what you will find out there are many
people in the financial services
industry that do not want me to tell you
what I’m about to tell you tonight so
but you know please be aware of that
also want to caution you this if some of
you what I may say tonight may threaten
or challenge some of your flat your
beliefs about money I mean how many we
were taught you know to save money for
example good tonight you’re going to
find out why that’s a bad idea so that’s
what I think this program is going to
shake some of you in all this for the so
stay tuned I promise
if you stay tuned you’re at minimum your
financial IQ will go up may learn to
take more control of your money and
possibly survive the financial hurricane
that’s going to start brewing in the
year 2008 the first year the first of 75
approximately 75 million baby boomers
begin to retire and how many people
realize those baby boomers may not have
enough money to retire on good and good
that’s why I thank you young people
because it’ll be up to you to take care
of us so so before we could get us a
question how many of you have probably
read Rich Dad Poor Dad thank you who has
not yet read the book good to some of
you for those who haven’t read the book
it’s good to see some customers still
out there and I bought my book but
anyway flow they’re having Rich Dad Poor
Dad I’ll give you a little to my
background missed airport as a true
story about my two dads my real dad was
the head of education for the state of
Hawaii
very smart hardworking great guy you
know it’s a PhD and he and he offered
ran he also ran for lieutenant governor
of the state of why so the great man but
I call him my poor dad very simply
because even though he was a high paid
government official no matter how much
money he made he was broken into every
month and he ultimately died broke so
obviously money doesn’t make you rich or
poor you know it’s really education that
does and as you can tell I’m fourth
generation Japanese American which means
I don’t speak Japanese and I’m gonna let
you know that now you know I barely
speak English
my Rich Dad on the other hand was my
best friend’s father and although he was
a man who started with nothing he
ultimately became on the richest men in
Hawaii so when you look at though you
know the white sands and the blue waters
and the tall palm trees and the hula
girls and the tall hotels right on
Waikiki Beach my rich dad’s family owns
some of the land under those hotels so
Rich Dad Poor Dad this book here is a
very simple true story of what two
fathers tell two sons my best friend and
I about the subject of money starting
the age of nine and I believe one of the
reasons the book has been so successful
it has written for nine year olds and
it’s simple enough for everybody to
understand high finance or more
importantly why the rich are getting
richer so that’s basically you know my
background as I grew up in Hawaii I was
educated in New York and spent six years
in marine corps went to Vietnam twice
and all that and then I came back and
started my business career so next
question is this how many people have
read this book prophecy doesn’t as fewer
of you have read this book and what Rich
Dad Poor Dad is a popular book I think
this is a more important book and the
reason I think prophecy is more
important it’s about a very important
year and that year was 1974 and 1974 was
a year that the u.s. swung from
socialism to capitalism a very important
reason for prop 19 74 it was one of
called ERISA came out and a riskless
stands for Employee Retirement Income
Security Act and the government’s
worried about your security you know
you’re in trouble but also it led to a
thing called the 401 K back in the 1980s
this is a very big change in the history
of our world right now
so prophecy came out in 2002 it was not
a very popular book because he was
writing about the failure of these
things called 401ks and pension plans in
the crash of Wall Street so this was
2002 and then in 2005 Time magazine just
in October of 2005 came out with a front
page cover of saying the same thing I
said here in prophecy that there was
been a big ripoff of people’s pensions
and Time magazine three years later in
2005 is a great retirement ripoff
millions of Americans who retire with
benefits are in for a nasty surprise
corporations are picking people’s
pockets with the help of Congress and
that’s not going on that’s why so many
people are in trouble and then one day
later the new york times magazine came
out saying the same thing prophecy did
and it says we were get to inform you
that you no longer have a pension and
that’s what that’s why USA Today came
out with a statement that said America’s
greatest fear is running out of money
during retirement and that’s what the
this program is about is why we have
this problem right now and why so many
people may be financially wiped out in
the financial horror game that’s hitting
us and also hopefully what you can do
about it so they may be able to save
your friends and family unfortunately
what I’m about to save tonight will not
work for everybody as you know life is
not fair but at least you’ll have an
idea of what you might be able to do on
this whole thing
so going into it really quickly is the
difference between one of the reasons
people are are having a big having
trouble is they don’t know the
difference between still can’t spell
that well wealth and being rich
I like to explain really quickly that my
rich dad taught me that wealth is
measured in time and rich is measured in
money and really quickly the difference
here is this a person who is when you
measure wealth for example let’s say you
have 10000 and savings and your monthly
expenses are a thousand dollars a month
that means you’re ten months wealthy you
will survive for ten months that’s what
it means and the reason people are
afraid of what’s going to come up with
them is they don’t have enough wealth
they’re afraid of running out of money
during retirement and what rich is is
trying to measure them times in their
lives and money so what my rich dad
taught me is don’t worry about becoming
rich worry about becoming wealthy and
one of the reasons I was able to retire
at the age of 47 was because I focus on
being wealthy not being rich and that’s
a very big difference here I thought I’d
review something a little book called
the cash flow quadrant I think it’s one
of the most important books for people
who want to make changes in their lives
because as I said the e stands for
employee S stands for self-employed or
small business being stands for big
business like Bill Gates and I stands
for investor like Donald Trump or Warren
Buffett so you know my poor dad always
said to me son go to school to get a
what job and he was programming me and
this was the word his program me to be
an employee and you know I talked to my
mom I said you know dad I don’t I don’t
want to be an employee in my desk you
must get a job you must get a job you
got to have good education good grades
get your PhD oh my goodness my mom says
don’t argue with your dad you know if
you want to be rich go to school to
become a doctor you know and yes
specialist nice and I said to my mom’s
only one problem mom says what’s that
doctors are smart she says you have a
good point there
you know don’t be a doctor
and I talked to my rich dad and he says
you know Robert are you basically lazy
and incompetent I said yeah I said good
you’ll do well in business and so this
year is having other people work for you
like my advisers and things like that
and this is having money work for me and
they’re very different educational paths
another thing my Rich Dad says again
going to words of vocabulary as
employees always say the same words
whether they’re the janitor or the
president of the company the CEO
employees all say the same work I’m
looking for a safe secure job with
benefits that’s their whole attitude and
their emotion is fear they don’t visit
they don’t know how survive in the real
world they need that they have that fear
travel and s self-employed their words
are if you want to done right do it by
yourself so these guys a problem with
them is they may own a business but they
really own a job they cannot quit
because they don’t trust other people
their emotion is trust and a business
owner is like me I want to have the
smartest people around me as much as
possible because then I don’t have to do
that much work and as an I I want to
know how have my money work hard for me
so I don’t have to work hard for money
so that’s why I started off as an
entrepreneur and over here this is the
beauty of real estate for every dollar I
make here I bring it down here and my
banker will give me nine more dollars as
long as it’s real estate tax free money
so I’m getting ahead faster and faster
and faster very simply because for every
dollar I have here my bankers giving me
eight or nine dollars to get ahead
financially because let me first
Ascencio their tax free money and if I
sell a property again I do a tax free
that’s why I’m getting rich that’s why
education or financial education is so
important and I think it’s really silly
that our school systems keep saying to
you go to school to get a safe secure
what job whence jobs are being exported
overseas so fast right now it’s
ridiculous
i mean i think i think was JP morgan
they just export another 47 hunt for
t700 jobs and these are smart guys guys
with MBAs and all they exported it to
india
so that’s what’s happening in the world
but the reason 1974 is so important was
because when ERISA which when Alan was a
401k came out it forced these people to
become investors also and that’s why
this change was such an important change
here so the Laporte point into it is
this is that there’s three basic kinds
of education one is academic the other
one is
professional so you go to school to
learn reading and writing it’s very very
important I didn’t do very well here but
I did graduate and then professional is
when you become a doctor or a lawyer or
something like that that’s those are
very important but what I’m saying here
is this in today’s tough in this world
there’s three types of education that’s
essential
I’m not saying these are not important
I’m saying they’re not enough today you
need more and the third type of
education is education that’s called
financial education so what this program
is about it’s not so much about these I
said these are very important but so is
this one right now and I’ve never
understood why our school systems don’t
teach us anything about money
your wonder that yourself why because
rich or poor smart or not so smart we’re
all going to use money and it’s because
our school systems don’t teach us much
about money that’s the reason so many
people are having problems today
financially and so I’m not blaming Wall
Street or people who are financial
advisers I’m blaming our education
system for not keeping up with the
changes in time so what happens because
we don’t have much financial education
at school we actually learn it from our
families so what happens with poor
people is you can look on the screen
over here in the plasma the poor people
tell their kids that the government is
going to take care of you you should
count on Social Security and you should
count on Medicare and things like this
what the middle class tells their kids
is that they should have a good
education get a good high paying job a
house and a pension what they are
passive investors a passive investor is
somebody who turns their money over to
somebody they hope and pray as an expert
the poor and non investors so the judge
being the passive investor and an active
investor and what the rich t-shirt kids
what my rich dad taught me was that I
should have I should be an entrepreneur
like Bill Gates or Oprah and I should be
an active investor like Warren Buffett
or Donald Trump and things like this so
in this program what you’ll be learning
about is the difference between active
investors and passive investors a
passive investor is a person always
going around saying I have twenty five
thousand
I have $25,000 what should I do with it
and the first thing I say if I were you
I would keep your mouth shut you know
because if you go around telling people
you have $25,000 and you were moron
somebody will tell you what to do with
that money and they’re gonna tell you to
give it to them does that make sense you
guys here so that’s what this program is
about so that at least you can help
determine a good financial advisor and
hey bad one because if you don’t know
what you do with your money somebody
else does so when we come back I’ll be
teaching more about financial education
and the secret boards that can change
over
I just love the way Robert Kiyosaki
I’ll make your calls join here’s Robert
Kiyosaki with rich dad’s guide to wealth
the quick reminder what we covered in
the last part was in 1974 the United
States change of the world change
actually from socialism to capitalism
and the reason that’s so important is
because the world changed and shifted to
a 401k or pension plans is because it
forced many people who were easy neces
to become investors like I said my poor
dad was a very smart good man but he was
a non investor there’s people who are
passive investors and that’s what most
people are they go to their company that
has given put into the 401k and they
hope and pray that person managing their
money is smarter than they are and the
third type is the active investor now if
you’re going to be an active investor
then you have to have financial
education and one of the keys to
financial education you know a lot of
people say well it takes money to make
money
some people ever heard that statement
well that that’s absolutely not true
because you’ll prove tonight it doesn’t
take money to get money to make money
what it begins with is a thing called
words or vocabulary the English language
has approximately two million words in
it and each of us as individuals the
estimate has command of about five
thousand words so one of the ways to
start increasing your wealth and your
financial ability is change your
vocabulary and one of the reasons my
poor debt was poor it’s a good man he
had the vocabulary of a schoolteacher
you know he thought Germans and
prepositions were really important but
I’ve never made a dollar off a German or
a preposition yet that I know of you
know I needed to be abitt ah Pease ro
eyes IRR that’s what makes me rich so
just know that words make you rich and
I’ve been going into right now the basis
of financial education is words and this
here is a thing called the financial
statement as my rich dad often said to
me you know this is your report card
when you grow up when you leave school
as my Rich Dad said his banker has never
ever asked to see his report card yet
you know banker never said say Robert
can you tell me what college went to are
you an A student
are you abhi student they never asked
them if you’re a professional investor
they will ask you for something called a
financial statement if you’re a non
investor or a passive investor like a
401k they’ll ask you for a credit report
so to begin becoming rich it’s you you
must have one of these I mean it’s a
must these people have credit reports
these people have financial statements
it’s very very big differences here so
let’s begin with words here and one of
the biggest words that people have
mistaken on the wrong definition for are
these words here assets and liabilities
how many people have ever heard people
say my house is an asset good that’s
using the wrong definition that’s the
problem so I’ll give you the definition
my rich dad gave me you won’t find this
in the regular dictionary oh this is a
very simple definition because this is
the guy to wealth a definition of an
asset is something that puts money in
your pocket whether you work or not
that’s very simply it ok so when you
look at this financial statement this is
an income statement and balance sheet
there’s one more form that basic a
common accountant but basic County
requires it’s called a statement of
cash flow and what that shows you here
is this assets are putting money in your
pocket
so for example I have a house and every
month let’s say I collect a hundred
dollars from after paying all my
expenses the house is an asset but if
the house goes on rented and every month
is now costing me money that same house
is a what liability so this is the cash
flow pattern of a liability so when a
person says their house is an asset I
then ask them I say is that house
putting money in your pocket they so
know nobody’s gone up in value that
shows lack of financial intelligence or
financial IQ okay I’m not saying don’t
buy a big house I’m not saying any of
that stuff I’m just saying don’t call a
liability a what asset and that’s the
problem is using the wrong word for the
wrong thing or I could have a car if I
use a car as a taxi and every month I’d
put a thousand dollars in my pocket it’s
an asset but I have my BMW here and it’s
costing me a thousand dollars a month
it’s a liability so that’s very simply
it so don’t call asset or liabilities
assets and that’s where people get in
trouble the next thing up is sale your
banker my banker has never asked me for
my report card yet and my banker if I’m
gonna borrow a lot of money from them
they want to see my financials and what
a banker was looking for is your
financial IQ they don’t care how your
academic IQ they want to see how smart
you are with money and it’s not that I
you know wear nice clothes and have a
nice watch and have a nice house a nice
car banker doesn’t care because how many
people know people who are looking good
but I flat broke I’m talking about here
so and that’s that’s the big problem
here so when a banker looks at this
thing the banker is looking again at
cash flow so when a banker looks at this
let’s say the person has a job the money
comes in and the money goes out they
look at that that’s a cash flow pattern
of a poor person if they don’t change
your pattern they’ll be poor it is not
how much money you make it is how much
money you spend is the
issue here for example I know of a
doctor friend he makes about $400,000 a
year he’s very proud he has no debts you
know he’s one of people think that debts
bad and that’s really moronic
but anyway so but he’s people he makes a
hunt 400,000 and he spends 400,000 so
even though he makes a lot of money he
has a cash flow pattern of a what poor
person what the middle class generally
tend to do is the first thing they want
to do is have a big house and they have
a thing called a mortgage and the
different definition of mortgage comes
from the French word more tier which
means death that’s pretty neat so what
happens they have a mortgage gets a nice
BMW or Mercedes so they’re looking good
but going broke you know so in the
banker they come in with their nice
suits and all this the banker looks at
it and goes ah I can see a cash flow
pattern as this and this is the cash
flow pattern of a middle-class it’s
working hard and going broke you know
they never get ahead they buy big houses
they do home equity loans and they think
they’re a Donald Trump with realist has
real estate investors all that God has a
big house they’re in debt to a lot of
people use their house as an ATM machine
and every time that goes up to failure
to borrow the money out know that is
really a losers point of view I mean
that’s not bankers loving but you’re
greatly in debt but it’s not a way to
get ahead and this is the cash flow
pattern of a rich person they have
assets here and so generally what it is
is they have a business they have real
estate and they may have dividends from
stocks and bonds and stuff like that or
interest at so those are assets so
oftentimes I ask people think about it
this way if you stopped working today
let’s say you’re married you have a
spouse if you stopped working today how
much money keeps coming in your pocket
and how much money keeps going out all
the things that are taking money out of
your pocket are what liabilities and I
think putting money in your pocket is
and asset so the reason my wife and I
could retire is very simply we have
money going like this this means we’re
wealthy
you know we don’t have much in savings
and all that but every month it’s
hundreds of thousands of dollars going
like this and that’s how you get wealthy
you know just have assets to produce
money every single month when I did this
program in Singapore I asked people
raise their hand and say would you mind
telling me some of the assets you have
it’s women raise their hands yes she
says ah my best asset is my husband and
I said ma’am ma’am I’m talking about
non-human inanimate objects she says
that’s it might make lots of money for
me I’m not talking about human being
slavery has been you know abolished for
a while here and all of this so I said
there’s been assets versus liabilities
the cash flow pattern and that’s why
bankers do not ask you for your what
report card they want to see your
financial statement if you have a good
financial IQ they’ll give you lots of
money even bad financial IQ they’ll give
you a credit card or home equity loan
that’s the difference and years and
years ago I went to Sunday school I’m
not a Bible start scholar not pushing
pledge on anybody I remember the story
of the you know the rich man I think he
had three sons with some blenders and he
gave one son X amount of dollars for the
second son X one of the talents you call
them and then the third son talents and
the first sign blew it got rid of all
its money and he said okay second son
came in and what you do with the money
in a son said I buried it and then the
third son multiplied it you know came
back with give him a thousand dollars
came back with $5,000 and at that point
the father or whoever the guy was took
all of the money and gave it to the what
the third son who multiplied the money
and that’s what I learned in Sunday
school is that not God where ever does
not like people who blow their money
people would just bury the money see the
poor spend their money the middle-class
bury their money you know just put it in
401ks or savings and the rich know how
to multiply their money so the real key
is this is not so much how much income
you make but where you put your money
its expenses do you expense your money
in this way this way or this way and
it’s why people who always try to make
more money they don’t get ahead
very simply because they’re looking in
the wrong place it’s over here is what
do you spend your time and money on
that’s why I thank you guys for you know
being here tonight and those you’ve got
home supporting Public Television and
your education you’re spending time and
hopefully some money to support your
education and a great cause here and
that’s really important is how you spend
your time and your money that makes the
difference and then the third thing is
this just to cover this thing while your
house is not an asset is when your
banker says your house is an asset your
banker is not lying to you this will
explain it better because to understand
this if you have a mortgage on a balance
sheet it must balance over mortgage is
your liability it has to balance the
your same mortgage as your bank’s asset
that’s the difference so that’s why your
banker says your house is an asset not
saying it’s not lying to you it’s just
saying it’s not whose asset is it’s
their asset you know and the way you
know that again is assets put money in
your pockets and liabilities what take
money from your pocket so when you look
at this money comes in when it goes out
goes in here and comes back here so it’s
taking money from your pocket and it’s
putting money in the bank’s pocket and
that is basically you know why your
banker says your house is an asset and
why it’s very important to understand
the definition of the word you use don’t
just use a work because if you keep
saying your house as an asset when
there’s a liability where you say a car
is an asset when it’s really a liability
and your vacation to Hawaii that’s it
for the liability or your home equity
loan is an asset you’re gonna not gonna
make it does that make sense you guys
here but what most people tell you is
this repeat after me work hard save
money get out of debt invest for the
long-term and diversify how many people
heard this okay and the reason I bring
this up here is that because around 1996
I was watching this very famous Morning
Show you know that broadcast all across
the nation and they have these nice
handsome you know couple who was a host
and hostess and they come and say and
today we have the financial expert of
all times
and he’s going to give us the financial
advice what I knew
it’s like 1996 or whatever it was you
know and it welcomed so-and-so in there
clap you know and out comes a financial
expert and he goes hi everybody
yeah what I recommend for this year 1997
is work hard save money get out of debt
I can even do it straight in the long
term and diversify and the and the whole
financial we thank you the next year
then by the back same thing and for the
new year I recommend you guys what work
hard save money get out of debt invest
for the long-term and diversify and the
hosted hosted oh I can’t believe what a
genius what a financial team just give
in my head I can’t believe every year
same guy same message same advice they
think it’s brilliant
then after 2000 the stock market started
to crash and they brained the same
expert on and he comes on and what does
he say what I recommend is work hard
save money get out of debt invest for
the long-term and diversify and the
market kept crashing and he skipped gave
the same advice and this is what I want
to say about that advice between the
year 2000 and 2004 millions of small
investors lost an estimated 7 to 9
trillion dollars the same time Wall
Street pays them as big as bonuses out
and this is the advice that we’re giving
people here I want to save you this
advice used to work it doesn’t work
today I’m not saying it’s bad advice and
it’s just saying it used to work after
1994 1974 it started to change and what
I’m gonna be going into is how that
change came about and why people are
getting in trouble following this advice
especially this one here because you’re
gonna find out the most risky of all
investments are savings stocks bonds and
mutual funds they are the riskiest of
all investments but most people think
they’re safe and that’s what you’ll find
out and that’s why I thank Public
Television for allowing me to say what
I’m going to say because there’s many
people as I said in organizations who do
not want me to tell you what I’m about
to tell you and all the little people
they hire who are financial experts but
they’re not really financial experts do
you realize most of financial experts
are not eyes they’re really ease and s’s
their sales people and I’ll be going
into some of those differences okay so I
know I’m an investor very simply because
I live by my income on my investments
I don’t live by my commissions and
there’s a very big difference so going
into it the reason work hard is obsolete
advice is because 1943 the US government
punished anybody was an employee after
1940 if there was a thing called current
tax payment net at that point anybody
who was an employee the government got
paid first how many we ever opened up
your own your paycheck and gone what
happened to my money
that was 1943 so the problem with being
an employee and working hard is the more
you work and the more money you make you
go up in tax brackets if you don’t get a
hit these guys here are taxed heavily
these guys have all the tax loopholes
that’s why I can make it make a lot of
money and pay zero taxes legally the
difference is I’m on this side here but
our school system teaches us to bend
this side in 1986 they passed an 86 tax
reform Act and they taxed all doctors
lawyers all the aged students they
nailed and so well the attorneys I don’t
mind but anyway but what happened here
is this is that guys like me you know
the C students we can make more money
and pay less taxes than the a students
which proves there’s a god somewhere the
next thing is saved money the reason
save money is an obsolete a dumb idea is
because in 1971 a man named President
Nixon took us off what’s called the gold
standard will the Bretton Woods
Agreement and at that point what
happened in 1971 money turned into a
currency so what you started to save
after 1971 was not money but a currency
and the problem with the currency is the
government can print it faster than you
can save it another thing about this if
you understand economics especially
Keynesian economics is that
when you look at a dollar a currency
let’s say this is one dollar and this is
forty years here a currency is designed
to go down to five cents over forty
years a currency is designed to lose
money so the government can keep running
up debt that’s the reason so they can
print it faster than you can save that’s
the big problem with the next thing is
this if you look at the real stats does
this and it’s a reason I don’t save
money if you look at this the last few
years like I said 1995 to 2005 what’s
happened is the dollar has gone this way
and the way you know how much is lost is
gold went from $250 up to $500 at the
same time that means your dollar lost
50% it lost 50% of us buying power and
the banks are paying you 1% interest
tell me that smart to save money that’s
why the debtor started to win because
what was happening as this was going up
and all this and the reason this happens
is for one very big phone up this is not
the only thing it’s not just gold
because I can hear the economists going
he doesn’t know what he’s talking about
well I’m not saying I’m an economist I’m
saying just look at the price of gold it
takes twice as many dollars to buy the
same amount day but not only that my
father’s house which he purchased in I
think nineteen nineteen sixty-five or
something he paid fifty thousand dollars
for it
and today it’s worth 1.5 million it’s
the same house so that means the
purchasing power of the dollar went wear
down the house didn’t go up in value
your dollar went down and the other
thing that comes to all that’s not
really good indicator but look at this
in 1995 oil was about 10 bucks today
it’s 60 bucks
so that means your dollar has you need
six more dollars to purchase the same
amount of oil and then the economists
say well oil doesn’t affect inflation
I’m going they want you to believe that
investing is risky how many people have
heard investing is risky
good what this section is about of this
program is how risky risk isn’t anything
but lack of control the number one
difference between an active investor
and a passive investor is a subject of
control so what I’m going to show you
tonight is how what I do as an active
investor is I want control if I have
control I don’t have any what risk and
that’s the difference so using a
metaphor that most of us can understand
over here we have you know a example of
a car okay now how many people realizing
there’s risk driving a car yeah but car
driving doesn’t have to be risky like
those guys want you to believe investing
is risky so some of the controls the six
controls a car must have number one is a
steering wheel right how many people
would not buy a car if it had no
ceremony good you know I mean so I’m you
sit down here like this so I sit down I
get in my car and control number one I
want to check on as I have a steering
wheel control number two gas pedal now
you have a gas pedal you better have
some what brakes how many people have
ever driven a car without brakes you
know you don’t need coffee for about six
weeks after that yeah
and then you have a forward and reverse
you know gear shift like this the other
thing you also have to have is a
driver’s license for driver’s ed and you
have to have insurance
so if I’m driving down the road you know
doing a little bit too fast
I hear the cop pulls me over a policeman
pulls me over what’s the first thing a
policeman asked me for driver’s license
and proof of what insurance how many
people would not let somebody who is
uninsured drive your car how many people
would not let somebody who had no
driver’s head drive your car you know I
mean that’s stupid
but that’s what investors are doing
they’re actually investing in savings
stocks bonds mutual funds with no
control and what happens that’s like
weighing like this and that’s why they
think it’s risky now this was the worst
part guess who else has no control your
financial advisor your financial advisor
diversify or what they do is this is
they go that’s the kind of financial
advice most people I get it
that’s risky that’s not what I do I want
control so let me help get out of this
wreck so when I’m as an investor I want
six controls too if a car has six
controls I want six controls as an
investor control number one you look on
the screen over here is I want control
of my income control number two expenses
three is asset value 4 is liability five
is I want financial education or
management and six that one insurance
those are the six controls I want as an
active investor so when we come back
what I’m going to talk about is one of
the ways to get rich is find that native
genius that’s well inside each and every
one of us and that’s what the next
section about here’s Robert Kiyosaki
with rich dad’s guide to well into a
thing my Rich Dad talked about is called
the game of money and the reason we say
it as a game is very simply because of
this and some of you may not be sports
fans but I love sports in football a
game is consistent of four quarters and
so my Rich Dad said life is also your
financial life is in four quarters also
so if we can have it up here on the
prompter on the plasma the game of money
we have a thing called a pregame show
okay and the next thing is that we go
into the first quarter so age 25 is
generally when most of us kind of get
out of school and we sort of figure out
what we’re going to do so age 25 to 35
is the first quarter the way we come up
with this is the ten years is because
our working life is generally 40 years
long 25 to 65 right so the first quarter
is 25 to 35 then what happens second
quarter is 35 to 45 got it you know
things like this by then if you should
be married which one be married your
career should be taking off and you have
a house a little bit in
and all this stuff and then we go into
halftime you know and at that point
sometimes in our lives is called midlife
crisis you know we say oh my goodness
I’m not getting ahead of knocking
promoting that game it panic sets in and
then we go into the third corner which
is 45 to 55 okay and then age is 55 to
65 is the fourth quarter and if you
haven’t acquired enough wealth like I
talked about the sleeping well and being
rich wealth is very simply measured in
time so we have recurring income coming
in for as long as you live here so if
you don’t have enough recurring income
from wealth you go into what’s called
over time and over time this means that
you may be on Social Security with my
Japanese friend call said oh so Social
Security you know because it’s so so is
that if you haven’t quite got it yet you
haven’t quite got it yeah over ties
means would you like that super-sized
would you like a giant size Coca Cola
with it or stuff like this and then you
go into what’s called out of time and I
think this is why people are terrified
right now is running out of money during
retirement because when you’re out of
time that often times your body gives up
and all this and what a lot of time what
people say is that you spend your health
gaining wealth and then the last few
years of your life you spend your wealth
trying to hang on to your health and
they say so many people their fortunes
get wiped out in the last two years of
their lives if they don’t have enough
and as I said the biggest problem in
America is not Social Security it’s
Medicare 64 trillion dollars in debt
right now so if you can so that’s why I
said I thank all of you who were born
you know after 1964 because you’re gonna
be paying for all the old guys who are
out of time especially right now pregame
show you know Paris Hilton was born I
think with three hundred million dollars
net worth she won the game before she
was born
you know how many people wish you were
you know born rich or all that kind of
stuff
I always did but but I wasn’t so
there are certain people who were born
with a silver spoon in the mouth and
they were so fortunate I wasn’t my wife
Kim won her game in the first quarter of
her life she was about 35 years old when
she retired she acquired enough well
enough passive income that she never had
to work again so her won she won the
game first quarter and I was 47 so I
wanted just in the second quarter of my
life that meant I never had to work
again not that I was rich but I was
wealthy I had money coming in every
month from my investments that I never
had to work again so then I took two
years off suffered my midlife crisis
then came back and when I was 40 when I
was 50 years old I wrote a book called
Rich Dad Poor Dad and the thing took off
and a whole new career opened up and now
I’m in the fourth quarter of my life and
thank God I don’t have to worry about
going into overtime or out of time
because acquiring wealth is just fun for
me
I love investing it’s not frightening
it’s control I have all that that make
sense you guys here is this fun so my
question is to you right now is what
quarter are you in how many people are
in the first quarter okay how many
people second quarter I’m a people third
quarter fourth quarter nobody’s raising
their hand on that one couple of you and
I won’t ask about overtime and out of
time but the question is this sometime
like it or not every single one of us
needs to win the game regardless of who
you are we need to win the game if we
don’t we go into this part over here so
with that I want to bring up my
sweetheart my darling
my best friend it’s almost 20 years of
marriage right now a mess my sweetheart
Kim
[Applause]
it has her own corporations I have my
own corporations if we ever split she is
completely independent she has control
of her own life that makes sense you
guys are that’s why we talk together he
had no money in matter of fact we
celebrated when we hit zero that’s how
far down we were Roberts been talking
about control and I love to encourage
women into this world of investing
because I think so many women today feel
out of control when it comes to money
when it comes to their financial freedom
in their financial lives and so my
passion is to educate and encourage
women in the world of investing and the
reason why I’m so driven kind of comes
from comes from an incident that
happened many many years ago and what it
was is I was 14 years old and I remember
coming home from school one day and I
walked in and there was my mom and her
best friend in our dining room and I
walked in and mom kind of signaled me –
no leave him alone leave him alone and
so I walked away into the kitchen and I
listened to the conversation and my
mom’s friend was very distraught she was
crying she was upset and it turned out
that her husband was leaving her for a
younger woman and she went on and on
they’d been married for 20-some years
and kept listening and then she said
something that just really hit home to
me and she said you know my marriage
hasn’t been good for many many years but
at least I was financially taken care of
and my mom said well that’s why you
stayed she said I stood because I stayed
because I didn’t know how to take care
of myself financially so at 14 years old
I decided I was never going to be
dependent on someone else for my
financial well-being and that was a
decision and that’s why I’m so driven
now to encourage women into this game as
well and so when Robert talks about
control I really believe that it’s time
that women today take control of their
financial lives I think it’s crucial I
don’t think it’s a luxury or a good idea
anymore I think it’s something that has
to happen
and you know the times have changed and
what worked for our mothers and our
grandmothers is not necessarily going to
work for us and our daughters and our
granddaughters and I came across some
startling statistics recently that show
how much times have changed for example
in the u.s. forty seven percent of women
over the age of 50 are single meaning
they are responsible for their financial
well-being and many of us have heard the
divorce rate one out of two marriages
ends in divorce so if she was depending
on Prince Charming to take care of her
well and who usually ends up with the
children the woman so the woman is now
responsible for herself and for her
children and the first year after a
divorce on average a woman standard the
living dropped 73 percent and for any of
you that are concerned about your
mother’s or your grandmother’s of the
elderly living in poverty three out of
four are women but the amazing thing is
80 percent of those women were not poor
when their husbands were alive so what
the statistics are telling me is that as
women especially as we get older we have
not been prepared we have not been
educated to take care of ourselves
financially and now is the time to do
that and it doesn’t take a lot it’s it’s
really just through education and that’s
why I’m so happy to be part of this
program on PBS because they’re all about
education and to get started in this
world of investing it takes education
start small you know make mistakes
you’re gonna make mistakes put a little
money down you’ll be amazed at how smart
you get when you put a little money down
on an investment your education goes
through the roof so again it’s just
about education and just to let you know
it’s not rocket science you know I don’t
have a special degree it doesn’t take
any special type of formal training when
I started in investing it was in 1989
and Robert came to me said it’s time you
start investing and I’m like I don’t
even know what the word means and so he
started to teach me what his rich dad
taught him about investing and I went
out and I’m stumbling along trying to
figure it out and finally I came across
this little two-bedroom
one bathhouse in a place called Portland
Oregon and I signed the papers and I got
the deal and and I’m doing all my due
diligence now and I’m checking it out to
see if I’m gonna do it or not and I’ll
tell you I was scared to death what if
the pennant was out what if the plumbing
breaks what if I what if I lose money
what if what if what if what if I was
scared to death and what happened is
when it came time to close the papers to
sign the papers my hand was shaking so
bad like they couldn’t even make out my
signature but the other thing that
happened is my fist was so tightly
clenched around my five thousand dollar
check that I had to part with that they
never they thought they’d never get it
but I did that deal and I went on to do
the next deal in next deal I kept
learning and I kept learning as I went
and when it when it came down to is
today
I control millions of dollars worth of
real estate and worth of property but it
all came down to it started with a
little education and it started with
that first step so I just want to say
again I so encourage women in this game
of investing it’s not difficult it takes
some time it takes some effort it takes
some education but the freedom for me
when I understood this game my
self-worth went up my confidence went up
I knew for the first time that I could
take care of myself I didn’t have to
depend on Robert I didn’t need Robert I
wanted Robert but I didn’t need him and
that made a huge difference so one final
statistic
only 20% studies show that only 20% of
baby boomer women will be financially
secure in retirement that means 80% of
us will not so again I thank you for
being at this PBS show because by being
here you’re getting yourself educated
and all it takes is education and some
action and you can be part of easily be
part of that 20% who’s secure and in
control thank you
well last thing I want to talk about
here is this is that I realized as I
studied education it came across I
started studying education a later time
I was about 38 years old and I realized
that each and every one of us was a
genius except in school there are
certain people I kind of classmate who
was considered a genius in school this
guy could do quantum physics and all
that when he was in kindergarten the
trouble is he couldn’t tie his shoelaces
how many people knew people like that
you know there absolutely are geniuses
in school but in the real world they’re
incompetent this guy didn’t know his
left hand from his right hand used to
play baseball and I said how can be a
genius he doesn’t know he could never
figure out with the glove when in his
left hand on his right hand but he was a
genius
you know I said how give me a genius he
can’t pitch can’t bet anything like this
so I started to realize that genius that
every one of us had it and what genius
stands for is this here
the chief the magic and so when I say
that this is this you know God created
every animal on earth every species to
have a special advantage for instance
birds can fly
cheetahs run fast and cockroaches we
can’t kill them
so if animals have special advantages so
does each and every one of us for
example Tiger Woods is a genius in the
environment called the golf course Tiger
Woods would not be a genius as a jockey
he’s just too big I would definitely not
be a jockey you don’t I mean like this
and you look at Mick Jagger he went to
school to be an accountant but he came a
billionaire as a rolling stone thing I
won’t leave you with tonight ladies and
gentlemen is have the courage to find
that environment like Tiger Woods on the
golf course Mick Jagger as a Rolling
Stone Oprah in front of television find
that spot where your genius comes out
that’s what intelligence is my genius
was crushed in school I was labeled
stupid and dyslexic and no attention and
jumping around all the time
also my genius did not come out in the
corporate world I do not like being told
what to do and kissing you know what to
get the corporate ladder I do not do
that stuff well I do well on the streets
does that make sense you guys here
that’s where my genius came out and the
other thing is that I never I flunked
out of school twice because I could not
write and I do not read that well yet
but only you know no it’s true
I flunked when I was fifteen and a
flaunt I was seventeen and today I have
one of the top three books in the
history of the New York Times I’ve been
a New York Times best seller list for
over five years now only two books that
beat me one of them’s a joy of sex that
might take a while to beat
so when I flunked out of school you know
and now I have a New York Times best
seller for five years and I’m still
allows you to writer people say you
can’t write something my English teacher
you know I did graduate out of a
Bachelor of Science degree and all that
I went to a very prestigious school here
in New York but the point here is this
that’s not you have to find where your
genius comes out that make sense you
guys here and after I flunked out of
school and this book became I was
scarred for a longest time I really
thought I was stupid it pained me here’s
my father the superinten of education
and his son Zamora
so what I’m thinking about if those
school teachers are still alive I’m
gonna look them up on you know one eight
hundred mill them a copy of my book page
by page in Jose here it is but the point
here is this I didn’t find what I was
good at until I had the courage to find
the environment when my genius came out
that make sense you guys here and I
asked you to do that intelligence is
don’t do as you’re told
go where you know your genius can come
out it’s not easy
Tiger Woods practices like a wild man to
kid this genius come out I practice like
I write like crazy I’m not a good writer
that makes sense you guys hear it’s not
easy if you think it’s easy this is not
it but you and every one of you at home
you need to find or I recommend finding
where your genius lies what environment
do you come the best time you see the
look at this picture over here of this
young boy I think this is really it you
know that’s really what it is
every child is formed with her genius I
didn’t did not know when I was nine
years old playing Monopoly that I was
that was I was seeing the future when I
played Monopoly I saw that I could
become a rich man where’s my poor deck
of saying go back to school so I like to
leave you with this have the courage to
find an environment
the magic lamp is your environment Tiger
Woods golf course Mick Jagger Rolling
Stone Oprah televisions have the courage
to find that environment where you rub
the magic
and your genius comes out the most
important thing is do what you know God
gave you the best genius
people in the financial services
industry that do not want me to tell you
what I’m about to tell you tonight so
but you know please be aware of that
also want to caution you this if some of
you what I may say tonight may threaten
or challenge some of your flat your
beliefs about money I mean how many we
were taught you know to save money for
example good tonight you’re going to
find out why that’s a bad idea so that’s
what I think this program is going to
shake some of you in all this for the so
stay tuned I promise
if you stay tuned you’re at minimum your
financial IQ will go up may learn to
take more control of your money and
possibly survive the financial hurricane
that’s going to start brewing in the
year 2008 the first year the first of 75
approximately 75 million baby boomers
begin to retire and how many people
realize those baby boomers may not have
enough money to retire on good and good
that’s why I thank you young people
because it’ll be up to you to take care
of us so so before we could get us a
question how many of you have probably
read Rich Dad Poor Dad thank you who has
not yet read the book good to some of
you for those who haven’t read the book
it’s good to see some customers still
out there and I bought my book but
anyway flow they’re having Rich Dad Poor
Dad I’ll give you a little to my
background missed airport as a true
story about my two dads my real dad was
the head of education for the state of
Hawaii
very smart hardworking great guy you
know it’s a PhD and he and he offered
ran he also ran for lieutenant governor
of the state of why so the great man but
I call him my poor dad very simply
because even though he was a high paid
government official no matter how much
money he made he was broken into every
month and he ultimately died broke so
obviously money doesn’t make you rich or
poor you know it’s really education that
does and as you can tell I’m fourth
generation Japanese American which means
I don’t speak Japanese and I’m gonna let
you know that now you know I barely
speak English
my Rich Dad on the other hand was my
best friend’s father and although he was
a man who started with nothing he
ultimately became on the richest men in
Hawaii so when you look at though you
know the white sands and the blue waters
and the tall palm trees and the hula
girls and the tall hotels right on
Waikiki Beach my rich dad’s family owns
some of the land under those hotels so
Rich Dad Poor Dad this book here is a
very simple true story of what two
fathers tell two sons my best friend and
I about the subject of money starting
the age of nine and I believe one of the
reasons the book has been so successful
it has written for nine year olds and
it’s simple enough for everybody to
understand high finance or more
importantly why the rich are getting
richer so that’s basically you know my
background as I grew up in Hawaii I was
educated in New York and spent six years
in marine corps went to Vietnam twice
and all that and then I came back and
started my business career so next
question is this how many people have
read this book prophecy doesn’t as fewer
of you have read this book and what Rich
Dad Poor Dad is a popular book I think
this is a more important book and the
reason I think prophecy is more
important it’s about a very important
year and that year was 1974 and 1974 was
a year that the u.s. swung from
socialism to capitalism a very important
reason for prop 19 74 it was one of
called ERISA came out and a riskless
stands for Employee Retirement Income
Security Act and the government’s
worried about your security you know
you’re in trouble but also it led to a
thing called the 401 K back in the 1980s
this is a very big change in the history
of our world right now
so prophecy came out in 2002 it was not
a very popular book because he was
writing about the failure of these
things called 401ks and pension plans in
the crash of Wall Street so this was
2002 and then in 2005 Time magazine just
in October of 2005 came out with a front
page cover of saying the same thing I
said here in prophecy that there was
been a big ripoff of people’s pensions
and Time magazine three years later in
2005 is a great retirement ripoff
millions of Americans who retire with
benefits are in for a nasty surprise
corporations are picking people’s
pockets with the help of Congress and
that’s not going on that’s why so many
people are in trouble and then one day
later the new york times magazine came
out saying the same thing prophecy did
and it says we were get to inform you
that you no longer have a pension and
that’s what that’s why USA Today came
out with a statement that said America’s
greatest fear is running out of money
during retirement and that’s what the
this program is about is why we have
this problem right now and why so many
people may be financially wiped out in
the financial horror game that’s hitting
us and also hopefully what you can do
about it so they may be able to save
your friends and family unfortunately
what I’m about to save tonight will not
work for everybody as you know life is
not fair but at least you’ll have an
idea of what you might be able to do on
this whole thing
so going into it really quickly is the
difference between one of the reasons
people are are having a big having
trouble is they don’t know the
difference between still can’t spell
that well wealth and being rich
I like to explain really quickly that my
rich dad taught me that wealth is
measured in time and rich is measured in
money and really quickly the difference
here is this a person who is when you
measure wealth for example let’s say you
have 10000 and savings and your monthly
expenses are a thousand dollars a month
that means you’re ten months wealthy you
will survive for ten months that’s what
it means and the reason people are
afraid of what’s going to come up with
them is they don’t have enough wealth
they’re afraid of running out of money
during retirement and what rich is is
trying to measure them times in their
lives and money so what my rich dad
taught me is don’t worry about becoming
rich worry about becoming wealthy and
one of the reasons I was able to retire
at the age of 47 was because I focus on
being wealthy not being rich and that’s
a very big difference here I thought I’d
review something a little book called
the cash flow quadrant I think it’s one
of the most important books for people
who want to make changes in their lives
because as I said the e stands for
employee S stands for self-employed or
small business being stands for big
business like Bill Gates and I stands
for investor like Donald Trump or Warren
Buffett so you know my poor dad always
said to me son go to school to get a
what job and he was programming me and
this was the word his program me to be
an employee and you know I talked to my
mom I said you know dad I don’t I don’t
want to be an employee in my desk you
must get a job you must get a job you
got to have good education good grades
get your PhD oh my goodness my mom says
don’t argue with your dad you know if
you want to be rich go to school to
become a doctor you know and yes
specialist nice and I said to my mom’s
only one problem mom says what’s that
doctors are smart she says you have a
good point there
you know don’t be a doctor
and I talked to my rich dad and he says
you know Robert are you basically lazy
and incompetent I said yeah I said good
you’ll do well in business and so this
year is having other people work for you
like my advisers and things like that
and this is having money work for me and
they’re very different educational paths
another thing my Rich Dad says again
going to words of vocabulary as
employees always say the same words
whether they’re the janitor or the
president of the company the CEO
employees all say the same work I’m
looking for a safe secure job with
benefits that’s their whole attitude and
their emotion is fear they don’t visit
they don’t know how survive in the real
world they need that they have that fear
travel and s self-employed their words
are if you want to done right do it by
yourself so these guys a problem with
them is they may own a business but they
really own a job they cannot quit
because they don’t trust other people
their emotion is trust and a business
owner is like me I want to have the
smartest people around me as much as
possible because then I don’t have to do
that much work and as an I I want to
know how have my money work hard for me
so I don’t have to work hard for money
so that’s why I started off as an
entrepreneur and over here this is the
beauty of real estate for every dollar I
make here I bring it down here and my
banker will give me nine more dollars as
long as it’s real estate tax free money
so I’m getting ahead faster and faster
and faster very simply because for every
dollar I have here my bankers giving me
eight or nine dollars to get ahead
financially because let me first
Ascencio their tax free money and if I
sell a property again I do a tax free
that’s why I’m getting rich that’s why
education or financial education is so
important and I think it’s really silly
that our school systems keep saying to
you go to school to get a safe secure
what job whence jobs are being exported
overseas so fast right now it’s
ridiculous
i mean i think i think was JP morgan
they just export another 47 hunt for
t700 jobs and these are smart guys guys
with MBAs and all they exported it to
india
so that’s what’s happening in the world
but the reason 1974 is so important was
because when ERISA which when Alan was a
401k came out it forced these people to
become investors also and that’s why
this change was such an important change
here so the Laporte point into it is
this is that there’s three basic kinds
of education one is academic the other
one is
professional so you go to school to
learn reading and writing it’s very very
important I didn’t do very well here but
I did graduate and then professional is
when you become a doctor or a lawyer or
something like that that’s those are
very important but what I’m saying here
is this in today’s tough in this world
there’s three types of education that’s
essential
I’m not saying these are not important
I’m saying they’re not enough today you
need more and the third type of
education is education that’s called
financial education so what this program
is about it’s not so much about these I
said these are very important but so is
this one right now and I’ve never
understood why our school systems don’t
teach us anything about money
your wonder that yourself why because
rich or poor smart or not so smart we’re
all going to use money and it’s because
our school systems don’t teach us much
about money that’s the reason so many
people are having problems today
financially and so I’m not blaming Wall
Street or people who are financial
advisers I’m blaming our education
system for not keeping up with the
changes in time so what happens because
we don’t have much financial education
at school we actually learn it from our
families so what happens with poor
people is you can look on the screen
over here in the plasma the poor people
tell their kids that the government is
going to take care of you you should
count on Social Security and you should
count on Medicare and things like this
what the middle class tells their kids
is that they should have a good
education get a good high paying job a
house and a pension what they are
passive investors a passive investor is
somebody who turns their money over to
somebody they hope and pray as an expert
the poor and non investors so the judge
being the passive investor and an active
investor and what the rich t-shirt kids
what my rich dad taught me was that I
should have I should be an entrepreneur
like Bill Gates or Oprah and I should be
an active investor like Warren Buffett
or Donald Trump and things like this so
in this program what you’ll be learning
about is the difference between active
investors and passive investors a
passive investor is a person always
going around saying I have twenty five
thousand
I have $25,000 what should I do with it
and the first thing I say if I were you
I would keep your mouth shut you know
because if you go around telling people
you have $25,000 and you were moron
somebody will tell you what to do with
that money and they’re gonna tell you to
give it to them does that make sense you
guys here so that’s what this program is
about so that at least you can help
determine a good financial advisor and
hey bad one because if you don’t know
what you do with your money somebody
else does so when we come back I’ll be
teaching more about financial education
and the secret boards that can change
over
I just love the way Robert Kiyosaki
I’ll make your calls join here’s Robert
Kiyosaki with rich dad’s guide to wealth
the quick reminder what we covered in
the last part was in 1974 the United
States change of the world change
actually from socialism to capitalism
and the reason that’s so important is
because the world changed and shifted to
a 401k or pension plans is because it
forced many people who were easy neces
to become investors like I said my poor
dad was a very smart good man but he was
a non investor there’s people who are
passive investors and that’s what most
people are they go to their company that
has given put into the 401k and they
hope and pray that person managing their
money is smarter than they are and the
third type is the active investor now if
you’re going to be an active investor
then you have to have financial
education and one of the keys to
financial education you know a lot of
people say well it takes money to make
money
some people ever heard that statement
well that that’s absolutely not true
because you’ll prove tonight it doesn’t
take money to get money to make money
what it begins with is a thing called
words or vocabulary the English language
has approximately two million words in
it and each of us as individuals the
estimate has command of about five
thousand words so one of the ways to
start increasing your wealth and your
financial ability is change your
vocabulary and one of the reasons my
poor debt was poor it’s a good man he
had the vocabulary of a schoolteacher
you know he thought Germans and
prepositions were really important but
I’ve never made a dollar off a German or
a preposition yet that I know of you
know I needed to be abitt ah Pease ro
eyes IRR that’s what makes me rich so
just know that words make you rich and
I’ve been going into right now the basis
of financial education is words and this
here is a thing called the financial
statement as my rich dad often said to
me you know this is your report card
when you grow up when you leave school
as my Rich Dad said his banker has never
ever asked to see his report card yet
you know banker never said say Robert
can you tell me what college went to are
you an A student
are you abhi student they never asked
them if you’re a professional investor
they will ask you for something called a
financial statement if you’re a non
investor or a passive investor like a
401k they’ll ask you for a credit report
so to begin becoming rich it’s you you
must have one of these I mean it’s a
must these people have credit reports
these people have financial statements
it’s very very big differences here so
let’s begin with words here and one of
the biggest words that people have
mistaken on the wrong definition for are
these words here assets and liabilities
how many people have ever heard people
say my house is an asset good that’s
using the wrong definition that’s the
problem so I’ll give you the definition
my rich dad gave me you won’t find this
in the regular dictionary oh this is a
very simple definition because this is
the guy to wealth a definition of an
asset is something that puts money in
your pocket whether you work or not
that’s very simply it ok so when you
look at this financial statement this is
an income statement and balance sheet
there’s one more form that basic a
common accountant but basic County
requires it’s called a statement of
cash flow and what that shows you here
is this assets are putting money in your
so for example I have a house and every
month let’s say I collect a hundred
dollars from after paying all my
expenses the house is an asset but if
the house goes on rented and every month
is now costing me money that same house
is a what liability so this is the cash
flow pattern of a liability so when a
person says their house is an asset I
then ask them I say is that house
putting money in your pocket they so
know nobody’s gone up in value that
shows lack of financial intelligence or
financial IQ okay I’m not saying don’t
buy a big house I’m not saying any of
that stuff I’m just saying don’t call a
liability a what asset and that’s the
problem is using the wrong word for the
wrong thing or I could have a car if I
use a car as a taxi and every month I’d
put a thousand dollars in my pocket it’s
an asset but I have my BMW here and it’s
costing me a thousand dollars a month
it’s a liability so that’s very simply
it so don’t call asset or liabilities
assets and that’s where people get in
trouble the next thing up is sale your
banker my banker has never asked me for
my report card yet and my banker if I’m
gonna borrow a lot of money from them
they want to see my financials and what
a banker was looking for is your
financial IQ they don’t care how your
academic IQ they want to see how smart
you are with money and it’s not that I
you know wear nice clothes and have a
nice watch and have a nice house a nice
car banker doesn’t care because how many
people know people who are looking good
but I flat broke I’m talking about here
so and that’s that’s the big problem
here so when a banker looks at this
thing the banker is looking again at
cash flow so when a banker looks at this
let’s say the person has a job the money
comes in and the money goes out they
look at that that’s a cash flow pattern
of a poor person if they don’t change
your pattern they’ll be poor it is not
how much money you make it is how much
money you spend is the
issue here for example I know of a
doctor friend he makes about $400,000 a
year he’s very proud he has no debts you
know he’s one of people think that debts
bad and that’s really moronic
but anyway so but he’s people he makes a
hunt 400,000 and he spends 400,000 so
even though he makes a lot of money he
has a cash flow pattern of a what poor
person what the middle class generally
tend to do is the first thing they want
to do is have a big house and they have
a thing called a mortgage and the
different definition of mortgage comes
from the French word more tier which
means death that’s pretty neat so what
happens they have a mortgage gets a nice
BMW or Mercedes so they’re looking good
but going broke you know so in the
banker they come in with their nice
suits and all this the banker looks at
it and goes ah I can see a cash flow
pattern as this and this is the cash
flow pattern of a middle-class it’s
working hard and going broke you know
they never get ahead they buy big houses
they do home equity loans and they think
they’re a Donald Trump with realist has
real estate investors all that God has a
big house they’re in debt to a lot of
people use their house as an ATM machine
and every time that goes up to failure
to borrow the money out know that is
really a losers point of view I mean
that’s not bankers loving but you’re
greatly in debt but it’s not a way to
get ahead and this is the cash flow
pattern of a rich person they have
assets here and so generally what it is
is they have a business they have real
estate and they may have dividends from
stocks and bonds and stuff like that or
interest at so those are assets so
oftentimes I ask people think about it
this way if you stopped working today
let’s say you’re married you have a
spouse if you stopped working today how
much money keeps coming in your pocket
and how much money keeps going out all
the things that are taking money out of
your pocket are what liabilities and I
think putting money in your pocket is
and asset so the reason my wife and I
could retire is very simply we have
money going like this this means we’re
wealthy
you know we don’t have much in savings
and all that but every month it’s
hundreds of thousands of dollars going
like this and that’s how you get wealthy
you know just have assets to produce
money every single month when I did this
program in Singapore I asked people
raise their hand and say would you mind
telling me some of the assets you have
it’s women raise their hands yes she
says ah my best asset is my husband and
I said ma’am ma’am I’m talking about
non-human inanimate objects she says
that’s it might make lots of money for
me I’m not talking about human being
slavery has been you know abolished for
a while here and all of this so I said
there’s been assets versus liabilities
the cash flow pattern and that’s why
bankers do not ask you for your what
report card they want to see your
financial statement if you have a good
financial IQ they’ll give you lots of
money even bad financial IQ they’ll give
you a credit card or home equity loan
that’s the difference and years and
years ago I went to Sunday school I’m
not a Bible start scholar not pushing
pledge on anybody I remember the story
of the you know the rich man I think he
had three sons with some blenders and he
gave one son X amount of dollars for the
second son X one of the talents you call
them and then the third son talents and
the first sign blew it got rid of all
its money and he said okay second son
came in and what you do with the money
in a son said I buried it and then the
third son multiplied it you know came
back with give him a thousand dollars
came back with $5,000 and at that point
the father or whoever the guy was took
all of the money and gave it to the what
the third son who multiplied the money
and that’s what I learned in Sunday
school is that not God where ever does
not like people who blow their money
people would just bury the money see the
poor spend their money the middle-class
bury their money you know just put it in
401ks or savings and the rich know how
to multiply their money so the real key
is this is not so much how much income
you make but where you put your money
its expenses do you expense your money
in this way this way or this way and
it’s why people who always try to make
more money they don’t get ahead
very simply because they’re looking in
the wrong place it’s over here is what
do you spend your time and money on
that’s why I thank you guys for you know
being here tonight and those you’ve got
home supporting Public Television and
your education you’re spending time and
hopefully some money to support your
education and a great cause here and
that’s really important is how you spend
your time and your money that makes the
difference and then the third thing is
this just to cover this thing while your
house is not an asset is when your
banker says your house is an asset your
banker is not lying to you this will
explain it better because to understand
this if you have a mortgage on a balance
sheet it must balance over mortgage is
your liability it has to balance the
your same mortgage as your bank’s asset
that’s the difference so that’s why your
banker says your house is an asset not
saying it’s not lying to you it’s just
saying it’s not whose asset is it’s
their asset you know and the way you
know that again is assets put money in
your pockets and liabilities what take
money from your pocket so when you look
at this money comes in when it goes out
goes in here and comes back here so it’s
taking money from your pocket and it’s
putting money in the bank’s pocket and
that is basically you know why your
banker says your house is an asset and
why it’s very important to understand
the definition of the word you use don’t
just use a work because if you keep
saying your house as an asset when
there’s a liability where you say a car
is an asset when it’s really a liability
and your vacation to Hawaii that’s it
for the liability or your home equity
loan is an asset you’re gonna not gonna
make it does that make sense you guys
here but what most people tell you is
this repeat after me work hard save
money get out of debt invest for the
long-term and diversify how many people
heard this okay and the reason I bring
this up here is that because around 1996
I was watching this very famous Morning
Show you know that broadcast all across
the nation and they have these nice
handsome you know couple who was a host
and hostess and they come and say and
today we have the financial expert of
all times
and he’s going to give us the financial
advice what I knew
it’s like 1996 or whatever it was you
know and it welcomed so-and-so in there
clap you know and out comes a financial
expert and he goes hi everybody
yeah what I recommend for this year 1997
is work hard save money get out of debt
I can even do it straight in the long
term and diversify and the and the whole
financial we thank you the next year
then by the back same thing and for the
new year I recommend you guys what work
hard save money get out of debt invest
for the long-term and diversify and the
hosted hosted oh I can’t believe what a
genius what a financial team just give
in my head I can’t believe every year
same guy same message same advice they
think it’s brilliant
then after 2000 the stock market started
to crash and they brained the same
expert on and he comes on and what does
he say what I recommend is work hard
save money get out of debt invest for
the long-term and diversify and the
market kept crashing and he skipped gave
the same advice and this is what I want
to say about that advice between the
year 2000 and 2004 millions of small
investors lost an estimated 7 to 9
trillion dollars the same time Wall
Street pays them as big as bonuses out
and this is the advice that we’re giving
people here I want to save you this
advice used to work it doesn’t work
today I’m not saying it’s bad advice and
it’s just saying it used to work after
1994 1974 it started to change and what
I’m gonna be going into is how that
change came about and why people are
getting in trouble following this advice
especially this one here because you’re
gonna find out the most risky of all
investments are savings stocks bonds and
mutual funds they are the riskiest of
all investments but most people think
they’re safe and that’s what you’ll find
out and that’s why I thank Public
Television for allowing me to say what
I’m going to say because there’s many
people as I said in organizations who do
not want me to tell you what I’m about
to tell you and all the little people
they hire who are financial experts but
they’re not really financial experts do
you realize most of financial experts
are not eyes they’re really ease and s’s
their sales people and I’ll be going
into some of those differences okay so I
know I’m an investor very simply because
I live by my income on my investments
I don’t live by my commissions and
there’s a very big difference so going
into it the reason work hard is obsolete
advice is because 1943 the US government
punished anybody was an employee after
1940 if there was a thing called current
tax payment net at that point anybody
who was an employee the government got
paid first how many we ever opened up
your own your paycheck and gone what
happened to my money
that was 1943 so the problem with being
an employee and working hard is the more
you work and the more money you make you
go up in tax brackets if you don’t get a
hit these guys here are taxed heavily
these guys have all the tax loopholes
that’s why I can make it make a lot of
money and pay zero taxes legally the
difference is I’m on this side here but
our school system teaches us to bend
this side in 1986 they passed an 86 tax
reform Act and they taxed all doctors
lawyers all the aged students they
nailed and so well the attorneys I don’t
mind but anyway but what happened here
is this is that guys like me you know
the C students we can make more money
and pay less taxes than the a students
which proves there’s a god somewhere the
next thing is saved money the reason
save money is an obsolete a dumb idea is
because in 1971 a man named President
Nixon took us off what’s called the gold
standard will the Bretton Woods
Agreement and at that point what
happened in 1971 money turned into a
currency so what you started to save
after 1971 was not money but a currency
and the problem with the currency is the
government can print it faster than you
can save it another thing about this if
you understand economics especially
Keynesian economics is that
when you look at a dollar a currency
let’s say this is one dollar and this is
forty years here a currency is designed
to go down to five cents over forty
years a currency is designed to lose
money so the government can keep running
up debt that’s the reason so they can
print it faster than you can save that’s
the big problem with the next thing is
this if you look at the real stats does
this and it’s a reason I don’t save
money if you look at this the last few
years like I said 1995 to 2005 what’s
happened is the dollar has gone this way
and the way you know how much is lost is
gold went from $250 up to $500 at the
same time that means your dollar lost
50% it lost 50% of us buying power and
the banks are paying you 1% interest
tell me that smart to save money that’s
why the debtor started to win because
what was happening as this was going up
and all this and the reason this happens
is for one very big phone up this is not
the only thing it’s not just gold
because I can hear the economists going
he doesn’t know what he’s talking about
well I’m not saying I’m an economist I’m
saying just look at the price of gold it
takes twice as many dollars to buy the
same amount day but not only that my
father’s house which he purchased in I
think nineteen nineteen sixty-five or
something he paid fifty thousand dollars
for it
and today it’s worth 1.5 million it’s
the same house so that means the
purchasing power of the dollar went wear
down the house didn’t go up in value
your dollar went down and the other
thing that comes to all that’s not
really good indicator but look at this
in 1995 oil was about 10 bucks today
it’s 60 bucks
so that means your dollar has you need
six more dollars to purchase the same
amount of oil and then the economists
say well oil doesn’t affect inflation
I’m going they want you to believe that
investing is risky how many people have
heard investing is risky
good what this section is about of this
program is how risky risk isn’t anything
but lack of control the number one
difference between an active investor
and a passive investor is a subject of
control so what I’m going to show you
tonight is how what I do as an active
investor is I want control if I have
control I don’t have any what risk and
that’s the difference so using a
metaphor that most of us can understand
over here we have you know a example of
a car okay now how many people realizing
there’s risk driving a car yeah but car
driving doesn’t have to be risky like
those guys want you to believe investing
is risky so some of the controls the six
controls a car must have number one is a
steering wheel right how many people
would not buy a car if it had no
ceremony good you know I mean so I’m you
sit down here like this so I sit down I
get in my car and control number one I
want to check on as I have a steering
wheel control number two gas pedal now
you have a gas pedal you better have
some what brakes how many people have
ever driven a car without brakes you
know you don’t need coffee for about six
weeks after that yeah
and then you have a forward and reverse
you know gear shift like this the other
thing you also have to have is a
driver’s license for driver’s ed and you
have to have insurance
so if I’m driving down the road you know
doing a little bit too fast
I hear the cop pulls me over a policeman
pulls me over what’s the first thing a
policeman asked me for driver’s license
and proof of what insurance how many
people would not let somebody who is
uninsured drive your car how many people
would not let somebody who had no
driver’s head drive your car you know I
mean that’s stupid
but that’s what investors are doing
they’re actually investing in savings
stocks bonds mutual funds with no
control and what happens that’s like
weighing like this and that’s why they
think it’s risky now this was the worst
part guess who else has no control your
financial advisor your financial advisor
diversify or what they do is this is
they go that’s the kind of financial
advice most people I get it
that’s risky that’s not what I do I want
control so let me help get out of this
wreck so when I’m as an investor I want
six controls too if a car has six
controls I want six controls as an
investor control number one you look on
the screen over here is I want control
of my income control number two expenses
three is asset value 4 is liability five
is I want financial education or
management and six that one insurance
those are the six controls I want as an
active investor so when we come back
what I’m going to talk about is one of
the ways to get rich is find that native
genius that’s well inside each and every
one of us and that’s what the next
section about here’s Robert Kiyosaki
with rich dad’s guide to well into a
thing my Rich Dad talked about is called
the game of money and the reason we say
it as a game is very simply because of
this and some of you may not be sports
fans but I love sports in football a
game is consistent of four quarters and
so my Rich Dad said life is also your
financial life is in four quarters also
so if we can have it up here on the
prompter on the plasma the game of money
we have a thing called a pregame show
okay and the next thing is that we go
into the first quarter so age 25 is
generally when most of us kind of get
out of school and we sort of figure out
what we’re going to do so age 25 to 35
is the first quarter the way we come up
with this is the ten years is because
our working life is generally 40 years
long 25 to 65 right so the first quarter
is 25 to 35 then what happens second
quarter is 35 to 45 got it you know
things like this by then if you should
be married which one be married your
career should be taking off and you have
a house a little bit in
and all this stuff and then we go into
halftime you know and at that point
sometimes in our lives is called midlife
crisis you know we say oh my goodness
I’m not getting ahead of knocking
promoting that game it panic sets in and
then we go into the third corner which
is 45 to 55 okay and then age is 55 to
65 is the fourth quarter and if you
haven’t acquired enough wealth like I
talked about the sleeping well and being
rich wealth is very simply measured in
time so we have recurring income coming
in for as long as you live here so if
you don’t have enough recurring income
from wealth you go into what’s called
over time and over time this means that
you may be on Social Security with my
Japanese friend call said oh so Social
Security you know because it’s so so is
that if you haven’t quite got it yet you
haven’t quite got it yeah over ties
means would you like that super-sized
would you like a giant size Coca Cola
with it or stuff like this and then you
go into what’s called out of time and I
think this is why people are terrified
right now is running out of money during
retirement because when you’re out of
time that often times your body gives up
and all this and what a lot of time what
people say is that you spend your health
gaining wealth and then the last few
years of your life you spend your wealth
trying to hang on to your health and
they say so many people their fortunes
get wiped out in the last two years of
their lives if they don’t have enough
and as I said the biggest problem in
America is not Social Security it’s
Medicare 64 trillion dollars in debt
right now so if you can so that’s why I
said I thank all of you who were born
you know after 1964 because you’re gonna
be paying for all the old guys who are
out of time especially right now pregame
show you know Paris Hilton was born I
think with three hundred million dollars
net worth she won the game before she
was born
you know how many people wish you were
you know born rich or all that kind of
stuff
I always did but but I wasn’t so
there are certain people who were born
with a silver spoon in the mouth and
they were so fortunate I wasn’t my wife
Kim won her game in the first quarter of
her life she was about 35 years old when
she retired she acquired enough well
enough passive income that she never had
to work again so her won she won the
game first quarter and I was 47 so I
wanted just in the second quarter of my
life that meant I never had to work
again not that I was rich but I was
wealthy I had money coming in every
month from my investments that I never
had to work again so then I took two
years off suffered my midlife crisis
then came back and when I was 40 when I
was 50 years old I wrote a book called
Rich Dad Poor Dad and the thing took off
and a whole new career opened up and now
I’m in the fourth quarter of my life and
thank God I don’t have to worry about
going into overtime or out of time
because acquiring wealth is just fun for
me
I love investing it’s not frightening
it’s control I have all that that make
sense you guys here is this fun so my
question is to you right now is what
quarter are you in how many people are
in the first quarter okay how many
people second quarter I’m a people third
quarter fourth quarter nobody’s raising
their hand on that one couple of you and
I won’t ask about overtime and out of
time but the question is this sometime
like it or not every single one of us
needs to win the game regardless of who
you are we need to win the game if we
don’t we go into this part over here so
with that I want to bring up my
sweetheart my darling
my best friend it’s almost 20 years of
marriage right now a mess my sweetheart
Kim
[Applause]
it has her own corporations I have my
own corporations if we ever split she is
completely independent she has control
of her own life that makes sense you
guys are that’s why we talk together he
had no money in matter of fact we
celebrated when we hit zero that’s how
far down we were Roberts been talking
about control and I love to encourage
women into this world of investing
because I think so many women today feel
out of control when it comes to money
when it comes to their financial freedom
in their financial lives and so my
passion is to educate and encourage
women in the world of investing and the
reason why I’m so driven kind of comes
from comes from an incident that
happened many many years ago and what it
was is I was 14 years old and I remember
coming home from school one day and I
walked in and there was my mom and her
best friend in our dining room and I
walked in and mom kind of signaled me –
no leave him alone leave him alone and
so I walked away into the kitchen and I
listened to the conversation and my
mom’s friend was very distraught she was
crying she was upset and it turned out
that her husband was leaving her for a
younger woman and she went on and on
they’d been married for 20-some years
and kept listening and then she said
something that just really hit home to
me and she said you know my marriage
hasn’t been good for many many years but
at least I was financially taken care of
and my mom said well that’s why you
stayed she said I stood because I stayed
because I didn’t know how to take care
of myself financially so at 14 years old
I decided I was never going to be
dependent on someone else for my
financial well-being and that was a
decision and that’s why I’m so driven
now to encourage women into this game as
well and so when Robert talks about
control I really believe that it’s time
that women today take control of their
financial lives I think it’s crucial I
don’t think it’s a luxury or a good idea
anymore I think it’s something that has
to happen
and you know the times have changed and
what worked for our mothers and our
grandmothers is not necessarily going to
work for us and our daughters and our
granddaughters and I came across some
startling statistics recently that show
how much times have changed for example
in the u.s. forty seven percent of women
over the age of 50 are single meaning
they are responsible for their financial
well-being and many of us have heard the
divorce rate one out of two marriages
ends in divorce so if she was depending
on Prince Charming to take care of her
well and who usually ends up with the
children the woman so the woman is now
responsible for herself and for her
children and the first year after a
divorce on average a woman standard the
living dropped 73 percent and for any of
you that are concerned about your
mother’s or your grandmother’s of the
elderly living in poverty three out of
four are women but the amazing thing is
80 percent of those women were not poor
when their husbands were alive so what
the statistics are telling me is that as
women especially as we get older we have
not been prepared we have not been
educated to take care of ourselves
financially and now is the time to do
that and it doesn’t take a lot it’s it’s
really just through education and that’s
why I’m so happy to be part of this
program on PBS because they’re all about
education and to get started in this
world of investing it takes education
start small you know make mistakes
you’re gonna make mistakes put a little
money down you’ll be amazed at how smart
you get when you put a little money down
on an investment your education goes
through the roof so again it’s just
about education and just to let you know
it’s not rocket science you know I don’t
have a special degree it doesn’t take
any special type of formal training when
I started in investing it was in 1989
and Robert came to me said it’s time you
start investing and I’m like I don’t
even know what the word means and so he
started to teach me what his rich dad
taught him about investing and I went
out and I’m stumbling along trying to
figure it out and finally I came across
this little two-bedroom
one bathhouse in a place called Portland
Oregon and I signed the papers and I got
the deal and and I’m doing all my due
diligence now and I’m checking it out to
see if I’m gonna do it or not and I’ll
tell you I was scared to death what if
the pennant was out what if the plumbing
breaks what if I what if I lose money
what if what if what if what if I was
scared to death and what happened is
when it came time to close the papers to
sign the papers my hand was shaking so
bad like they couldn’t even make out my
signature but the other thing that
happened is my fist was so tightly
clenched around my five thousand dollar
check that I had to part with that they
never they thought they’d never get it
but I did that deal and I went on to do
the next deal in next deal I kept
learning and I kept learning as I went
and when it when it came down to is
today
I control millions of dollars worth of
real estate and worth of property but it
all came down to it started with a
little education and it started with
that first step so I just want to say
again I so encourage women in this game
of investing it’s not difficult it takes
some time it takes some effort it takes
some education but the freedom for me
when I understood this game my
self-worth went up my confidence went up
I knew for the first time that I could
take care of myself I didn’t have to
depend on Robert I didn’t need Robert I
wanted Robert but I didn’t need him and
that made a huge difference so one final
statistic
only 20% studies show that only 20% of
baby boomer women will be financially
secure in retirement that means 80% of
us will not so again I thank you for
being at this PBS show because by being
here you’re getting yourself educated
and all it takes is education and some
action and you can be part of easily be
part of that 20% who’s secure and in
control thank you
well last thing I want to talk about
here is this is that I realized as I
studied education it came across I
started studying education a later time
I was about 38 years old and I realized
that each and every one of us was a
genius except in school there are
certain people I kind of classmate who
was considered a genius in school this
guy could do quantum physics and all
that when he was in kindergarten the
trouble is he couldn’t tie his shoelaces
how many people knew people like that
you know there absolutely are geniuses
in school but in the real world they’re
incompetent this guy didn’t know his
left hand from his right hand used to
play baseball and I said how can be a
genius he doesn’t know he could never
figure out with the glove when in his
left hand on his right hand but he was a
genius
you know I said how give me a genius he
can’t pitch can’t bet anything like this
so I started to realize that genius that
every one of us had it and what genius
stands for is this here
the chief the magic and so when I say
that this is this you know God created
every animal on earth every species to
have a special advantage for instance
birds can fly
cheetahs run fast and cockroaches we
can’t kill them
so if animals have special advantages so
does each and every one of us for
example Tiger Woods is a genius in the
environment called the golf course Tiger
Woods would not be a genius as a jockey
he’s just too big I would definitely not
be a jockey you don’t I mean like this
and you look at Mick Jagger he went to
school to be an accountant but he came a
billionaire as a rolling stone thing I
won’t leave you with tonight ladies and
gentlemen is have the courage to find
that environment like Tiger Woods on the
golf course Mick Jagger as a Rolling
Stone Oprah in front of television find
that spot where your genius comes out
that’s what intelligence is my genius
was crushed in school I was labeled
stupid and dyslexic and no attention and
jumping around all the time
also my genius did not come out in the
corporate world I do not like being told
what to do and kissing you know what to
get the corporate ladder I do not do
that stuff well I do well on the streets
does that make sense you guys here
that’s where my genius came out and the
other thing is that I never I flunked
out of school twice because I could not
write and I do not read that well yet
but only you know no it’s true
I flunked when I was fifteen and a
flaunt I was seventeen and today I have
one of the top three books in the
history of the New York Times I’ve been
a New York Times best seller list for
over five years now only two books that
beat me one of them’s a joy of sex that
might take a while to beat
so when I flunked out of school you know
and now I have a New York Times best
seller for five years and I’m still
allows you to writer people say you
can’t write something my English teacher
you know I did graduate out of a
Bachelor of Science degree and all that
I went to a very prestigious school here
in New York but the point here is this
that’s not you have to find where your
genius comes out that make sense you
guys here and after I flunked out of
school and this book became I was
scarred for a longest time I really
thought I was stupid it pained me here’s
my father the superinten of education
and his son Zamora
so what I’m thinking about if those
school teachers are still alive I’m
gonna look them up on you know one eight
hundred mill them a copy of my book page
by page in Jose here it is but the point
here is this I didn’t find what I was
good at until I had the courage to find
the environment when my genius came out
that make sense you guys here and I
asked you to do that intelligence is
don’t do as you’re told
go where you know your genius can come
out it’s not easy
Tiger Woods practices like a wild man to
kid this genius come out I practice like
I write like crazy I’m not a good writer
that makes sense you guys hear it’s not
easy if you think it’s easy this is not
it but you and every one of you at home
you need to find or I recommend finding
where your genius lies what environment
do you come the best time you see the
look at this picture over here of this
young boy I think this is really it you
know that’s really what it is
every child is formed with her genius I
didn’t did not know when I was nine
years old playing Monopoly that I was
that was I was seeing the future when I
played Monopoly I saw that I could
become a rich man where’s my poor deck
of saying go back to school so I like to
leave you with this have the courage to
find an environment
the magic lamp is your environment Tiger
Woods golf course Mick Jagger Rolling
Stone Oprah televisions have the courage
to find that environment where you rub
the magic
and your genius comes out the most
important thing is do what you know God
gave you the best genius
Please follow and like us: