7 Rich Dad Lessons for Getting Rich - Robert Kiyosaki

[Music] who wants to live below their means I want to live the best life I can possibly live so I talk about this often I use liability if I want to buy a new Ferrari I first buy an asset and the asset pays for the Ferrari I wanted to rolls-royce why because I never had a rolls-royce I've had Bentley's so I built an asset and the asset then bought my rolls-royce now I'm kind of bored with cars so I don't have us guilty thing is that I have financial education which is what the Rich Dad

Company teaches and you can have the same thing too you just have to stop listening to those schoolteachers who are poor you know most school school teachers like my poor dad very good good people but they're so terrified of making mistakes they want they want a steady paycheck and they want a guaranteed pension I don't think you can get rich from that point of view look at this chart here is called a cashflow quadrant E&S employee and self-employed that was my poor debt you know thank these guys work for money these guys are not capitalist

they work for money and they invest their own money on the B and the I side is my Rich Dad site that's the capitalist site capitalist use other people's labor and other people's money to get rich which side do you want to be on I'd rather be on the capital of site so that's the only difference it's a whole shift of mindset and education but everybody can do it if you want to do it it was really hard because I didn't like I'm actually a very shy person so learning how to sell with a heart

attack to do but if I hadn't spent four years learning how to sell I never made it here I never made it here so the entire time that you were here you were preparing to jump to the other correct so every job is not so much for the high paying job with job security for not everybody and most people should have job security because they're not designed to be entrepreneurs but if you're going to be an entrepreneur then you better take this job and say well which way am I gonna go yeah okay so I

knew my job at Xerox was to go here and here and here not stay here and I actually make so much money over here that I don't need job security yeah so really that's a lesson when you look at a job you look at what can I learn more than how much can I make mm-hmm and I think that's the biggest challenge and if you look for a job where you can learn a lot the heart of the job the better it is do you know what makes something an asset a liability is the tomb

are the two most important words in business cash flow which way is a cash flowing so an asset if the money is flowing into your income statement it's an asset so my rich that would save money is flowing into your pocket it's an asset if money is flowing out of your pocket it's a liability so the average person they go out there buy a house they say oh it's an asset but every month its flowing straight to the bank so your money flows straight to the bank not that intelligent you know I want the money

to flow from the bank to me so it flows to the bank or what they'll do is they'll buy a stock or a bond to a mutual fund and it's an asset and it flies straight to Wall Street not your asset it's Wall Street's asset and the third line when you look under expense first line is tax so the average employee like my poor dad with a high paying job the money comes in go straight out the taxes and to the government it makes sense so you when you when you get a job first line

taxes second mortgage to the bank third your 401k or IRA straight to Wall Street but you think they're assets it's not their assets but they're not your asset so that's one of the big things my rich dad taught me is you got to control your cash flow you want the money flowing into your pocket not out of your pocket so the one last thing I'll show you here is this is this is the asset column this is what Rich Dad worked for he worked for assets you didn't want a job and this is my poor

jet here you wanted a high paying job different mindsets so today you know I don't I still go home to Hawaii I see my relatives and they keep they call me Bobby Bobby Bobby have you got a job yet and I go no aunt I don't have a job she goes Oh too bad you're unemployed said yep so their mindset is they've been programmed to be employees to work for the rich and that's what my rich dad taught me so it's all here in the financial statement the rich worked for assets the poor middle class

worked for money very different mindset so I don't want a job I just want the asset that produces income called cash flow not taxable not taxable that's why they're educating register let's start with this one first keep it small is here you have you go to school get a job you become an employee but you learn nothing about taxes then you become a little entrepreneur you stretch a little falafel shop business or whatever you start right so the self-employed small business and then you have big business 500 employees or more or I for an investor

so Tom how much tax do employees pay well typically if they're making a good salary and this is by the way the same rates around the world typically it's going to be about 40% 40% and after the attack the Trump tax cut did that changed much not much it didn't so if you're a you know oh I'm gonna start my own little business I'm gonna you know start my little pizza shop or a my coffee shop how much of these guys pay well now it goes up because you're paying both your share of the taxes

plus the employer share the taxes because you've got both sides so now goes up as high as 60% so when you hear a young person an old guy like me say I'm gonna start my own business they don't anything about taxes do they no and in fact this is the place where people get in trouble because over here this the money being taken out of your paycheck but here you're responsible for your taxes and so what happens is is that you you go let's say you're successful with your pizza shop right all of a sudden

tax time comes around oh no I've spent all my money and I don't have money to pay the taxes and people go out of business real fast here well it is surprising because a lot of the Millennials do want to start up their own small little business right and what they don't they're not aware of is that they're gonna be in a 60% tax bracket because taxes are you a single largest expense so if you guys start your own business you gotta be aware of taxes yeah now big business as 500 employees or more how

much do they pay typically around the world about 20% now why is it that big business people pay less than small business well basically the government wants the government wants us do certain things and they'll give us incentives if we do them and what they've won out of a big business is they want employment so I want to create employment because that creates stability in the country jobs jobs right and so the more jobs you create actually the more tax benefit you get well look at Amazon right now they're looking at moving their company how

many tax benefits they are getting Oh My heavens they pay very very little tax Amazon does and they pay you need to talk about all those different kinds of taxes not only they pay very little income tax but they're also paying very little sales tax and employment taxes and all those others because they're getting benefits from multiple types of government the federal government state government the city government is that how is that how a lan must started his battery factory in Nevada well yeah I mean Elon Musk he has huge research and development tax benefits

which by the way that's a tax benefit that is true that is available in most countries more than the US right so if you're going to stay small and is a good place to start but you gotta really want to come over here eventually and then the professional investor see these guys are passive these guys invest in stocks bonds mutual funds they save money they're passive guys they pay the highest taxes but how much does a professional investment it's like Shark Tank how much of these guys pay so they can pay as little as zero

percent right they can actually completely eliminate their tax and this is called a financial statement what makes the cash flow game different from monopoly which might help my rich dad taught me via monopoly is my Richard also taught me about financial statements so a cash flow is the only game with a financial statement so really simply may look at a financial statement there's income expense assets liabilities there's one more thing in the cash flow game on the financial statement you'll see it's the most important statement of all is called the statement of cash flows off

to the side here so if you're gonna be an entrepreneur or a capitalist you have to have one of these kind of a rich you have to have one of these but 99% of all high school students live in school and college have no idea what this is you have FICO scores you know but you don't know what this is so when a banker asked you for your financial statement they want to see how smart you are here so let me tell you why school makes students poor so really simply that's this let's say I

have a master's in hearts I don't master of arts degree right yeah or a Bachelor of Arts degree yeah do I learn anything about income no what about Greek mythology there you go I learn about income and we wonder why kids are leaving a school or young generation looking for that high paying job but let me ask you this if you have a a degree in technology do you learn anything about assets never so you could be a techie and you know nothing about you you could be a techie and know nothing about this you

see when a banker looks at your financial statement they're looking at the mirror of you this is a reflection of you and if you got Jack here and Jack here then you're not that smart financially so the reason the cash flow game is such an important game it teaches you what is important to your banker or from a capitalist or for an entrepreneur is it entrepreneurs got to know how to increase their income and an entrepreneurs gotta know how to create assets if you don't know those two things you should not be an entrepreneur you

should be an employee and this is another lesson my rich dad would give me Rockhopper this is a cashflow quadrant you know you have a stands for an employee s sense will self-employed or small business or specials like a doctor or a lawyer B stands for big business five hundred employees or more and I stands for insider investor see these guys are passive investors they're out setters these guys invest from the inside so the eyes are like shark tank guys like Mark Cuban and know that they're they're entrepreneurs who now acquire other companies so when

I was probably in my twenties or when I was growing up should I say my my my dad wanted me be an employee so I when I got out of the Marine Corps I could fly so they want me to fly for the airline's as a pilot said I won't do that and my mom she wanted she was a nurse and she wanted me to be a specialist like a medical doctor I said to my mom is this one problems that medical doctors are smart that's what S stands for she goes you're right you'll never

be a doctor so I only had one hope was to go to the B side and the eyesight so today you know I own many many businesses and I invest from the inside now some people say well insider trading that's the illegal it's not illegal there are certain parts of it of insider trading illegal but the biggest deal is always inside so while my rich dad taught me says if you're not on the inside here on the outside and the reason most people don't make much money is on the outside you know I just now

uber and lyft floated on this on the stock exchanges the insiders already made their money now the outsiders come in that's the game so I've taken in my lifetime I've taken three companies public you know on the Toronto Stock Exchange a goal company a silver company and an oil company I did it because I wanted to find out what it's like to be on this side on the B and the I side and they're completely different worlds different mindsets different human beings so if you want to go to school this is where people wind up

ENS and Rich Dad stands where people want to be on this side here it's a very different mindset skillsets education processes so let me ask you this question when you are in school were you an A student or a C student you know where you're the star of the class or the flunky of the class and if you weren't the a student then did that mean you couldn't be successful is that is that what it means to you if you didn't go to a great school you're never gonna be successful what if you drop out

you know what if you drop out like Steve Jobs and no Bill Gates that means you've had it Jack Ma who was the found who is a founder of a little company called Alibaba he just recently said if you're 35 and you're not rich and successful you'll never be successful of course Jack Ma is a school teacher former school teacher who struck it rich but naturally they have this idea that if you're not successful in school you'll never be successful in life and my contention has always been it almost damages you in school you know

school damaged my brain and my father was a head of education for the state of Hawaii PhD and I hated school I mean I said they're getting pounded all the time for being stupid [Music]