RICH VS POOR MINDSET | An Eye Opening Interview with Robert Kiyosaki

The most obsolete idea

is go to school, get a job, work hard, save money,

get out of debt and invest for the long-term in the stock market

See, why would you save money

when they're printing trillions of dollars?

The gap between the 1% and 99% is massive.

You see it's not just money,

you have to step back and look at the bigger picture.

So what do you do?

In every one of us there's a poor person,

there's still a poor person inside me.

There's also a middle-class person

and the middle-class person wants security

they want that steady paycheck.

And there's a rich person

And they're all inside of us except that...

It's not taught.

It's- you're taught to go to school, get a job and get a paycheck.

Not taught how to get rich.

If you've read Rich Dad Poor Dad, my rich dad refused to pay me.

He said the paycheck

was one of the most damaging things you can take in your life.

He says the moment you take a paycheck you're an employee

and that's the mindset.

So my rich dad never paid me.

It drove my poor dad, you know, a government employee nuts.

"You got to pay people, you got to pay people"

And rich dad was not saying that the paycheck was bad,

he says he didn't want to be a slave to money.

So as an entrepreneur,

you know, if rich dad folded

I just try another company.

I don't need a paycheck.

I don't need anybody to take care of me.

If my government doesn't like me I move to another country

because they need entrepreneurs there.

So the entrepreneur is not so much the business,

the entrepreneur is really the mindset and the skill sets

and the different set of rules.

You see, I don't operate small business

does not not operate in the same rules as big business.

Entrepreneur is a mindset first,

a skill set and rules.

And depending upon whether you're an employee or small business

the rules are different,

the mindsets are different, the skill sets are different.

If you could say one thing to somebody whose never been an entrepreneur

and they're thinking about making the leap of faith

into becoming an entrepreneur,

what could you tell them?

Well, I'll just tell them the same thing that happened to me.

You know, my last paycheck, I still remember it clearly

it was one of the worst and the best days of my life

and I was in Puerto Rico,

I was in, I was working for Xerox

and my boss gave me my last, it wasn't a paycheck it was a bonus check

I think it was about 30,000 bucks

taxable, that's the only problem with that.

So I get this check and I went, "Holly mackerel."

You know, I mean, so I was excited

but I was also disturbed.

And so this other guy comes up to me, his name was John

and John says to me says to me this,

"you're going to be back." I said "Why?"

he says, "because you're going to fail."

I looked at him and I said, "look...

few expletive words

Because that's what he did, he left Xerox, failed and he came back.

I said, "look...

You fail and you came back

but I'm going to fail and I'm never coming back."

and that's the attitude.

- Do you know what I mean, - yeah

If you say, "Well, if I fail I'll go back to mommy and daddy"

then that's what you'll do.

So if you fail, that's when I became an entrepreneur because I had no money.

I had no money for years

Yeah, I didn't have a paycheck

But that's what my rich dad encouraged me to do.

He says when, when you don't have this paycheck

you get hungrier, smarter and it's a test of your character

will you become a crook? Will you become dishonest?

Will you cheat and steal?

Or will you become a better human being?

So really that's the benefit of becoming an entrepreneur

you really find out who you are

when you don't have anything.

So you always have to look at the big picture.

Too many people look at, "well, what's, what's going to happen to me?"

When you look at the big picture, you're also going to know

that when something bad happens something good is going to happen.

But you gotta prepare for whatever is coming

If you think the next 20 years will be like the last 20 years

you're going to get creamed.

You know, when you and I go to the supermarket

and we buy a carton of milk

We always check for the expiration date.

But most people do not check for the expiration date on their brains

Instead of getting out of debt I get into debt.

I just refinanced 300 million in debt

I went from 5% to 2.5% interest

I made a fortune.

Every month more money comes in because my cost of money has gone down.

So while some financial experts are saying get out of debt,

I'm saying learn how to use debt.

See when I came back from serving in Vietnam

in January of 73

and the first thing my rich dad said to me was,

"Go to school to learn how to invest in real estate."

It wasn't real estate, it was how to use debt and taxes

debt and taxes make the rich richer.

Debt and taxes make the poor and middle class poorer.

So all the rich guys who are doctors and lawyers or...

you know, those guys, they're getting creamed

- and they don't know why - doctors are getting creamed?

Oh, yeah, they're making more money but the take-home is less

You know, my doctor just yelled at me

he's happy, he says, "Oh, guess what I finally made a million dollars."

And I said, "Yeah", this is just three weeks ago.

And so I said, "Yeah, well how much you pay in tax?"

He says, "$750,000 in taxes."

So his net was about $400,000

That's not bad

but when I make a million bucks, I keep a million bucks.

And the reason is because I don't make it by working for money.

See if you work for money your taxed.

So that's why lesson number one in Rich Dad Poor Dad

is the rich don't work for money.

What we do instead is we create businesses as entrepreneurs.

We acquire real estate.

I don't invest in the stock market

So the reason is because as entrepreneurs

I have more control over my income,

how much I make and how much I pay in taxes.

And because I'm an entrepreneur as well as an investor in real estate

I pay zero tax.

So every time I make let's say a million dollars as an entrepreneur

I immediately invest it in real estate, and I have a 4 to 1 step up.

So I put a million dollars in real estate, I get four million from the bank.

That's why I love banks.

But the banks are screwing everybody else

you know, terrible but it's good for me.

I thought you said when you print it's good for you

but when you print it's bad for people that work for money.

Because when you print savers get creamed

and people who work for money get creamed.

When they print debtors get rich.

You see, debt and taxes make the rich richer

and debt and taxes make the poor and middle class poorer.

When we have obsolete ideas we get obsolete results.

So what's happening for most people

the idea of going to school,

getting a job, working hard, saving money, getting out of debt,

buying your house because it's an asset and investing for a long term.

It's obsolete.

The world has changed, the world changed in 1971

when President Nixon took us off the gold standard

and money became debt.

What if we get rid of school then what would happen?

Would it be better if we had no educational system at all?

No, I'm saying education was more important before, it's just obsolete.

You know, there's Moore's law that...

Moore's law which states information doubles every 18 months.

In other words, everything is obsolete, 18 months.

So, and this is a recent phenomenon.

So when you come out of school, you're already obsolete,

and that's why I'm the old guy,

you know, I meet my friends, I went to Harvard.

Yeah, I went to Harvard. I said,

"Yeah, that was how long 50 years ago?"

Today the banks are charging you interest to save money.

In other words, the banks don't want your money

because they've printed too much of it.

And that's why there's bubbles and stocks and bubbles in real estate and all this.

People are dumping the cash.

Because as I said in here, "Savers are losers and cash is trash"

And yet people are, "Well, I want a high-paying job."

Well, that's an obsolete idea.

Get out of debt, it's an obsolete idea.

You should learn how to get into debt How to you use debt to get rich

And they'll never teach you about taxes.

The reason the 1% is way up here and the 99% are going this way

is because when you print money two things happen

inflation and taxes.

It's crushing them.

And any entrepreneur that thinks "I'm just going to make money

and start a business and make a lot of money because that what we talk about

They really have got to smell the roses man.

You know, that's not what the real entrepreneurs are doing.

Most entrepreneurs, there's 28 million small business owners in America

24 million are, are one person entrepreneurs.

They're called non-employee entrepreneurs.

So that because, and that's what happens

is when people don't really understand what an entrepreneur does.

So most people are self-employed, but they're not really entrepreneurs.

The self-employed pay the highest taxes of all

and nobody tells them that.

Yeah, it's also called the entrepreneurial spirit

but what we're actually talking about

was there's no such thing as a bad economy.

You know those externally, you and I, we all have an external economy.

But we also have an internal economy

and the will power is to change our internal economy.

So for me, I can see the good, I can see the bad

I don't really give a damn.

Because I'm going to be rich anyway.

But a poor person with a poor personal economy

All they're going to see is a bad economy.

Because they don't know how to make money in any economy.

And a middle-class person, they have a middle-class economy

you know what they want is a nice house, a steady paycheck

and the job and the car.

And so when you take their job away to them that's disaster.

Well since an entrepreneur doesn't have a job anyway, it's no big deal.

So all I'm saying to people is what Bucky Fuller taught me.

There's always two sides, you know what I mean,

you know to use plural at minimum two.

So if you think the economy is bad, it's because your economy is bad.

If you think that steady, you know, employment is important

- then you'll see an economy without jobs. - Your economy

Your economy versus the external economy.

Where you control VS where you can't control

I can control yes, it's called, it's called an internal focus

versus an external focus.

So the real entrepreneur has an internal focus

but if they fall down they say, "Oh, this is good

because I'm going to go up higher."

You know, the average person will fall down and

say "Oh, I'm going to take some Prozac"

Or, or the- or somebody has the mistakes, all the mistakes don't matter well

Mistakes, mistakes matter, it means you didn't know something.

But a real entrepreneur whether they fall down

or they go, they always can go up

They can stand back up and go higher.

That no matter what happens to them

they got stronger and better and smarter and happier.

But a person with a weak internal mindset

Is that they're so afraid of what happens, it generally happens.

Like, you know, people who are afraid of losing their jobs

they generally lose their jobs.

- You know what I mean, - yeah,

no doubt, so everything comes through you

Yeah, so the entrepreneur first job is control inside here

not outside there.

The moment you take that paycheck you're an employee

You've got to be stronger than that.

It's about inside control.