Why Most People Stay Poor (and How to Change It)

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1:18Try today for free at odoo.com. That's O-D-O-O dot com. This is the Rich Dad Radio Show. The good news and bad news about money. Here's Robert Kiyosaki. Hi, Robert Kiyosaki. And I'm probably best known for this book here, Rich Dad, Poor Dad, which came out in 1997. And it's still on bestseller lists in different parts of the world. And this came out in 1997. And this board game, Cash Flow, came out in 1996. So this is what I'm kind of known for. So what I'm gonna talk today about is, as you know, is this word, change. So a lot of people are talking about what can I do? What can I do? What can I do?

2:09And for many people, this is the hardest word there is because it's very easy to keep doing the same old thing. So there's a saying that I've had for years, and the saying is this, for things to change,

2:41first, I must change. And for many, many people, this is the hardest thing there is. The most difficult thing for a poor person is stop being poor. And you can just keep doing the same old thing and wind up poor. Millions and millions of people are finding out they're poor. They may have done all the right things. They went to school. They got a job. They work hard. They live below their means. They save money. and they may have invested in the stock market or a superannuation or RRSP, but they can't change, that's the problem. And I've been talking about this for years and years and years and years and years about this word here is how do you change?

3:32It's more than just changing your thoughts. You've got to change what you do. You've got to change your emotions and change spiritually here. So what I'll be talking to you today about for the next 45 minutes to an hour, is how do you change? Because we at the Rich Dad Company, this is all we focused on. So even though millions of people, if without government support, would be on the streets, homeless, because they don't have any money, the reason is they went to stupid schools. You know, they taught you to get a job, work hard, save money, get out of debt, invest in the stock market. And that's why they're in trouble today.

4:16And the hardest thing to do is change that thought. So I have some, again, this here is my book, Rich Dad, Poor Dad, which I'll be talking about. This, for many people, is the most profound book of change. It's the cash flow quadrant. But this here is another book called Fake, Fake Money, Fake Teachers, Fake Assets. fake money, fake teachers, fake assets. And one of the reasons people are in trouble is our money is fake. The U.S. dollar is fake. It's a fiat currency. It's an IOU. It's printed out of thin air. And then you go to school, you learn from teachers who don't know anything about money.

5:00And you take advice from them, or your parents who are poor gave you financial advice. And it's hard to change that because you love your parents. Probably hate your teachers like I did. But if you still listen to your parents or your teachers, you're in trouble. And then they tell you to invest in assets like stocks, bonds, mutual funds, and ETFs. And what's really, really sad is that one of the biggest assets today is called the U.S. Treasury Bill, the T-Bill. It's the biggest phony piece of garbage I've ever met. But millions of people my age, the baby boomers, they hold T-bills, treasury bills, bonds.

5:42And bonds only exist because there's fake money. But that's far beyond what most people can handle. So anyway, that's what I write and I talk about. So again, for things to change first, I must change. When you talk about fake money, fake teachers, fake assets, many of us had bad teachers. So the reason I created the Rich Dad Company was again to teach people about money playing games, the cash flow games. So this is what I'll be covering today about how you can change using a simple board game and books, but you have got to want to change. I'm afraid the world is on the verge of a depression or a collapse.

6:33And for some people, it's bad news. For those who are prepared, it's good news. So that's what I'll be talking today about. The other thing, I'll just give you a quick review of Rich Dad Poor Dad.

6:56So this was in the book, Rich Dad, Poor Dad.

7:04You have income, expense, asset, liability. This is the difference. and a lot of people read Rich Dad, Poor Dad, but they didn't get the message. You know, Rich Dad, Poor Dad, I said the rich don't work for money. Well, this is where most people are focusing on. This was Poor Dad. You know, most people watching right now want a paycheck. That was Poor Dad. They work for money and then they try and reduce their expenses. That's poor people thinking. You know, I'm going to work hard, and I'm going to try and save a little money. That's ridiculous. That's why you're poor. Got to change that thought.

7:57And this here is rich dad. Rich dad said the rich don't work for money. The rich work for assets, and assets are down here. So this is called a P &L, and this is called a balance sheet. Now, again, it's the words. And from the Bible, not really religious, but the word becomes flesh. You've got to know this word here. When I talk to my friends, we're talking about balance sheets. How many assets do you have offset via liabilities? And the average person, like my poor dad, a PhD, most employees, they think here. They think P &L, profit and loss. And the rich think in balance sheets. And when I talk to the average person, they have no idea.

8:45what a balance sheet is. You know, they call their house an asset, which was number two in Rich Dad Poor's, when their house is really a liability. And so the reason people are poor is they have liability after liability after liability, they call assets. That was this book here. So if you want to change, it begins by changing your words, because, again, from the Bible, and the word becomes flesh. You call liabilities assets, you'll be poor. That's what the PhDs at the Federal Reserve Bank are doing. They're calling their liabilities assets. PhD stands for poor, helpless, desperate. That's my poor dad.

9:33PhD. Rich dad, no education. So what Rich Dad, Poor Dad, the book was teaching was basically this here. And this here was what the cash flow game was about, was to teach people how to acquire assets. But most people just want out and they want to make more money. They want a higher paying job. They want to trade the stock market, make some cash. And that's why people are in trouble. And then they try and reduce expenses or they buy a big house or a new car and they call it an asset. Your house and your car are liabilities. Then you have credit card debt, all liabilities. You have kids, every kid, they may be God's asset, but they're your financial liability.

10:24And you look at some of the poorest people, they have the most kids. You know, it's tragic. And that's what happens when there's no financial education in our school. So going back to this here, for things to change first, I must change. It begins by looking at this here. This is old stuff, 1997, Rich Dad put it. If you're going to change, change your vocabulary, change your words, the words become flesh. So here is a picture. This is Rich Dad, and his most important document was a financial statement, this. that was important to Rich Dad. And this is what happened to my poor dad, was his diploma.

11:14He had a PhD. Poor, helpless, and desperate, and it's these PhDs that run the Federal Reserve Bank, the U.S. Treasury, and our school system. So if you're struggling today, it may be because you've been listening to poor, helpless, and desperate people versus rich people, financial statements. What my rich dad taught my best friend and I, Mike, was when you go to the bankers as adults, the banker never asks you for your diploma. Your banker wants to see your financial statement. And 99 % of you out there watching this program, you don't have one of these. You have a credit card. but you don't have a financial statement.

12:06You have a FICO, in America it's called a FICO score, which just proves how well you pay your bills. So again, I just want to get to it. It's really quite simple. For things to change, first I must change, and the change is you don't want to keep working for money because as I say in this book here, it's fake money. In 1971, President Nixon took the dollar off the gold standard, and the U.S. could print as much money as it wanted. In 1971, the U.S. dollar became debt. That was the difference. So then what most poor people say is get out of debt. well if the dollar is debt u.s dollar is debt the singapore dollar is debt the ringgit is debt the peso is debt the euro is debt the yen is debt that's free money i borrow my ass off so i borrow money here

13:14So I borrow debt here and I buy assets. So my primary asset are apartment houses. And every month I have 8 ,000 of them. Every month they cash flow income here. That's my formula. There's millions of formulas to get rich, millions. But there's billions of ways to go poor. So this is my formula. But the most important thing you notice here, if you understand financial statements, is your biggest expense is tax. I don't pay taxes legally. That's called financial education. Now, some of you say, well, that's not fair. It isn't fair. But if you went to school and you had fake teachers, that's the best you got.

14:15Or your parents believe in paying taxes, you're in trouble. You're in serious trouble today. Because the rich, as you know, don't pay taxes legally. You can be a cheat and not pay them illegally, or you can do it legally. So anyway, that's what happened. Again, it's a story of rich dad, poor dad. poor dad PhD poor helpless industry he died a poor man and my rich dad financial state again your banker asks you for your financial statement that's the that's where the change starts and the reason we created the cash flow board game because inside here it's a financial statement it's not the game board, but you have to train your brain to acquire this.

15:07This is all I focus on here. So, when the markets crash in 2020, I'm not in the stock market. You can make a lot of money in the stock market. I just don't like stocks or bonds or ETFs or that stuff. I just don't like it. If If you like it, good, buy it. But anyway, that's what this game was teaching, and it teaches you physically. You have to do something. So this is book number one. This here is, so this here is Rich Dad Poor Dad. If you haven't read it, please read it. Very simple book. It's still on the bestseller list. This book was on the bestseller list of the New York Times for nearly seven years, until the communist people, the PhDs at the New York Times took it off.

15:56Just like they don't like Trump, they don't like me because I'm a capitalist. Trump is a capitalist. The people who are PhDs, most of them are socialists or communists. They're good people, but they don't like rich people because they're not rich. Because most of the PhDs work for this and this. That's the difference. And the rich, Trump and I, work here. That's the difference. And that's where the change starts. The second book that came out was this book here, The Cash Flow Quadrant. And many people says this was the most important book for them to change. It kind of woke them up. So this is a diagram of the cash flow quadrant.

16:45So this is the diagram, a simple sketch of the cash flow quadrant.

16:56So when I was a young boy, my rich dad would just show this here.

17:04E stands for employee, S stands for self-employed, small business, or specialist, like a doctor or lawyer, computer programmer. And S can do their job on their own. That's the difference. If you can do your job on your own, you're an S. If you need a job, you're an E. That's the difference here. B stands for big business, 500 employees or more, or I stands for inside investor. See, these guys, when they invest in the stock market, they're outsiders. When I invest, I want to be an insider. So the people with their retirement plans and all that, guys who invest with Warren Buffett, they're outsiders.

17:53I wanted to be an insider. We'll be right back.

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18:48Robert Kiyosaki, Rich Dad Radio Show, the good news and bad news about money. So this is the big difference between thoughts and how you change. This here is poor dad. The words in his head were go to school, get a job, get a paycheck and retirement plan. And this was my poor mom. She wanted me to be a doctor. The problem was I kept flunking out of school. It's not very smart. And over here was my rich dad. So if you're gonna change your thoughts, how do you change? You may wanna consider making your changes here. This one is the hardest, by far the hardest, but they are the richest. They are the richest people on the earth.

19:38Like today, Steve Jobs, he didn't finish school. Michael Dell didn't finish school. Zuckerberg didn't finish school. Walt Disney did not finish school. This is the hardest quadrant here. B stands for 500 employees or more, but also stands for the word brand. Apple is a brand. Disneyland is a brand. Tesla is a brand. Rich Dad is a brand. These guys, they want everything in their names, like Joe's Fish Company. It cannot explain, it's hard to explain if you're the worker. Again, an S can do their job on their own. These guys cannot. Very, very big difference. These guys are inside investors. I'd rather be inside, and these guys, what they teach you in school is to be on the outside.

20:35So as you're listening and watching this program, your brain should be twisting right now because it goes back again to words and the words become flesh from the Bible. I'm not religious, I'm just telling you the Bible. If you're saying I need job security and a steady paycheck, you're stuck here. If you say I wanna start my own business, I wanna do it on my own, you're an S. Nothing right or wrong, there's nothing right or wrong. Just be aware. If I want to start a big business like Apple or Facebook or Google, then it becomes a brand. And those are the richest people on earth. And I stands for inside investor.

21:19So when I invest in real estate, I'm an insider. When I buy gold, silver, or Bitcoin, I'm an insider doing that. I don't need a fund manager to do it for me. So those are thoughts and things that people need to change about their lives. What do you want to do? This is hard. I've been working on this a long time. So The Rich Dad is a brand, and let me explain how I make so much money. It's because I am a brand. I can sell what's called a license.

22:04So when I write a new book like this, I sell a license to about 50 publishing companies throughout the world. I make a lot of money writing one book. This guy might write a book, but not sell any. So those are some of the differences here. So it's not so much what school you went to, it's more how you think. So I'll let you think about that. So if you could take a moment and ask yourself, what's in my head? If you want to do it on your own, fine. But there's a price for that too, it's hard to grow. You can make a lot of money, but this is mega money here. So one of the reasons I make so much money because I also license this product here all over the world.

23:00So that's what my rich dad taught me and my poor dad said, go to school, get a job, and my mom wanted to be a doctor so I could be a professional. I don't do that. So once again, I go all the way back to this. For things to change first, first I must change, but this is a big change here.

23:27It's this word here.

23:32This, for these people, is tax. Tax is your single largest expense for these people here. So when we look at taxes, and this is true all over the world, these guys pay about 40 % in taxes, and that's going up because of the economy going down. These people pay 60 % in taxes. This is all over the world. This is US, China, Singapore, Australia, New Zealand, Europe. These people here pay 20 % in tax and investors pay 0 % tax. So those of you who have stocks, who invest with bond funds and all that, that's fine, but you don't get this here. So one of the reasons I make so much money is I make more money from here, but also I pay no taxes legally.

24:26So think about that. And I know some of you are saying, well, you can't do that. That's illegal. That's criminal. And if that's what you think, that's what you think. But it's not true. That's what you've been taught. So if you're going to change something, the change starts up here, and this is some of the changes people go to. I'm not saying you have to. I'm saying this is where the change starts. Change starts here. Now, does it mean you have to quit your job? No. You know, you can be different quadrants. For example, an employee, they always say the same words, I have job security, steady paycheck.

25:09I'm an employee of my own company, Rich Dad. I'm also an S. When I write a book, I'm an S. I basically do it on my own. But I also own the Rich Dad company, the brand. and I license it all over the world. And I'm also an inside investor because I invest in real estate. When you go real estate, you go inside. If you stay in stocks, bonds, mutual funds, you're outside. And those are some of the thoughts if you're going to make changes, these are some of the things you need to think about. Because what's happening today, as you know, is these guys are getting wiped out left and right. in America, unemployment is still at 30 million people.

25:55And what's happening in the bad real estate investments, like I don't invest in shopping centers and office buildings. Those things, office buildings and shopping centers are going down. So the guys who invested in what's in America called REITs, Real Estate Investment Trusts, so they invest in real estate via paper assets, they're getting crushed here. Whereas because I'm investing in apartment houses, I'm a safer, much, much safer than people investing in shopping centers, office buildings, and big projects. So those are some of the thoughts I ask you to think about because if you think that real estate is bad, then you're screwed.

26:43There's bad real estate and there's good real estate. So I'll let you think about that. Again, for things to change first, I must change. So one of the changes, you know, if I'm gonna, I have to change also. So one of the changes we're doing at the Rich Dad Company is we're making things simpler. You know, what's happening today, people are making it more complex. You go to school, they take one plus one, they turn into calculus. You know, I want to take one plus one and just say, tell me two. But anyway, we're putting a lot of things in picture. So these are things I ask you to think about. This is called intelligence is the ability to see both sides of the coin.

27:25So all coins have three sides. You have heads, tails, and the edge. Intelligence is when you're on the edge. And the trouble with stupid, stupid, stupid schoolteachers and stupid people, they think there's only one answer. That's why we have fights. If you're going to be intelligent, look at both sides. See, over here, this is what happens when you go to school. You go, I'm right and you're wrong. Well, it's not right or wrong. What's best for you? And over here, it's I'm right and you're wrong. And that's the problem with going to school. That was my poor dad. He thought the rich were evil and greedy.