Wisdom of Rich Dad

If I want to be successful and rich, then I need to overcome my fear of failure. That is my conclusion after attending quite a few seminars and reading a lot of books including the Rich Dad’s series by Robert Kiyosaki. If I could overcome my fear of failure, then I would be able to make mistakes. By learning from my mistakes and never repeating them again, I would be able to accelerate my learning process and thus achieving success in a much shorter time.

By perceiving failures as valuable lessons that could lead to success and wealth, I could reduce my fear of failure to a minimum. But is fear of failure the only fear that I had to face during my struggle to be successful and rich?

After doing some research and reflecting upon this question, I have came out with a list of fears other than fear of failure that I felt that I had to face during my struggle to be successful and rich.

Firstly, there is a fear of success. Most people including myself tend to link success to busy. The reason that I want to be rich and successful is because I want to gain financial freedom. With financial freedom, I can do the things that I like. But if I were become so busy after achieving success, this would defeat the whole purpose of me trying to become rich and successful in the first place.

It is important to manage the fear of success. If not, I am likely to sabotage myself subconsciously to prevent myself from achieving success and wealth. To reduce fear of success, there is need to choose a business or asset that could run without actively involving me. This is inline with what I have learned from the cashflow quadrant by Robert Kiyosaki. Be a business owner or an investor if I want to be successful and rich.

For examples, a successful multi-level marketing business could run almost without me because there is a system in place. I will need to be involved but not to the extent that the moment that I am on leave, the business stop. This is different compared to a self-employed person such as a doctor. The moment the doctor is on leave, the clinic business will not be able to function unless there is another doctor. As for asset, if I invest in a property and rent it out, other than collecting rental, there is minimum work on my part.

Secondly, there is a fear of unknown. If I were to work for money, then I would more or less know what my future would be like. My job and future would be predictable to a certain extent. There would be this sense of familiarity that gave me comfort.

If I were to decide not to work for money but try to become an investor or a business owner, then my future would be unknown. There would be no predictability in the outcome of my investment or business. To reduce fear of unknown, I would focus on what I know to increase the odds of winning by identifying and managing the risks involved.

Next, there is a fear of losing friends. Friendship is usually founded on the basis that there are common views and thoughts regarding certain things. The moment there is a change in my views and thoughts, there is a tendency to be alienated by my friends. They may feel that I have changed and no longer similar to them. Slowly, I would lose my friends.

It would be sad to lose friends but sometime that would be evitable. But due to my change in thinking, I would have the chance of knowing more friends. That would be the only comforting way that I could think of to reduce my fear of losing friends.

Lastly, there is a fear of losing loved ones. If I were constantly learning from my mistakes, I would be growing at a much faster rate than my loved ones. As a result, there maybe conflicts due to difference in opinions and perspectives. Ultimately, the conflicts may lead to separation. To counter this fear of losing loved ones, I would always make it a point to communicate more with my loved ones so that we could grow at the same rate.

The above list of fears is by no means complete. I feel that this list will differ from person to person because everyone situation is different. Thus, I agreed with the Rich Dad’s Series by Robert Kiyosaki that different people pays different price to be rich and successful.

By Ryan Phillips 

For those of you unfamiliar with the “Rich Dad Poor Dad” series written and published by Robert Kiyosaki, it is a series of financial books contrasting the philosophies of the “Rich Dad and the Poor Dad.” If you’ve read my previous columns, it is probably of little surprise that the Poor Dad is a product of the educational system, while the Rich Dad is an independent thinker who believes in making your money work for you.

I’ve noticed that our society is becoming more and more focused on job security and pension programs. The concept of big ideas has become scarce as people are overly afraid of risk. Instead of using their talents to earn money, they use them to earn money for other people. This trend is killing capitalism in the United States.

It is sad that in an educated country, our consumer spending habits are so terrible that we are spending more money than we make. We have adjustable mortgage problems and unmanageable credit card debt. If this trend continues, it will simply be impossible for some individuals to earn enough money to even pay off the interest on their credit cards.

The ideas that Kiyosaki expounds upon are to think independently, to not fear having big dreams and ideas and to make your income work for you through investments. While his book was a on the New York Times Best Sellers List, his ideas are not being enacted in society.

The problem is that most people are either unmotivated or lack the foresight to reach their potential. It is easy to find a job, make rent money and live an okay life.

It is not my place to judge anyone’s decisions. However, the distance between the rich and the poor will continue to grow. I realize political scientists and the like have been saying this for years, but it is becoming evident that the middle class may vanish entirely. Not to mention a ridiculously small percentage of Americans are thinking big and trying to reach the American Dream, while others are satisfied being content with mediocrity.

Kiyosaki’s books are a perfect start for someone who is motivated and wants to achieve more out of his or her financial life but doesn’t know how to go about it. They explain the difference between assets and liabilities, not in accounting terms, which are meaningless to finance, but in an easy-to-understand way that clarifies what you should be aiming for.

Clearly, Kiyosaki’s books do not fit in with the underlying theme of Las Vegas: That is to buy stuff you can’t afford and then figure out a way to pay for it later. “The Rich Dad Poor Dad” book stresses earning interest on your income and then taking that income to pay for things you want.

If you aren’t earning a decent amount of money off of interest, then don’t buy a new Lexus. At the very least, don’t agree to monthly payments off of the assumption that in the future you will earn the income to pay for it.

There are more investment opportunities today than ever before. The Internet has made real estate, stocks and trade more accessible than ever. Many people are engaging in these activities, which I definitely think is a step in the right direction, but these people could think bigger. They could be designing new outlets.

I realize this is difficult and thinking up billions of ideas isn’t an everyday occurrence, but at the very least, people could be thinking with this state of mind. It is nice to buy things that you want, and while being patient is no longer fashionable, the current spending habits simply cannot last.

A new option must be presented, and Kiyosaki’s idea of earning income off of income and gaining the original income through independent thought and opportunity is a great starting point. Working a nine-to-five job and retiring should not be the main option for college students. It should be a back-up plan.

A friend recently told me that we are so obsessed with security that, “We’ve become more afraid of living than dying.”

In a strictly financial sense, I believe the average person is overly worried about risk. Sometimes the best career move that ever happens to a person is when they get fired because then they can find job opportunities that they otherwise wouldn’t have considered.

Most people flounder in jobs because they don’t know any better. They live paycheck to paycheck and they can’t afford to quit a job and try and find a better one.

A possible reason for this is overspending. The prospect of not having to worry about money far outweighs the need to buy a car a couple of thousand dollars more than I can afford. And while saving up a couple of thousand won’t make you rich, you’d be surprised how much of a start it is.

By Robert Kiyosaki 

For years, I choked when I heard such a question. I choked because I was at a loss for words. I was at a loss for words because such a simple question does not have a simple answer.

So the answer I came up with was, “It depends.”

I tried this answer for awhile and soon noticed that this answer was unsatisfactory not only to the person asking the question – but also to me…

Looking for a new answer, I came up with, “If you do not know what to do with your money, put it in a bank far away from you, with instructions not to let you touch it.” I would add, “If you do not know what to do with your money, and you announce publicly that you are an idiot with money, many people will call and tell you what to do with your money…which is to give your money to them.” This new answer was not a satisfactory answer, yet it was better than “It depends.”

Today, I am happy to announce that I have a new answer to the same question and that answer is, “Read my latest book, Who Took My Money?” After years of frustration and unsatisfactory short answers, the answer to that simple question is now in a book and I am very proud of this book. I am proud of this book because it takes the time to answer the question, “What should I do with $10,000?”

The reason the answer to such a simple question is complex is because what a person should do with the money depends upon who the person is. For example, if the person has a limited financial IQ, then the person should definitely put it in a bank and keep the money secret and far away so no one; including that person, can touch it. If the person has a higher financial IQ, then he or she can invest, leverage, and speed up their money to achieve far higher returns than most people think possible.

In my new book, Who Took My Money, there are three different examples of investing $20,000. Using exactly the same parameters of 5% interest, and a 7-year period:

The difference between real estate in choice #2 and choice #3 is that financial velocity is added to choice 3. If you would like further clarification on the causes of the differences, you can find this example on page 118 of the book.

The point of this article is that a higher financial IQ does definitely pay off and that variable is why I have had a difficult time answering such a simple question. If a person has a very low financial IQ then, obviously, they should put the $20,000 in the bank. At 1% interest, the $20,000 would have grown to approximately $22,000. While not great, it is better than losing the nest egg.

Total Living Network will be airing the Robert Kiyosaki Show beginning 6 October 2007. The show will air on Saturday’s at 10:00 pm Eastern each week.

The network is seen on several stations owned by TLN – Chicago, Rockford, San Francisco, and Las Vegas.

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- Robert Kiyosaki 

Now that our book, Why We Want You to Be Rich, is out, I can tell you what working with Donald Trump has been like.

Millions of people know “the Donald” as the tough guy who says, “You’re fired” at the end of The Apprentice. I’ve been asked often if he’s that gruff in real life. The answer is yes. My experience with Donald is that he’s being real whether he’s on camera or off. He never pretends to be Donald Trump. He is Donald Trump.

Obviously, co-authoring a book with him has been a milestone for me — as an author and as a businessman. Appearing on Larry King Live, The Big Idea with Donny Deutsch, The Today Show, The Early Show, and CNBC with Donald gave me more credibility in the business world.
 

An Unofficial Apprenticeship
Yet I gained more than just recognition and credibility. I also became a better businessman and a better person just from working with Donald over the years.
Here are a few of the ways that knowing Donald has enriched my life: 

1. I got tougher.
I know many people don’t like Donald because he comes across as a tough guy. That’s their problem. In spending time with him, I realized that I wasn’t as successful as I could be simply because I wasn’t tough enough.

As a businessman, I often didn’t say what I wanted to say because I was afraid of hurting someone’s feelings, or of having my feelings hurt. Instead of being forthright, I would be polite. Because of my association with Donald, I took back control of my business in 2005 and 2006 and fired people who should have been let go a long time ago.

The employees I got rid of weren’t bad people, they were just the wrong people for my company. Today, business is thriving and people are happier.

2. I became kinder and more respectful.
One of my problems is that I’m very impatient and get angry too quickly. I believe Donald can be the same. Yet I saw him be patient, kind, and respectful in many situations that would have caused me to lose my patience.

When I asked him about this trait, he simply said, “One of the most important lessons my parents taught me was to treat all people with respect, even if I’m angry with them.” Today, in my dealings with people, I do my best to treat all people with respect — especially if I’m angry at them. Although I haven’t always been successful, I believe I’ve become a little kinder as a result. 

3. I got richer.
My wife, Kim, and I have more than enough money. We consider ourselves rich. When we entered Donald’s world, however, we saw a whole new level of rich.

There’s a difference between being a millionaire and a billionaire. The Trump lifestyle — the penthouse, mansion, limos, and 727 — gave me a firsthand glimpse into his world, and I began to understand why he constantly talks about thinking big.

Just being around him, I began to think bigger and richer. I set my sights on becoming a billionaire and began redesigning my business to become a billion-dollar business. Today, I constantly remind my staff that my job is to make them millionaires — and their job is to make me a billionaire.

4. I became less petty.
One day, during a meeting in Donald’s office, I was complaining about someone we were doing business with. I didn’t like the way we were being treated. When I asked Donald about this person and voiced my concerns, he simply said, “Don’t be so petty. Sometimes you have to do business with people you don’t like. It doesn’t mean you have to be like them or like them.”

From that, I learned to think bigger and, more important, to know the difference between paying attention to details and being petty. 

5. I was reminded of the value of collaboration and partnership, as well as the value of loyalty.
I saw this repeatedly as we developed the concept for our book, discovered our shared concerns and our passion for teaching, and shared the stage for dozens of media interviews.

Getting on Larry King Live and The Today Show is easy for Donald, but in booking a few of these interviews he insisted that we get equal billing. And when a show host mispronounced my name, Donald jumped in to correct him on national television. These simple acts spoke volumes. 

History in the Making
About the same time our book was released, a new book about Andrew Carnegie, the richest man in the world at the start of the 20th century, was also published. The timing is ironic. I believe that when history looks back at the start of the 21st century, Bill Gates, Warren Buffett, and Donald Trump will be seen as the Carnegies of the era.

Many historians view Carnegie as a ruthless man, and I know that many people also see these three in the same light. Yet if you study Carnegie’s life, you find that he was extremely generous, and donated billions of dollars in support of building libraries and preserving world peace.

He even envisioned the League of Peace, a precursor to President Wilson’s League of Nations. I trust that history will allow a space for the good that Gates, Buffett, and Trump have done, and not simply resent them for their wealth.

Donald and I got together to write our book as teachers, not just as rich men. We’re both concerned about the lack of financial education in our schools. In the process of writing it, I not only became a richer person, I believe I also become a better human being. And for this, I feel privileged to have seen a side of Donald Trump that not many people see.