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LearningTranscript
00:00Robert Kiyosaki, the author of the book Rich Dad, Poor Dad, says that earning money is a science that is not taught in schools.
00:07Schools teach us how to become an employee and build a career.
00:11If you are coming from a middle-class family like I do, then there's a high probability that your parents taught you how to become poor.
00:18And this is not because your parents don't love you or don't want you to be successful.
00:22It's simply because they themselves are not educated on this topic.
00:26They consumed expired information, and when you were born, they passed it on to you.
00:32Kiyosaki says, poverty is like genetics.
00:35It passes on from one generation to another.
00:38Rich Dad, Poor Dad is one of those finance books that I wish I had read when I was 14 or 15 years old.
00:44I strongly recommend reading the book or watching this video because I will be doing a detailed summary of all seven key lessons.
00:52Lesson number one, the rich don't work for money.
00:57When he was nine years old, Robert and his childhood friend Mike weren't invited to a classmate's beach house because they were poor kids.
01:05Robert came home and asked his dad how to become rich, and the only response he got was, you have to learn how to make more money.
01:12Even as a kid, Robert understood that this advice wasn't going to help him to become rich.
01:17Robert's father, whom Robert calls his Poor Dad, was a teacher and made a good living, but always struggled financially.
01:26Seeing how determined Robert and his friend Mike were to learn about making more money,
01:30Robert's dad, the Poor Dad, advised them to go and talk to Mike's dad, whom Robert called his Rich Dad.
01:38Both Robert and Mike were quite surprised because Rich Dad wasn't rich yet.
01:43Plus, he never finished eighth grade, but ran multiple successful businesses.
01:49Nevertheless, they went to meet Mike's dad.
01:51On the day of the meeting, he asked them if they were ready to learn how to make money.
01:55They were excited and nodded their heads quickly.
01:58He then made them an offer.
01:59He said that he would teach them how to make money, but not in a classroom style.
02:04He would only teach them if they worked for him.
02:07According to him, he would be wasting his time if they just wanted to sit and listen as they did in school.
02:12They could learn faster if they worked for him.
02:16Robert wanted to ask a question, but he didn't give them a chance.
02:20He said if they couldn't make up their mind decisively, then they would never learn to make money.
02:24Opportunities come and go, and being able to know when to make quick decisions is an important skill.
02:30They knew they had to make a decision.
02:32Robert and Mike looked at each other and both agreed to take the offer.
02:36Mike's dad was pleased and said he would pay them 10 cents an hour.
02:40And they would work three hours every Saturday.
02:44Even though Robert had a softball game that day, he chose to work and learn instead of playing.
02:49He knew this was his opportunity, and he didn't want to waste it.
02:53So, Robert and Mike started working for Mrs. Martin, who was an employee of Mike's dad,
02:58and used to take care of a small supermarket.
03:00They were the kind of stores where people bought essentials like milk, bread, butter, and cigarettes.
03:04The only problem was that the stores didn't have air conditioning.
03:09So, they had to keep the doors wide open to the road and parking lot,
03:12which meant that dust would swirl and settle inside every time a car drove by.
03:16Their job was to take canned goods off the shelves, brush them with a feather duster to get the dust off,
03:22and then restack them neatly.
03:24It was mind-numbingly boring work.
03:29They worked for three hours every Saturday and got paid 30 cents, which was not very exciting for them,
03:35since one comic book cost 10 cents back then.
03:38They did it because they wanted to learn how to make money.
03:42But after three weeks of doing this, Robert was ready to quit.
03:46He felt like a slave, working for just 10 cents an hour,
03:49and hadn't even seen Mike's dad since the first meeting.
03:52So, at lunchtime on the fourth week, he told Mike that he was quitting.
03:57The school was boring enough, and he didn't want to waste his Saturdays doing this job anymore.
04:02He was done.
04:04To his surprise, Mike started smiling and said that his dad had expected this to happen.
04:09He had told Mike to meet with him when Robert was ready to quit.
04:14It made Robert mad, but Mike said that his father's way of teaching was different from Robert's parents.
04:19He didn't like to lecture, and used experience as a way of teaching.
04:24Robert agreed to meet with Mike's dad the following Saturday to hear him out.
04:28Even his real dad was angry with Mike's dad.
04:31Robert's poor dad had advised him to demand a raise of at least 25 cents an hour,
04:36and to quit if he didn't get it.
04:38When Robert arrived at Mike's house,
04:40he was made to wait in line for 45 minutes before Mike's dad finally appeared.
04:45Frustrated and angry, Robert told Mike's dad that he had not kept his end of the bargain.
04:52He had promised to teach him if he worked for him, but he had not fulfilled his promise.
04:57Robert accused him of being greedy and not respecting his employees.
05:01He asked Robert if teaching meant talking or giving a lecture, and Robert replied with a nod.
05:07Rich dad told him that life is the best teacher of all,
05:11and that most of the time, life does not talk to you.
05:14He explained that life often pushes us around to teach us something.
05:18Some people let life push them around, while others fight back against the wrong things,
05:23such as their job, boss, or spouse.
05:25But only a few people welcome life's push as an opportunity to learn and grow.
05:32Rich dad said that he had over 150 employees,
05:35but none of them had ever asked him to teach them about money.
05:39They only sought jobs and paychecks,
05:41never really grasping the purpose of their work.
05:44However, when Mike told him that both of them wanted to learn how to make money,
05:49rich dad decided to create a program that mirrored real-life experiences.
05:54He paid them a mere 10 cents an hour, which initially made them angry.
05:58But he explained that he wanted them to experience life's push,
06:02so that they could understand what he was trying to teach.
06:05When rich dad asked Robert what he had learned from working for such a low wage,
06:10he complained about his greed and lack of respect for his workers.
06:13He even threatened to quit if his rich dad didn't pay him more or teach him more.
06:18Rich dad explained that most people would do exactly what he was suggesting,
06:22quit and look for a higher-paying job.
06:25However, this usually wouldn't solve their problems.
06:27He wanted Robert to understand that waiting for a raise,
06:31thinking that more money would solve his problems,
06:33was not the solution.
06:35The solution is to make money work for you.
06:39Robert was slowly starting to understand the lesson rich dad was trying to teach.
06:43Rich dad asked if Robert still had a passion to learn.
06:46When Robert said yes,
06:47he told him he was going to stop paying him for the work at the store.
06:51Robert was confused.
06:53He came for a raise,
06:54but now he was going to work for free?
06:57Rich dad said that if he wanted to make more money,
07:00then he needed to use his head and figure it out.
07:03Robert and Mike worked for free for three weeks.
07:07One day, Mike's dad showed up and took the boys outside for ice cream.
07:11Rich dad asked if they learned anything yet.
07:13They said no.
07:15The rich dad told them they better hurry
07:17and start thinking about the lesson that was staring at them.
07:20To explain the lesson,
07:22he asked the boys to look at Mrs. Martin and the people in the park
07:25and think if the life they were living seemed exciting to them.
07:28They worked hard for little money their whole lives,
07:31clinging to the illusion of job security
07:33and looking forward to a three-week vacation each year
07:36and maybe a pension after 45 years of service.
07:40Rich dad said if this kind of life excited them,
07:43he would be willing to offer them a raise of 25 cents an hour.
07:46Their heartbeats raised,
07:48and they knew it would mean so much to them,
07:50but still, they said no.
07:53Seeing their resistance,
07:54rich dad raised his offer to $1 an hour,
07:57then $2.
07:59Each time he raised his offer,
08:01Robert's heart started exploding
08:03and his brain was pushing him to take the offer.
08:06He knew $2 an hour would have made him
08:08the richest kid in the world.
08:11He couldn't imagine earning that kind of money.
08:13He wanted to say yes.
08:16He could picture a new bicycle,
08:17a new baseball glove,
08:18and the adoration of his friends
08:20when he flashed some cash.
08:22But somehow his mouth stayed shut.
08:25Rich dad was looking at two boys staring back at him,
08:28eyes wide open and brains empty.
08:31He was testing them,
08:33and he knew there was a part of their emotions
08:35that wanted to take the deal.
08:37He understood that every person
08:39has a weak and needy part of their soul
08:41that can be bought.
08:42And he knew that every individual
08:44also had a part of their soul
08:46that was resilient and could never be bought.
08:49It was only a question of which one was stronger.
08:52So he made a final offer of $5 an hour.
08:57Suddenly, the boys' expressions changed
09:00and their empty looks changed into calmness.
09:04It felt their temptation disappear in the second.
09:08They felt the part of their soul
09:09that was weak and needy was silenced
09:12and taken over by the part that had no price.
09:16The rich dad said it was good
09:17they didn't have a price.
09:19Most people did
09:20because their lives were controlled
09:22by fear and greed.
09:24Fear of being without money
09:25makes them work hard and earn a paycheck.
09:27But once they have that money,
09:29greed gets them thinking
09:30about all the things they could buy,
09:32which makes them need more money,
09:33which makes them spend more
09:35and work more.
09:36It's what the rich dad called
09:38the rat race.
09:40Mike asked if there was another way
09:42and rich dad said there was,
09:44but not many people knew about it.
09:46Mike wanted to know what it was
09:47and rich dad said they would learn it
09:49while working with him for no pay.
09:52Mike asked for a hint
09:53and rich dad replied
09:55that the first step is
09:56to tell the truth.
09:58When asked what truth,
10:00he replied that it was about
10:01how they feel
10:02and they must confess it to themselves,
10:05not others.
10:06Rich dad expressed doubt
10:08that the people working for him
10:09were capable of confessing their truth.
10:12Instead, they feel the fear
10:13of not having money
10:14and respond emotionally
10:16rather than logically.
10:18They do not confront their fear
10:19and their emotions
10:20control their brains.
10:22They work to earn money,
10:23hoping it will relieve their fear,
10:25but it never does.
10:28Money governs their emotions and souls
10:30and they refuse to acknowledge this truth.
10:33Rich dad urged them
10:35to avoid this trap,
10:36stating that being rich
10:37does not solve the problem.
10:39When asked why,
10:41he introduced the other key emotion,
10:44desire.
10:45It's common for people
10:46to desire things
10:47that are better,
10:48prettier,
10:48or more exciting.
10:49They often work for money
10:51because they think
10:51it will make them happy,
10:52but the happiness
10:53from money
10:54is short-lived.
10:56Many rich people
10:57are actually driven by fear,
10:59thinking that money
11:00will make them feel secure.
11:01However,
11:02they end up fearing losing it all,
11:04which makes them more anxious
11:05than when they were poor.
11:07Emotions often control our thinking,
11:09and fear can lead us
11:11to make decisions
11:11that don't solve the real problem.
11:14For example,
11:15when someone is afraid
11:16of not having enough money,
11:17they might think
11:18getting a job
11:19is the only solution.
11:20But in reality,
11:21a job is only a temporary fix
11:23for a long-term problem.
11:25It's important
11:26to learn how to think
11:27for ourselves
11:28and not let our emotions
11:30control us.
11:32Rich Dad said
11:32that he saw hope
11:33when both of the boys
11:34agreed to work for free,
11:36and they also took the first step
11:37when they resisted their emotions
11:39when Rich Dad tempted them
11:40with more money.
11:42They were learning to think
11:43in spite of being
11:44emotionally charged.
11:46He told them
11:46to keep working,
11:47and the sooner they forget
11:48about needing a paycheck,
11:50the easier their adult life
11:51would be.
11:52He encouraged them
11:53to keep using their brain,
11:54work for free,
11:55and soon their mind
11:56would show them
11:57ways of making money
11:58far beyond
11:59what he could ever pay them.
12:01They would be able
12:01to see things
12:02that others couldn't.
12:04The moment they saw
12:05one opportunity,
12:06they would see them
12:07for the rest of their lives.
12:09The boys did
12:09as Rich Dad advised,
12:11and pretty soon
12:11they saw an opportunity
12:12in creating a library
12:14where kids could pay
12:15an admission fee
12:16and read as many comic books
12:17as they wanted.
12:19They hired Mike's younger sister
12:20to be the head librarian.
12:22She charged each child
12:2310 cents for admission
12:25to the library.
12:26It was a bargain
12:26for the kids
12:27since a comic book
12:28cost 10 cents each,
12:30and they could read
12:31five or six in two hours.
12:33Mike and Robert
12:34averaged $9.50 per week
12:36over a three-month period.
12:39They paid his sister
12:40$1 a week
12:41and allowed her
12:42to read the comics
12:42for free.
12:43They had to close
12:44the library
12:45after three months
12:46because of a fight
12:47that took place there,
12:48but they had already learned
12:50how to make money
12:50work for them
12:51even when they
12:53weren't physically present.
12:54They had learned
12:55the first lesson
12:56which was
12:57the rich
12:58don't work
12:59for money.
13:00They were ready
13:01to learn more
13:02and Mike's dad
13:03was ready
13:03to teach them.
13:05Lesson two.
13:06Why teach
13:07financial literacy?
13:09When people ask Robert
13:10where he started
13:11getting rich,
13:12he gives them
13:13the same answer
13:13his rich dad
13:14gave him.
13:15If you want to be rich,
13:16you need to be
13:17financially literate.
13:18For example,
13:19accounting
13:20is a subject
13:20that is boring,
13:21confusing,
13:22but absolutely crucial
13:24to financial success.
13:25To make it easy,
13:26rich dad
13:27used pictures
13:27and simple language
13:29to teach it
13:29to the two boys.
13:31One of the first things
13:32rich dad
13:32explained to Robert
13:33and Mike
13:33was the difference
13:34between an asset
13:35and a liability.
13:37He said that
13:37if you want to be rich,
13:38the only thing
13:39you need to do
13:39is buy assets.
13:41That's all you need
13:42to know to get rich,
13:43but despite it
13:44being so simple,
13:44it's something
13:45that many people
13:46don't understand.
13:47When rich dad
13:48first explained it
13:49to Robert and Mike,
13:49they thought
13:50he was joking
13:51because the concept
13:52was so simple.
13:53How could adults
13:54not understand this?
13:55Shouldn't everyone
13:56be rich?
13:57The problem
13:58is that most people
13:59have been educated
14:00differently by bankers,
14:01financial planners,
14:02and others,
14:03so they must unlearn
14:05what they think
14:06they know,
14:07and because of that
14:08they buy liabilities
14:09thinking that they
14:10are assets.
14:11Robert uses
14:12simple definitions
14:13for assets
14:14and liabilities.
14:15An asset is something
14:16that puts money
14:17in your pocket,
14:18and a liability
14:18is something
14:19that takes money
14:20out of your pocket.
14:22This is the cash flow
14:23pattern of an asset.
14:25The top part
14:26of the diagram
14:26is an income statement,
14:28often called
14:29a profit and loss statement.
14:30It measures income
14:31and expenses,
14:32money in and money out.
14:34The lower part
14:35of the diagram
14:35is a balance sheet.
14:37It's called that
14:38because it's supposed
14:39to balance assets
14:40against liabilities.
14:42Assets add to your income,
14:44they put money
14:44in your pocket.
14:45For example,
14:46if you have a house
14:47and you rent it out,
14:48then it's an asset
14:49because it puts money
14:50in your pocket
14:51every month.
14:53And this is the cash flow
14:54pattern of a liability.
14:56A liability
14:56takes money
14:57out of your pocket.
14:59If you want to be rich,
15:00what you need to do
15:01is to avoid liabilities
15:03and instead
15:03buy more assets.
15:06Through these
15:06simplified diagrams,
15:08you can easily tell
15:09how each person
15:10handles money.
15:12Robert says,
15:12often those in debt
15:14think the answer
15:14to their problem
15:15is to make more money.
15:17But not only
15:17will more money
15:18not always solve
15:19their problems,
15:20it may compound them.
15:22It's why many people
15:23who get a sudden windfall
15:24through the lottery
15:25or an inheritance
15:26quickly burn through it.
15:28An increase in cash
15:30only results
15:30in an increase
15:31in spending.
15:33What is missing
15:34for so many people
15:35is the financial education.
15:37It's why they might
15:38still end up successful
15:39in their professions
15:40but still struggle
15:41with money.
15:42They may have learned
15:43how to make money
15:44but not how to manage it.
15:46People can be very intelligent
15:47and still be illiterate
15:48when it comes to finances.
15:50They learned how
15:50to work hard for money
15:51but not how to make
15:53their money work hard
15:54for them.
15:55Many people still believe
15:56that their home
15:57is an asset.
15:58But Robert teaches
15:59that a home
16:00is a liability
16:01because it takes money
16:02out of your pocket
16:03through taxes
16:04and other expenses.
16:06This doesn't mean
16:06you can't ever buy a house.
16:08You can, of course.
16:09But make sure
16:10to first buy assets
16:11that will generate
16:12the cash flow
16:13to pay for the house.
16:14Robert says
16:15if you want to get rich
16:16all you need to do
16:17is to buy more
16:18income-producing assets,
16:20keep your liabilities
16:21and expenses low.
16:22And when will you know
16:24that you already
16:24have enough wealth?
16:26Robert uses
16:26the following definition
16:27for wealth.
16:28Wealth is a person's ability
16:30to survive
16:31so many number
16:32of days forward
16:32or if I stopped
16:34working today
16:35how long could I survive?
16:37Another way of stating it,
16:38Wealth is the measure
16:40of the cash flow
16:41from the asset column
16:42compared with
16:43the expense column.
16:45When your assets
16:45generate enough income
16:47to cover your expenses,
16:49you are wealthy,
16:50even if you are
16:52not yet rich.
16:54Lesson three.
16:55Mind your own business.
16:58A friend of Robert
16:59heard Ray Kroc,
17:00the founder of McDonald's,
17:01speak at the University
17:02of Texas in 1974.
17:04Afterward,
17:05Ray agreed to join
17:06the students
17:06at their favorite hangout
17:08for a few beers.
17:09He asked the students
17:10what business he was in.
17:12At first,
17:13they laughed
17:13and then they answered
17:14that he was in the business
17:15of selling hamburgers,
17:17of course.
17:18But Ray told them
17:19he was not
17:19in the hamburger business
17:21but in the real estate business.
17:23He knew that the land
17:24and location
17:25of each franchise
17:26were the most significant factors
17:28in its success.
17:30Today,
17:31McDonald's is the largest
17:32single owner
17:33of real estate
17:34in the world.
17:35owning some of the most
17:37valuable intersections
17:38and street corners
17:39around the globe.
17:41There's a big difference
17:42between your profession
17:43and your business.
17:45Often,
17:45Robert asks people,
17:47what's your business?
17:48And they say,
17:49oh,
17:49I'm a banker.
17:50Then he asks them
17:51if they own the bank
17:52and they usually respond,
17:54no,
17:55I work there.
17:56In that instance,
17:57they have confused
17:58their profession
17:59with their business.
18:00Their profession
18:01may be a banker
18:02but they still need
18:03their own business.
18:04So many people
18:06work for everyone else.
18:07Their employer,
18:08the government,
18:09taxes,
18:10and the bank,
18:11mortgage.
18:12What Ray Kroc
18:14and Rich Dad knew
18:15was secret number three
18:16of the rich.
18:18Mind your own business.
18:19Don't spend your whole life
18:20working for someone else.
18:22Too many people
18:23spend their lives
18:24minding someone else's business
18:25and making them rich.
18:27Minding your business
18:28doesn't mean
18:29starting a company
18:30though for some people
18:32it will.
18:32Instead,
18:33your business revolves
18:34around your asset column,
18:36not your income column.
18:38Keep your daytime job
18:39but start buying
18:40real assets,
18:42not liabilities
18:42that lose value
18:43as soon as you walk
18:44out of the store.
18:46Keep expenses low,
18:47reduce liabilities,
18:49and diligently build
18:50a base of solid assets.
18:53Parents need to teach
18:54young people this
18:54before they leave home
18:55so that they understand
18:56what a true asset is
18:58and won't find themselves
18:59trapped in a lifestyle
19:00of debt.
19:02Robert says
19:03real assets fall
19:04into the following categories.
19:05Businesses that do not
19:06require his presence.
19:08He owns them
19:09but they are managed
19:10or run by other people.
19:11If he has to work there,
19:12it's not a business,
19:13it becomes his job.
19:15Number two,
19:16stocks.
19:17Number three,
19:18bonds.
19:19Number four,
19:20income generating real estate.
19:22Five,
19:23royalties from intellectual property
19:25such as music
19:26and patents.
19:27Six,
19:28anything else that has value,
19:30produces income,
19:31or appreciates
19:32and has a ready market.
19:34Acquire assets that you love.
19:36Robert loves real estate
19:38and thus spends most of his time
19:40thinking about
19:40and shopping for it.
19:42If you don't like real estate,
19:44don't invest in it.
19:45Even while working for Xerox,
19:47Robert minded his own business.
19:49He kept his day job
19:51and slowly built his asset column.
19:53The more he understood accounting
19:54and cash management,
19:55the better he was
19:56at analyzing investments
19:57and eventually building
19:59his own company.
20:00He doesn't recommend
20:01people start a company
20:02unless they really have
20:04the desire to.
20:05Otherwise,
20:06he advises them
20:06to keep their day job
20:08and mind their business,
20:09building and keeping
20:10their asset column strong.
20:13As cash flow grows,
20:15you can indulge in luxuries,
20:17but only if the cash flow
20:19supports them.
20:20Build the asset column
20:22and let the income generated
20:23by those assets
20:24pay for the luxuries.
20:26When assets generate
20:28enough income
20:28to cover luxuries,
20:30that's when you can buy them.
20:32Lesson four.
20:34The history of taxes
20:35and the power of corporations.
20:37Many people see Robin Hood
20:39as a hero,
20:40taking from the rich
20:41and giving to the poor.
20:42Rich dad did not share
20:44that opinion.
20:45He called Robin Hood a crook.
20:47Though the popular sentiment
20:49is that the rich
20:49should pay more in taxes
20:51and give to the poor,
20:52in reality,
20:53it's the middle class
20:54that is heavily taxed,
20:56especially the educated
20:57upper income middle class.
21:00To understand how this happens,
21:02Robert gives a brief
21:02history of taxes.
21:04In England and America,
21:05originally there were no taxes,
21:07only occasional temporary levies
21:09to pay for such things as wars.
21:12In 1874,
21:13England made income tax
21:14a permanent levy
21:15on its citizens.
21:16And in 1913,
21:18America made an income tax
21:20permanent.
21:21These countries were able
21:22to get taxes accepted
21:24by the majority
21:25because they were first levied
21:27only against the rich.
21:29However,
21:30although income tax
21:31was designed
21:32to punish the rich,
21:34it wound up punishing
21:35those who had voted for it,
21:36the poor and middle class.
21:39Rich dad explained
21:40that he and poor dad
21:41were opposite.
21:42Poor dad,
21:43as a government employee,
21:44was rewarded
21:45if he spent money
21:46and hired people,
21:47making his organization larger.
21:50But for rich dad,
21:51the fewer people he hired
21:52and the less money he spent,
21:54the more he was respected
21:55by his investors.
21:57Poor dad sincerely believed
21:59the government
21:59should help people.
22:01For Robert,
22:01it was a challenge
22:02to work for one
22:03of the biggest capitalists
22:05in town
22:05and go home
22:06to a prominent
22:07government leader.
22:08It wasn't easy
22:09to know which dad
22:10to believe.
22:12But over time,
22:13as Robert studied
22:14the history of taxes,
22:15he saw an interesting
22:16perspective.
22:18As the government's
22:19appetite for money grew,
22:20taxes soon needed
22:21to be levied
22:22on the middle class,
22:23and from there,
22:24it kept trickling down.
22:26But the rich
22:26saw an opportunity
22:27because they don't play
22:29by the same set of rules.
22:32Corporations,
22:32which became popular
22:33in the days of sailing ships,
22:35offered a way
22:36around taxes.
22:38Understanding the legal
22:39corporate structure
22:40gave the rich
22:40a steep advantage
22:42and allowed them
22:43to outsmart
22:44the intellectuals.
22:45A corporation
22:46is simply
22:47a legal document
22:47that creates
22:48a legal entity.
22:49It's not really
22:50a thing,
22:51not a factory
22:52or a group of people,
22:54but it offers
22:55a lower income tax rate
22:57than individuals have.
22:58This is why
22:59most wealthy people
23:00on the planet
23:00don't pay taxes
23:01or pay very little
23:03percentage of their
23:04income as taxes.
23:05Attempts to punish
23:06the rich rarely work
23:08because the rich
23:09find ways
23:09to minimize
23:10their tax burden.
23:12Lesson number five,
23:13the rich invest money.
23:16Our mind is
23:17the most important asset.
23:19If you train it right,
23:20millions can be made
23:21from a simple idea
23:22or an agreement.
23:23If you increase
23:24your financial intelligence,
23:26you will start seeing
23:27things that others don't.
23:28In other words,
23:29you'll start inventing money.
23:31For example,
23:32in the early 1990s,
23:34the economy
23:34in Arizona,
23:35USA was terrible.
23:38When most people
23:38were scared
23:39and warned about
23:40the economic crash,
23:41Robert and his wife,
23:42Kim,
23:43made a lot of money.
23:45Robert gives an example
23:46of buying a house
23:46worth $75,000
23:48for $20,000.
23:50They had to put
23:51two grand down
23:51as a down payment,
23:53but they didn't have it,
23:54so they asked a friend
23:55to lend them two grand
23:56for a $200 fee.
23:58The friend agreed,
23:59and while the purchase
24:00was being processed,
24:01Robert ran an ad
24:02advertising the same
24:04$75,000 house
24:05for only $60,000
24:07and required
24:08no down payment
24:09from the buyers.
24:11As soon as the house
24:12was legally his,
24:13he sold it in minutes,
24:15and the $40,000
24:16was created
24:17almost out of nothing.
24:19Total working time?
24:21Five hours.
24:23What this simplified example
24:25illustrates
24:25is how ideas
24:26can create
24:27hundreds of thousands
24:28of dollars
24:29if you improve
24:30your financial intelligence
24:31and see what others miss.
24:34Robert says,
24:35markets go up and down
24:36and investments
24:37come and go.
24:38The world is always
24:39handing you opportunities
24:40of a lifetime.
24:42You simply need
24:43to be able
24:43to see them.
24:45The more you develop
24:45your financial intelligence,
24:47which takes time,
24:48the more opportunities
24:49will be offered
24:50to you.
24:51There are many changes
24:52ahead in our world,
24:54and developing
24:54your financial IQ
24:55allows you to see
24:56that future of change
24:57through the lens
24:58of excitement,
24:59not dread.
25:00You'll see the opportunities
25:02and act on them,
25:03as opposed to those
25:04who allow their fear
25:05to keep them
25:06on the sideline,
25:07watching others
25:08move boldly forward.
25:10For example,
25:11land was wealth
25:12300 years ago.
25:13Later,
25:14wealth was in factories
25:15and production.
25:17Today,
25:17wealth is in information,
25:19but information
25:19flies around the world
25:20at the speed of light,
25:21and this process
25:22will be faster
25:23and more dramatic
25:25as time passes.
25:27Lesson six.
25:28Work to learn,
25:29don't work for money.
25:32Robert was interviewed
25:33a few years ago
25:34in Singapore
25:34by a journalist
25:35who,
25:36over the course
25:36of their conversation,
25:38revealed that she wanted
25:39to become a best-selling
25:40author like him,
25:41but her novels,
25:42which everyone said
25:43were excellent,
25:44never sold.
25:46Robert suggested
25:47that she take a course
25:48in sales training.
25:49That offended the reporter
25:51who said she had
25:52a master's
25:52in English literature
25:53and didn't see
25:54how learning to sell
25:55would help her.
25:56In fact,
25:57she hated salespeople.
25:59When Robert pointed out
26:00that he was
26:01a best-selling author,
26:03not a best-writing author,
26:05she replied that
26:06she would never
26:07step so low
26:08and learn to sell
26:09and left the interview.
26:12There are talented people
26:13all around us
26:14who struggle financially,
26:15just like that reporter.
26:17In the words
26:18of one business consultant,
26:20they are one skill
26:21away from greatness.
26:22When it comes to money,
26:23the only skill
26:24most people know
26:25is to work hard.
26:27If that reporter
26:27took some courses
26:28in sales,
26:29then got a job
26:30at an advertising agency,
26:32she would learn
26:32a lot about sales
26:33and then she could
26:34use that knowledge
26:35to sell more novels.
26:36When Robert came out
26:37with his first book,
26:39If You Want to Be Rich
26:40and Happy,
26:40Don't Go to School,
26:42a publisher suggested
26:43he change the title
26:44to The Economics
26:45of Education.
26:47But Robert knew
26:47that such a title
26:48wouldn't sell.
26:50Even though
26:50he is pro-education,
26:52he chose a title
26:53that was controversial
26:54because he knew
26:55it would get him
26:56on more TV
26:56and radio shows.
26:58And it worked.
26:59Rich Dad encouraged Robert
27:01to learn a little
27:02about a lot.
27:03That's why Robert
27:04and his friend Mike
27:05had worked so many jobs
27:06growing up
27:07to gain a variety
27:08of experiences.
27:10Most people work hard
27:11to get a secure job,
27:12focusing on pay
27:13and benefits
27:14in the short term.
27:15What they should do
27:16is seek work
27:17that will teach them
27:18the skills they'll need.
27:20Robert recommends
27:21a long-term view
27:22instead of simply
27:23working for money
27:23and security,
27:24take a second job
27:25to learn a second skill.
27:27Many will resist this
27:29because they aren't
27:29ready for change.
27:31But it's like going
27:31to the gym.
27:32You might have to
27:33talk yourself into starting,
27:34but you'll be so glad
27:35you did
27:36when the workout is over.
27:38Poor Dad wanted Robert
27:39to become specialized,
27:40even though that didn't
27:41work out well
27:42in his own life.
27:43He never understood
27:44that the more specialized
27:44you become,
27:45the more you are trapped
27:46and dependent
27:47on that specialty.
27:49Rich Dad,
27:49on the other hand,
27:50encouraged Mike and Robert
27:51to groom themselves
27:52and learn about
27:53a lot of different
27:55areas of business.
27:56According to Robert,
27:57the main skills needed
27:58for success are
27:59one, management of cash flow,
28:01two, management of systems,
28:03and three, management of people.
28:05And the most important
28:06specialized skills
28:07are sales and marketing.
28:10These are skills
28:10Robert works on constantly,
28:13attending courses
28:13or buying educational resources
28:15to expand his knowledge.
28:18Lesson seven,
28:19overcoming obstacles.
28:21The four main reasons
28:23financially literate people
28:24may still not develop
28:25abundant cash flow
28:26are one, fear,
28:28two, cynicism,
28:30three, laziness,
28:31and four, bad habits.
28:34Let's look at each of them.
28:35Overcoming fear.
28:37No one likes to lose money.
28:39The only people
28:39who have never lost money
28:40investing are those
28:41who haven't done it.
28:43Everyone has the fear
28:44of losing money.
28:45The difference is how
28:45you handle fear and losing.
28:48The primary difference
28:49between a rich person
28:50and a poor person
28:50is how they manage that fear.
28:53Robert says,
28:54I have never met
28:55a rich person
28:56who hasn't lost money,
28:57but they don't let
28:58the fear of that
28:59take them out of the game.
29:01Most people play
29:01not to lose
29:02when they need
29:03to be playing to win.
29:05And that's why
29:05so many people
29:06struggle financially.
29:08They might have
29:08a safe, sensible,
29:10and balanced portfolio,
29:11but it's not
29:12a winning portfolio.
29:13They're playing
29:14not to lose.
29:16For example,
29:17a balanced portfolio
29:18isn't a bad thing,
29:19but it's not going
29:20to help you win big.
29:22It's not how successful
29:23investors play the game.
29:24You must be a little
29:25unbalanced in the beginning
29:27and put your eggs
29:28in a few baskets
29:29and focus on them.
29:32Overcoming cynicism.
29:33Whether it's our own
29:34self-doubt
29:35or the doubts
29:35of other people
29:36in our lives,
29:37often we allow that doubt
29:38to keep us from acting.
29:40We play it safe
29:40and opportunities
29:41pass us by.
29:43Robert shares
29:44the example of a friend
29:45who was about to buy
29:46an investment property
29:46for a great price
29:47but backed out
29:48at the last minute
29:49when a neighbor
29:50who wasn't an investor
29:51told him it was a bad deal.
29:54Had he stayed in it,
29:55he would have doubled
29:56his investment
29:56and started to get out
29:57of the rat race.
29:59Doubts and cynicism
30:00keep most people poor.
30:02Rich Dad liked to say,
30:05Cynics criticize
30:05and winners analyze.
30:08Winners keep their eyes open
30:09and see opportunities
30:10everyone else missed.
30:13For example,
30:13real estate is a powerful
30:15investment tool
30:16for anyone seeking
30:17financial independence.
30:19Yet every time Robert
30:20mentions real estate
30:21as a vehicle,
30:22he often hears,
30:23I don't want to fix toilets
30:24or I don't want to deal
30:26with problematic tenants.
30:28They focus on toilets
30:29and it keeps them poor.
30:33Overcoming laziness.
30:35What's the cure to laziness?
30:37A little greed.
30:39That can be hard to hear
30:40because so many of us
30:41were raised to see greed
30:42or desire as a bad thing.
30:44Rather than saying,
30:45I can't afford it,
30:47change your mindset to,
30:48how can I afford it?
30:50That opens the brain
30:52and forces it
30:53to think of solutions.
30:55I can't afford it
30:56is a lie.
30:57The human spirit knows
30:59it can do anything.
31:00By saying you can't do something,
31:02you're creating a conflict
31:03between your spirit
31:04and your lazy mind.
31:06How can I afford it
31:08creates a stronger mind
31:09in a dynamic spirit?
31:11Without that little greed,
31:13the desire to have something better
31:14wouldn't be possible.
31:16Our world progresses
31:17because we all desire
31:19a better life.
31:20New inventions are made
31:21because we desire
31:22something better.
31:23We go to school
31:24and study hard
31:25because we want
31:26something better.
31:28Too much greed is bad,
31:30but a little
31:30can motivate you.
31:33Overcoming bad habits.
31:35To be successful,
31:36you must develop
31:37successful habits.
31:38Poor dad always paid
31:39everyone else first
31:40and himself last,
31:42but he rarely had
31:43any left over.
31:44This was his habit.
31:45On the contrary,
31:47rich dad always
31:47paid himself first,
31:49even if he was short of money.
31:51He knew that creditors
31:52and the government
31:52would complain
31:53if he didn't pay them.
31:54This motivated rich dad
31:56to seek other forms
31:57of income to pay them.
31:58If he paid himself last,
31:59he wouldn't feel
32:00that kind of
32:01productive pressure.
32:02Forcing himself
32:03to think about
32:03how to come up
32:04with the extra income
32:05to pay the creditors
32:06made him stronger.
32:09This is it for this video.
32:10I've summarized
32:11several other books
32:12from Robert Kiyosaki.
32:14If you are interested,
32:15then check out the playlist
32:16you see on your screen.
32:17Thanks for watching.
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