[Continued from “Rich Dad Poor Dad - Part 7″]

Some of the visible differences between Kiyosaki’s Rich Dad and Poor Dad were that Rich Dad lived and worked in a tiny old creaky house in the poor side of town filled with old ratty furniture and drove an old pickup truck, while Poor Dad lived in the richer side of town in a much bigger, newer, and better looking house and drove a newer, nicer, and better looking automobile.

But, the invisible differences were in their Income Statements and Balance Sheets. Poor Dad’s Income statement looked almost perfectly balanced with all of his income going to expenses every month and hardly anything left over for savings or investments. Therefore, in his Balance Sheet, he had a tiny asset column compared to a huge liability column, mostly made up of his home, automobile, and all other excessively expensive purchases. (By “excessive,” I mean “unnecessary.” We all need a safe place to live, but it should never be more than we can afford or more than we need.)

Rich Dad, on the other had a much different financial picture. The income side of his Income Statement was huge compared to his expense side. And, the asset column of his Balance sheet was also huge compared to his liability column. These 2 statements were interrelated in this way: Because he kept his expenses down by not buying an expensive house, furniture, or car to begin with, and by not upgrading every few years like most people with any money do, he had excess income to purchase true assets, such as investing in his own businesses (convenient stores, construction companies, etc.), which in turn generated more income, increasing the relative size of the income side of his Income Statement, which he again reinvested into buying more real assets, and so on.

The middle class finds itself in a constant state of financial struggle. Their primary income is through wages; and, as their wages increase, so do their taxes. Their expenses tend to increase in equal increments as their wages increase; hence, the phrase “the rat race.” They treat their home as their primary asset, instead of investing in income-producing assets.

This pattern of treating your home as an investment and the philosophy that a pay raise means you can buy a larger home or spend more is the foundation of today’s debt-ridden society. This process of increased spending throws families into greater debt and into more financial uncertainty, even though they may be advancing in their jobs and receiving pay raises on a regular basis. This is high risk living caused by weak financial education.

…

Mutual funds are popular because they represent safety. Average mutual fund buyers are too busy working to pay taxes and mortgages, save for their children’s college and pay off credit cards. They do not have time to study to learn how to invest, so they rely on the expertise of the manager of a mutual fund. Also, because the mutual fund includes many different types of investments, they feel their money is safer because it is “diversified.”

This group of educated middle class subscribes to the “diversify” dogma put out by mutual fund brokers and financial planners. Play it safe. Avoid risk.

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. They are loaded with liabilities, with 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, those same people cannot take advantage of the opportunity. They must play it safe, simply because they are working so hard, are taxed to the max, and are loaded with debt.

As I said at the start of this section, the most important rule is to know the difference between an asset and a liability. Once you understand the difference, concentrate your efforts on only buying income-generating assets. That’s the best way to get started on a path to becoming rich. Keep doing that, and your asset column will grow. Focus on keeping liabilities and expenses down. This will make more money available to continue pouring into the asset column. Soon, the asset base will be so deep that you can afford to look at more speculative investments. Investments that may have returns of 100 percent to infinity. Investments that the middle class calls “too risky.” The investment is not risky. It’s the lack of simple financial intelligence, beginning with financial literacy, that causes the individual to be “too risky.”

If you do what most everyone else who is an employee and owns a house does, you will end up working more for 3 other entities than yourself or your own family:

1. You work for your employer, making them rich. The harder you work, the more rich you make them.

2. You work for the government by having taxes withheld from your paychecks. The harder you work, more money is withheld from your paychecks. 15% of your paycheck is like turning over your entire paycheck from January to May every year.

3. You work for the bank, making them rich off your mortgage and credit card payments. The harder you work, the more house and stuff you usually end up buying; and, ultimately, the more the banks get rich off of your hard work.

Now, do you want to work harder to make your employer, the government, and the banks more rich? Or, do you want to turn your hard work to directly benefit you and your family?

The first step is to minimize or eliminate as many of your expenses and liabilities as you can while maintaining or increasing your income as much as possible.

The second step is saving enough cash to start acquiring true income-generating assets. [Almost all income-generating assets are taxed at a lower rate than typical wages or salaries. Get educated about the different types of income-generating assets. It could be something as simple as renting out space in your home or starting a low-cost start-up part-time business out of your own home.]

My next goal would be to have the excess cash flow from my assets reinvested into the asset column. The more money that goes into my asset column, the more my asset column grows. The more my assets grow, the more my cash flow grows. And, as long as I keep my expenses less than the cash flow from these assets, I will grow richer, with more and more income from sources other than my physical labor.

As this reinvestment process continues, I am well on my way to being rich. The actual definition of rich is in the eye of the beholder. You can never be too rich.

Just remember this simple observation:

The rich buy assets.
The poor only have expenses.
The middle class buys liabilities they think are assets.

No matter what the sales staff (including real estate agents and bankers) tell you, these are not assets: houses that you live in don’t get any rental income from; any remodeling or landscaping on your home unless you are going to sell it immediately at a much higher price than if you didn’t pay for any of that extra work; jewelry, including diamonds, unless you are going to sell them immediately for a profit; automobiles, unless you are going to sell them or rent them for profit; and so on.

Time to Review the Lessons So Far:

1. The Rich Do Not Work for Money; They Make Money Work for Them

The poor and middle class are only interested in getting a big paycheck because they fall into the dual traps of fear and greed. Instead, the rich use their brains to find ways of making money work for them, thinking outside the box, seeing the opportunities that others don’t see and acting on them, educating themselves about how money works all along the way.

2. Why Is Financial Literacy Important? To Make More of It and Keep It

Remember Rule No. 1: Know the difference between an asset and a liability. (Hint: a house is not usually an asset — unless you are renting it out at a profit.) Then, buy up as many true income-earning assets as you can. Know how your cash flows between your Income Statement and your Balance Sheet. Understand why most of the middle class struggle financially based on their typical cash flow pattern.

Now, we move on to Lesson No. 3: Mind Your Own Business

No matter what you do to earn your paycheck, that work is not your business. That’s just your job or profession. So, what is your business? If you want to be rich, your business is to build and keep your asset column strong. While at work for your boss, you mind your boss’s business. But, when you’re home, you mind your own business. The business of acquiring true assets requires you to do work for it, starting with using your brain to look for and think about and finally put into practice the opportunities that most others don’t see. And, always continuing and broadening your financial education as you go. This is focusing on the asset column of your Balance Sheet more than the income side of your Income Statement.

To become financially secure, a person needs to mind their own business. Your business revolves around your asset column, as opposed to your income column. As stated earlier, the No. 1 rule is to know the difference between an asset and a liability, and to buy assets. The rich focus on their asset columns while everyone else focuses on their paychecks.

That is why we hear so often: “I need a raise.” “If only I had a promotion.” “I am going to go back to school to get more training so I can get a better job.” “I am going to work overtime.” “Maybe I can get a second job.” “I’m quitting in two weeks. I found a job that pays more.”

…

These ideas all still focus on the income column and will only help a person become more financially secure if the additional money is used to purchase income-generating assets.

…

When I say mind your own business, I mean to build and keep your asset column strong. Once a dollar goes into it, never let it come out. Think of it it this way, once a dollar goes into your asset column, it becomes your employee. The best thing about money is that it works 24 hours a day and can work for generations. Keep your daytime job, be a great hard-working employee, but keep building that asset column.

…

After you’ve taken the time and invested in and built your own business, you are now ready to add the magic touch — the biggest secret of the rich. The secret that puts the rich way ahead of the pack. The reward at the end of the road for diligently taking the time to mind your own business.

[To be continued …]

[For your own copy of Rich Dad Poor Dad, click here.]

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• Rich Dad Poor Dad - Part 7
• Money Lessons: The Game - Part 3
• Rich Dad Poor Dad
• Rich Dad Poor Dad - Part 3
• Build Your Future with Bricks—Not Straw or Sticks

[Continued from “Rich Dad Poor Dad - Part 6″]

Up till now, I’ve quoted more than summarized Rich Dad Poor Dad because Kiyosaki’s own words were compelling to share his earliest lessons from Rich Dad. But, from here on out, I will be summarizing more than quote the lessons I find important from the rest of this book.

However, I strongly recommend anyone interested in his teachings so far to get a copy of this book for your own use and reuse often as I’ll be using very broad strokes here.

Rule No. 1: You Must Know the Difference Between an Asset and a Liability

Rich people acquire real assets. Poor just have liabilities. And, middle class people acquire liabilities that they think are assets. All anyone needs to be rich is to know what a true asset is and acquire as many of them as you can.

The trick is most people are confused about what are true assets and true liabilities. They are not what most educated professionals think they are, people like bankers, accountants, real estate agents, financial planners, and so on. Even dictionary definitions don’t clarify what a true asset or liability is.

So, what is a true asset or liability? To answer that question, you have to be able to read and understand financial statements. But, don’t let the concept of financial statements scare you. It’s really quite simple. The only 2 financial statements you need to understand to know what a true asset is are: (1) an Income Statement and (2) a Balance Sheet. Let’s break down each one.

Income Statement

An Income Statement measures 2 things: (1) income and (2) expenses. Income is money that comes in. Expenses is money that goes out.

Balance Sheet

A Balance Sheet also measures 2 things: (1) assets and (2) liabilities. Assets put money into your pocket. Liabilities take money out of your pocket.

But, simple as the concept of these 2 financial statements are, it’s the interaction between them that is absolutely crucial to understanding how to get rich. Cash flows from the assets side of your Balance Sheet (if you have any assets) to the income column in your Income Statement. And, cash flows from the liabilities side of your Balance Sheet to the expense column in your Income Statement.

Now, how to be rich is easily understood with these financial statements. If you want to be rich, spend your life buying up and collecting assets. If you want to be poor or middle class, spend your life buying up and collecting liabilities.

The cash flow pattern of a poor person can be described in more detail as a job providing all the income in the income side of the Income Statement and all of that goes straight to the expense side in the form of taxes, food, rent, clothes, fun, transportation, etc., and disappears. They usually have nothing in their Balance Sheet because they don’t own any assets or liabilities.

The cash flow pattern of a middle class person goes from a higher-paying job, still providing all the income in the income side of the Income Statement, which also goes straight to the expense side in the form of taxes, food, clothes, fun, and other fixed expenses. But, now, those fixed expenses include additional expenses that are tied to the liabilities column on the Balance Sheet, which, for most middle class people, include a mortgage, consumer loans, and credit cards. And, once again, the assets column of the Balance Sheet remains completely empty.

The cash flow pattern of a rich person starts with the assets column on their Balance Sheets, filled with stocks, bonds, notes, real estate, or intellectual property and moves to the income side of their Income Statement, which is mostly from those assets in the form of dividends, interest, rental income, or royalties.

Understanding the relationship between your Income Statement and your Balance Sheet, how your cash flows from one to the other (if at all), is to understand why you are poor, middle class, or rich. That’s why most people who make lots of money from high-paying jobs still struggle financially. They let all their income drain out of their expense side of their Income Statement and the liability side of their Balance Sheet. As most financially uneducated people get into deeper debt, all they can think of to solve their problems is to try to get a raise or a higher paying job. They never think about getting rid of their liabilities or acquiring true assets (because they don’t know what a true asset is and they don’t educate themselves).

Money often makes obvious our tragic human flaws. Money puts a spotlight on what we do not 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 they received the money. 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.”

I have said many times that we go to school to gain scholastic skills and professional skills, both important. We learn to make money with our professional skills. In the 1960s, when I was in high school, if someone did well in school academically, almost immediately people assumed this bright student would go on to be a medical doctor. Often no one asked the child if they wanted to be a doctor. It was assumed. It was the profession with the promise of the greatest financial reward.

Today, doctors are facing financial challenges I would not wish on my worst enemy: insurance companies taking control of the business, managed health care, government intervention, and malpractice suits, to name a few. Today, kids want to be basketball stars, golfers like Tiger Woods, computer nerds, movie stars, rock stars, beauty queens, or traders on Wall Street. Simply because that is where the fame, money, and prestige is. 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 spend money — what to do after you make it. 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 long you keep it, and how hard that money works for you. Most people cannot tell 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 for them.

How the American Dream Turns into a Financial Nightmare

The pattern of hardworking people getting into financial trouble is more common than you think. A highly-educated, couple starting their careers in one of the professions gets married and move in together into one of their little apartments. They immediately start saving money effortlessly because two can live as cheaply as one. But, they want to start a family and get a house. So, they start saving money for the down payment. Meanwhile, they work hard and get annual raises.

The problem is their expenses go up, too. The No. 1 expense for them is probably taxes. The biggest tax they pay is not income tax, but Social Security combined with the Medicare tax, which is really about 15% of their salaries when you factor in the the employer’s required match. That’s money their employers cannot pay them but must deduct from their paychecks even before handing them out. Then, to make matters worse, their income tax is taxed on the entire paycheck amount, including the pre-deducted amount for Social Security tax by the employer.

They find the house of their dreams and buy it. Then, they buy a new car, new furniture, and new appliances for their new house. Now, they have a mortgage payment, property tax, and credit card payments to add to their expenses. They have just fallen into the Rat Race. Then, a child comes along, and childcare services are expensive — or one of the parents stays home with the child — either way, income is lost or additional expenses are incurred. One or both parents scramble to earn more income; but, the more they make the more they’re taxed.

They’re struggling to make it when a brand new credit card shows up in the mail. They max it out before they know it. Then, they’re in hot water again. Then, they are advised to take out loans against their home because it is such a great “asset,” and has appreciated in value. So, they refinance their mortgage for the maximum period allowed or take out an equity line of credit. That clears their credit cards for a while, but, of course, ties them down to the new mortgage or equity line, now with the possible loss of the home in addition to damaging your credit. But, they don’t worry about that. Instead, they are tempted to start charging on their credit cards again because everyone else is doing it. The urge to keep up with their friends’ and coworkers’ lifestyles is tremendous because they have no financial literacy; and, soon, they are close to maxed out again on all their credit cards.

It is said that the fear of public speaking is a fear greater than death for most people. According to psychiatrists, the fear of public speaking is caused by the fear of ostracism, the fear of standing out, the fear of criticism, the fear of ridicule, the fear of being an outcast. The fear of being different prevents most people from seeking new ways to solve their problems.

…

It is that same fear, the fear of ostracism that causes people to conform 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.” “Tickle Me Elmo dolls are out of stock, but I just happen to have one in back that another customer has not come by for yet.”

Many great financial problems are caused by going along with the crowd and trying to keep up with the Joneses. Occasionally, we all need to look in the mirror and be true to our inner wisdom rather than our fears.

But, most people buy their “dream houses” anyway because they can’t separate their emotions from their money. (And, their “dream cars,” “dream vacations,” “dream weddings,” and “dream fill-in-the-blanks.”) The more they “fall in love” with something they really want to make their own, they just have to buy it at all costs, not unlike an addiction. And, they throw caution and financial literary to the wind.

[To continue with Rich Dad - Part 8, click here.]

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• Rich Dad Poor Dad - Part 8
• Money Lessons: The Game - Part 3
• Who Needs Prenups?
• Rich Dad Poor Dad - Part 5
• Rich Dad Poor Dad - Part 4

A. NETWORK, NETWORK, NETWORK!

If you need or want a job, you are not alone. Apparently, there are 14.9 million folks out there competing for jobs in this shrinking market. So, if you’re wondering how the ones who are getting them are doing it, one big advantage is honest networking.

For 9 great tips on how to do it right, see “How to Network Without Being Phony, Lame or Desperate, ” here.

B. THINK OUTSIDE THE BOX

It just doesn’t cut it anymore to send out cookie-cutter resumes. Tailor your job search, do the research, and sell yourself the right way. This means downplay or ignore any education or work experience that’s no longer relevant to the specific sales pitch (your cover letters, resumes, and interviews) for this job and highlight all that might be useful to the new employer. Focus on the parts of your background that make you uniquely qualified for the position and, if necessary, be willing to take a pay cut.

For examples of how others did it, see “Giving a Stalled Job Search a Jump-Start.”

C. INTERVIEW WARDROBE MALFUNCTIONS

Got the job interview? Fantastic! Know what to wear? Whatever you do, be sure to avoid the 20 things listed in “What Not to Wear to a Job Interview,” here.

D. WHAT EMPLOYERS REALLY WANT

It’s not as mysterious as you might think. For the 10 basic traits and skill sets that almost all employers, big or small, look for when they make their final hiring decisions, see “”Top 10 Reasons Employers Want to Hire You,” here.

D. EVEN IF YOU ALREADY HAVE A JOB …

Sometimes you should dust off your resume anyway and start a new job search. (Or, better yet, seriously consider alternatives to the whole employee rat race thing.) For 10 excellent reasons to do so, see “10 Signs It’s Time to Quit,” here.

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• How to Ace Job Interviews
• How to Fill Out Job Applications
• Success in the Corporate World: Play the Game - Part 1
• How to Fill Out Job Applications - Part 2
• The Golden Rule of Networking: “Do Unto Others”

[Continued from “Rich Dad Poor Dad - Part 5″]

Picking up right where we left off last time in Rich Dad Poor Dad:

“So, you’ve been talking about the fear of not having money. How does the desire of money affect our thinking?” Mike asked.

“How did you feel when I tempted you with a pay raise? Did you notice your desire rising?”

We nodded our heads.

“By not giving in to your emotions, you were able to delay your reactions and think. That is most important. We will always have emotions of fear and greed. From here on in, it is most important for you to use those emotions to your advantage and for the long term, and not simply let your emotions run you by controlling your thinking. Most people use fear and greed against themselves. That’s the start of ignorance. Most people live their lives chasing paychecks, pay raises, and job security because of their emotions of desire and fear, not really questioning where those emotion-driven thoughts are leading them. It’s just like the picture of a donkey dragging a cart with its owner dangling a carrot just in front of the donkey’s nose. The donkey’s owner may be going where he wants to go, but the donkey is chasing an illusion. Tomorrow there will only be another carrot for the donkey.”

“You mean the moment I began to picture a new baseball glove, candy, and toys, that’s like a carrot to a donkey?” Mike asked.

“Yeah. And, as you get older, your toys get more expensive. A new car, a boat, and a big house to impress your friends,” said rich dad with a smile. “Fear pushes you out the door; and, desire calls to you. Enticing you toward the rocks. That’s the trap.”

“So, what’s the answer?” Mike asked.

“What intensifies fear and desire is ignorance. That is why rich people with lots of money often have more fear the richer they get. Money is the carrot, the illusion. If the donkey could see the whole picture, it might rethink its choice to chase the carrot.”

Rich dad went on to explain that a human’s life is a struggle between ignorance and illumination.

He explained that once a person stops searching for information and knowledge of one’s self, ignorance sets in. That struggle is a moment-to-moment decision — to learn to open or close one’s mind.

“Look, school is very, very important. You go to school to learn a skill or profession so as to be a contributing member of society. Every culture needs teachers, doctors, mechanics, artists, cooks, business people, police officers, firefighters, soldiers. Schools train them, so our culture can thrive and flourish,” said rich dad. “Unfortunately, for many people, school is the end, not the beginning.”

…

“I want you to always remember this talk. I want you to always think of Mrs. Martin [a sweet old lady who manages the convenient store for Rich Dad where these boys work every Saturday for 3 hours without pay]. I want you always to think of the donkey. Never forget; because your two emotions, fear and desire, can lead you into life’s biggest trap if you’re not aware of them controlling your thinking. To spend your life living in fear, never exploring your dreams, is cruel. To work hard for money, thinking that money will buy you things that will make you happy is also cruel. To wake up in the middle of the night terrified about paying bills is a horrible way to live. To live a life dictated by the size of a paycheck is not really a life. Thinking that a job will make you feel secure is lying to yourself. That’s cruel, and that’s the trap I want you to avoid, if possible. I’ve seen how money runs people’s lives. Don’t let that happen to you. Please don’t let money run your life.”

…

“So, what does ignorance have to do with greed and fear?” I asked.

“Because it is ignorance about money that causes so much greed and so much fear,” said rich dad.

…

“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, first 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.”

“Why is that so important?” I asked.

“Well, that’s up to you to find out. If you want to learn. I’ll take you boys into the briar patch. That place where almost everyone else avoids. I’ll take you to that place where most people are afraid to go. If you go with me, you’ll let go of the idea of working for money and instead learn to have money work for you.”

“And, what will we get if we go with you? What if we agree to learn from you? What will we get?” I asked.

“The same thing Briar Rabbit got,” said rich dad. “Freedom from the Tar Baby.”

“Is there a briar patch?” I asked.

“Yes,” said rich dad. “The briar patch is our fear and our greed. Going into our fear and confronting our greed, our weaknesses, our neediness is the way out. And, the way out is through the mind, by choosing our thoughts.”

“Choosing our thoughts?” Mike asked, puzzled.

“Yes. Choosing what we think rather than reacting to our emotions. Instead of just getting up and going to work to solve your problems, just because the fear of not having the money to pay your bills is scaring you. Thinking would be taking the time to ask yourself a question. A question like, ‘Is working harder at this the best solution to the problem?’ Most people are so terrified at telling themselves the truth — that fear is in control — that they cannot think, and instead run out the door. Tar Baby is in control. That’s what I mean by choosing your thoughts.”

“And, how do we do that?” Mike asked.

“Remember what I said before. A job is only a short-term solution to a long-term problem. Most people only have one problem in mind; and, it’s short term. It’s the bills at the end of the month, the Tar Baby. Money now runs their lives. Or, I should say, the fear and ignorance about money. So, they do as their parents did, get up every day and go work for money. Not having the time to say, ‘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.

“Oh, yes. I hear it all the time,” said rich dad. “I hear things like, ‘Well, everyone has to work.’ Or, ‘The rich are crooks.’ Or, ‘I’ll get another job. I deserve a raise. You can’t push me around.’ Or, ‘I like this job because it’s secure.’ Instead of, ‘Is there something I’m missing here?’ which breaks the emotional thought and gives you time to think clearly.”

…

“Keep working boys, but the sooner you forget about needing a paycheck, the easier your adult life will be. Keep using your brain, work for free, and soon your mind will show you ways of making money far beyond what I could ever pay you. You will see things that other people never see. Opportunities right in front of their noses. Most people never see these opportunities because they’re looking for money and security, so that’s all they get. The moment you see one opportunity, you will see them for the rest of your life. The moment you do that, I’ll teach you something else. Learn this, and you’ll avoid one of life’s biggest traps. You’ll never, ever touch that Tar Baby.”

After a couple more Saturdays of working for free and missing the comic books he used to buy when he was at least making 10 cents an hour, young Kiyosaki suddenly noticed something Mrs. Martin was doing that he never paid much attention to before: She was ripping the top cover of each comic book that did not sell and keeping those but throwing the actual comic books away. When he asked her why she was doing this, she explained that she was getting ready for the comic book distributor who would arrive in an hour. He gave her credit for the unsold comic books. The boys had an idea. They decided to wait for the distributor. When he arrived, they asked him if they could keep the old comic books; and, he said they could as long as they worked for the store and they agreed not to resell them. And, just like that, their second business venture was born! (Remember that their first was casting nickels out of old lead toothpaste tubes.)

They cleaned out the basement of Mike’s house that no one used and filled it with hundreds of comic books. Then, they hired Mike’s younger sister to be the head librarian. She charged each kid 10 cents admission to their new comic book library, which was open from 2:30 to 4:30 p.m. every day after school. The children of the neighborhood could read as many comics as they could in that time, which was often 5 or 6 in two hours. Since comic books cost 10 cents each, this was a great deal for them!

Mike’s sister was a great librarian. She made sure all the comic books were returned after use each day and kept track of who came, when, and which books they liked, and any other comments or complaints they had. The boys averaged $9.50 a week over 3 months! Out of that, they paid Mike’s sister $1 a week and let her read all the comics for free. The boys kept their end of the bargain with the distributor by continuing to work for the convenient store and not selling any of the comic books. And, when the comic books got too tattered, they burned them.

They even tried opening another branch, but they couldn’t find another employee as dedicated as Mike’s sister to work as the new librarian. The boys learned at a very early age how hard it is to find good staff.

After 3 months of a very successful business, some bullies pushed their way into the library and started a fight. Then, Rich Dad suggested they close their comic book business and stop working at the convenient store. He was excited to teach them the next lesson. He was happy they had learned the first lesson so well, of how to make money work for them instead of working for money.

By not getting paid for our work at the store, we were forced to use our imaginations to identify an opportunity to make money. By starting our own business, the comic-book library, we were in control of our own finances, not dependent on an employer. The best part was that our business generated money for us, even when we weren’t physically there. Our money worked for us. [¶] Instead of paying us money, rich dad had given us so much more.

[To continue with Rich Dad - Part 7, click here.]

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• Rich Dad Poor Dad - Part 5
• Rich Dad Poor Dad - Part 2
• Rich Dad Poor Dad - Part 4
• Rich Dad Poor Dad - Part 3
• All About You — Day 26: Learn What You Need to Learn

WHAT IS NANOWRIMO?

Today is the first day of NaNoWriMo (pronounced like “nah-no-rhyme-o”). What is it? In a nutshell, it’s a sort of writer’s marathon that takes place every year where participants from all around the world of all ages and skill levels pledge to write a total of 50,000 words (the equivalent of a short novel) during the 30 consecutive days of November.

4 TIPS BY FOUNDER CHRIS BATY

Sounds hard? Not really. The 4 tips for week 1 provided by their website explain just how easy it can be:

1. “Go to write-ins. These are incredibly casual but deeply productive group noveling sessions that are run in coffee shops and libraries by our volunteer chapter heads called municipal liaisons. To find out about the write-in nearest you in week 1, just head to our contact page and find your area municipal liaison.”

2. “Go big early. Seriously. On November first, sit down and write your 1,667 words. And then just keep going to 2,000, or 3,000, or, 5,000, if you can. Racking up a big word-count cushion early makes the rest of the month so much easier.”

3. “Do not revise anything you write. And, this is going to be painful, I know. But, remember, revision is for December.”

4. “Know that it’s okay to not be entirely sure where your story is going in week 1. These things have a crafty way of working themselves out by weeks 3 and 4.”

THE RULES

Okay, even if it were somehow helpful to writers to indiscriminately type as many words as they possibly can regardless of the quality of their work or even if it follows any sort of plot at all (Their motto is “No Plot, No Problem!”), how can it possibly be helpful to enforce the following strict rules?

1. You cannot start before Nov. 1 and simply count 30 days after your start date.

2. Even if you start after Nov. 1, you must stop by November 30 11:59:59 P.M.

3. It must be a completely new novel. No earlier written material can go into the body of the novel. However, advance planning and extensive notes are permitted.

THE BOTTOM LINE

It seems the goal of this whole thing is merely the accumulation of 50,000 new words of a new novel between November 1 and November 30 every year. If I did that, I’d probably end up with 40,000 words of junk and 10 extra pounds!

I’m not surprised that Chris Batty’s only published book that I could find is nonfiction: No Plot? No Problem!. Even though he’s been a successful “winner” of NaNoWriMo for the past 9 years, since he founded this project in 1999.

It just makes no sense to me to spin your wheels like that. I don’t know. Maybe other people can write like crazy without editing and end up with literary gold.

Bukowski wrote 10 pages per day and got his first novel Post Office done in about 28 days, so it’s not impossible. But even he was so nervous about it that he was throwing up every morning just to keep up that kind of momentum. Plus, I don’t know if that style of raw autobiographical fiction would have sold any copies at all if it wasn’t about an already notoriously shocking and hilarious underground poet.

But, more power to anyone who benefits from this project! As for me, I’m sticking to the old fashioned way of carefully piecing it together as I go. I just can’t see any of my writing heroes doing this NaNoWriMo thing at the beginning of their careers. I know when Hemingway was in top form he was cranking out 2 pages per day, that’s only 500 words. And he didn’t consider all of that great stuff, either. He’d edit the hell out of it. What’s good enough for them is good enough for me.

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• It Pays to Work Past Your Plateaus
• RLL No. 33: Know the Rules before You Break ‘Em
• Success in the Corporate World: Think Like a Winner - Part 1
• How to Fill Out Job Applications - Part 3
• FBO: Post When Your Viewers Are Most Receptive

[Continued from “Rich Dad Poor Dad - Part 4″]

Last time, we learned from Rich Dad Poor Dad. that young Kiyosaki and his best friend Mike agreed to work for Mike’s dad (Kiyosaki’s “Rich Dad”) to learn from him how to be rich.

After 3 weeks of the boys working 3 hours each Saturday — this time without any pay — Rich Dad meets them at the store and takes them to a park across the street to teach them some hard lessons about life:

“Well, you boys had better start thinking. You’re staring at one of life’s biggest lessons. If you learn the lesson, you’ll enjoy a life of great freedom and security. If you don’t learn the lesson, you’ll wind up like Mrs. Martin and most of the people playing softball in the park. They work very hard, for little money, clinging to the illusion of job security, looking forward to a three-week vacation each year and a skimpy pension after forty-five years of work. If that excites you, I’ll give you a raise to 25 cents an hour.”

When they rejected 25 cents an hour, he raised it to a dollar, then $2, and finally $5. Five dollars an hour was more than what most adults in Hawaii made at the time! Although the boys were very tempted by the more realistic previous offers, the $5 offer was too unreal for them. Suddenly, they stopped imagining all the things they could buy with the money and felt calm enough to resist this final offer.

“Good,” rich dad said softly. “Most people have a price. And, they have a price because of human emotions named fear and greed. First, the fear of being without money motivates us to work hard, and then once we get that paycheck, greed or desire starts us thinking about all the wonderful things money can buy. The pattern is then set.”

“What pattern?” I asked.

“”The pattern of get up, go to work, pay bills, get up, go to work, pay bills … Their lives are then run forever by two emotions, fear and greed. Offer them more money, and they continue the cycle by also increasing their spending. This is what I call the Rat Race.”

“There is another way?” Mike asked.

“Yes,” said rich dad slowly. “But only a few people find it.”

“And what is that way?” Mike asked.

“That’s what I hope you boys will find out as you work and study with me. That is why I took away all forms of pay.”

“Any hints?” Mike asked. “We’re kind of tired of working hard, especially for nothing.”

“Well, the first step is telling the truth,” said rich dad.

“We haven’t been lying,” I said.

“I did not say you were lying. I said to tell the truth,” rich dad came back.

“The truth about what?” I asked.

“How you’re feeling,” rich dad said. “You don’t have to say it to anyone else. Just yourself.”

“You mean the people in this park, the people who work for you, Mrs. Martin, they don’t do that?” I asked.

“I doubt it,” said rich dad. “Instead, they feel the fear of not having money. Instead of confronting the fear, they react instead of think. They react emotionally instead of using their heads,” rich dad said, tapping us on our heads. “Then, they get a few bucks in their hands, and again the emotion of joy and desire and greed take over, and again they react, instead of think.”

“So, their emotions do their thinking,” Mike said.

“That’s correct,” said rich dad. “Instead of telling the truth about how they feel, they react to their feelings, fail to think. They feel the fear, they go to work, hoping that money will soothe the fear; but, it doesn’t. That old fear haunts them, and they go back to work, hoping again that money will calm their fears; and, again, it doesn’t. Fear has them in this trap of working, earning money, working, earning money, hoping the fear will go away. But, every day, they get up; and, that old fear wakes up with them. For millions of people, that old fear keeps them awake all night, causing a night of turmoil and worry. So, they get up and go to work, hoping that a paycheck will kill that fear gnawing at their soul. Money is ruining their lives, and they refuse to tell the truth about that. Money is in control of their emotions and, hence, their souls.”

…

“I want you boys to avoid that trap. That is really what I want to teach you. Not just to be rich, because being rich does not solve the problem.”

“It doesn’t?” I asked, surprised.

“No, it doesn’t. Let me finish the other emotion, which is desire. Some call it greed, but I prefer desire. It is perfectly normal to desire something better, prettier, more fun or exciting. So, people also work for money because of desire. They desire money for the joy they think it can buy. But, the joy that money brings is often short lived; and, they soon need more money for more joy, more pleasure, mroe comfort, more security. So, they keep working, thinking money will soothe their soul that is troubled by fear and desire. But, money cannot do that.”

“Even rich people?” Mike asked.

“Rich people included,” said rich dad. “In fact, the reason many rich people are rich is not because of desire but because of fear. They actually think that money can eliminate that fear of not having money, of being poor, so they amass tons of it, only to find out the fear gets worse. They now fear losing it. I have friends who keep working even though they have plenty. I know people who have millions who are more afraid now than when they were poor. They’re terrified of losing all their money. The fears that drove them to get rich got worse. That weak and needy part of their soul is actually screaming louder. They don’t want to lose the big house, the cars, the high life that money has bought them. They worry about what their friends would say if they lost all their money. Many are emotionally desperate and neurotic, although they look rich and have more money.”

“So, is a poor man happier?” I asked.

“No, I don’t think so,” replied rich dad. “The avoidance of money is just as psychotic as being attached to money.”

…

“I’ve met so many people who say, ‘Oh, I’m not interested in money.’ Yet, they’ll work at a job for eight hours a day. That’s a denial of truth. If they weren’t interested in money, then why are they working? That kind of thinking is probably more psychotic than a person who hoards money.”

“So, what do we do?” I asked. “Not work for money until all traces of fear and greed are gone?”

“No, that would be a waste of time,” said rich dad. “Emotions are what make us human. Make us real. The word ‘emotion’ stands for energy in motion. Be truthful about your emotions; and, use your mind and emotions in your favor, not against yourself.”

…

“Just be an observer, not a reactor, to your emotions. Most people do not know that it’s their emotions that are doing the thinking. Your emotions are your emotions; but, you have got to learn to do your own thinking.”

“Can you give me an example?” I asked.

“Sure,” replied rich dad. “When a person says, ‘I need to find a job,’ it’s most likely an emotion doing the thinking. Fear of not having money generates that thought.”

“But, people do need money if they have bills to pay,” I said.

“Sure they do,” smiled rich dad. “All I’m saying is that it’s fear that is all too often doing the thinking.”

“I don’t understand,” said Mike.

“For example,” said rich dad. “If the fear of not having enough money arises, instead of immediately running out to get a job so they can earn a few bucks to kill the fear, they instead might ask themselves this question, ‘Will a job be the best solution to this fear over the long run?’ In my opinion, the answer is ‘no.’ Especially when you look over a person’s lifetime. A job is really a short-term solution to a long-term problem.”

“But, my dad is always saying, ‘Stay in school, get good grades, so you can find a safe, secure job.’” I spoke out, somewhat confused.

“Yes, I understand he says that,” said rich dad, smiling. “Most people recommend that; and, it’s a good idea for most people. But, people make that recommendation primarily out of fear.”

“You mean my dad says that because he’s afraid?”

“Yes,” said rich dad. “He’s terrified that you won’t be able to earn money and won’t fit into society. Don’t get me wrong. He loves you and wants the best for you. And, I think his fear is justified. An education and a job are important. But, it won’t handle the fear. You see, that same fear that makes him get up in the morning to earn a few bucks is the fear that is causing him to be so fanatical about you going to school.”

“So, what do you recommend?” I asked.

“I want to teach you to master the power of money. Not be afraid of it. And, they don’t teach that in school. If you don’t learn it, you become a slave to money.”

…

“You see, we’re all employees ultimately. We just work at different levels,” said rich dad. “I just want you boys to have a chance to avoid the trap. The trap caused by those two emotions, fear and desire. Use them in your favor, not against you. That’s what I want to teach you. I’m not interested in just teaching you to make a pile of money. That won’t handle the fear or desire. If you don’t first handle fear and desire, and you get rich, you’ll only be a high-paid slave.”

“So how do we avoid the trap?” I asked.

“The main cause of poverty or financial struggle is fear and ignorance, not the economy or government or the rich. It’s self-inflicted fear and ignorance that keeps people trapped. So, you boys go to school and get your college degrees. I’ll teach you how to stay out of the trap.”

[To continue with Rich Dad - Part 6, click here.]

[For your own copy of Rich Dad Poor Dad, click here.]

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• Rich Dad Poor Dad - Part 6
• Rich Dad Poor Dad - Part 3
• Rich Dad Poor Dad - Part 2
• Rich Dad Poor Dad - Part 4
• All About You — Day 26: Learn What You Need to Learn

[Continued from “Rich Dad Poor Dad - Part 3″]

And now for more pithy words from young Kiyosaki’s “Rich Dad” from his bestselling Rich Dad Poor Dad:

“I’m glad you got angry about working for 10 cents an hour. If you had not gotten angry and had gladly accepted it, I would have to tell you that I could not teach you. You see, true learning takes energy, passion, a burning desire. Anger is a big part of that formula, for passion is anger and love combined. When it comes to money, most people want to play it safe and feel secure. So, passion does not direct them. Fear does.”

“So, is that why they’ll take a job with low pay?” I asked.

“Yes,” said rich dad. “Some people say I exploit people because I don’t pay as much as the sugar plantation or the government. I say the people exploit themselves. It’s their fear, not mine.”

“But, don’t you feel you should pay them more?” I asked.

“I don’t have to. And, besides, more money will not solve the problem. Just look at your dad. He makes a lot of money; and, he still can’t pay his bills. Most people, given more money, only get into more debt.”

“So, that’s why the 10 cents an hour,” I said, smiling. “It’s a part of the lesson.”

“That’s right,” smiled rich dad. “You see, your dad went to school and got an excellent education, so he could get a high-paying job. Which he did. But, he still has money problems because he never learned anything about money at school. On top of that, he believes in working for money.”

“And, you don’t?” I asked.

“No, not really,” said rich dad. “If you want to learn to work for money, then stay in school. That is a great place to learn to do that. But, if you want to learn how to have money work for you, then I will teach you that. But, only if you want to learn.”

“Wouldn’t everyone want to learn that?” I asked.

“No,” said rich dad. “Simply because it’s easier to learn to work for money, especially if fear is your primary emotion when the subject of money is discussed.”

“I don’t understand,” I said with a frown.

“Don’t worry about that for now. Just know that it’s fear that keeps most people working at a job. The fear of not paying their bills. The fear of being fired. The fear of not having enough money. The fear of starting over. That’s the price of studying to learn a profession or trade, and then working for money. Most people become a slave to money … and then get angry at their boss.”

“Learning to have money work for you is a completely different course of study?” I asked.

“Absolutely,” rich dad answered, “absolutely.” [¶] “Ready to learn?” asked rich dad.

“Absolutely,” I said with a grin.

“I have kept my promise. I’ve been teaching you from afar,” my rich dad said. “At 9 years old, you’ve gotten a taste of what it feels like to work for money. Just multiply your last month by fifty years, and you will have an idea of what most people spend their life doing.”

“I don’t understand,” I said.

“How did you feel waiting in line to see me? Once to get hired and once to ask for more money?”

“Terrible,” I said.

“If you choose to work for money, that is what life is like for many people,” said rich dad.

“And, how did you feel when Mrs. Martin dropped three dimes in your hand for three hours’ work?”

“I felt like it wasn’t enough. It seemed like nothing. I was disappointed,” I said.

“And, that is how most employees feel when they look at their paychecks. Especially after all the tax and other deductions are taken out. At least you got 100 percent.”

“You mean most workers don’t get paid everything?” I asked with amazement.

“Heavens no!” said rich dad. “The government always takes its share first.”

“How do they do that?” I asked.

“Taxes,” said rich dad. “You’re taxed when you earn. You’re taxed when you spend. You’re taxed when you save. You’re taxed when you die.”

“Why do people let the government do that to them?”

“The rich don’t,” said rich dad with a smile. “The poor and the middle class do. I’ll bet you that I earn more than your dad, yet he pays more in taxes.”

“How can that be?” I asked. As a 9-year-old boy, that made no sense to me. “Why would someone let the government do that to them?”

Rich dad sat there in silence. I guess he wanted me to listen instead of jabber away at the mouth.

Finally, I calmed down. I did not like what I had heard. I knew my dad complained constantly about paying so much in taxes, but really did nothing about it. Was that life pushing him around?

Rich dad rocked slowly and silently in his chair, just looking at me.

“Ready to learn?” he asked.

I nodded my head slowly.

“As I said, there is a lot to learn. Learning how to have money work for you is a lifetime study. Most people go to college for four years, and their education ends. I already know that my study of money will continue over my lifetime, simply because the more I find out, the more I find out I need to know. Most people never study the subject. They go to work, get their paychecks, balance their checkbooks, and that’s it. On top of that, they wonder why they have money problems. Then, they think that more money will solve the problem. Few realize that it’s their lack of financial education that is the problem.”

“So my dad has tax problems because he doesn’t understand money?” I asked, confused.

“Look,” said rich dad. “Taxes are just one small section on learning how to have money work for you. Today, I just wanted to find out if you still have the passion to learn about money. Most people don’t. They want to go to school, learn a profession, have fun at their work, and earn lots of money. One day, they wake up with big money problems; and, then they can’t stop working. That’s the price of only knowing how to work for money instead of studying how to have money work for you. So do you still have the passion to learn?” asked rich dad.

I nodded my head.

“Good,” said rich dad. “Now, get back to work. This time, I will pay you nothing.”

“What?” I asked in amazement.

“You heard me. Nothing. You will work the same three hours every Saturday, but this time you will not be paid 10 cents per hour. You said you wanted to learn to not work for money, so I’m not going to pay you anything.”

I couldn’t believe what I was hearing.

“I’ve already had this conversation with Mike. He’s already working, dusting, and stacking canned goods for free. You’d better hurry and get back there.”

“That’s not fair,” I shouted. “You’ve got to pay something.”

“You said you wanted to learn. If you don’t learn this now, you’ll grow up to be like the two women and the older man sitting in my living room, working for money and hoping I don’t fire them. Or, like your dad, earning lots of money only to be in debt up to his eyeballs, hoping more money will solve the problem. If that’s what you want, I’ll go back to our original deal of 10 cents an hour. Or, you can do what most people grow up to do. Complain that there is not enough pay, quit, and go looking for another job.”

“But, what do I do?” I asked.

Rich dad tapped me on the head. “Use this,” he said. “If you use it well, you will soon thank me for giving you an opportunity, and you will grow into a rich man.”

I stood there, still not believing what a raw deal I had been handed. Here, I came to ask for a raise; and, now, I was being told to keep working for nothing.

Rich dad tapped me on the head again and again, “Use this. Now get out of here; and, get back to work.”

[To continue with Rich Dad - Part 5, click here.]

[For your own copy of Rich Dad Poor Dad, click here.]

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• Rich Dad Poor Dad - Part 3
• Rich Dad Poor Dad - Part 5
• Rich Dad Poor Dad - Part 6
• Rich Dad Poor Dad
• Rich Dad Poor Dad - Part 2

[Continued from “Rich Dad Poor Dad - Part 2″]

Let’s pick up exactly where we left off in the story of Rich Dad Poor Dad, when young Kiyosaki confronted his Rich Dad (actually his best friend Mike’s father who agreed to teach the boys how to get rich then promptly put them to work for 3 hours on 3 consecutive Saturdays earning only 10 cents an hour). Rich Dad had just said to Kiyosaki, “I understand you want a raise or you’re going to quit”:

“Well, you’re not keeping your end of the bargain,” I blurted out, nearly in tears. It was really frightening for a 9-year-old boy to confront a grownup.

“You said that you would teach me if I worked for you. Well, I’ve worked for you. I’ve worked hard. I’ve given up my baseball games to work for you. And you don’t keep your word. You haven’t taught me anything. You are a crook, like everyone in town thinks you are. You’re greedy. You want all the money and don’t take care of your employees. You make me wait and don’t show me any respect. I’m only a little boy, and I deserve to be treated better.”

Rich dad rocked back in his swivel chair, hands up to his chin, somewhat staring at me. It was like he was studying me.

“Not bad,” he said. “In less than a month, you sound like most of my employees.”

“What?” I asked. Not understanding what he was saying, I continued with my grievance. “I thought you were going to keep your end of the bargain and teach me. Instead you want to torture me? That’s cruel. That’s really cruel.”

“I am teaching you,” rich dad said quietly.

“What have you taught me? Nothing!” I said angrily. “You haven’t even talked to me once since I agreed to work for peanuts. Ten cents an hour. Hah! I should notify the government about you. [¶] We have child labor laws, you know. My dad works for the government, you know.”

“Wow!” said rich dad. “Now you sound just like most of the people who used to work for me. People I’ve either fired, or they’ve quit.”

“So what do you have to say?” I demanded, feeling pretty brave for a little kid. “You lied to me. I’ve worked for you, and you have not kept your word. You haven’t taught me anything.”

“How do you know that I’ve not taught you anything?” asked rich dad calmly.

“Well, you’ve never talked to me. I’ve worked for three weeks, and you have not taught me anything,” I said with a pout.

“Does teaching mean talking or a lecture?” rich dad asked.

“Well, yes,” I replied.

“That’s how they teach you in school,” he said smiling. “But, that is not how life teaches you; and, I would say that life is the best teacher of all. Most of the time, life does not talk to you. It just sort of pushes you around. Each push is life saying, ‘Wake up. There’s something I want you to learn.’”

…

“If you learn life’s lessons, you will do well. If not, life will just continue to push you around. People do two things. Some just let life push them around. Others get angry and push back. But, they push back against their boss, or their job, or their husband or wife. They do not know it’s life that’s pushing.”

…

“Life pushes all of us around. Some give up. Others fight. A few learn the lesson and move on. They welcome life pushing them around. To these few people, it means they need and want to learn something. They learn and move on. Most quit; and, a few like you fight.”

Rich dad stood and shut the creaky old wooden window that needed repair. “If you learn this lesson, you will grow into a wise, wealthy, and happy young man. If you don’t, you will spend your life blaming a job, low pay, or your boss for your problems. You’ll live life hoping for that big break that will solve all your money problems.”

…

“Or, if you’re the kind of person who has no guts, you just give up every time life pushes you. If you’re that kind of person, you’ll live all your life playing it safe, doing the right things, saving yourself for some event that never happens. Then, you die a boring old man. You’ll have lots of friends who really like you because you were such a nice, hard-working guy. You spent a life playing it safe, doing the right things. But, the truth is, you let life push you into submission. Deep down, you were terrified of taking risks. You really wanted to win; but, the fear of losing was greater than the excitement of winning. Deep inside, you, and only you, will know you didn’t go for it. You chose to play it safe.”

…

“You’ve been pushing me around?” I asked.

“Some people might say that,” smiled rich dad. “I would say that I just gave you a taste of life.”

“What taste of life?” I asked, still angry, but now curious. Even ready to learn.

“You boys are the first people that have ever asked me to teach them how to make money. I have more than 150 employees; and, not one of them has asked me what I know about money. They ask me for a job and a paycheck, but never to teach them about money. So most will spend the best years of their lives working for money, not really understanding what it is they are working for.”

…

“So ,when Mike told me about you wanting to learn how to make money, I decided to design a course that was close to real life. I could talk until I was blue in the face; but, you wouldn’t hear a thing. So, I decided to let life push you around a bit so you could hear me. That’s why I only paid you 10 cents.”

“So what is the lesson I learned from working for only 10 cents an hour?” I asked. “That you’re cheap and exploit your workers?”

Rich dad rock back and laughed heartily. Finally, after his laughing stopped, he said, “You’d best change your point of view. Stop blaming me, thinking I’m the problem. If you think I’m the problem, then you have to change me. If you realize that you’re the problem, then you can change yourself, learn something, and grow wiser. Most people want everyone else in the world to change but themselves. Let me tell you, it’s easier to change yourself than everyone else.”

“I don’t understand,” I said.

“Don’t blame me for your problems,” rich dad said, growing impatient.

“But you only pay me 10 cents.”

“So, what are you learning?” rich dad asked, smiling.

“That you’re cheap,” I said with a sly grin.

“See you think I’m the problem,” said rich dad.

“But you are.”

“Well, keep that attitude and you learn nothing. Keep the attitude that I’m the problem, and what choices do you have?”

“Well, if you don’t pay me more or show me more respect and teach me, I’ll quit.”

“Well put,” rich dad said. “And, that’s exactly what most people do. They quit and go looking for another job, better opportunity, and higher pay, actually thinking that a new job or more pay will solve the problem. In most cases, it won’t.”

“So, what will solve the problem?” I asked. “Just take this measly 10 cents and hour and smile?”

Rich dad smiled. “That’s what the other people do. Just accept a paycheck knowing that they and their family will struggle financially. But, that’s all they do, waiting for a raise thinking that more money will solve the problem. Most just accept it, and some take a second job working harder, but again accepting a small paycheck.”

I sat staring at the floor, beginning to understand the lesson rich dad was presenting. I could sense it was a taste of life. Finally, I looked up and repeated the question. “So, what will solve the problem?”

“This,” he said, tapping me gently on the head. “This stuff between your ears.”

It was at that moment that rich dad shared the pivotal point of view that separated him from his employees and my poor dad — and led him to eventually become one of the richest men in Hawaii, while my highly educated, but poor, dad struggled financially all his life. It was a singular point of view that made all the difference over a lifetime.

Rich dad said, over and over, this point of view, which I call Lesson No. 1: “The poor and the middle class work for money. The rich have money work for them.”

[To continue with Rich Dad - Part 4, click here.]

[For your own copy of Rich Dad Poor Dad, click here.]

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• Rich Dad Poor Dad - Part 4
• Rich Dad Poor Dad - Part 5
• Rich Dad Poor Dad - Part 6
• Rich Dad Poor Dad - Part 2
• All About You — Day 26: Learn What You Need to Learn

If you had millions of dollars, would you hand it over to an accountant to take care of it for you? For 4 years? And never ask what he’s doing with it. What if it was 40 million dollars?

What if you were also a famous bestselling author of mystery novels featuring a very clever woman who always figures out whodunnit? And what if your partner was also not too shabby in the brains department, considering she’s a neurosurgeon at Harvard but she, too, trusted all her money to the same accountant.

Patricia Cornwell is one of the biggest selling female authors in the world. (In fact, her character Dr. Kay Scarpetta is so popular that Angelina Jolie is going to play her in a new movie coming out soon by Twentieth Century Fox. It will be a suspense thriller sort of like The Silence of the Lambs and Seven.) Cornwell has written 16 of them so far. She’s no dummy.

But, according to the article at DailyFinance “Did the Accountant Murder Patricia Cornwell’s Nest Egg?,” she and her partner filed a lawsuit against their New York-based accounting and financial advisory firm, Anchin, Block & Anchin LLP for losing their $40 million personal fortunes … over 4 1/2 years … without providing either of them with any information about their assets, liabilities, or net worth.

My first reaction was, “WTF? How can such smart women do something so stupid?!” Then, I stopped to really think about it. She’s a bestselling author, busy with writing her brains out and all that goes along with that kind of celebrity, book signings, movie deals, the whole 9 yards. Her partner is a freakin’ neurosurgeon! In my book, that’s the equivalent of a rocket scientist. These are two brainy women who are at the top of their game in their respective fields. They’re too busy making money to keep track of what the so-called money experts who are entrusted with probably hundreds of millions of other very smart people’s money are doing with it.

They don’t want to have to worry about all that. That’s what they pay those guys for. We all trust our cars to the mechanics, right? We trust our taxes to our government. We trust our children to our schools. Our bodies to our doctors.

And I and everyone I’ve known have been lazy like this in the past,too. But let this be a lesson to all of us — and especially to me — if and when I get to be rich and famous writing my own bestselling books, do not — repeat, DO NOT — just hand over your money to the experts to invest it for you. NEVER forgot that you are responsible for your own physical, mental, emotional, and financial health.

Hopefully the new film starring Angelina Jolie will get a whole new generation excited about buying Cromwell’s books and she’ll get all of her and her partner’s $40 million back. And hopefully they’ll be smarter about investing it this time, too.

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[Continued from “Rich Dad Poor Dad”]

LESSON ONE: THE RICH DON’T WORK FOR MONEY

As the story goes, when Kiyosaki was 9 years old, he and his best friend Mike were rudely made aware of the fact that they were perceived as “poor kid” by the other kids in school who did not invite them to their swanky weekend parties. When young Kiyosaki asked his own father (his Poor Dad) how he could get rich, his father simply advised, “If you want to be rich, you have to learn to make money.” That’s when young Kiyosaki and his best friend Mike started their first business together, trying to coin nickels out of old lead toothpaste tubes.

After young Kiyosaki’s dad warned them that trying to counterfeit nickels was illegal, the boys despaired that they must stay poor after all, so he told them:

“You’re only poor if you give up. The most important thing is that you did something. Most people only talk and dream of getting rich. You’ve done something. I’m very proud of the two of you. I will say it again. Keep going. Don’t quit.

Mike and I stood there in silence. They were nice words, but we still did not know what to do.

“So how come you’re not rich, dad?” I asked.

“Because I chose to be a schoolteacher. Schoolteachers really don’t think about being rich. We just like to teach. I wish I could help you, but I really don’t know how to make money. …

“I know,” said my dad. “If you boys want to learn how to be rich, don’t ask me. Talk to your dad, Mike.”

“My dad?” asked Mike with a scrunched up face.

“Yeah, your dad,” repeated my dad with a smile. “Your dad and I have the same banker, and he raves about your father. He’s told me several times that your father is brilliant when it comes to making money.”

“My dad?” Mike asked again in disbelief. “Then how come we don’t have a nice car and a nice house like the rich kids at school?”

“A nice car and a nice house does not necessarily mean you’re rich or you know how to make money,” my dad replied. “Jimmy’s [one of the rich kids that snubbed young Kiyosaki and Mike] dad works for the sugar plantation. He’s not much different from me. He works for a company, and I work for the government. The company buys the car for him. The sugar company is in financial trouble, and Jimmy’s dad may soon have nothing. Your dad is different Mike. He seems to be building an empire, and I suspect in a few years he will be a very rich man.”

With that, Mike and I got excited again. With new vigor, we began cleaning up the mess caused by our now defunct first business. As we were cleaning up, we made plans on how and when to talk to Mike’s dad. The problem was that Mike’s dad worked long hours and often did not come home until late. His father owned warehouses, a construction company, a chain of stores, and three restaurants. It was the restaurants taht kept him out late.

…

“OK,” I said. “Next Saturday.” And I put the phone down. Mike’s dad had agreed to meet with Mike and me.

At 7:30 Saturday morning, I caught the bus to the poor side of town.

…

Michael and I met with his dad that morning at 8 o’clock. He was already buys and had been at work for more than an hour. His construction supervisor was just leaving his pickup truck as I walked up to his simple, small and tidy home. Mike met me at the door.

“Dad’s on the phone, and he said to wait on the back porch,” Mike said as he opened the door.

The old wooden floor creaked as I stepped across the threshold of this aging house. There was a cheap mat just inside the door. The mat was there to hide the years of wear from countless footsteps that the floor had supported. Although clean, it needed to be replaced.

I felt claustrophobic as I entered the narrow living room, which was filled with old musty overstuffed furniture that today would be collector’s items. Sitting on the couch were two women, a little older than my mom. Across from the women sat a man in workman’s clothes. He wore khaki slacks and a khaki shirt, neatly pressed but without starch, and polished work boots. He was about 10 years older than my dad; I’d say about 45 years old. They smiled as Mike and I walked past them, heading for the kitchen, which led to the porch that overlooked the backyard. I smiled back shyly.

“Who are those people?” I asked.

“Oh, they work for my dad. The older man runs his warehouses, and the women are the managers of his restaurants. And you saw the construction supervisor, who is working on a road project about 50 miles from here. His other supervisor, who is building a tract of houses, had already left before you got here.”

“Does this go on all the time?” I asked.

“Not always, but quite often,” said Mike, smiling as he pulled up a chair to sit down next to me.

…

Suddenly, Mike’s dad burst through the rickety screen door and onto the porch. Mike and I jumped to our feet, not out of respect but because we were startled.

“Ready, Boys?” Mike’s dad asked as he pulled up a chair to sit down with us.

We nodded our heads as we pulled our chairs away from the wall to sit in front of him.

…

“Mike says you want to learn to make money? Is that correct, Robert?”

I nodded my head quickly, but with a little intimidation. He had a lot of power behind his words and smile.

“OK, here’s my offer. I’ll teach you, but I won’t do it classroom-style. You work for me; I’ll teach you. You don’t work for me; I won’t teach you. I can teach you faster if you work, and I’m wasting my time if you just want to sit and listen, like you do in school. That’s my offer. Take it or leave it.”

“Ah … may I ask a question first?” I asked.

“No. Take it or leave it. I’ve got too much work to do to waste my time. If you can’t make up your mind decisively, then you’ll never learn to to make money anyway. Opportunities come and go. Being able to know when to make quick decisions is an important skill. You have an opportunity that you asked for. School is beginning or it’s over in ten seconds,” Mike’s dad said with a teasing smile.

“Take it,” I said.

“Take it,” said Mike.

“Good,” said Mike’s dad. “Mrs. Martin will be by in ten minutes. After I’m though with her, you ride with her to my sperette and you can begin working. I’ll pay you 10 cents an hour and you will work for three hours every Saturday.”

“But I have a softball game today,” I said.

Mike’s dad lowered his voice to a stern tone. “Take it or leave it,” he said.

“I’ll take it,” I replied, choosing to work and learn instead of playing softball.

Young Kiyosaki and Mike spent 3 begrudging Saturdays dusting off the shelves of the superette for 3 sweltering dusty hours and only got paid 3 dimes each time. Even in Hawaii in the 1950s, 10 cents an hour was shockingly cheap wages and all the boys could buy with it was 3 comic books each after each work day.

After 3 weeks of this, Kiyosaki was ready to quit and told Mike so. Mike laughed and said his father was expecting this to happen and said to meet with him again.

I was ready to face him and I was prepared. Even my real dad was angry with him. My real dad, the one I call the poor one, thought that my rich dad was violating child labor laws and should be investigated.

My educated poor dad told me to demand what I deserve. At least 25 cents an hour. My poor dad told me that if I did not get a raise, I was to quit immediately.

“You don’t need that damned job anyway,” said my poor dad with indignity.

At 8 o’clock Saturday morning, I was going through the same rickety door of Mike’s house.

“Take a seat and wait in line,” Mike’s dad said as I entered. He turned and disappeared into his little office next to a bedroom.

I looked around the room and did not see Mike anywhere. Feeling awkward, I cautiously sat down next to the same two women who were there four weeks earlier. They smiled and slid across the couch to make room for me.

Forty-five minutes went by, and I sat out in his musty dark living room on a beautiful sunny Hawaiian day, waiting to talk to a cheapskate who exploited children. I could hear him rustling around the office, talking on the phone, and ignoring me. I was now ready to walk out, but for some reason I stayed.

Finally, fifteen minutes later, at exactly 9 o’clock, rich dad walked out of his office, said nothing, and signaled with his hand for me to enter his dingy office.

“I understand you want a raise or you’re going to quit,” rich dad said as he swiveled in his office chair.

[To continue with Rich Dad - Part 3, click here.]

[For your own copy of Rich Dad Poor Dad, click here.]

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• Rich Dad Poor Dad - Part 3
• Rich Dad Poor Dad - Part 6
• Rich Dad Poor Dad - Part 5
• Rich Dad Poor Dad - Part 4
• Rich Dad Poor Dad