- Hello this is Robert Kiyosaki and we're here
for another exciting and important and financial education.
Money for Millennials, or Millennials and Their Money.
Cause as you and I know,
our school teaches us this about money.
- Yes.
- And it really kinda screws people up,
because they go out of school and they start doing
the thing we talked about,
go to school and get a job, right?
So that was the first two lessons.
So we have Alexandra here.
She is a daughter of our dear friends
Fernando and Cicilia Gonzalez.
And Alexandra was born
the same year that rich dad was born.
- Yeah.
- And again for those who may not know
my rich dad was my best friend's father.
My poor dad was an academic straight A student,
I wasn't.
I was a D, F, and C student.
On a good day.
(laughing)
But my rich dad never finished school.
So he had a completely different point of view.
It's not right or wrong,
but rich dad was an entrepreneur,
and poor dad was a school teacher,
head of education,
PhD,
Stanford, University of Chicago,
all the credentials for academics.
So at the age of nine in Hilo, Hawaii,
my rich dad starting teaching me.
Cause I asked a question of my teacher,
my fourth grade teacher,
said, "When do we learn about money?"
"Well we don't teach about money."
And I thought that was really stupid.
Why go to school, get a job
but know nothing about money?
So with that this lesson's lesson number one,
and the rich don't work for money.
So when I show you that what goes through your head?
- Because I already know your philosophy
it makes a lot of sense to me.
- But for somebody watching this for the first time.
It doesn't make sense right?
- [Alexandra] Yeah it doesn't make sense.
- Cause you go to school to get a job
so you can work for money.
- [Alexandra] That's the purpose of life, yeah.
- Right, right.
To be a slave for money.
- Exactly.
- And work for idiots like me.
(laughing)
- [Alexandra] Exactly.
- But anyway my way of teaching is to first put doubt
in your brain.
To challenge your belief systems.
And then maybe you can choose new beliefs,
or keep up with old beliefs.
So when you think about working for money,
what comes through your head?
- I think about the time that I worked at the bank
and I was working paycheck to paycheck.
And I wasn't exposed to the financial education
that you provide me with.
It was kind of sad that I couldn't afford the things
that I wanted to do,
and I was just in this cycle of paying my bills,
and going to work and that's it.
- Do you have friends who haven't found the good job,
even though they went to school.
- So I have many friends that have graduated
and they're told that they're gonna go to school,
and they're gonna find a job,
and they find themselves without anything.
So many of them have found jobs,
and many of them have have also not found a job.
- The irony of when I left school in the '60s,
there was plenty of jobs.
But the world has changed.
And our schools haven't.
And they're still making this innate promise of
get a job.
And I was very fortunate when I graduated in '69,
we're the highest paid graduates in the world.
My classmates were making about $120,000 to $150,000
a year.
That's not much money today,
but 1969 that was a lot of money.
But naturally as young guys do,
we spent every penny of it.
(laughing)
So I had my rich dad's lesson,
the rich don't work for money,
in my head.
I said, "Okay I'm making all this money,
I have a secure job,
but what's beyond that?"
And that's where education comes in.
So if I could explain this to you for the rest of
the millennial lessons,
it's really gonna be on this theme here.
Because financial education is about not working for money.
Like one of the first questions,
when I finally realized what my rich dad was saying,
I said, "well when do I never need a paycheck again?"
See my goal wasn't go to the moon,
or cure cancer,
my job was when would I never need a paycheck again?
Because as long as you need a paycheck,
be it from an employer or like my poor dad,
he was so afraid of losing his government pension.
And I'm going "Jesus what a way to run your life."
Your pension?
So my old man kinda got fired,
he lost his pension.
It was the most frightening thing in the world to him.
He had no pension.
Then it was social security,
which is even worse.
So that's why my goal when I was about your age,
a little older around 25 I said,
"My goal is to never need a paycheck again,
from anybody, even the government,
I don't want any Medicare, social security,
or whatever."
Well I was a military pilot,
so, "Oh you gotta get the military pilot pension."
I said, "You do, but I'm not going to."
And just because of this here.
That was the difference.
Cause I never wanted to work for money
to need a paycheck.
So the next few lessons in Millennial Money,
you'll find out what I do work for.
So for right now let me go to the lesson here.
So this comes from rich dad poor dad.
And these are some of the distinctions.
It was the advantage I had at age nine,
cause I knew what I wanted to work for.
And this here in simple terms is called
a financial statement.
In school they teach you to get a FICO score.
FICO is BS.
All that means,
how good are you paying your bills?
That's all FICO means.
Should be the Fido score.
(laughing)
Good dog.
So this is what your banker wants to see.
When I was nine years old playing Monopoly
with my rich dad,
this was the lesson that's not included in Monopoly,
but rich dad taught me.
And fundamentally the problem that most people make,
they go to school to get a job,
and they work here.
So this is the poor middle class and these guys.
And we're gonna talk about later
your first line on an expense is taxes.
You know just recently President Trump said he'd get
a tax cut.
He didn't have a tax cut for these guys.
As you know the rules are always written for the rich.
I didn't make the rules.
You can get angry at me,
but these are the rules.
The rich make the rules.
The Golden Rule.
He who has the gold makes the rules.
(laughing)
So the tax cut went to people here.
That's where it goes to,
you'll learn more about this later on.
But this is what I work for.
So what I work for number one is
I'm an entrepreneur,
I want businesses, I have multiple businesses.
And I don't work as you know because you work here,
you never see me do you?
- No.
- Because I don't work for a paycheck.
- [Alexandra] Exactly.
- Next is real estate.
And real estate is good for many things
which we'll go into,
but number one is debt.
I use a lot of debt to buy real estate,
and I pay no taxes.
That's the relationship there.
The next is paper.
And that's savings, stocks, bonds,
mutual funds, ETFs, and that stuff.
I don't have any of that stuff.
I don't save money,
I don't have any of that.
But this is what most people have,
go to school get a job,
get a 401K and save money.
Loser.
(laughing)
I'm doing that just to upset you guys.
Cause maybe you'll start to think.
Cause I didn't make the rules,
I'm just telling you these are the rules.
These people pay the highest taxes.
And they work the hardest.
And the last are commodities for different assets classes.
So commodities are,
number one is gold, silver, oil,
land, water, food.
So this is what I work for.
When I left school,
rather than working for a paycheck,
and working for money,
my education had to go beyond getting a job.
Which I had a good job,
but I now had to start when I left school,
about your age,
the thing I focused on first actually was commodities.
So back in 1972 I started buying gold.
And it was illegal for Americans to own gold,
can you imagine that?
Back in '72.
Today you have Bitcoin,
it's different.
Everything is changing so rapidly today.
So I started with gold,
but actually the next thing was actually oil.
Because I went to school to be a tanker officer,
driving ships for Standard Oil.
So understand oil if I own,
my wife and I don't own Standard Oil
or Chevron or Exon.
We own oil wells.
Again taxes.
You get no tax breaks for owning paper oil,
huge tax breaks for owning real oil.
And then I went into real estate.
Why?
Because I can use debt to buy real estate.
And because I use debt,
I pay no taxes.
And then third I started my business,
my first real real business.
I had many many businesses as a kid.
But my first real business was a nylon and velcro
surfer wallet business.
I went worldwide right away,
the trouble is I was an idiot
and the business went up
and the business came down.
What kept me alive was this and this.
So you may say well aren't you working for money,
but we'll go into that next.
I don't want what's called
a paycheck.
I want cash flow,
from here.
So that's what I mean by the rich don't work for money.
You want cash flow that pays very little taxes,
and I can use lots of debt over here.
The average person went to school,
their biggest liability they have
is student loans of course.
(laughing)
- Yeah of course, definitely.
- I mean it's horrible what they do to you guys today.
A student loan was just the worst type of debt of all
because you cannot declare bankruptcy on it.
Then you get and you try to buy a house,
and you call it an asset when it's really a liability.
Why?
Because the cash if flowing that way.
Your house costs you money every...
You rent a house it's all costing you money.
Then you have to have a nice car,
I had one of those... this.
So the problem with most young people is they go to school
to get that job,
then a lot of them has student loan debt.
Then they try to get married and buy a house,
have a car,
and then they have credit card debt.
But they never have the chance to come over here.
If they do any investing in America it's a 401K,
which I wouldn't touch with a 10 foot pole.
Now you should,
but I don't cause I don't have to.
Cause I went to school for here,
and people who don't go to school should be here.
This is a 401K, IRA, ETFs and that stuff.
Paper.
Savings.
I don't touch that stuff.
And we'll go into that later on.
So when I say the rich don't work for money,
I never want to be dependent on a paycheck,
either from an employer or the government.
I want to be a free human being.
Any comments any questions on this?
- Well now I see it clearly because it's ironic how
people were upset about Trump not paying taxes,
but in reality he would have to be a complete idiot
if he paid taxes especially when you were talking about
your assets and how the government
wants you to have these things.
They want you to own homes and invest in properties.
That's exactly what Trump was doing,
and so he gets all the tax benefits from it.
- Correct.
- So many people come to this country because
they want to live the American Dream,
of buying their house,
going to a job working paycheck to paycheck,
goin to school,
when in reality that's a nightmare.
- And what happens if they lose their job.
- They lose all security they were promised
and they lose everything.
And they don't have anything
to provide for their family either.
- So what does your brain,
I mean you're a very smart young lady,
but now your brain is a think right?
- [Alexandra] Yeah.
- So the question is when I talk to people
about financial education,
well right now we're gonna talk about there's another issue
is Bitcoin, the dollar and gold.
Which one is better?
I love real estate again because it's debt.
I use debt to buy real estate.
And everybody else is saying get out of debt.
(laughing)
I love debt.
Trump loves debt he's the king of debt.
I'm in debt about $600 million.
The average person cannot pay for their credit card debt.
- [Alexandra] Wow.
- That's how tragic it is.
And I'm talking about educated people.
And then this here I get tax breaks
because I have employees.
This'll be another subject going down with Millennial Money.
But if you have a job you're taxed,
if you hire employees they give you tax breaks.
Look at right now Amazon is looking for a new home.
Every government wants to give them a home.
"Please move to Indiana. Please move to Canada."
Why?
Cause they'll bring in employees,
and employees pay the tax.
It's the same as Tesla.
They got I think $50 billion from the state of Nevada.
Cause they bring in employees.
So that's why when your teacher says to you
go to school get a job,
you say, "I think I'll think a little bit different
this time."
Now you need a job in interim.
But you want a job for the experience.
That's the difference.
So the reason rich dad's lesson number one is
rich don't work for money,
is I never want a paycheck,
I wanna use debt,
and I don't wanna pay tax,
I pay some tax but minimum tax.
But I wanna accumulate this so I have cash flow.
Anything you wanna say, any questions on that?
- No, I'm happy because I can see both sides.
I do see the employee's side,
and the entrepreneur's side.
And thankfully because I work in this company,
I'm not forced to work a regular nine to five job.
I'm able to actually work on my own projects,
and it's incentivized that we
actually do become entrepreneurs.
- Our company encourages everybody to come here.
So we don't have a 401K do we?
(laughing)
- [Alexandra] No.
- We don't have a retirement plan here do you?
- [Alexandra] No.
- Keeps you motivated right?
- [Alexandra] Yeah it does, it does.
- So what would you say to your friends or your fellow
millennials about why the rich don't work for money?
- I would tell that they truly need to educate themselves
because to work for money is completely ridiculous.
While taxes are increasing,
and the inflation is increasing,
it doesn't make any sense to be working
from paycheck to paycheck.
The rich don't work for money.
Money works for them.
- Or being afraid of being fired.
Or losing your pension.
Do you realize that's the biggest terror of most people?
I might lose my pension too?
- Yeah it's really sad that it's one of the biggest fears
of everybody on a daily basis whether
they're gonna get fired or not.
And just seeing that my dad previously and my mother
were both scared of not being able to support our family
and now thankfully because we followed your philosophy,
we have all the freedom in the world.
- And your mother's a real estate agent.
She's an investor and real estate agent,
and she can help you.
- [Alexandra] Yeah exactly.
Both of them are my team,
and tomorrow if I do get fired
I have my properties to live off of.
- You do too good a job for us to fire you.
(laughing)
- [Alexandra] No I work hard here.
- Are you afraid of being,
if you make a mistake in this company,
are fired?
- No mistakes are actually encourage.
Coming from a traditional work system,
where we're punished for it,
and then coming to this one where they're actually
incentivized because we learn from them,
it's amazing.
- Correct but you have to admit you made a mistake.
If you cover up the mistake you're fired.
- [Alexandra] Exactly.
So Sarah my supervisor whenever
I'm like, "I'm so sorry I can't believe I messed up."
She's like, "No it's okay we learn from our mistakes."
- That's our culture here.
- [Alexandra] It's awesome.
- So thank you.
So the rich don't work for what?
- Money.
- And for those of you at home,
find a friend and discuss this.
Thank you.