Master the Six Basic Rules of Investing – Robert Kiyosaki

I always borrow to invest one of my

favorite books that just came out with

us called fake fake money

fake teachers fake assets I use debt to

invest but to be able to do that to go

to here to get rich to do that you've

really got to have a lot of financial

education I don't recommend it but it's

the best way to get rich President Trump

you know my friend we wrote two books

together and now some of you guys hate

him a lot of people hate the guy but

he's very smart he's a capitalist Obama

socialist communist LRA crook

so anyway be very careful right now

because I use debt Trump uses debt the

more debt we use the less tax we pay

that is why I love real estate I can use

debt and pay no taxes make a lot of

money so that's really what I teach I

don't recommend it but for those of you

who understand what's called an infinite

return it's the best way to get rich but

you have to have a lot of financial

education so the reason the rich don't

pay taxes is because there's three types

of income and they'll never teach you

this in school

the fake teacher will never then number

one type of the three types of income

okay number one type of income is earned

income that's earned income it's when

you work for money it's earned

so that earned income shows up here so

these are the guys that pay tax so when

all the guys are screaming taxed are

rich

well you can't tax them because they

don't have jobs it's kind of funny is it

you've got a tax too rich oh yeah good

luck and the second type of income

is portfolio income and portfolio income

is from flipping houses or you buy a

stock for like $10 you sell it for $20

that's portfolio income okay I don't do

that Trump doesn't do that so most guys

are all flipping houses and all that

buying stocks and flipping them foot -

you're getting this type of income so

this this income is about 20% today some

about here but the income that the rich

work for is called passive income

passive income is also known as cash

flow that's the Neymar game cash flow

and that income is income that's flowing

from here to here it bypasses taxes so I

know it doesn't sound fair and it isn't

fair I don't disagree with you but

what's not fair is our schools which are

part of the problem will never explain

to our school system is so fake is more

fake than those fake plastic plans and

these teachers bless our hearts they

don't know any of this and I really want

to talk to you about the most important

subject for all of us today rich young

poor old it's called financial education

and as you know our school systems teach

us nothing about money nothing it's

pathetic you know they have financial

literacy courses today well that's not

financial education you know it's really

pathetic and what's happening for most

people today is you know they follow

that age-old mantra go to school what do

you learn about money in school nothing

get a job

well jobs are disappearing not only that

is that with artificial intelligence and

ji5 coming more jobs are gonna be wiped

out plus with driverless cars more jobs

again wiped out so why would you go to

school to get a job and then work hard

for money but pay and pay taxes taxes

are going to keep

going up sports fans they have to

somebody's gonna pay off this massive

mountain of debt stacking up all over

the world and only where they pay off

debt is via taxes and then they tell you

to get out of debt Oh God

debt is money please understand me in

1971 when Nixon took the dollar off the

gold standard money became debt so the

rich know how to use debt to get rich

and that's what I do my friend Donald

Trump I know so you hate the guy more

power to you you know but we use debt as

money and other guys will tell you get

out of debt well you choose the rich use

debt to get rich and the poor and middle

class get wiped out because they're in

debt that's because the lack of

financial education and that tell you

invest for long term the

well-diversified portfolio stocks bonds

mutual funds and ETFs the key word in

there is invest for the long-term why

would you invest for the long-term when

they're printing trillions of dollars

and zerp zero interest rate policy

they're paying you nothing for your

money and you're gonna hold for the long

term and you got HFT high-frequency

trading you know that they can they can

trade a thousand pieces of stock in a

second and you don't have a prayer your

your you're trading against a machine a

robot so all this financial advice

people are giving out there is a recipe

for disaster

again this is my message to anybody

including Millennials is where is your

head and I know most most Millennials

they won the high paying job they want

to be able to pay the rent and eat and

all this stuff and then you dream of the

big house a nice car and all that but

that's why 99% of Americans are broke

because her heads are on the wrong spot

so when I asked Kim it would take an

accounting course it was just two days

you know I wanted to see

if showerhead could get into the asset

column that was a difference wasn't it

yeah actually it didn't happen right at

that moment but it's love with me but

this started this started the journey on

investing the start of the the journey

on assets but I do remember the moment

down the road where just like everybody

else I was focused on the income column

get a job get the pay raises if in an

hourly rate wage work more hours or

raise your hourly wage so I was always

focused here and then finally after we'd

actually bought some investment

properties

the light finally went on and I'm like

instead of focusing on acquiring income

what if we focus on just acquiring

assets that the assets go into the

income process so that was a huge shift

in my mindset and once that shift

happened for me I don't think about the

income column anymore I just think about

the asset and that's and that's our game

called cash flow yeah the first way you

understand risk is you look in the

mirror it's who's looking back at you

your the risk not the investment for

example I invest in a lot of real estate

and said Oh real estate is so risky it's

nothing called by ETF so you play it

safe but but you'll learn more by

investing in real estate right because

you'll make more mistakes yeah so that's

the difference that so it's not real

estate that's risky

yes you're risky yeah and and sometimes

it's how you're on it cuz I think about

it like so blindly turning your money

away to someone you barely know

isn't risky or let's say I don't know

maybe just depending on this job where

your employer can fire you any day isn't

risky either

you know it just it makes you think a

little what truly is risky for you yeah

how do you define it and you look at all

the pensions of the school teachers

firefighters all the guys with 401ks

they're all bankrupt because Wall Street

stole their money from them you know and

the Federal Reserve Bank they're run by

phd's like my port head

and PhD stands for poor helpless and

desperate the Fed has not been right in

years thereby worships the Federal

Reserve Bank the other day somebody says

what I think about artificial

intelligence I said oh are you talking

about the Federal Reserve Bank no

they're they're a criminal operation

there that guy stealing from our pension

systems there's it's horrible what's

going on because we have all these PhDs

poor helpless and desperate people who

are risk averse but let me tell you what

risk is so so when you go to your banker

your banker does not ask you for your

report card so here's the cash flow game

and this is called a financial statement

what makes the cash flow game different

from monopoly which might help my rich

dad taught me feel monopoly is my Rich

Dad also taught me about financial

statements so a cash flow is the only

game with a financial statement so

really simply when you look at a

financial statement

there's income expense assets

liabilities there's one more thing in

the cash flow game on the financial

statement you'll see it's the most

important statement of all it's called

the statement of cash flows off to the

side here so if you're going to be an

entrepreneur or a capitalist you have to

have one of these kind of a rich you

have to have one of these but 99% of all

high school students live in school and

college have no idea what this is

you have FICO scores you know but you

don't know what this is no so when a

banker ask you for your financial

statement they want to see how smart you

are here so let me tell you why school

makes students poor so really simply

that's this let's say I have a master's

in hearts I don't master of arts degree

right yeah or a Bachelor of Arts degree

yeah do I learn anything about income

what about Greek mythology oh there you

go

hello everybody about income and we

wonder why kids are leaving a school or

a young generation looking for that high

paying job but let me ask you this if

you have a adi degree in technology do

you learn anything about assets never so

you could be a techie and you know

nothing about it you could be a techie

and know nothing about this

you see when a banker looks at your

financial statement they're looking at

the mirror of you this is a reflection

of you and if you got Jack here and Jack

here then you're not that smart

financially so the reason the cash flow

game is such an important game it

teaches you what is important to your

banker or from a capitalist or for an

entrepreneur is it entrepreneurs gotta

know how to increase their income and an

entrepreneurs gotta know how to create

assets if you don't know those two

things you should not be an entrepreneur

you should be an employee which is why

so many young people coming out of

school have massive student loan debt

over here right but they don't know

anything about this and bought this here

that's risky and we always have to find

outside outside resources to like find

this information learn this information

you know taking courses here at Rich Dad

learning through your seminars and so

it's really astonishing how something

that's supposed to prepare you for the

future leaves you with just the most

important documents that we're told that

we need to have our resume and your

report cards your transcripts button

really wanna be an employee exactly but

for Entrepreneurship which is what a lot

of people come to us for this is where

you can learn it here because in the

school system you won't you see if

you're gonna increase your income right

over here you need a real teacher

if you're going to acquire assets you

need real teachers what is high risk is

asking people who are fake teachers like

my calculus teacher and my accounting

account you'll love a comment you know

anything about this no nothing

did your can teach you nothing about

this no that's rescue so that's why I

wrote the book fake fake money think

teachers make assets and what Wall

Street is telling you to do was just

give your money to them that's risky so

the reason I say only lazy people use

their own money is because it takes much

more intelligence to raise capital and

so I've never been able ever since my

rich death is a little boy my Rich Dad

forbade me from ever saying I can't

afford it

he says figure out how you can't afford

it how can you do something figure out

how you can do something so over my

lifetime most of the projects I have

started I've never had any man I like

not having money because it forces me to

think I get creative I have to educate

myself have to talk to rich guys how did

you do this how did you do that how you

do that and what has happened to me I

mean I just turned 72 I've never needed

money because if I need money I figure

out how to raise

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