Rich Dad Poor Dad | S5 – E15 | Many Financial Problems are Caused by Keeping Up with The Joneses

No, this isn’t the Gary Vee rant. This is what Robert Kiyosaki wrote in his book decades ago.

That is why my educated dad said the Japanese valued the power of the mirror the most, for it is only when we look into it that we find truth. Fear is the main reason that people say, “Play it safe.” That goes for anything, be it sports, relationships, careers, or money. It is that same fear, the fear of ostracism, that causes people to conform to, and not question, commonly accepted opinions or popular trends: “Your home is an asset.” “Get a bill-consolidation loan, and get out of debt.” “Work harder.” “It’s a promotion.” “Someday I’ll be a vice president.” “Save money.” “When I get a raise, I’ll buy us a bigger house.” “Mutual funds are safe.”

Rich Dad Poor Dad

Rich Dad says “home is a liability.”

Poor Dad says “home is an asset.”

I remember when I drew the following diagram for my dad showing him the direction of cash flow. I also showed him the ancillary expenses that went along with owning the home. A bigger home meant bigger expenses, and the cash flow kept going out through the expense column.

Home as an asset can only be an asset if it’s real-estate. If it’s not real estate, you’re not getting rental income from it; therefore, you’re living in the house.

Also, with a mortgage comes monthly expenses such as property tax, maintenance and utilities.

Rich Dad Poor Dad

  • When it comes to houses, most people work all their lives paying for a home they never own. In other words, most people buy a new house every few years, each time incurring a new 30-year loan to pay off the previous one.
  • Even though people receive a tax deduction for interest on mortgage payments, they pay for all their other expenses with after-tax dollars, even after they pay off their mortgage.
  • My wife’s parents were shocked when the property taxes on their home increased to $1,000 a month. This was after they had retired, so the increase put a strain on their retirement budget, and they felt forced to move.
  • Houses do not always go up in value. I have friends who owe a million dollars for a home that today would sell for far less.
  • The greatest losses of all are those from missed opportunities. If all your money is tied up in your house, you may be forced to work harder because your money continues blowing
    out of the expense column, instead of adding to the asset column—the classic middle-class cash-flow pattern. If a young couple would put more money into their asset column early on, their later years would be easier. Their assets would have grown and would be available to help cover expenses. All too often, a house only serves as a vehicle for incurring a home-equity loan to pay for mounting expenses.

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 – E11 | Assets vs. Liabilities | Cash-flow Pattern of an Asset

Rich dad believed in the KISS principle—Keep It Simple, Stupid (or Keep It Super Simple)—so he kept it simple for us, and that made our financial foundation strong.

So what causes the confusion? How could something so simple be so screwed up? Why would someone buy an asset that was really a liability? The answer is found in basic education.

We focus on the word “literacy” and not “financial literacy.” What defines something to be an asset or a liability are not words. In fact, if you really want to be confused, look up the words “asset”

Rich Dad Poor Dad

An asset puts money in my pocket. A liability takes money out of my pocket.

and “liability” in the dictionary. I know the definition may sound good to a trained accountant, but for the average person, it makes no sense. But we adults are often too proud to admit that something does not make sense.

To us young boys, rich dad said, “What defines an asset are not words, but numbers. And if you can’t read the numbers, you can’t tell an asset from a hole in the ground.” “In accounting,” rich dad would say, “it’s not the numbers, but what the numbers are telling you. It’s just like words. It’s not the words, but the story the words are telling you.”

“If you want to be rich, you’ve got to read and understand numbers.” If I heard that once, I heard it a thousand times from my rich dad. And I also heard, “The rich acquire assets, and the poor and middle class acquire liabilities.”

Here is how to tell the difference between an asset and a liability. Most accountants and financial professionals do not agree with
the definitions, but these simple drawings were the start of strong financial foundations for two young boys.

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.

Rich Dad Poor Dad | S5 – E8 | Should Prices Go Up?

Because it is ignorance about money that causes so much greed and fear,” said rich dad. “Let me give you some examples. A doctor, wanting more money to better provide for his family, raises his fees. By raising his fees, it makes health care more expensive for everyone.

It hurts the poor people the most, so they have worse health than those with money. Because the doctors raise their fees, the attorneys raise their fees. Because the attorneys’ fees have gone up, schoolteachers want a raise, which raises our taxes, and on and on and on. Soon there will be such a horrifying gap between the rich and the poor that chaos will break out and another great civilization will collapse. History proves that great civilizations collapse when the gap between the haves and have-nots is too great. Sadly, America is on that same course because we haven’t learned from history. We only memorize historical dates and names, not the lesson.”

“Aren’t prices supposed to go up?” I asked.

“In an educated society with a well-run government, prices should actually come down. Of course, that is often only true in theory. Prices go up because of greed and fear caused by ignorance. If schools taught people about money, there would be more money and lower prices. But schools focus only on teaching people to work for money, not how to harness money’s power.”

“But don’t we have business schools?” Mike asked. “And haven’t you encouraged me to go for my MBA?”

“Yes,” said rich dad. “But all too often business schools train employees to become sophisticated bean-counters. Heaven forbid a bean- counter takes over a business. All they do is look at the numbers, fire people, and kill the business. I know this because I hire bean-counters. All they think about is cutting costs and raising prices, which cause more problems. Bean-counting is important. I wish more people knew it, but it, too, is not the whole picture,” added rich dad angrily.

“So is there an answer?” asked Mike.

“Yes,” said rich dad. “Learn to use your emotions to think, not think with your emotions. When you boys mastered your emotions by agreeing to work for free, I knew there was hope. When you again resisted your emotions when I tempted you with more money, you were again learning to think in spite of being emotionally charged. That’s the first step.”

Stephen Covey’s Action Plan on Trust

As promised in my podcast, this is the action plan with behaviors 1-13 and here’s an excerpt, along with the action plan, so you can figure out what needs to be done intrinsically.

In the beginning of this 13 behaviors section, I used a personal challenge for you to make this material highly relevant and actionable by identifying two relationships — one professional and one in personal — in which you wanted to build trust. I said that at the end of the section, I would give you the opportunity to look back, determine which two or three behaviors would make the greatest difference, and create an action plan to create change.

Well, here we are. If you didn’t do it before, I encourage you to do it now. This is where you can make decisions that will build trust, that will transform taxes into dividends, that will improve your relationships with two people, and — geometrically — with many others, as well.

Many people find it helpful to use a chat such as this one below. If this approach works for you, I suggest you start with one relationship. Go over the behaviors. Mark on the continuum where you think you are now with regard to each one. Then go back and circle the two or three behaviors that you feel will make the greatest positive difference.

Identify one or two next steps for each of those behaviors to create change. You may want to use one of the Trust Tips at the end of each chapter, or you may come up with something that will work better in your situation. The key is to make the steps actionable and to make and keep a commitment to yourself to do them.

Then go back and do the same for the second relationship you chose.

As you create your plan, keep in mind that the quickest way to make a withdrawal is to violate a behavior or character; the quickest way to make a deposit is to demonstrate a behavior of competence. This may help you in determining how to most quickly build trust in your situation.

If you prefer to use a different approach to implementation, that’s fine. However, you may still want to look at the chart. It will give you an overview of all 13 Behaviors, including their opposites and counterfeits. It’s a good way to capture a vision of the way high-trust leaders interact with others.

Stephen Covey
BehaviorCurrent PerformanceOpposite/
Counterfeit
Talk Straight___/____/____/____/____/Lie, spin, tell half
truths
Demonstrate
Respect
___/____/____/____/____/Don’t care or don’t
show you care.
Create
Transparency
___/____/____/____/____/Withhold information;
keep secrets;
Right Wrongs___/____/____/____/____/Don’t admit or
repair mistakes
Show Loyalty___/____/____/____/____/Sell others out; take the credit
yourself
Deliver
Results
___/____/____/____/____/Fail to deliver
on activities.
Get Better___/____/____/____/____/Deteriorate; don’t
invest in improvement
Confront
Reality
___/____/____/____/____/Bury your head in the sand;
focus on busywork
Clarify
Expectations
___/____/____/____/____/Assume expectations
or don’t disclose them.
Practice
Accountability
___/____/____/____/____/Don’t take responsibility.
Listen First___/____/____/____/____/Don’t listen; speak first, listen
last.
Keep
Commitments
___/____/____/____/____/Break commitments;
violate promises.
Extend Trust___/____/____/____/____/Withhold trust;
fake trust and then
snoopervise.

The Enlightenment Series: S1 – E2 – Carla Trigo on

It’s been a long time coming, but Carla and I finally had the opportunity to connect on a wonderful Facebook live (both in YouTube and podcast format) in a very captivating and enlightening chat about a wide variety of things. You guys are going to enjoy this. The topics, audio and video are down below!

Get in touch with Carla Riago from Spain

Links:

Things we discussed:

  • Introduction given by Carla Trigo about her work.
  • What is lifestyle design?
  • How does an individual redesign their lifestyle?
  • How do people breakout from the familiar trend?
  • How can people be more observant?
  • How did Carla start innovating?
  • What are things that help the guest as her blueprint for mind changing?
  • Journaling is a way for you to get rid of negative mindsets.
  • How to ask questions instead of giving statements.
  • How to have a better relationship by asking the right questions.
  • Reading and applying from what readers have read is an important skill.
  • What three steps should be taken by listeners?

Thank you for listening!

Links:

  1. Facebook page: https://www.facebook.com/thearseniobuckshow/
  2. Instagram: https://www.instagram.com/thearseniobuckshow/?hl=en
  3. YouTube: https://www.youtube.com/channel/UCIzp4EdbJVMhhSnq_0u4ntA
  4. Podcasts: https://www.spreaker.com/user/thearseniobuckshow, https://open.spotify.com/show/7hdzplWx6xB8mhwDJYiP6f, https://www.buzzsprout.com/165390
  5. Website: https://thearseniobuckshow.com/
  6. Twitter: https://twitter.com/arseniobuckshow?lang=en

Speed of Trust: Season 4 – Episode 46 – Behavior #6 – Deliver RESULTS!

If you want to establish a relationship with a client, what is one thing you can do to build trust the fastest?

Stephen Covey

DELIVER THE RESULTS!

When I first started teaching at a language center and company, I would venture out to a part of town/street that I used to work on in my previous job. Get this, the new company was located just 1km down the street where I was fired — which lead to me quitting the job that had originally sent me there because of mistreatment.

Going down there was nostalgic, and I really didn’t want go down a road that had been closed in the previous 5 months, but because I did and delivered the results, the chirps happened.

What do I mean by that? Well, different institutions began contacting me around Bangkok saying, “we heard about you through _____________ and we heard you’re a great teacher.” That word-of-mouf happened and that took me to the next level because I DELIVERED RESULTS.

Results give you instant credibility and instant trust. They give you clout. They clearly demonstrate that you add value, that you can contribute, that you can perform.

In a separate story, when I got the results needed for my students to go to universities around the world, it created chatter amongst the toxic Gen B foreigner teachers at my previous job. They were scared: “does this mean he will get more IELTS test? But he can’t teach this…or that. So more pre-conceived notions came in and that’s when I began teaching outside because I knew what my capabilities were.

Results provide a powerful tool for building trust in your relationships with others.

Stephen Covey

I post all the results of specific tests online. Why? Because people then know if I can deliver. What’s a more reputable institution: Arsenio Buck, or The British Council? Well, I see Arsenio teaching on YouTube, podcasts, Facebook lives, and free live sessions on Facebook. He’s demonstrated that he knows what he’s talking about. British Council, on the other hand, doesn’t show her the teachers are, what they do, free coaching, and doesn’t provide services. It just provides a “check out” page on their website.

The opposite of Deliver Results is performing poorly or failing to deliver. The counterfeit is delivering activities instead of results.

It’s like the people who make fantastic presentations and exciting promises….but never come through.

A funny, but head-scratching example of this would be Ja Rule, an American Rapper who promised a Fyre Festival full of booze, resort villas, 5-star gourmet food, and more. He delivered refugee tents, food in styrofoam boxes, and out-houses. What’s more shocking is people were bamboozled not only once, but three times! They didn’t learn the first time; therefore, he did it again, and again….and now people finally know how scandalous he is.

Another example would be a place I worked for before. In short, my student got a 7 on a speaking test. She paid an ABSURD AMOUNT OF MONEY at a famous institution and it went down to a 6. She learned with me again and shot up to a 7.5 on her speaking test.

So, going forward, I can NEVER recommend that language institution because they didn’t deliver the results.

Speed of Trust: Season 4 – Episode 37 – Demonstrating Trust Part III – Tips

Think back to some of the researched. Why is it that only 29 percent of employees believe that management cares about them developing their skills? Why is it that only 42 percent believe that management cares about them at all? In too many cases, though management might talk about it, fundamentally, management does not behave in ways that demonstrate respect, and as a result, employees don’t trust management.

And what is the impact on speed and cost? When employees believe their managers really don’t care, how willing are they to give their best? To be innovative? To collaborate? On the other hand, how quick are employees to complain? Criticize? Strike?

Stories in Podcast

  • Present work story about director not caring
  • Employee getting a free pass for no-call, no-show

Trust Tips

Apply the “waiter” rule to yourself in terms of how you treat people at work and at home. Do you like what you see? If not, focus on improving your intent?

Think about specific things you can do to show others you care about them. Call people. Write thank-you notes. Give acknowledgement. Send emails of concern. Try to do something each day to put a smile on someone’s face–even if that someone is the janitor in the building where you work. Don’t let there be a gap between how you feel and what you do.

Never take relationships for granted — particularly relationships with loved ones, family, and friends. Avoid the common tendency to put more energy into new relationships and assume that people in existing relationships know you care. There is probably a greater need for demonstrations of concern in existing relationships than in new relationships.

The basis of this is to genuinely care for others. Show you care. Respect the dignity of every person and every role. Treat everyone with respect. Show kindness. Don’t fake caring. Don’t attempt to be “efficient” with people.