Wisdom of Rich Dad

The last couple weeks have been a zoo in Washington, showcasing much of what is wrong with our country, our politics, and our economy. It’s said that as Rome declined, the emperors said, “Give them bread and circuses.” Feed the populace and entertained them, and they’ll never revolt—until you run out of bread. People can live without entertainment, but they need bread.

Sadly, our government is the circus, and many people are starting to get hungry.

Yesterday, the house has passed a compromise bill to raise the debt ceiling that has no details and opens the way for a potential historic lobbying effort as the rich and powerful get ready to fight for the scraps of government funding.

But I don’t need to point out how dysfunctional our government is to you. The whole world knows by now.

Instead, I’m going to focus on another dysfunction—the college education system.

Huffington Post, reports that in an effort to pay for college, many young women are exchanging sex for tuition with dirty, old, rich men.

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Except for a handful of hedge funds and perhaps some gold coin dealers, few investors are able or willing to stand up during a recession and proclaim that they’re on a hot streak.

Borrowing the open from Charles Dickens’ A Tale of Two Cities, Kiyosaki uses the phrase, “it was the best of times, it was the worst of times,” to illustrate his belief that opportunity always exists, even when the typical barometers of growth and economic vitality suggest otherwise. (For the record, the line that follows is also telling: “It was the age of wisdom, it was the age of foolishness.”)

“I hate to say it but it has been the best three years of my life,” says best-selling author and financial literacy advocate Robert Kiyosaki. “I have never made so much money – America is on sale.”

This self-proclaimed “cash-flow guy” prefers investments that “throw money in my pocket every month.” He’s focused on real estate, oil, gold, silver, and natural gas. Given his belief that “commercial real estate is done and individual real estate is a mess,” Kiyosaki says 300-800 unit apartment complexes are “the hottest part of the market.”

When asked if dividend paying blue chip stocks meet his criteria for value and cash flow, the native Hawaiian says no, and refers to a cyclical prediction from a previous book that has called for a bottom in 2016. In the meantime, he has no interest in owning shares of Exxon Mobil (XOM) or BP (BP). Instead he prefers “buy private oil drilling projects, where the entrepreneur and I are good friends.”

Clearly, a man of his means, who has access to and writes books with Donald Trump, will have a different array of investment choices and opportunities available to him than the average Joe. For us mortals, his advice is 3-fold: Educate yourself, be smarter, and seek cash flow.

Kiyosaki has been a gold bug since his time in Vietnam 40 years ago. “If I have cash and I can’t figure a way to put it into real estate or my business, I hold it in gold and silver,” he says.

For those holding out hope that Ben Bernanke and the Fed will inject more dollars into the monetary system and markets, Kiyosaki says you’ve got it all wrong. “The Fed just printed like $4trillion dolllars in three years,” he says. “That wipes out the purchasing power of your money and your labor. So I think the Fed and the Treasury have basically ripped off the American worker.”

If he’s right, perhaps it’s time for a policy re-branding and would suggest, “Quantitative Teasing.”

Many have said that Robert Kiyosaki’s “Rich Dad, Poor Dad” is a piece of fiction — that he never had a rich dad and a poor dad as described in his book. Or at least that’s what many believe.

But I did.

My parents divorced before I was 2, and both remarried. My father, who lived across town, was my “Rich Dad.” My stepfather was my “Poor Dad.” Let me tell you about them and how they each affected my views toward money, business and life.

My Rich Dad

My father started his business in college. He sold stolen records, and when that didn’t pay the bills, he hustled others for money at the local pool hall. He was apparently a real shark at billiards and pocket billiards. Mom tells the story of the time he played Willie Mosconi (prettiest blue eyes she’d ever seen) and lost. But apparently he held his own.

When he graduated, he moved away from the hot vinyl market and into a wholesale business selling posters and incense (they were big in the ’70s). After cornering the Farrah Fawcett poster market, he upgraded to selling jewelry from Mexico. From Mexican jewelry he moved on to gold jewelry and eventually diamonds.

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Knowledge, taxes, debt, risk, and compensation are the five aspects about money that Robert T. Kiyosaki elaborately discusses in ‘Unfair Advantage: The power of financial education’. Before you jump into these, however, you would need to know how to catch a monkey, as explained in the introduction.

The native trick is to find a tree with a small hole in the tree trunk and place fruits or nuts inside it. What happens then? A monkey comes along, puts its fist in the hole and grabs onto the fruit or nuts, narrates the author.

“The monkey’s fist, now clenched and filled with the fruit or nuts, cannot be withdrawn from the hole, trapping the monkey.  Rather than let go of the fruits or nuts, the monkey twists and turns, pulls and tugs, but refuses to let go…”

The sobering lesson from this tale is that humans are similar to monkeys, clinging to job security, possessions and money, as Kiyosaki frets. He notes that, due to a lack of financial education, like the trapped monkey, most people will spend their lives as wage slaves of their employers and tax slaves of the government.

KNOWLEDGE ADVANTAGE

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In Greek mythology, everything King Midas touched turned to gold. And that’s what entrepreneur and best-selling author Robert Kiyosaki suggests is possible in his new book Midas Touch: Why Some Entrepreneurs Get Rich – And Why Most Don’t, co-authored with Donald Trump.

Kiyosaki has built his empire around financial education and books. He first shot to prominence following the success of his Rich Dad, Poor Dad series of books, which have held a top spot on the famed New York Times list for over six years. Trump is a magnate thanks to his property and casino interests and reality television show The Apprentice.

In Sydney this week, I spoke to Kiyosaki about how business owners can acquire the Midas touch.

Don’t go to school!

Fond of stirring the pot, Kiyosaki says that most entrepreneurs don’t get rich because they go to school

“Schools don’t teach you to be entrepreneurs, they teach you to be employees,” says Kiyosaki. “They also teach you not to make mistakes at school. But the only way I learnt to walk, or ride a bicycle or be a pilot is to fall down a couple of times. Most people that go to school come out risk averse, and rather than becoming entrepreneurs, they become bureaucrats.

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An interview with Donald Trump and Robert Kiyosaki, whose Midas Touch is out this week from Plata Publishing

Working from your new book’s title, what’s your definition of the Midas touch?
Donald Trump: We are specifically pointing out the skill set needed to be a successful entrepreneur. Entrepreneurs are crucial today because they create jobs. People who can successfully incorporate the skills and imagination required to create new businesses are significant to the current economic landscape on several levels. The job forecast is greatly improved when jobs are literally created by someone who has had the fortitude and vision to bring something new to the table. I’ve provided thousands of jobs and continue to do so, and I know the process involved. Midas Touch explains this process, and we hope we will inspire others to become entrepreneurs.

Robert Kiyosaki: The Midas touch is also called alchemy—when you can touch something and turn it into gold. I’ve had my share of bad luck and expect I will continue to have setbacks and challenges. If you can turn bad luck into good luck, that’s the Midas touch. Right now, I see a lot of opportunity out there. Do you have the skill set to see opportunity, pursue it and make it work? I “drilled for oil” in publishing. I struck gold in the brand Rich Dad—in discovering that there was a huge mass of people who wanted to hear that message. The guys behind search engines like Google struck massive IT oil. FedEx struck oil; Facebook struck oil. Perceiving opportunity is part of the Midas touch.

The book’s subtitle says that most entrepreneurs don’t get rich—why not?
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