Financial Lessons

To be financially independence, you first have to know “YOUR WHY” and “YOUR HOW”. The teachings of life (how life pushes you around) answers the “WHY” and knowing the secrets of the rich will answer your “HOW”. Learning the lessons of LIFE and that of the RICH is the sure way to reach the stage of abundance by GRACE.


Does teaching mean talking or lecturing? That’s how they teach you in school. 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 is 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 or government. They do not know its life that’s pushing.”

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, or government for your problems. You will live life hoping for that big break that will solve all your money problems.

Also, if you are the kind of person who has no guts, you just give up every time life pushes you. If you are that kind of person, you will 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 will 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.

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. That’s why most people prefer working as employees instead of becoming employers.

If you had really learned life lessons then you don’t need to be told to start building and promoting your own business to impact generations.


To become rich is simply playing by the rules of the rich. The rules of the rich are six basic lessons which serve as guideposts that will assist you and your children to grow wealthier no matter what happens in a world of increasing change and uncertainty according to Robert T. Kiyosaki with Sharon L. Lechter.


Most people especially the poor and middle class work their entire life for money as a result of the following reasons:


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 pay check, greed or desire starts us thinking about all the wonderful things money can buy. This set the pattern of get up, go to work, and pay bills, get up, go to work and 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. That is what we call the RAT RACE.


Instead of confronting their fears, they reacts instead of think. They react emotionally instead of using their heads. They get a few money 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. Instead of telling the truth about how they feel, they react to their feeling, 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 fear, and again it doesn’t. Fear has them in this trap of working, earning money, working, earning, and hoping the fear will go away.

But everyday, they get up and that old fear wakes up with them. For million 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 running their lives, and they refuse to tell the truth about that. Money is in control of their emotions and hence their souls.


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, more comfort, and more security. So they keep working, thinking money will soothe their souls that are trouble by fear and desire. But money cannot do that.

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 keep more money, only to find out the fear gets worse. They now fear loosing it. I have friends who keep working even though they have plenty. I know people who have millions who are afraid now than when they were poor. They are terrified of losing all their money. The fear that drove them to get rich got worse. That weak and ready part of their soul is actually screaming louder. They don’t want to lose the big house, the cars, and the high life that money has brought 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.

Is a poor man happier?

No. The avoidance of money is just as psychotic as being attached to money. Most people will say they are not interested in money, yet they will 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.

What You Need To Do

I am not saying don’t work for money until all traces of fear and greed are gone, that would be a waste of time. Emotions are what make us human, make us real. The word emotion stands for energy in motion. Be truthful about your emotions in your favor, not against yourself. Most people do not know that it’s their emotions that doing the thinking. Your emotions are your emotions, but you have got to learn to do your own thinking. For example, 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.

That is, if the fear of not having enough money arises, instead of immediately running out to get a job so they can earn money to kill the fear, they instead think the job is the best solution to their fear over the long-run. Which is wrong looking at a person’s lifetime. A job is really a short- term solution to a long -term problem.

By not giving in to your emotions, you will be able to delay your reactions and think .That is most important. We will always have emotions of fear and greed. It is important 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.


What intensifies fear and desire is ignorance. That is why rich people with lots of money often have more fear the richer they get. Human life is a struggle between ignorance and illumination. 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. You go to school to learn a skill or profession so as to be contributing member of society. Every culture needs teachers, doctors, mechanics, artists, cooks, business people, police officers, fire fighters, soldiers etc. Schools train them so our culture can thrive and flourish. Unfortunately, for many people, school is the end, not the beginning.



Ignorance about money causes so much greed and so much fear. For e.g. a doctor wanting more money to better provide for his family, raises his fees. By raising his fees, it makes health care more expensive for everyone. Now it hurts the poor the most. So poor people have worse health than those with money. Because the doctors raise their rates the attorney raise their rates, because the attorney rates have gone up, school teachers want a raise which raise the tax and so on and on. Soon there will be such a horrifying gap between the rich and the poor that chaos will breakout and another great civilization will collapse. Great civilization collapse when gap between the haves and have not was too great.

The question is “aren’t prices supposed to go up?”

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

What You Need to Do

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 right. Yes choosing what we think rather than reacting to our emotions. Instead of just getting up and going to work to solve our problems, just because of fear of not having the money to pay your bill is scaring you, thinking would be taking time to ask yourself a question. A question like” Is working harder at this the best solution to this problem? “Most people are so terrified at not telling themselves the truth- that Fear is in control - which they cannot think, and instead run out the door.

Remember what I said before: A Job is only a short term solution to a long-term problem. Most people have only one problem in mind, and its short term. It’s the bills at the end of the month. Money now runs their lives or should I say the fear and ignorance about money. So they do as their parents did- get up everyday and go to work for money. Not having the time to say, Is there another way? Their emotions now control their thinking, not their heads.

Keep using your brain, work for free and soon your mind will show you ways of making money far beyond your paycheck. You will see things that other people never see. Opportunities right in front of their noses. Most people never see these opportunities because they are 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. Learn this and you will avoid the life’s biggest traps.



Money is not taught in schools. School focus on scholastic and professional skills, but not on financial skills. This explains how smart bankers, doctors and accountants who earned excellent grades in school may still struggle financially all their lives. Our staggering national debt is due in large part to highly educated politicians and government officials making financial decisions with little or no training on the subject of money.

I am concerned that too many people are focused too much on money and not their greatest wealth which is their education. If people are prepared to be flexible, keep an open mind and learn, they will grow richer and richer through the changes. If they think money will solve problems, I am afraid those people will have a rough ride. Intelligence solves problems and produces money. Money without financial intelligence is money soon gone.

One of the reasons the rich get richer, the poor get poorer and the middle class struggles in debt is because the subject of money is taught at home, not in school. Most of us learn about money from our parents. So what can a poor parents tell their child about money? They simply say “stay in school and study hard”. The child may graduate with excellent grades but with a poor person’s financial programming and mindset. It was learned while the child was young.


Education is the foundation of success, Robert Kiyosaki said. Just as scholastic skills are vitally important, so are financial skills and communication skills.

We need to advice our children with a greater degree of sophistication. We need new ideas and different education. May be telling our children to strive to be good employees while also striving to own their own investment corporation is not such a bad idea.

It is Kiyosaki hope to inform people that anyone can achieve prosperity if they choose. If today you are a gardener or unemployed, you have the ability to educate yourself and teach those you love to take care of themselves financially. Remember that financial intelligence is a mental process through which we solve our financial problems.


According to Robert Kiyosaki, children spend years in an antiquated educational system, studying subjects they will never use. Preparing for a world that no longer exists. Today, the most dangerous advice you can give a child is “Go to school, get good grades and look for a safe secure job”. That is old advice and its bad advice, because if you want your child to have a financially secure future, they can’t play by the old set of rules. It’s just too risky. It is foolish to assume that the education the school system provides will prepare your children for the world they will face upon graduation. Each child needs more education, different education. And they need to know the rules, the different sets of rules. They are rules of money that the rich play by, and there are rules that the other 95% of the population plays by. And the 95% learn those rules at home and in school. That is why it’s risky today to simply say to a child, study hard and look for a job. A child today needs a more sophisticated education and the current system is not delivering the goods.

So how does a parent teach their children what the school does not? And how do you teach investing when as a parent you yourself are risk averse? Instead of teaching my children to simply play it safe, I decided it was best to teach them to play it smart.

The only number 1 rule is knowing the difference between an asset and a liability and buy assets. Most people struggle financially because they do not know the difference between an asset and a liability. Rich people acquire assets. The poor and middle class acquire liabilities but they think they are assets.

What is an asset?

What defines an asset is not words but numbers. And if you cannot read the numbers, you cannot tell an asset from a hole in the ground. It is not the numbers but what the numbers are telling you.

An asset is something that puts money in my pocket. A liability is something that takes money out of my pocket. This is really all you need to know. If you want to be rich simply spend your life buying assets. If you want to be poor or middle class, spend your life buying liabilities. It’s not knowing the difference that causes most of the financial struggle in the real world.

Illiteracy, both in words and numbers is the foundation of financial struggle. If people are having difficulties financially, there is something that they cannot read either in number or words. Something is misunderstood. The rich are rich because they are more literate in different areas than people who struggle financially. So if you want to be rich and maintain your wealth, it’s important to be financially literate, in words as well as numbers.


More money will often not solve the problem. Money often makes obvious our tragic human flaws. Money often 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, 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. If someone did well 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 is 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 kinds want to be basketball stars, golfers, footballers, movie stars etc., 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.


More money seldom solves someone’s money problems. Intelligence solves problems. There is a saying a friend of mine says over and over to people in debt. “If you find you have a dug yourself into a hole…. Stop digging. The Japanese were aware of three powers.” The power of the sword, the jewel and the mirror.” The sword symbolizes the power of weapons. America has spent trillions of dollars on weapons and because of this, is the supreme military presence in the world. The jewel symbolizes the power of money. There is some degree of truth to the saying “Remember the golden rule- he who has the gold makes the rules”. The mirror symbolizes the power of self knowledge. This self knowledge according to Japanese legend, was the most treasured of the three.

The poor and middle class all too often allow the power of the money to control them. By simply getting up and working harder, falling to ask themselves if what they do makes sense. They shoot themselves in the foot as they leave for work every morning. By not fully understanding money. The vast majority of people allow the awesome power of money to control them. The power of money is used against them. If they use the power of the mirror, they would have asked themselves, “Does this makes sense?” All too often, instead of trusting their inner wisdom, that genius inside of them, most people go along with the crowd. They do things because everybody else does, they conform rather than question. Often, they mindlessly repeat what have been told. Ideas such as” diversity or your home is an asset.” Your home is your biggest investment.” You get a tax break for going into greater debt.” Get a safe job” Don’t make mistakes” Don’t take risks”.

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, 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 problem. That’s why the Japanese valued the power of the mirror the most, for it is only when we human look into the mirror do we find the truth. And the main reason that most people say “play it safe is out of fear”. That goes for nothing, be it sports, relationships, career and money. 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” work harder, it’s promotion, when I get a pay raise, I will buy us a bigger house, mutual funds are safe. Many great financial problems are caused by going along with the Joneses. Occasionally, we all need to look in the mirror and be true to our inner wisdom rather than our fears.

What You Need To Do

The real tragedy is that the lack of early financial education is what creates the rise 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 wen genuine deals of 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 maximum 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 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 in to 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% to infinity. Investments that go for 500gh are soon turned into millions of cedes or more. Investments that the middle class call “too risky”. The investment is not risky. It’s lack of simple financial literacy that causes the individual to be “too risky”.

If you do what the masses do (being employee forever) your work effort are generally as follows:

1. You work for someone else – your efforts and success will help provide for the owners’ success and retirement. 2. You work for the government – you simply increase the amount of taxes taken by the government. 3. You work for the bank – mortgage and credit card debt.

The problem with simply working harder is that each of these three levels takes a greater share of your increased efforts. You need to learn how to have your increased efforts benefit you and your family directly. Once you have decided to concentrate on minding your own business, how do you set your goals? For most people, they must keep their profession and rely on their wages to fund their acquisition of assets. As their assets grow, how to they measure the extent of their success? When someone does realized that they are rich, that they have wealth?

Buckminster Fuller defined wealth as a person’s ability to survive so many number of days forward……. Or if I stopped working today, how long could I survive? Unlike net worth- the difference between your assets and liabilities, which is often filled with a person’s expensive junk and opinions of what things are worth- this definition creates the possibility for developing a truly accurate measurement. I could now measure and really know where I was in terms of my goal to become financially independent.

Although net worth often includes these non - cash producing assets like stuff you bought that now sits in your garage. Wealth measures how much money your money is making and therefore, your financial survivability.

Wealth is the measure of the cash flow from my asset column compared with the expense column. Let’s use an example. Let’s say I have a cash flow from my asset column of $1000 a month. And I have monthly expenses of $2000. What is my wealth?

Let’s go back to Buckminster Fuller’s definition. Using his definition how many days forward can I survive? And let’s assume a 30-day month. By that definition I have enough cash flow for half a month. When I have achieved $2000 a month cash flow from my assets, then I will be wealthy. So I am not yet rich, but I am wealthy. I now have income generated from assets each month that fully cover my monthly expenses. If I want to increase my expenses, I first must increase my cash flow from assets to maintain this level of wealth. Take notice that it is at this point that I no longer am dependent on my wages. I have focused on and been successful in building an asset column that has made me financially independent. If I quit my job today, I would be able to cover my monthly expenses with the cash flow from my assets.

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 grows, the more my cash flow grows. And as long as I keep my expenses less than the cash flow from these assets, let 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 these simple observations:

1. The rich buy assets 2. The poor only have expenses 3. The middle class buys liabilities they think are assets.


What is your business?

Financial struggle is often directly the results of people working all their life for someone else. Many people will have nothing at the end of their working days. Our current educational system focuses on preparing today’s youth to get good jobs by developing scholastic skills. Their lives will revolve around their wages or as described earlier, their income column. And after developing scholastic skills, they go on to higher levels of schooling to enhance their professional abilities. They study to become engineers, scientists, cooks, police officers, artists, writers and so on. These professional skills allow them to enter the workforce and work for money.

There is a big difference between your profession and your business. Often I ask people, “Hat is your business? And they will say, “Oh I’m a banker.” Then I ask them if they own the bank? And they usually respond,” NO I work there”. In that instance, they have confused their profession with their business. Their profession may be a banker but they still need their own business. Your profession is always the same.

A problem with school is that you often become what you study, so if you study, say, cooking, you become a chef, if you study law, you become an attorney and a study of auto mechanics makes you a mechanic. The mistake in becoming what you study is that too many people forget to mind their own business. They spend their lives minding someone else’s business and making that person rich.


The primary reason the majority of the poor and middle class are fiscally conservative, which means,” I can’t afford to take risk is that they have no financial foundation. They have to cling to their jobs. They have to play it safe. When a downsizing became the “in” thing to do, millions of workers found out their largest so called asset, their home, was eating them alive. Their asset, called a house still cost them money every month. Their car, another asset was eating them alive. Without Job security, they had nothing to fall back on. What they thought were assets could not help them survive in a time of financial crisis.

So many people have put themselves in a deep financial trouble when they run short of income. To raise cash, they sell their assets. First, their personal assets can generally be sold for only a fraction of the value that is listed in their personal balance sheet. Or if there is a gain on the sale of the assets, they are taxed on the gain, thus reducing the amount available to help them out of debt. That is why I say someone’s net worth is often “worth less” than they think.

Start minding your own business. Keep your day time job, but start buying real assets, not liabilities or personal effects that have no real value once you get them home. A new car loses nearly 25% of the price you pay for it the moment you drive off the lot. It is not a true asset even if your banker let’s you list it as one.

For adults, keep your expenses low, reduce your liabilities and diligently build a base of solid assets. For young people who have not yet left home, it is important for parents to teach them the difference between an asset and a liability. Get them to start building a solid asset column before they leave home, get married, buy a house, have kids and get stuck in a risky financial position, clinging to a job and buying everything on credit. I see so many couples who get married and trap themselves into a lifestyle that will not let them get out of the debt for most of their working years. For most people, just as the last child leaves home, the parents realize they have not adequately prepared for retirement and they begin to scramble to put some money away. Then, their own parents become I’ll and they find themselves with new responsibilities.


1. Business that do not require your presence. You own, but they are managed or run by other people. If you have to work there, it’s not a business. It become your job.

2. Stocks 3. Bonds 4. Mutual funds 5. Income generating assets 6. Notes (IOUs) 7. Royalties from intellectual property such as music, scripts, patents. 8. Anything else that has value, producing income or appreciate and has a ready market.

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 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 day time job, be a great hard working employee, but keep building that asset column.

As your cash flow grows, you can buy some luxuries. An important distinction is that the rich people buy luxuries last, while the poor and middle class tend to buy luxuries items such as big house, diamonds, jewelry or boats because they want to look rich. They look rich, but I. reality they just get deeper in debt on credit. The old money people, the long term rich, built their asset column first, then the income generated from the asset column bought their luxuries. The poor and middle class buy luxuries with their sweat, blood and children’s inheritance. A true luxury is a reward for investing in and developing a real asset.

After you have taken the time and invested in and built your own business, you are now ready to add magic touch – the biggest secret of the rich. The secret that put 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.



Tax was made popular and accepted by the majority, by telling the poor and the middle class that taxes were created only to punish the rich. This is how the masses voted for the law, and it became constitutionally legal. Although it was intended to punish the rich, in reality it wound up punishing the very people who voted for it, the poor and middle class.

Yet, when you study the history of taxes, an interesting perspective emerges. As I said, the passage of taxes was only possible because the masses believed in the Robin Hood theory of economics, which was to take from the rich and give to everyone else. The problem was that the government’s appetite for money was so great that taxes soon needed to be levied on the middle class, and from there it keeps “trickling down”.


The rich, on the other hand, saw an opportunity. They do not play by the same set of rules. The rich already knew about corporations, which became popular in the days of sailing ships. The rich created the corporations as a vehicle to limit their risk to the assets of each voyage. The rich put their money into corporation to finance the voyage. The corporation would then hire a crew to sail to the New World to look for treasures. If the ship was lost, the crew lost their lives, but the loss to the rich would be limited only to the money they have invested for that particular voyage. It is the knowledge of the power of legal structure of the corporation that really gives the rich a vast advantage over the poor and the middle class.


Once the “take from the rich “tax was passed, cash started flowing into government coffers. Initially, people were happy. Money was handed out to government workers and the rich. It went to the government workers in the former of jobs and pensions. It went to the rich via their factories receiving government contracts. The government became a large pool of money, but the problem was the fiscal management of that money. There really is no recirculation. In other words, in the government policy, if you were a government bureaucrat, was to avoid having excess money. If you failed to spend your allotted funding, you risk losing it in the next budget. You could certainly not be recognized for being efficient. Business people, on other hand, are rewarded for having excess money and are recognize their efficiency.

As this cycle of growing government spending continued, the demand for money increased and the “Tax the rich” idea was now adjusted to include lower income levels, down to the very people who voted it in, the poor and the middle class.

True capitalist used their financial knowledge to simply find a way to escape them headed back to the protection of a Corporation. A corporation protects the rich. But what many people who have never formed a corporation do not know is that a corporation is not really a thing.


A corporation is merely a file folder with some legal documents in it, sitting in some attorney’s office registered with a state government agency. It’s not a factory or a group of people.

A corporation is merely a legal document that creates a legal body without a soul. The wealth of the rich was once again protected. Once again, the use of corporation became popular- once the permanent income laws were passed- because the income tax rate of the corporation was less than the individual income tax rates.

A war is always waged between the “take from the rich” and the rich, whenever and wherever laws are made. The battle will go on forever. The problem is, the people who lose are the uninformed. The ones who get up every day and diligently go to work and pay taxes. If they only understood the way the rich play the game, they could play it too. Then, they would be on their way to their own financial independence. This is why I cringe every time I hear a parent advice their children to go to school, so they can find a safe, secure job. An employee with a safe, secure job, without financial aptitude, has no escape.

Every time people try to punish the rich, the rich don’t simply comply, they react. They have the money, power and intent to change things. They do not just sit there and voluntarily pay more taxes. They search for ways to minimize their tax burden. They hire smart attorneys and accountants, and pursued politicians to change laws or create legal loopholes. They have the resources to effect change. Most of these vehicles are available to anyone, but it is the rich who usually look for them because they are minding their own business. The poor and the middle class do not have the same resources. They sit there and let the government’s needless enter their arm and allow the blood donation to begin. Today, I am constantly shocked at the number of people who pay more taxes, or take fewer deductions, simply because they are afraid of the government and failed to play the game the smart way through corporation – the biggest secret of the rich.


Knowledge is power. And with money comes great power that requires the right knowledge to keep it and make it multiply. Without that knowledge, the world pushes you around. The first lesson of having money work for me, as opposed to working for money, is really all about power. If you work for money, you give the power up to your employer. If your money works for you, you keep and control the power. Once you have this knowledge of the power of money working for you, you must be financially smart and not let bullies push you around. You need to know the law and how the system works. If you are ignorant, it is easy to be bullied. If you know what you are talking about, you have a fighting chance. Remember that it is expensive to not know the law.


I remind people that financial IQ is made up of knowledge from four broad areas of expertise.

• ACCOUNTING – A vital skill needed to build an empire. The more money you are responsible for, the more accuracy is required, or the house comes tumbling down. Financial literacy is the ability to read and understand financial statements. This ability allow you to identify the strengths and weaknesses of any business. This is the left brain side or the details. • INVESTING – What I call the science money making. This involves strategies and formulas. This is the right brain side or the creative side. • UNDERSTANDING MARKETS – The science of supply and demand. There is a need to know the technical aspects of the market, which is emotion driven. For eg. Occasions like Christmas is emotion driven. The other market factor is the fundamental or the economic sense of an investment. • LAW – For instance, utilizing a corporation wrapped around the technical skills of accounting, investing and market can aid explosive growth. An individual with the knowledge of the tax advantages and protection provided by a corporation can get rich so much faster than someone who is an employee or a small business sole proprietor. It’s like the difference between someone walking and someone flying. The difference is profound when it comes to long term wealth.


1. TAX ADVANTAGES: A corporation can do so many things that an individual cannot. Like pay for expenses before it pays taxes. That is a whole area of expertise that is so exciting but not necessary to get into unless you have a sizeable assets or a business. Employees earn and get taxed and they try to live on what is left. A corporation earns, spends everything it can and is taxed on anything that is left. It’s one of the biggest legal tax loopholes that the rich use. They are easy to set up and are not experience if you own investment that are producing good cash flow.

2. PROTECTION FROM LAW SUITS: We live in a litigious society. Every body wants a piece of your action. The rich hide much of their wealth using vehicles such as corporation and trusts to protect their asset from creditors. When someone sues a wealthy individual they are often met with layers of legal protection, and often find that the wealthy person actually owns nothing. They control everything but own nothing. The poor and middle class try to own everything and lose it to the government or fellow citizens, who like to sue the rich.

If you own any kind of legitimate assets, I would consider finding out more about the benefits and protection offered by a corporation as soon as possible. There are many books written on the subject that will detail the benefits and even walk you through the steps necessary to set up a corporation. One book in particular “INC. AND GROW RICH”, provides a wonderful insight into the power of personal corporations.

Financial IQ is actually the synergy of many skills and talents. But I would say it us the combination of the four technical skills listed above that make up the basic financial intelligence. If you aspire to great wealth, it is the combination of these skills that greatly amplify and individual intelligence.


1. The rich earn then spend before paying taxes on what is left. 2. People who work for corporation earn, then pay taxes before spending on what is left.

As part of your overall financial strategy, we recommend owning your own corporation wrapped around your assets.


Money is an illusion. It’s only out of fear and greed that the illusion of money is held together by billions of people thinking that money is real. Money is really made up. The poor, the middle class and the ignorant will have their lives ruined simply because they will continue to believe that money is real and that the company they work for, or the government, will look after them. Exercising the following will help you create money.


We all have tremendous potential, and we all are blessed with gifts. Yet, the one thing that holds all of us back is some degree of self doubt. It is not so much the lack of technical information that holds us back, but more the lack of self confidence. Some are more affected than others. Once we leave school, most of us know that it is not as much a matter of college degrees or good grades that count. In the real world outside of academics, something more than just grades is required. I have heard it call “guts”, “chutzpah”, “balls, “audacity, “bravo”, “cunning”, “daring”, “tenacity”, and “brilliance”. This factor whatever it is labeled, ultimately decides one’s future much more than school grades. Inside each of us is one of these characters. There is also the flip side of that character, people who could get down on their knees and if necessary.

Yet as a teacher, I recognized that it was excessive fear and self doubt that were the greatest detractors of personal genius. It broke my heart to see students know the answers, yet lack the courage to act on the answers, yet lack the courage to act on the answer. Often in the real world, it’s not the smart that get ahead but the bold. In my personal experience, your financial genius requires both technical knowledge as well as courage. If fear is too strong, the genius is suppressed. In my classes, I strongly urge students to learn to take risks, to be bold, to let their genius convert that fear into power and brilliance. It works for some and just terrifies others. I have come to realize that for most people, when it comes to the subject of money, they would rather play it safe.


One must be financially literate just to have more options. There are huge changes up head. There will be a hundred people like Bill Gates and hugely successful companies like Microsoft created every year, all over the world. And there also will be many more bankruptcies, layoffs and downsizing.

So why bother developing your financial IQ?

No one can answer that but you. Yet, I can tell you why I myself do it. I do it because it is most exciting time to be alive. I’d rather be welcoming change than dreading change. I’d rather be excited about making millions than worrying about not getting a raise. This period we are in now is a most exciting time, unprecedented in our world’s history. Generations from now, people will look back at this period of time and remark at what an exciting era it must have been. It was the death of the old and birth of the new. It was full of turmoil and it was exciting.

If you develop your financial IQ, you will prosper greatly. And if you don’t, this period of time will be a frightening one. It will be a time of watching people move boldly forward while others cling to decaying life rings. Developing your financial IQ will give you access to the following:

a. INFORMATIONS-: Land was wealth 300years ago. So the person who owned the land owned the wealth. Then, it was factories and production, and America rose to dominance. The industrialists owned the wealth. Today, it is information. And the person who has the timeliest information owns the wealth. The problem is, information flies all around the world at the speed of light. The new wealth cannot be contained by boundaries and borders as land and factories were. The changes will be faster and more dramatic. There will be a dramatic increase in the number of new multi-millionaires. There also will be those who are left behind. Today I find so many people struggling, often working harder, simply because they cling to old ideas. They want things to be the way they were; they resist change. I know people loosing their jobs or their houses, and they blame technology or the economy or their boss. Sadly they fail to realize that they might be a problem. Old ideas are their biggest liability. It is a liability simply because they fail to realize that while that idea or way of doing something was an asset yesterday, yesterday is gone.

b. FINANCIAL OPTIONS: - The people who get out of the “RAT RACE” in the game the quickest are the people who understand numbers and have creative financial minds. They recognize different financial options. People who take the longest are people who are not familiar with numbers and often do not understand the power of investing. Rich people are often creative and take calculated risks.

Most people have not been financially successful in real life. Everyone else seems to be getting ahead of them even though they have money. And that is true in real life. There are a lot of people who have a lot of money and do not get ahead financially.

Limiting your options is the same as hanging on to old ideas. I have a friend from high school who now works at three jobs. Twenty years ago, he was the richest of all my classmates. When the local sugar Plantation closed, the company he worked for went down with the plantation. In his mind, he had but one option, and that was the old option; work hard. The problem was he couldn’t find an equivalent job that recognized his seniority in the old company. As a result, he is over qualified for the jobs he currently has, so his salary is lower. He now works three jobs to earn enough to survive.

c. OPPORTUNITIES: - I have watched people playing CASHFLOW complaining that the “right opportunity” cards are not coming their way. So they sit there. I know people who do that in real life. They wait for the right opportunity. I have watched people get the right opportunity card then not have enough money. Then they complain that they would have gotten out of the Rat Race, if they had had more money. So they sit there. I know people in reliance life who do that also. They see all the great deals, but they have no money.

And I have people pull a great opportunity card, read it out loud and have no idea that it is a great opportunity. They have the money, the time is right. They have the card but they can’t see the opportunity staring at them. They fail to see how it fits into their financial plan for escaping the Rat Race. And I know more people like that than all the others combined. Most people have an opportunity of a lifetime flash right in front of them, and they fail to see it. A year later, they find out about it, after everyone else got rich. Another case for developing your financial intelligence, over a lifetime, is simply that more opportunities are presented to you. And the greater your financial intelligence, the easier it is to tell whether a deal is good. It’s your intelligence that can spot a bad deal, or make a bad deal good. The more likely learn- and there is a lot to learn- the more money I make simply because I gain experience and wisdom as the years go on. I have friends who are playing it safe, working hard at their profession, and failing to gain financial wisdom, which does take time to develop.

My overall philosophy is to plant seeds inside my asset column. That is my formula. I start small and plant seeds. Some grow; some don’t.

Financial intelligence is simply having more options. If the opportunities aren’t coming your way, what else can you do to improve your financial position? If an opportunity lands in your lap, and you have no money and the bank won’t talk to you, what else can you do to get the opportunity work in your favor? If your bunch is wrong, and what you have been counting on doesn’t happen, how can you turn a lemon into millions? That is financial intelligence. It is not so much what happens, but how many different financial solutions you can think of to turn a lemon into millions. It is how creative you are in solving financial problems.

Most people only know one solution; work hard, save and borrow. So why would you want to increase your financial intelligence?

Because you want to be the kind of person who creates your own luck. You take whatever happens and make it better. Few people realize that luck is created. Just as money is. And if you want to be luckier and create money instead of working hard, then your financial intelligence is important. If you are the kind of person who is waiting for the right thing to happen, you might wait for a long time. It’s like, waiting for all the traffic lights to be green for five miles before starting the trip.


Money is not real. The more real you think money is, the harder you will work for it. If you grasp the idea that money is not real, you will grow richer faster.

What is money if it’s not real?

The single most powerful asset we all have is our mind. If it is trained well, it can create enormous wealth in what seems to be an instant. An untrained mind can also create extreme poverty that lasts lifetime by teaching it to their families.

In information age, money is increasing exponentially. A few individuals are getting ridiculously rich from nothing, just ideas and agreements. I have been developing this area of my intelligence because I want to make money fast. Not because I need to, but because I want to. It is a fascinating learning process. And in my small way, I would like to be part of this unprecedented evolution of humanity, the Era where humans work purely with their minds and not with their bodies. Besides it is where the action is. Great opportunities are not seen with your eyes. They are seen with your mind. Most people never get wealthy simply because they are not trained financially to recognize opportunities right in front of them.


It is very risky to make mistakes but mistakes are pathway to financial freedom, remember to have fun. This is only a game. Sometimes you win and sometimes you learn. But have fun. Most people never win because they’re more afraid of losing. That is why I found school so silly. In school we learn that mistakes are bad and we are punished for making them. Yet, if you look at the way humans are designed to learn, we learn by making mistakes. We learn to walk by falling down. If we never fell down, we would never walk. The same is true for learning to ride a bike. I still have scars on my knees, but today I can ride without thinking. The same is true for getting rich. Unfortunately the main reason most people are not rich is because they are terrified of losing. Winners are not afraid of losing. But losers are. Failure is part of the process of success. People who avoid failure also avoid success.

I look at money much like my game of tennis. I play hard, make mistakes, correct, make more mistakes, correct and get better. If I lose the game, I reach across the net, shake my opponent’s hand, smile and say, “See you next Saturday”.

Remember it is what you know that is your greatest wealth. It is what you do not know that is your greatest risk. There is always risk, so learn to manage risk instead of avoid it.



The world is filled with smart, talented, educated and gifted people. We meet them everyday. They are all around us.


The sad truth is, great talent is not enough. I am constantly shocked at how little talented people earn. A business consultant who specializes in the medical trade was telling me how many doctors, dentists and chiropractors struggle financially. All this time, I thought that when they graduated, the dollars would pour in. it was this business consultant who gave me the phrase, “They are one skill away from great wealth.”


In school and in the workplace, the popular opinion is the idea of “specialization”. That is, in order to make more money or get promoted, you need to “specialize”. That is why medical doctors immediately begin to seek a specialty such as orthopedics or pediatrics. The same is true for accountants, architects, lawyers, pilots and others.


Rich dad encourage me to do exactly the opposite. “You want to know little about a lot” was his suggestion. That is why for years I worked in different areas of his companies. For a while, I worked in his accounting department. Although I would probably never have been an accountant, he wanted me to learn via “osmosis”. Rich dad knew I would pick up jargon and a sense of what is important and what is not. I also worked as a bus boy and a construction worker, as well as in sales, reservations and marketing. He was grooming Mike and me. That is why he insisted we sit in on the meetings with his bankers, lawyers, accountants and brokers. He wanted us to know a little about every aspect of his empire.


There is an old cliché that goes, “Job is an acronym for ‘Just over Broke’.” And unfortunately, I would say that the saying applies to millions of people. Because school does not think financial intelligence is an intelligence, most workers “live within their means.” They work and they pay the bills.


The net result is that most workers never get ahead. They do what they’ve been taught to do. “Get a secure job.” Most workers focus on working for pay and benefits that reward them in the Short term, but this is often disastrous in the long run.

Instead I recommend to young people to seek work for what they will learn, more than what they I’ll earn. Look down the road at what skills they want to acquire before choosing a specific profession and before getting trapped in the “Rat Race.” People use to keep themselves busy working away to pay bills. I know my educated dad looked forward to his pay raise every year, and every year he was disappointed. So he would go back to school to earn more qualifications so he could get another raise, but again, it would be another disappointment.

The question I often ask people is, “Where is this daily activity taking you?” I wonder if people look at where their hard work is taking them. What does the future hold? Also, I wonder, are workers looking into the future or just until their next paycheck, never questioning where they are headed?



To the statement of “It’s too much of a hassle,” I ask, “So you would rather work all your life giving 50% of what you earn to the government?” To the other statement – “I only do what I am interested in” – I say, “I’m not interested in going to the gym, but I go because I want to feel better and live longer.”

Unfortunately, there is some truth to the old statement “You can’t teach an old dog new tricks.” Unless a person is used to changing, it’s hard to change.


If you are unwilling to work to learn something new and insist on, instead, becoming highly specialized within your field, make the company you work for is unionized. Labor unions are designed to protect specialists.

In the past it was considered bad to skip from company to company. Today, it is considered smart. Since people will skip from company to company, rather than seek greater specialization, why not seek to “learn” more than “earn”? In the short term, it may earn you less. In the long term, it will pay off in large dividends.


1. The management of cash flow. 2. The management of systems. 3. The management of people.

The most important specialized skills are sales and understanding marketing. It is the ability to sell – therefore, to communicate to another human being, be it a customer, employee, boss, spouse, or child – that is the base skill of personal success. It is a skill that I work on constantly, attending courses or buying educational tapes to expand my knowledge.

As I have mentioned, my educated dad worked harder and harder the more competent he became. He also became more trapped the more specialized he got. Although his salary went up, his choices diminished. Soon after he was locked out of government work, he found out how vulnerable he really was professionally. It is like professional athletes who suddenly are injured or are too old to play. Their once high paying position is gone, and they have limited skills to fall back on. I think that is why my educated dad sided so much with unions after that. He realized how much a union would have benefited him.





Both of my dad’s were generous men. Both made it a practice give first. Teaching was one of their ways of giving. The more they gave, the more they received. One glaring difference was in the giving of money. My rich dad gave lots of money away. He gave to his church, to charities, to his foundation. He knew that to receive money, you had to give money. Giving money is the secret to most great wealthy families. That is why there are organizations like the Rockefeller Foundation and the Ford Foundation. These are organizations designed to take their wealth and increase it, as well as give it away in perpetuity.

My educated dad always said, “When I have some extra money, I will give it.” The problem was, there was never any extra. So he worked harder to draw more money in rather than focus on most important law of money. “Give and you shall receive.” Instead, he believed in “Receive and then you give.”

A. In conclusion, I became both dads. One part of me is a hard core capitalist who loves the game of making money. The other side is a socially responsible teacher who is deeply concerned with this ever- widening gap between the haves and have nots. I personally hold the archaic educational system primarily responsible for this growing gap. (Robert T. Kiyosaki with Sharon L. Lecher)