RICH DAD POOR DAD | S5 – E46 | LESSON VIII | 10 sTEPS TO dEVELOP yOUR pOWERS

Guys, welcome to the first two of the ten steps on how to developer your powers. These excerpts below are from Robert Kiyosaki’s book, so make sure you tune into the podcast at the end to hear me explain how you can do it.

1. Find a reason greater than reality: the power of spirit

If you ask most people if they would like to be rich or financially free, they would say yes. But then reality sets in. The road seems too long with too many hills to climb. It’s easier to just work for money and hand the excess over to your broker.

Rich Dad Poor Dad

I once met a young woman who had dreams of swimming for the U.S. Olympic team. The reality was that she had to get up every morning at four o’clock to swim for three hours before going to school. She did not party with her friends on Saturday night. She had to study and keep her grades up, just like everyone else.

When I asked her what fueled her super-human ambition and sacrifice, she simply said, “I do it for myself and the people I love. It’s love that gets me over the hurdles and sacrifices.”

A reason or a purpose is a combination of “wants” and “don’t wants.” When people ask me what my reason for wanting to be rich is, I tell them that it is a combination of deep emotional “wants” and “don’t wants.”

I will list a few: first, the “don’t wants,” for they create the “wants.”


I don’t want to work all my life. I don’t want what my parents aspired for, which was job security and a house in the suburbs. I don’t like being an employee. I hated that my dad always missed my football games because

Quote from Vientiane Embassy in Podcast Down Below

he was so busy working on his career. I hated it when my dad worked hard all his life and the government took most of what he worked for at his death. He could not even pass on what he worked so hard for when he died. The rich don’t do that. They work hard and pass it on to their children.

Now the “wants.” I want to be free to travel the world and live in the lifestyle I love. I want to be young when I do this. I want
to simply be free. I want control over my time and my life. I want money to work for me.

Those are my deep-seated emotional reasons. What are yours? Be greater than your reasons. I have lost money and been set back many times, but it was the deep emotional reasons that kept me standing up and going forward. I wanted to be free by age 40, but it took me until I was 47, with many learning experiences along the way.

As I said, I wish I could say it was easy. It wasn’t. But it wasn’t
that hard either. I’ve learned that, without a strong reason or purpose, anything in life is hard.

IF YOU DO NOT HAVE A STRONG REASON, THERE IS NO SENSE READING FURTHER. IT WILL SOUND LIKE TOO MUCH WORK.

2. Make daily choices: the power of choice

Choice is the main reason people want to live in a free country. We want the power to choose.

Financially, with every dollar we get in our hands, we hold the power to choose our future: to be rich, poor, or middle class. Our spending habits reflect who we are. Poor people simply have poor spending habits. The benefit I had as a boy was that I loved playing Monopoly constantly. Nobody told me Monopoly was only for kids, so I just kept playing the game as an adult. I also had a rich dad who pointed out to me the difference between an asset and a liability. So a long time ago, as a little boy, I chose to be rich, and I knew that
all I had to do was learn to acquire assets, real assets. My best friend, Mike, had an asset column handed to him, but he still had to choose.

Most people choose not to be rich. For 90 percent of the population, being rich is too much of a hassle. So they invent sayings that go: “I’m not interested in money.” “I’ll never be rich.” “I don’t have to worry.
I’m still young.” “When I make some money, then I’ll think about my future.” “My husband/wife handles the finances.” The problem with those statements is that they rob the person who chooses to think such thoughts of two things: One is time, which is your most precious asset. The second is learning. Having no money should not be an excuse to not learn. But that is a choice we all make daily: the choice of what we do with our time, our money, and what we put in our heads. That is

the power of choice. All of us have choice. I just choose to be rich, and I make that choice every day.

Invest first in education. In reality, the only real asset you have is your mind, the most powerful tool we have dominion over. Each of us has the choice of what we put in our brain once we’re old enough. You can watch TV, read golf magazines, or go to ceramics class or a class on financial planning. You choose. Most people simply buy investments rather than first investing in learning about investing.

A friend of mine recently had her apartment burglarized. The thieves took her electronics and left all the books. And we all have that same choice. 90 percent of the population buys TV sets, and only about 10 percent buy business books.

So what do I do? I go to seminars. I like it when they are at least two days long because I like to immerse myself in a subject. In 1973, I was watching this guy on TV who was advertising a three-day seminar on how to buy real estate for nothing down. I spent $385 and that course has made me at least $2 million, if not more. But more importantly, it bought me life. I don’t have to work for the rest of my life because of that one course. I go to at least two such courses every year.

I love CDs and audio books. The reason: I can easily review what I just heard. I was listening to an investor say something I completely disagreed with. Instead of becoming arrogant and critical, I simply listened to that five-minute stretch at least 20 times, maybe more. But suddenly, by keeping my mind open, I understood why he said what he said. It was like magic. I felt like I had a window into the mind of one of the greatest investors of our time. I gained tremendous insight into the vast resources of his education and experience.

The net result: I still have the old way I used to think, and I now
have a new way of looking at the same problem or situation. I have two ways to analyze a problem or trend, and that is priceless. Today, I often say, “How would Donald Trump do this, or Warren Buffett or George Soros?” The only way I can access their vast mental power is to be humble enough to read or listen to what they have to say. Arrogant or critical people are often people with low self-esteem who are afraid of taking risks. That’s because, if you learn something new, you are then required
to make mistakes in order to fully understand what you have learned.

If you have read this far, arrogance is not one of your problems. Arrogant people rarely read or listen to experts. Why should they? They are the center of the universe.

There are so many “intelligent” people who argue or defend when a new idea clashes with the way they think. In this case, their so-called intelligence combined with arrogance equals ignorance. Each of us knows people who are highly educated, or believe they are smart, but their balance sheet paints a different picture. A truly intelligent person welcomes new ideas, for new ideas can add to the synergy of other accumulated ideas. Listening is more important than talking. If that were not true, God would not have given us two ears and only one mouth. Too many people think with their mouth instead of listening in order to absorb new ideas and possibilities. They argue instead of asking questions.

I take a long view on my wealth. I do not subscribe to the get-rich-quick mentality most lottery players or casino gamblers have. I may go in and out of stocks, but I am long on education. If you want to fly an airplane, I advise taking lessons first. I am always shocked at people who buy stocks or real estate, but never invest in their greatest asset, their mind. Just because you bought a house or two does not make you an expert at real estate.

Rich Dad Poor Dad | S5 – E39 | Lesson VII | Overcoming obstacles

Once people have studied and become financially literate, they may still face roadblocks to becoming financially independent. There are five main reasons why financially literate people may still not develop abundant asset columns that could produce a large cash flow. The five reasons are:

  1. Fear
  2. Cynicism
  3. Laziness
  4. Bad habits
  5. Arrogance

I have never met anyone who really likes losing money. And in all my years, I have never met a rich person who has never lost money. But I have met a lot of poor people who have never lost a dime— investing, that is.

The fear of losing money is real. Everyone has it. Even the rich. But it’s not having fear that is the problem. It’s how you handle fear. It’s how you handle losing. It’s how you handle failure that makes the difference in one’s life. The primary difference between a rich person and a poor person is how they manage that fear.

It’s okay to be fearful. It’s okay to be a coward when it comes to money. You can still be rich. We’re all heroes at something, and cowards at something else. My friend’s wife is an emergency-room nurse. When she sees blood, she flies into action. When I mention investing, she runs away. When I see blood, I don’t run. I pass out.

My rich dad understood phobias about money. “Some people are terrified of snakes. Some people are terrified about losing money. Both are phobias,” he would say. So his solution to the phobia of losing money was this little rhyme: “If you hate risk and worry, start early.”

Rich Dad Poor Dad | S5 – E34 | Lesson VI | Learn to Work — Don’t Work for Money

Job security meant everything to my educated dad. Learning meant everything to my rich dad.

Robert Kiyosaki – Rich Dad Poor Dad

Interview in Singapore with interviewee lead to this…

“I’ll never stoop so low as to learn how to sell. People like you have no business writing. I am a professionally trained writer and you are a salesman. It is not fair,” she fumed.

Rich Dad Poor Dad

I am constantly shocked at how little talented people earn. I have met brilliant, highly educated people who earn less than $20,000 a year. A business consultant who specializes in the medical trade was telling me how many doctors, dentists, and chiropractors struggle financially. All this time, I thought that when they graduated, the dollars would pour in. It was this business consultant who gave me the phrase: “They are one skill away from great wealth.”

Rich Dad Poor Dad

What this phrase means is that most people need only to learn
and master one more skill and their income would jump exponentially. I have mentioned before that financial intelligence is a synergy of accounting, investing, marketing, and law. Combine those four technical skills and making money with money is easier than most people would believe. When it comes to money, the only skill most people know is to work hard.

The classic example of a synergy of skills was that young writer for the newspaper. If she diligently learned the skills of sales and marketing, her income would jump dramatically. If I were her, I would take some courses in advertising copywriting as well as sales. Then, instead of working at the newspaper, I would seek a job at an advertising agency. Even if it were a cut in pay, she would learn how to communicate in short-cuts that are used in successful advertising. She also would spend time learning public relations, an important skill. She would learn how to get millions in free publicity. Then, at night and on weekends, she could be writing her great novel. When it was finished, she would be better able to sell her book. Then, in a short while, she could be a “best- selling author.”

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Rich Dad Poor Dad | S5 – E30 | Lesson V | There Are Five Reasons for Using Examples

There are five reasons for using examples:

  1. To inspire people to learn more.
  2. To let people know it is easy if the foundation is strong.
  3. To show that anyone can achieve great wealth.
  4. To show that there are millions of ways to achieve your goals.
  5. To show that it’s not rocket science.

To inspire people and to learn more. Extremely critical. This isn’t a money-driven podcast, but more a tribe-building podcast. Too many people aren’t vulnerable, and without vulnerability, it seems like that barrier is always up and there’s no getting to the other side. It’s like having an “outsider” buy your course and then leave a poor review because they didn’t know anything about you.

Another example would be having random people buy my ESL Pronunciation courses. This could be a huge problem, because even if I did an amazing job, a no-name would have the ability to give me a harsh review to keep people away.

It’s very important to have my audience get to know you me first before they buy anything from me. I was trying to buy click-funnels but I didn’t know anything about the CEO or his vision. After runarounds with his staff, I gave it an extremely poor review.

So, keep that in mind. Making money will come with harsh criticism.

2. Having that strong foundation

People never talk about the foundation. People only talk about the foundation if a building collapses. No one talks about the amazing foundations that these gigantic metropolis’ are built on. I built a two-year foundation of ESL podcasts, constantly giving value to everyone. I’m not just a random who’s trying to sell…if that’s the case, criticism is going to be waiting for you.

Numbers 3, 4, and 5 are in the podcast down below!

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Rich Dad Poor Dad | S5 – E28 | Lesson V | The Story of The Economy in Phoenix Circa 1990

That is why I invest in my financial intelligence, developing the most powerful asset I have. I want to be with people moving boldly forward. I do not want to be with those left behind.

I will give you a simple example of creating money. In the early 1990s, the economy of Phoenix, Arizona, was horrible. I was watching a TV show when a financial planner came on and began forecasting doom and gloom. His advice was to save money. “Put $100 away every month,” he said. “In 40 years you will be a multimillionaire.”

Well, putting money away every month is a sound idea. It is one option—the option most people subscribe to. The problem is this: It blinds the person to what is really going on. It causes them to miss major opportunities for much more significant growth of their money. The world is passing them by.

As I said, the economy was terrible at that time. For investors, this is the perfect market condition. A chunk of my money was
in the stock market and in apartment houses. I was short of cash. Because people were giving properties away, I was buying. I was not saving money. I was investing. Kim and I had more than a million dollars in cash working in a market that was rising fast. It was the best opportunity to invest. The economy was terrible. I just could not pass up these small deals.

Houses that were once $100,000 were now $75,000. But instead of shopping with local real estate agents, I began shopping at the bankruptcy attorney’s office, or the courthouse steps. In these shopping places, a $75,000 house could sometimes be bought for $20,000 or less. For $2,000, which was loaned to me from a friend for 90 days for $200, I gave an attorney a cashier’s check as a down payment. While the acquisition was being processed, I ran an ad advertising a $75,000 house for only $60,000 and no money down.

The phone rang hard and heavy. Prospective buyers were screened and once the property was legally mine, all the prospective buyers were allowed to look at the house. It was a feeding frenzy. The house sold in a few minutes. I asked for a $2,500 processing fee, which they gladly handed over, and the escrow and title company took over from there. I returned the $2,000 to my friend with an additional $200. He was happy, the home buyer was happy, the attorney was happy, and I was happy. I had sold a house for $60,000 that cost me $20,000. The $40,000 was created from money in my asset column in the form of a promissory note from the buyer. Total working time: five hours.

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Rich Dad Poor Dad | S5 – E18 | The Risk Faced by Average Middle-Class People

The real tragedy is that the lack of early financial education is what creates the risk faced by average middle-class people. The reason they have to play it safe is because their financial positions are tenuous at best. Their balance sheets are not balanced. Instead, they are loaded with liabilities and have no real assets that generate income. Typically, their only source of income is their paycheck. Their livelihood becomes entirely dependent on their employer. So when genuine “deals of a lifetime” come along, these people can’t take advantage of them because they are working so hard, are taxed to the max, and are loaded with debt.

Rich Dad Poor Dad

“Their only source of income is their paycheck.” See, I told myself at the beginning of last year that THAT would change. However, had to purchase a visa and suffered some heavy losses throughout the year based on bad decisions and partnering up with someone who lengthen the liabilities list.

This is why I don’t all my eggs in the same basket. I have sources of income coming from everywhere.

Example, student who I had taught for maybe 8 months no longer works for me. Is that a huge hit? No. Something else must fill it in. Another client who was BIG TIME ended up disappearing on me and that would’ve been a substantial amount of income. Well, I never got the income in my pocket, so is it a loss? NO.

But again, this is all income. Assets are still at a minimal, and that’s why I’m committed to assets this year.

As an employee who is also a homeowner, your working efforts are generally as follows:

  1. You work for the company. Employees make their business owner or the shareholders rich, not themselves. Your efforts and success will help provide for the owner’s success and retirement.
  2. You work for the government. The government takes its share from your paycheck before you even see it. By working harder, you simply increase the amount of taxes taken by the government. Most people work from January to May just for the government.
  3. You work for the bank. After taxes, your next largest expense is usually your mortgage and credit-card debt.

The problem with simply working harder is that each of these three levels takes a greater share of your increased efforts. You need to learn how to have your increased efforts benefit you and your family directly.

Once you have decided to concentrate on minding your own business—focusing your efforts on acquiring assets instead of a bigger paycheck—how do you set your goals? Most people must keep their job and rely on their wages to fund their acquisition of assets.

As their assets grow, how do they measure the extent of their success? When does someone know that they are rich, that they have wealth?

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Rich Dad Poor Dad | S5 – E14 | How the Quest for a Financial Dream Turns into a Financial Nightmare

Recently married, the happy, highly educated young couple moves into one of their cramped rented apartments. Immediately, they realize that they are saving money because two can live as cheaply as one.

The problem is the apartment is cramped. They decide to save money to buy their dream home so they can have kids. They now have two incomes, and they begin to focus on their careers. Their incomes begin to increase.

Rich Dad Poor Dad

So because their income goes up, their expenses must go up, too.

Going back to the young couple, as a result of their incomes increasing, they decide to buy the house of their dreams. Once in their house, they have a new tax, called property tax. Then they buy a new car, new furniture, and new appliances to match their new house. All of a sudden, they wake up and their liabilities column is full of mortgage and credit-card debt. Their liabilities go up.

Rich Dad Poor Dad

So then not only do you have income and expenses going up, but now the liabilities go up. It’s the common story of Thai people. They buy a car thinking it’s an asset, but in fact it’s a liability on top of their expenses.

They’re now trapped in the Rat Race. Pretty soon a baby comes along and they work harder. The process repeats itself: Higher incomes cause higher taxes, also called “bracket creep.” A credit card comes in the mail. They use it and max it out. A loan company calls and says their greatest “asset,” their home, has appreciated in value. Because their credit is so good, the company offers a bill- consolidation loan and tells them the intelligent thing to do is clear off the high-interest consumer debt by paying off their credit card. And besides, interest on their home is a tax deduction. They go for it, and pay off those high-interest credit cards. They breathe a sigh of relief. Their credit cards are paid off. They’ve now folded their consumer debt into their home mortgage. Their payments go down because they extend their debt over 30 years. It is the smart thing to do. Their neighbor calls to invite them to go shopping. The Memorial Day sale is on. They promise themselves they’ll just window shop, but they take a credit card, just in case.

Rich Dad Poor Dad

Ask yourself, “does this make sense?

The mirror symbolizes the power of self-knowledge. This self- knowledge, according to Japanese legend, was the most treasured of the three. In the Japanese culture.

If they used the power of the mirror, they would have asked themselves, “Does this make sense?” All too often, instead of trusting their inner wisdom, that genius inside, most people follow the crowd. They do things because everybody else does them. They conform, rather than question. Often, they mindlessly repeat what they have been told: “Diversify.” “Your home is an asset.” “Your home is your biggest investment.” “You get a tax break for going into greater debt.” “Get a safe job.” “Don’t make mistakes.” “Don’t take risks.”

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Rich Dad Poor Dad | S5 – E13 | Understanding | Get Rich Quick? TERRIBLE Decision

The reason I started with the story of the richest men in America
is to illustrate the flaw in believing that money will solve all problems. That is why I cringe whenever I hear people ask me how to get rich quicker, or where they should start. I often hear, “I’m in debt, so I need to make more money.”

Rich Dad Poor Dad

But more money will often not solve the problem. In fact, it may compound the problem. Money often makes obvious our tragic human

Cash flow tells the story of how a person handles money.

flaws, putting a spotlight on what we don’t know. That is why, all too often, a person who comes into a sudden windfall of cash—let’s say an inheritance, a pay raise, or lottery winnings—soon returns to the same financial mess, if not worse, than the mess they were in before. Money only accentuates the cash-flow pattern running in your head. If your pattern is to spend everything you get, most likely an increase in cash will just result in an increase in spending. Thus, the saying, “A fool and his money is one big party.”

Today, doctors face financial challenges I wouldn’t wish on my worst enemy: insurance companies taking control of the business, managed health care, government intervention, and malpractice suits. Today, kids want to be famous athletes, movie stars, rock stars, beauty queens, or CEOs because that is where the fame, money, and prestige are. That is the reason it is so hard to motivate kids in school today.

They know that professional success is no longer solely linked to academic success, as it once was.

Because students leave school without financial skills, millions
of educated people pursue their profession successfully, but later find themselves struggling financially.
They work harder but don’t get ahead. What is missing from their education is not how to make money, but how to manage money. It’s called financial aptitude—what you do with the money once you make it, how to keep people from taking it from you, how to keep it longer, and how to make that money work hard for you. Most people don’t understand why they struggle financially because they don’t understand cash flow. A person can be highly educated, professionally successful, and financially illiterate. These people often work harder than they need to because they learned how to work hard, but not how to have their money work hard for them.

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Rich Dad Poor Dad | S5 – E10 | The Broken American School System

Our school system, created in the Agrarian Age, still believes in homes with no foundation. Dirt floors are still the rage. So kids graduate from school with virtually no financial foundation. One day, sleepless and deep in debt in suburbia, living the American Dream, they decide that the answer to their financial problems is to find a way to get rich quick.

Construction on the skyscraper begins. It goes up quickly, and soon, instead of the Empire State Building, we have the Leaning Tower of Suburbia. The sleepless nights return.

As for Mike and me in our adult years, both of our choices were possible because we were taught to pour a strong financial foundation when we were just kids.

Accounting is possibly the most confusing, boring subject in the world, but if you want to be rich long-term, it could be the most important subject. For rich dad, the question was how to take a boring and confusing subject and teach it to kids. The answer he found was to make it simple by teaching it in pictures.

My rich dad poured a strong financial foundation for Mike and me. Since we were just kids, he created a simple way to teach us.

For years he only drew pictures and used few words. Mike and I understood the simple drawings, the jargon, the movement of money,

Rich people acquire assets. The poor and middle class acquire liabilities that they think are assets.

and then in later years, rich dad began adding numbers. Today, Mike has gone on to master much more complex and sophisticated accounting analysis because he had to in order to run his empire. I am not as sophisticated because my empire is smaller, yet we come from the same simple foundation. Over the following pages, I offer to you the same simple line drawings Mike’s dad created for us. Though basic, those drawings helped guide two little boys in building great sums of wealth on a solid and deep foundation.

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Rich Dad Poor Dad | S5 – E9 | A Job is a Short-term Solution to a Long-term Problem

“Remember what I said before: A job is only a short-term solution to a long-term problem. Most people have only one problem in mind, and it’s short-term. It’s the bills at the end of the month, the Tar Baby. Money controls their lives, or should I say the fear and ignorance about money controls it. So they do as their parents did. They get up every day and go work for money, not taking the time to ask the question, ‘Is there another way?’ Their emotions now control their thinking, not their heads.”

“Can you tell the difference between emotions thinking and the head thinking?” Mike asked.

Rich Dad Poor Dad

The absolute TRUTH! I’ve never heard it put so eloquently. A job is a short-term solution to a long-term problem. Genetics maybe? Mother did the same thing — work hard for a dead end check and pay all the bills.

Why Teach Financial Literacy

Whenever I speak to groups of people, they often ask what I would recommend that they do. “How do I get started?” “Is there a book
you would recommend?” “What should I do to prepare my children?” “What is your secret to success?” “How do I make millions?”

Whenever I hear one of these questions, I’m reminded of the following story:

The Richest Businessmen

In 1923 a group of our greatest leaders and richest businessmen held a meeting at the Edgewater Beach hotel in Chicago. Among them were Charles Schwab, head of the largest independent steel company; Samuel Insull, president of the world’s largest utility; Howard Hopson, head of the largest gas company; Ivar Kreuger, president of International Match Co., one of the world’s largest companies at that time; Leon Frazier, president of the Bank of International Settlements; Richard Whitney, president of the New York Stock Exchange; Arthur Cotton and Jesse Livermore, two of the biggest stock speculators; and Albert Fall, a member of President Harding’s cabinet. Twenty-five years later, nine of these titans ended their lives as follows: Schwab died penniless after living for five years on borrowed money. Insull died broke in a foreign land, and Kreuger and Cotton also died broke. Hopson went insane. Whitney and Albert Fall were released from prison, and Fraser and Livermore committed suicide.

I doubt if anyone can say what really happened to these men. If you look at the date, 1923, it was just before the 1929 market crash and the Great Depression, which I suspect had a great impact on these men and their lives. The point is this: Today we live in times of greater and faster change than these men did. I suspect there will be many booms and busts in the coming years that will parallel the ups and downs these men faced. I am concerned that too many people are too focused on money and not on their greatest wealth, their education. If people are prepared to be flexible, keep an open mind and learn, they will grow richer and richer despite tough changes. If they think money will solve problems, they will have a rough ride. Intelligence solves problems and produces money. Money without financial intelligence is money soon gone.

So when people ask, “Where do I get started?” or “Tell me how to get rich quick,” they often are greatly disappointed with my answer.
I simply say to them what my rich dad said to me when I was a little kid. “If you want to be rich, you need to be financially literate.”

That idea was drummed into my head every time we were together. As I said, my educated dad stressed the importance of reading books, while my rich dad stressed the need to master financial literacy.