest things About wealth building is to be true to yourself and to be willing to not go along with the crowd this is because in the market it is usually the crowd that shows up late that is slaughtered if a great deal is on the front page it's too late in most instances look for a new deal as we used to say as surfers there is always another wave people who hurry

and catch a wave late usually are the ones who wipe out smart investors don't time the markets if they miss a wave they search for the next one and get themselves in position this is hard for most investors because buying what is not popular is frightening timid investors are like sheep going along with the crowd or their greed gets them in when wise investors have already taken their profits and moved on wise investors buy an investment when it's not popular they know their profits are made when they buy not when they sell they wait patiently

as i said they do not time the market just like a surfer they get in position for the next big swell it's all insider trading there are forms of insider trading that are illegal And there are forms of insider trading that are legal but either way it's insider trading the only distinction is how far away from the inside are you the reason you want to have rich friends is because that is where the money is made it's made on information you want to hear about the next boom get in and get out before the next

bust i'm not saying do it illegally but the sooner you know the better your chances are for profits with minimal risk that is what friends are for and that is financial intelligence four master a formula and then learn a new one the power of learning quickly in order to make bread every baker follows a recipe even if it's only held in their head the same is true for making money most of us have heard the saying you are what you eat i have a different slant i say you become what you study in other words

be careful what you learn because your mind is so powerful that you become what you put in your head for example if you study cooking you then tend to cook if you don't want to be a cook anymore then you need to study something else when It comes to money the masses generally have one basic formula they learned in school and it's this work for money the predominant formula i see in the world is that every day millions of people get up go to work earn money pay bills balance checkbooks buy some mutual funds and

go back to work that is the basic formula or recipe if you're tired of what you're doing or you're not making enough it's simply a case of changing the formula via which you make money years ago when i was 26 i took a weekend class called how to buy real estate foreclosures i learned a formula the next trick was to have the discipline to actually put into action what i had learned that is where most people stop for three years while working for xerox i spent my spare time learning to master the art of buying

foreclosures i've made several million dollars using that formula so after i mastered that formula i went in search of other formulas for many of the classes i did not directly use the information i learned but i always learned something new i have attended classes designed for derivative traders commodity option traders and chaologists i was way out of My league being in a room full of people with doctorates in nuclear physics and space science yet i learned a lot that made my stock and real estate investing more meaningful and lucrative most junior colleges and community colleges

have classes on financial planning and buying traditional investments they are good places to start but i always search for faster formula that is why on a fairly regular basis i make more in a day than many people will make in their lifetime another side note in today's fast changing world it's not so much what you know anymore that counts because often what you know is old it is how fast you learn that skill is priceless it's priceless in finding faster formulas recipes if you will for making dough working hard for money is an old formula

born in the day of cavemen five pay yourself first the power of self-discipline if you cannot get control of yourself do not try to get rich it makes no sense to invest make money and blow it it is the lack of self-discipline that causes most lottery winners to go broke soon after winning millions It is the lack of self-discipline that causes people who get a raise to immediately go out and buy a new car or take a cruise it is difficult to say which of the 10 steps is the most important but of all the

steps this step is probably the most difficult to master if it is not already a part of your makeup i would venture to say that personal self-discipline is the number one delineating factor between the rich the poor and the middle class simply put people who have low self-esteem and low tolerance for financial pressure can never be rich as i have said a lesson learned from my rich dad was that the world will push you around the world pushes people around not because other people are bullies but because the individual lacks internal control and discipline people

who lack internal fortitude often become victims of those who have self-discipline in the entrepreneur classes i teach i constantly remind people to not focus on their product service or widget but to focus on developing management skills the three most important management skills necessary to start your own business Are management of one cash flow two people three personal time i would say the skills to manage these three apply to anything not just entrepreneurs the three matter in the way you live your life as an individual or as part of a family a business a charitable organization

a city or a nation each of these skills is enhanced by the mastery of self-discipline i do not take the saying pay yourself first lightly the statement pay yourself first comes from george clayson's book the richest man in babylon millions of copies have been sold but while millions of people freely repeat that powerful statement few follow the advice as i said financial literacy allows one to read numbers and numbers tell the story by looking at a person's income statement and balance sheet i can readily see if people who spout the words pay yourself first actually

practice what they preach in reality each month many allocate money to their asset column before they pay their monthly expenses although millions of people have read clayson's book and understand the words pay Yourself first in reality they pay themselves last now i can hear the howls from those of you who sincerely believe in paying your bills first and i can hear all the responsible people who pay their bills on time i am not saying be irresponsible and not pay your bills all i am saying is do what the book says which is pay yourself first

if you can truly begin to understand the power of cash flow you will soon realize why ninety percent of people work hard all their lives and need government support like social security when they are no longer able to work kim and i have had many bookkeepers accountants and bankers who have had a major problem with this way of looking at pay yourself first the reason is that these financial professionals actually do what the masses do they pay themselves last there have been times in my life when for whatever reason cash flow was far less than

my bills i still paid myself first my accountant and bookkeeper screamed in panic they're going to come after you the irs is going to put you in jail you're going to ruin your credit rating they'll cut off the electricity i still Paid myself first why you ask because that's what the story the richest man in babylon was all about the power of self-discipline and the power of internal fortitude as my rich dad taught me the first month i worked for him most people allow the world to push them around a bill collector calls and you

pay or else a sales clerk says oh just put it on your charge card your real estate agent tells you go ahead the government allows you a tax deduction on your home that is what the book is really about having the guts to go against the tide and get rich you may not be weak but when it comes to money many people get wimpy i am not saying be irresponsible the reason i don't have high credit card debt and doodad debt is because i pay myself first the reason i minimize my income is because i

don't want to pay it to the government that is why my income comes from my asset column through a nevada corporation if i work for money the government takes it although i pay my bills last i am financially astute enough to not get into a tough financial situation i don't like consumer debt i actually have liabilities That are higher than ninety nine percent of the population but i don't pay for them other people pay for my liabilities they're called tenants so rule number one in paying yourself first is don't get into debt in the first

place although i pay my bills last i set it up to have only small unimportant bills that are due when i occasionally come up short i still pay myself first i let the creditors and even the government scream i like it when they get tough why because those guys do me a favor they inspire me to go out and create more money so i pay myself first invest the money and let the creditors yell i generally pay them right away anyway kim and i have excellent credit we just don't cave into pressure and spend our

savings or liquidate stocks to pay for consumer debt that is not too financially intelligent to successfully pay yourself first keep the following in mind one don't get into large debt positions that you have to pay for keep your expenses low build up assets first then buy the big house or nice car being stuck in the rat race is not intelligent Two when you come up short let the pressure build and don't dip into your savings or investments use the pressure to inspire your financial genius to come up with new ways of making more money and

then pay your bills you will have increased your ability to make more money as well as your financial intelligence so many times i have gotten into financial hot water and used my brain to create more income while staunchly defending the assets in my asset column my bookkeeper has screamed and dived for cover but i was like a good soldier defending the fort fort assets poor people have poor habits a common bad habit is innocently called dipping into savings the rich know that savings are only used to create more money not to pay bills i know

that sounds tough but as i said if you're not tough inside the world will always push you around anyway if you do not like financial pressure then find a formula that works for you a good one is to cut expenses put your money in the bank pay more than your fair share of income tax buy safe mutual funds and take the vow of the average But this violates the pay yourself first rule this rule does not encourage self-sacrifice or financial abstinence it doesn't mean pay yourself first and starve life was meant to be enjoyed if

you call on your financial genius you can have all the goodies of life get rich and pay bills and that is financial intelligence six pay your brokers well the power of good advice sometimes i see people posting a sign in front of their house that says for sale by owner or i see people on tv claiming to be discount brokers my rich dad taught me to take the opposite approach he believed in paying professionals well and i have adopted that policy also today i have expensive attorneys accountants real estate brokers and stock brokers why because

if and i do mean if the people are professionals their services should make you money and the more money they make the more money i make we live in the information age information is priceless a good broker should provide you with information as well as take the time to educate you i have several brokers who do that for me some taught me when i had little or no money and i am Still with them today what i pay a broker is tiny in comparison with what kind of money i can make because of the information

they provide i love it when my real estate broker or stockbroker makes a lot of money because that usually means i made a lot of money a good broker saves me time in addition to making me money like when i bought the vacant land for nine thousand dollars and sold it immediately for over twenty five thousand dollars so i could buy my porsche quicker a broker is my eyes and ears in the market they're there every day so i do not have to be i'd rather play golf people who sell their house on their own

must not value their time much why would i want to save a few bucks when i could use that time to make more money or spend it with those i love what i find funny is that so many poor and middle class people insist on tipping restaurant help 15 to 20 percent even for bad service but complain about paying a broker three to seven percent they enjoyed tipping people in the expense column and stiffing people in the asset column that is not financially intelligent keep in mind that not all brokers are created equal unfortunately most

Brokers are only sales people they sell but they themselves own little or no real estate there is a tremendous difference between a broker who sells houses and a broker who sells investments the same is true for stock bond mutual fund and insurance brokers who call themselves financial planners when i interview any paid professional i first find out how much property or stocks they personally own and what percentage they pay in taxes and that applies to my tax attorney as well as my accountant i have an accountant who minds his own business his profession is accounting

but his business is real estate i used to have an accountant who was a small business accountant but he had no real estate i switched because we did not love the same business find a broker who has your best interests at heart many brokers will spend the time educating you and they could be the best asset you find just be fair and most of them will be fair to you if all you can think about is cutting their commissions then why should they want to help you it's just simple logic as i said earlier one

of The management skills is the management of people many people only manage people they feel smarter than and they have power over many middle managers remain middle managers failing to get promoted because they know how to work with people below them but not with people above them the real skill is to manage and reward the people who are smarter than you in some technical area that is why companies have a board of directors you should have one too that is financial intelligence seven be an indian giver the power of getting something for nothing when the

first european settlers came to america they were taken aback by a cultural practice some american indians had for example if a settler was cold the indian would give the person a blanket mistaking it for a gift the settler was often offended when the indian asked for it back the indians also got upset when they realized that settlers did not want to give it back that is where the term indian giver came from a simple cultural misunderstanding in the world of the asset column being an indian giver is vital to wealth the sophisticated investors First question

is how fast do i get my money back they also want to know what they get for free also called a piece of the action that is why the roi or return on investment is so important for example i found a small condominium that was in foreclosure a few blocks from where i lived the bank wanted sixty thousand dollars and i submitted a bid for fifty thousand dollars which they took simply because along with my bid was a cashier's check for fifty thousand dollars they realized i was serious most investors would say aren't you tying

up a lot of cash would it not be better to get a loan on it the answer is not in this case my investment company uses this condominium as a vacation rental in the winter months when the snow birds come to arizona it rents for two thousand five hundred dollars a month for four months out of the year for rental during the off season it rents for only one thousand dollars a month i had my money back in about three years now i own this asset which pumps money out for me month in and month

out the same is done with stocks frequently my broker calls and recommends i Move a sizable amount of money into the stock of a company that he feels is just about to make a move that will add value to the stock like announcing a new product i will move my money in for a week to a month while the stock moves up then i pull my initial dollar amount out and stop worrying about the fluctuations of the market because my initial money is back and ready to work on another asset so my money goes in

and then it comes out and i own an asset that was technically free true i have lost money on many occasions but i only play with money i can afford to lose i would say on an average 10 investments i hit home runs on two or three while five or six do nothing and i lose on two or three but i limit my losses to only the money i have in at that time people who hate risk put their money in the bank in the long run safe savings are better than no savings but it

takes a long time to get your money back and in most instances you don't get anything for free with it on every one of my investments there must be an upside something for free like a condominium a mini storage a piece of free land a house stock shares or an office building And there must be limited risk or a low risk idea there are books devoted entirely to this subject so i will not talk about it here ray kroc of mcdonald's fame sold hamburger franchises not because he loved hamburgers but because he wanted the real

estate under the franchise for free so wise investors must look at more than roi they look at the assets they get for free once they get their money back that is financial intelligence eight use assets to buy luxuries the power of focus a friend's child has been developing a nasty habit of burning a hole in his pocket just 16 he wanted his own car the excuse all his friends parents gave their kids cars the child wanted to go into his savings and use it for a down payment that was when his father called me and

then came to see me do you think i should let him do it or should i just buy him a car i answered it might relieve the pressure in the short term but what have you taught him in the long term can you use this desire to own a car and inspire your son to learn something Suddenly the lights went on and he hurried home two months later i ran into my friend again does your son have his new car i asked no he doesn't but i gave him three thousand dollars for the car i

told him to use my money instead of his college money well that's generous of you i said not really the money came with a hitch so what was the hitch i asked well first we played your cash flow game we then had a long discussion about the wise use of money after that i gave him a subscription to the wall street journal and a few books on the stock market then what i asked what was the catch i told him that three thousand dollars was his but he could not directly buy a car with it

he could use it to find a stock broker and buy and sell stocks once he had made six thousand dollars with the three thousand dollars the money would be his for the car and the three thousand dollars would go into his college fund and what are the results i asked well he got lucky early in his trading but lost everything a few days later then he really got interested today i would say he is down two thousand dollars but his interest is up he has read all the books i bought him And he's gone to

the library to get more he reads the wall street journal voraciously watching for indicators he's only got one thousand dollars left but his interest and learning are sky high he knows that if he loses that money he walks for two more years but he does not seem to care he even seems uninterested in getting a car because he's found a game that is more fun what happens if he loses all the money i asked we'll cross that bridge when we get to it i'd rather have him lose everything now than wait till he's our age

to risk losing everything and besides that is the best three thousand dollars i've ever spent on his education what he is learning will serve him for life and he seems to have gained a new respect for the power of money as i said earlier if a person cannot master the power of self-discipline it is best not to try to get rich i say this because although the process of developing cash flow from an asset column is easy in theory what's hard is the mental fortitude to direct money to the correct use due to external temptations

it is much easier in today's consumer world to simply blow money out The expense column with weak mental fortitude that money flows into the paths of least resistance that is the cause of poverty and financial struggle the following example illustrates the financial intelligence needed to direct money to make more money if we give one hundred people ten thousand dollars at the start of the year i believe that at the end of the year 80 would have nothing left in fact many would have created greater debt by making a down payment on a new car refrigerator

electronics or a holiday sixteen would have increased that ten thousand dollars by five to ten percent four would have increased it to twenty thousand dollars or into the millions we go to school to learn a profession so we can work for money it is my opinion that it's just as important to learn how to have money work for you i love my luxuries as much as anyone else the difference is i don't buy them on credit it's the keep up with the jones's trap when i wanted to buy a porsche the easy road would have

been to call my banker and get a loan instead of choosing to focus in the liability column i chose to focus in the asset column As a habit i use my desire to consume to inspire and motivate my financial genius to invest too often today we focus on borrowing money to get the things we want instead of focusing on creating money one is easier in the short term but harder in the long term it's a bad habit that we as individuals and as a nation have gotten into remember the easy road often becomes hard and

the hard road often becomes easy the earlier you can train yourself and those you love to be masters of money the better money is a powerful force unfortunately people use the power of money against themselves if your financial intelligence is low money will run all over you it will be smarter than you if money is smarter than you you will work for it all your life to be the master of money you need to be smarter than it then money will do as it is told it will obey you instead of being a slave to

it you will be the master of it that is financial intelligence nine choose heroes the power of myth when i was a kid i greatly admired willie mays Hank aaron and yogi berra they were my heroes and i wanted to be just like them i treasured their baseball cards i knew their stats the rbis the eras their batting averages how much they got paid and how they came up from the minor leagues as a nine-year-old kid when i stepped up to bat or played first base or catcher i wasn't me i pretended i was a

famous baseball player it's one of the most powerful ways we learn and we often lose that as adults we lose our heroes today i watch young kids playing basketball near my home on the court they're not little johnny they're pretending to be their favorite basketball hero copying or emulating heroes is true power learning i have new heroes as i grow older i have golf heroes and i copy their swings and do my best to read everything i can about them i also have heroes such as donald trump warren buffett peter lynch george soros and jim

rogers i know their stats just like i knew the eras and rbis of my childhood baseball heroes i follow what warren buffett invests in and i read anything i can about his point of view on the market and how He chooses stocks and i read about donald trump trying to find out how he negotiates and puts deals together just as i was not me when i was up to bat when i'm in the market or i'm negotiating a deal i am subconsciously acting with the bravado of trump or when analyzing a trend i look at

it as the warren buffett we're doing it by having heroes we tap into a tremendous source of raw genius but heroes do more than simply inspire us heroes make things look easy making it look easy convinces us to want to be just like them if they can do it so can i when it comes to investing too many people make it sound hard instead find heroes who make it look easy 10 teach and you shall receive the power of giving both of my dads were teachers my rich dad taught me a lesson i have carried

all my life the necessity of being charitable or giving my educated dad gave a lot of his time and knowledge but almost never gave away money he usually said that he would give when he had some extra money but of course there was rarely any extra my rich dad gave money as well as education he believed firmly in tithing if you want something You first need to give he would always say when he was short of money he gave money to his church or to his favorite charity if i could leave one single idea with

you it is that idea whenever you feel short or in need of something give what you want first and it will come back in buckets that is true for money a smile love or friendship i know it is often the last thing a person may want to do but it has always worked for me i trust that the principle of reciprocity is true and i give what i want i want money so i give money and it comes back in multiples i want sales so i help someone else sell something and sales come to me

i want contacts and i help someone else get contacts like magic contacts come to me i heard a saying years ago that when god does not need to receive but humans need to give my rich dad would often say poor people are more greedy than rich people he would explain that if a person was rich that person was providing something that other people wanted in my life whenever i have felt needy or short of money or short of help i simply went out or found in my heart what i wanted and decided to give it

first and when i gave it always came Back it reminds me of the story of the guy sitting with firewood in his arms on a cold freezing night he is yelling at the potbellied stove when you give me some heat then i'll put some wood in you and when it comes to money love happiness sales and contacts all one needs to remember is to give first often just the process of thinking of what i want and how i could give that to someone else breaks free a torrent of bounty whenever i feel that people aren't

smiling at me i simply begin smiling and saying hello like magic the next thing i know i'm surrounded by smiling people it is true that your world is only a mirror of you so that's why i say teach and you shall receive i have found that the more i teach those who want to learn the more i learn if you want to learn about money teach it to someone else a torrent of new ideas and finer distinctions will come in there are times when i have given and nothing has come back or what i have

received is not what i wanted but upon closer inspection and soul-searching i was often given to receive in those instances instead of giving for the joy that giving itself brings my dad taught teachers And he became a master teacher my rich dad always taught young people his way of doing business in retrospect it was their generosity with what they knew that made them smarter there are powers in this world that are much smarter than we are you can get there on your own but it's easier with the help of the powers that be you only

need to be generous with what you have chapter 9 still want more here are some to do's many people may not be satisfied with my 10 steps they see them more as philosophies than actions i think understanding the philosophy is just as important as the action there are many people who want to do instead of think and then there are people who think but do not do i would say that i am both i love new ideas and i love action so for those who want a to-do list on how to get started i will

share with you some of the things i do in abbreviated form stop doing what you're doing in other words take a break and assess what is working and what is not working the definition of insanity is doing the same thing over and Over and expecting a different result stop doing what is not working and look for something new look for new ideas for new investing ideas i go to bookstores and search for books on different and unique subjects i call them formulas i buy how-to books on formulas i know nothing about for example in the

bookstore i found the book the 16 solution by joel moskowitz i bought the book and read it and the next thursday i did exactly as the book said most people do not take action or they let someone talk them out of whatever new formula they are studying my neighbor told me why 16 percent would not work i did not listen to him because he's never done it find someone who has done what you want to do take them to lunch and ask them for tips and tricks of the trade as for 16 percent tax lien

certificates i went to the county tax office and found the government employee who worked in that office i found out that she too invested in the tax liens immediately i invited her to lunch she was thrilled to tell me everything she knew and how to do it after lunch she spent all afternoon showing me everything by the next day i Found two great properties with her help that have been accruing interest at 16 ever since it took a day to read the book a day to take action and hour for lunch and a day to

acquire two great deals take classes read and attend seminars i search newspapers and the internet for new and interesting classes many of which are free or inexpensive i also attend and pay for expensive seminars on what i want to learn i am wealthy and free from needing a job simply because of the courses i took i have friends who did not take those classes who told me i was wasting my money and yet they're still at the same job make lots of offers when i want a piece of real estate i look at many properties

and generally write an offer if you don't know what the right offer is neither do i that is the job of the real estate agent they make the offers i do as little work as possible a friend wanted me to show her how to buy apartment houses so one saturday she her agent and i went and looked at six apartment houses four were dogs but two were good i said to write offers on all six offering half of what the owners asked for she and the agent nearly had heart attacks They thought it was rude

and would offend the sellers but i really don't think the agent wanted to work that hard so they did nothing and went on looking for a better deal no offers were ever made and that person is still looking for the right deal at the right price well you don't know what the right price is until you have a second party who wants to deal most sellers ask too much it is rare that a seller asks a price that is less than something is worth moral of the story make offers people who are not investors have

no idea what it feels like to try to sell something i have had a piece of real estate that i wanted to sell for months i would have welcomed any offer they could have offered me 10 pigs and i would have been happy not at the offer but just because someone was interested i would have countered maybe for a pig farm in exchange but that's how the game works the game of buying and selling is fun keep that in mind it's fun and only a game make offers someone might say yes i always make offers

with escape clauses in real estate i make an offer with language that details subject-to contingencies such as The approval of a business partner never specify who the business partner is most people don't know that my partner is my cat if they accept the offer and i don't want the deal i call home and speak to my cat i make this ridiculous statement to illustrate how absurdly easy and simple the game is so many people make things too difficult and take it too seriously finding a good deal the right business the right people the right investors

or whatever is just like dating you must go to the market and talk to a lot of people make a lot of offers counter offers negotiate reject and accept i know single people who sit at home and wait for the phone to ring but it's better to go to the market even if it's only the supermarket search offer reject negotiate and accept are all parts of the process of almost everything in life jog walk or drive a certain area once a month for 10 minutes i have found some of my best real estate investments doing

this i will jog a certain neighborhood for a year and look for change for there to be profit in a deal there must be two elements a bargain and change there Are lots of bargains but it's change that turns a bargain into a profitable opportunity so when i jog i jog a neighborhood i might like to invest in it is the repetition that causes me to notice slight differences i notice real estate signs that are up for a long time that means the seller might be more agreeable to deal i watch for moving trucks going

in or out i stop and talk to the drivers i talk to the postal carriers it's amazing how much information they acquire about an area i find a bad area especially an area that the news has scared everyone away from i drive it for sometimes a year waiting for signs of something changing for the better i talk to retailers especially new ones and find out why they're moving in it takes only a few minutes a month and i do it while doing something else like exercising or going to and from the store shop for bargains

in all markets consumers will always be poor when the supermarket has a sale say on toilet paper the consumer runs in and stocks up but when the housing or stock market has a sale most often called a crash or correction the same consumer often runs away from it when The supermarket raises its prices the consumer shops somewhere else but when housing or the stock market raises their prices the same consumer often rushes in and starts buying always remember profits are made in the buying not in the selling look in the right places a neighbor bought

a condominium for one hundred thousand dollars i bought the identical condo next door for fifty thousand dollars he told me he's waiting for the price to go up i told him that profit is made when you buy not when you sell she shopped with a real estate broker who owns no property of her own i shopped at the foreclosure auction i paid 500 for a class on how to do this my neighbor thought that the 500 for a real estate investment class was too expensive he said he could not afford the money or the time

so he waits for the prices to go up look for people who want to buy first then look for someone who wants to sell a friend was looking for a certain piece of land he had the money but did not have the time i found a large piece of land larger than what my friend wanted to buy tied it up with an option called My friend and he said he wanted a piece of it so i sold the piece to him and then bought the land i kept the remaining land as mine for free moral

of the story buy the pie and cut it in pieces most people look for what they can afford so they look too small they buy only a piece of the pie so they end up paying more for less small thinkers don't get the big breaks if you want to get richer think big think big retailers love giving volume discounts simply because most business people love big spenders so even if you're small you can always think big when my company was in the market for computers i called several friends and asked them if they were ready

to buy also we then went to different dealers and negotiated a great deal because we wanted to buy so many i have done the same with stocks small people remain small because they think small act alone or don't act at all learn from history all the big companies on the stock exchange started out as small companies colonel sanders did not get rich until after he lost everything in his 60s bill gates was one of the richest men in the world before he was thirty action always beats inaction These are just a few of the things

i have done and continue to do to recognize opportunities the important words are have done and do as repeated many times throughout this audiobook you must take action before you can receive the financial rewards act now final thoughts i would like to share some final thoughts with you the main reason i wrote this book and the reason it has remained a bestseller since 2000 was to share insights into how increased financial intelligence can be used to solve many of life's common problems without financial training we all too often use the standard formulas to get through

life work hard save borrow and pay excessive taxes today more than ever we need better information i use the following story as an example of a financial problem that confronts many young families today how do you afford a good education for your children and provide for your own retirement it requires using financial intelligence instead of hard work a friend of mine was griping one day about how hard it was to save money for his four Children's college educations he was putting three hundred dollars away in a college fund each month and had so far accumulated

only about twelve thousand dollars he had about twelve more years to save for college since his oldest child was then six years old at the time the real estate market in phoenix was terrible people were giving houses away i suggested to my friend that he buy a house with some of the money in his college fund the idea intrigued him and we began to discuss the possibility his primary concern was that he did not have credit with the bank to buy another house since he was so overextended i assured him that there were other ways

to finance a property rather than through the bank we looked for a house for two weeks a house that would fit all our criteria there were plenty to choose from so shopping was fun finally we found a three bedroom two bath home in a prime neighborhood the owner had been downsized and needed to sell that day because he and his family were moving to california where another job waited the owner wanted one hundred two thousand dollars But we offered only seventy nine thousand dollars he took it immediately and agreed to carry back the loan with

a ten percent down payment all my friend had to come up with was seven thousand nine hundred dollars as soon as the owner moved my friend put the house up for rent after all expenses were paid including the mortgage he put 125 dollars in his pocket each month his plan was to keep the house for 12 years and let the mortgage get paid down faster by applying the extra 125 dollars to the principal each month we figured that in 12 years a large portion of the mortgage would be paid off and he could possibly be

clearing 800 a month by the time his first child went to college he could also sell the house if it had appreciated in value three years later the real estate market greatly improved in phoenix and he was offered 156 thousand dollars for the same house by the tenant who lived in it again he asked me what i thought i advised that he sell it using a 1031 tax deferred exchange suddenly he had nearly eighty thousand dollars to operate with i called another friend in austin texas who then moved this tax Deferred capital gain into a

mini storage facility within three months he began receiving checks for a little less than one thousand dollars a month which he then poured back into the college fund a couple of years later the mini warehouse sold and he received a check for nearly 330 000 as proceeds from the sale he rolled those funds into a new project that would now generate over three thousand dollars a month in income again going into the college fund he is now very confident that his goal will be met easily it only took seven thousand nine hundred dollars to start

and a little financial intelligence his children will be able to afford the education they want and he will then use the underlying asset wrapped in his legal entity to pay for his retirement as a result of this successful investment strategy he will be able to retire early thank you for listening to this audiobook i hope it has provided some insights into utilizing the power of money to work for you today we need greater financial intelligence to simply survive the idea that it takes money to make money is the thinking of financially unsophisticated people It does

not mean that they're not intelligent they have simply not learned the science of money making money money is only an idea if you want more money simply change your thinking every self-made person started small with an idea and then turned it into something big the same applies to investing it takes only a few dollars to start and grow it into something big i meet so many people who spend their lives chasing the big deal or trying to amass a lot of money to get into a big deal but to me that is foolish too often

i have seen unsophisticated investors put their large nest egg into one deal and lose most of it rapidly they may have been good workers but they were not good investors education and wisdom about money are important start early buy a book go to a seminar practice start small i turned five thousand dollars cash into a one million dollar asset producing five thousand dollars a month cash flow in less than six years but i started learning as a kid i encourage you to learn because it's not that hard in fact it's pretty easy once you get

the hang of it i think i have made my message clear it's What is in your head that determines what is in your hands money is only an idea there is a great book called think and grow rich the title is not work hard and grow rich learn to have money work hard for you and your life will be easier and happier today don't play it safe play it smart the three incomes in the world of accounting there are three different types of income one ordinary earned two portfolio three passive when my poor dad said

to me go to school get good grades and find a safe secure job he was recommending i work for earned income when my rich dad said the rich don't work for money they have their money work for them he was talking about passive income and portfolio income passive income in most cases is income derived from real estate investments portfolio income is income derived from paper assets such as stocks and bonds portfolio income is the income that makes bill gates the richest man in the world not earned income rich dad used to say the key to

becoming wealthy is the ability to convert earned income into passive income or portfolio income as quickly as possible he would say Taxes are highest on earned income the least taxed income is passive income that is another reason why you want your money working hard for you the government taxes the income you work hard for more than the income your money works hard for in my second book rich dad's cash flow quadrant i explain the four different types of people who make up the world of business they are e employee s self-employed b business owner and

i investor most people go to school to learn to be an e or an s the cash flow quadrant is written about the core differences of these four types and how people can change their quadrant in fact most of our products are created for people in the b and i quadrants in rich dad's guide to investing book number three in the rich dad series i go into more detail on the importance of converting earned income into passive and portfolio income rich dad used to say all a real investor does is convert earned income into passive

and portfolio income if you know what you're doing investing is not risky it's just common sense The key to financial freedom the key to financial freedom and great wealth is a person's ability to convert earned income into passive and or portfolio income my rich dad spent a lot of time teaching mike and me this skill having this ability is the reason my wife kim and i are financially free never needing to work again we continue to work because we choose to today we own a real estate investment company for passive income and participate in private

placements and initial public offerings of stock for portfolio income we also went back to work to build a financial education company so that we can continue to create and publish books and games all of our educational products are created to teach the same skills my rich dad taught me the skills of converting earned income into passive and portfolio income the games we create are important because they teach what books cannot teach for example you would never learn to ride a bicycle by only reading a book our cash flow games for adults and cash flow for

kids game are designed to teach Players the basic investment skills of converting earned income into passive and portfolio income they also teach the principles of accounting and financial literacy these games are the only educational products in the world that teach people all of these skills simultaneously cash flow 202 is the advanced version of cash flow 101 and requires the game board from 101 as well as a full understanding of 101 before it can be played cash flow 101 and cash flow for kids teach the principles of fundamental investing cash flow 202 teaches the principles of

technical investing technical investing involves advanced trading techniques such as short selling call options put options and straddles a person who understands these advanced techniques is able to make money when the market goes up as well as when the market comes down as my rich dad would say a real investor makes money in an up market and a down market that is why they make so much money one of the reasons they make more money is simply because they have more self-confidence rich dad would say they have more self-confidence because they are less afraid of losing

In other words the average investor does not make as much money because they are so afraid of losing money the average investor does not know how to protect themselves from losses and that is what cash flow 202 teaches average investors think investing is risky because they have not been formally trained to be professional investors as warren buffett america's richest investor says risk comes from not knowing what you're doing my board games teach the simple basics of fundamental investing and technical investing while people are having fun i occasionally hear someone say your educational games are expensive

which poses the question of roi the return on investment or the value returned for the price paid i nod my head in reply yes they may be expensive especially when compared to entertainment board games but my games are not as expensive as a college education working hard all your life for earned income paying excessive taxes and then living in terror of losing all of your money in the investment markets when someone walks away mumbling about the price i can hear my rich dad saying if you want to be rich You must know what kind of

income to work hard for how to keep it and how to protect it from loss that is the key to great wealth rich dad would also say if you do not understand the differences in those three incomes and do not learn the skills on how to acquire and protect those incomes you will probably spend your life earning less than you could and working harder than you should my poor dad thought a good education a good job and years of hard work were all you needed to be successful my rich dad also thought a good education

was important but to him it was also important that mike and i know the differences in the three incomes and what kind of income to work hard for to him that was basic financial education knowing the differences in the three incomes and learning the investment skills of how to acquire the different incomes is basic education for anyone who strives to acquire great wealth and achieve financial freedom a special kind of freedom that only a few will ever know as rich dad states in lesson number one the rich do not work for money they know how

to have money Work hard for them rich dad said earned income is money you work for and passive and portfolio income is money working for you knowing that little difference has been significant in my life or as robert frost ends his poem and that has made all the difference take action all of you were given two great gifts your mind and your time it is up to you to do what you please with both with each dollar bill that enters your hand you and only you have the power to determine your destiny spend it foolishly

and you choose to be poor spend it on liabilities and you join the middle class invest it in your mind and learn how to acquire assets and you will be choosing wealth as your goal and your future the choice is yours and only yours every day with every dollar you decide to be rich poor or middle class choose to share this knowledge with your children and you choose to prepare them for the world that awaits no one else will you and your children's future will be determined by choices you make today not tomorrow i wish

you great wealth and much happiness with this fabulous gift called life robert kiyosaki