(gentle music)
- Okay, once again, it's Robert Kiyosaki.
We're here talking to Miss Alex,
and we're also talking about
financial education for millennials and money.
And I'm glad she's asking me when she's very young,
because one of the biggest mistakes,
I still hear it today, from young people,
oh, I don't have to worry 'cause I'm still?
- Young. - Yeah.
And that is death to most people.
Because eventually you get old
and then you're not young again.
So it's a way of saying,
when I talk about assets and liabilities,
one of the most important things
you have in your life is time.
It's one of your greatest assets or it's your liability.
And being, you know I just turned 70,
and I have friends who have nothing.
I mean they have zero.
Now they've made a lot of money, but they have nothing here.
They have nice houses, nice cars,
16 wives, 19 kids, I don't know what they have,
but do you know what I mean?
And being young is great,
except it can be a liability to you.
'Cause when you're young you're just havin' a lot of fun
and life's exciting, you know, it's new.
So, at the time, but the thing is, this is the lesson today,
is so many people spend their time focusing here.
They wanna make a lot of money.
And I can hear it in their words.
They say, oh, I want a career.
This is career.
'Kay, or, I'm gonna start my own business
and this is the chart here, which we've seen.
This is the cash flow quadrant, book number two.
E is employee.
S is small business, self-employed, or a specialist
like a doctor or lawyer or web designer.
B is big business, 500 employees or more.
And I is professional investor.
So, when I was your age, I knew I wanted to get here.
This takes time.
This is the hardest, you know?
This is where the mega bucks are, and Kim and I are here.
And the money is massive.
But it takes time to get there.
The big mistake I see young people make is they focus here.
And the words are, I wanna do what I love.
That's the track.
You see, in the real life,
sometimes you have to do what you hate.
Like, people think I like to write books.
I hate writing books.
But it fills my purpose in life.
It's not my passion, my purpose in life.
Because my purpose was to get here.
A lot of these guys get trapped here doing what they love,
and as we've talked about on earlier episodes of this,
you guys pay the highest taxes.
40% here, 60% in taxes here, 20% here, and then 0% here.
So when I was in my, before my 20s,
I knew I wanted to go there.
And it wasn't doing what I love.
I had to learn what I didn't want to learn.
I sometimes had to do what I hated.
I had to learn about taxes.
I had to learn about debt.
I had to take classes, I had to learn about insurance.
So I was doing a lot of things
I hated doing so I could come over here.
These guys never do this,
'cause they want to live their passion.
I want my passion.
The difference is passion is greedy,
purpose is for the people.
So my purpose was to come over here
so I could serve more people.
'Kay?
So I have employees here and all this.
I don't buy stocks, bonds, mutual funds,
because as a professional investor
I can create my own assets.
'Kay?
Any comments on anything so far?
- Yeah, if you ask anyone, they all say
they want to do what they love.
- And they're talkin' about here.
And this is where you get taxed.
- [Alexandra] Yeah.
- And coming here I was doing fine over here
'cause I didn't have much money.
(laughs) 'Cause the government
takes all your money anyway, right?
40% in taxes, nobody's gonna sue you.
But you come over here, they sue you.
'Kay, so I had to learn about lawsuits.
I hated it, but I learned it.
So the big mistake for young people
who say I'm gonna do what I love,
which is fine over here, but what do you love the most?
Well, I loved my freedom.
And I know it sounds greedy, but I love making money.
I'd rather have a lot of money than no money.
I've been both.
I've been broke, I've been down, and everything.
But I'd rather have a lot of money.
So it was worth my purpose to get over here.
The big mistakes I see young people making is here.
You know, they think about what they wanna do,
what they love, and what I'm saying
to the millennials right now, invest in what you love.
There's a very big difference.
In other words, think about this side first.
Most young people, or should I say short-sighted people,
they think this is it or this is it.
But this is the one here.
So when I was your age, I knew
that the assets I wanted to acquire,
the richest people own businesses.
Over here, these guys are small businesses, self-employed.
You're self-employed if you can't stop working.
I stopped working years ago because I have businesses.
Very big difference.
It was painful, but I got there.
So number one is a business.
So when I was in my 20s, I knew I was gonna do
whatever it took, school, study,
learn about taxes, debt, insurance, accounting,
lawsuits, and all this, through business.
Next is real estate.
I love real estate.
But most people can't do what I do
'cause they don't have a business.
It's catch 22.
They don't have enough money to get over here.
Your mom just made that switch
'cause she uses other people's money.
- [Alexandra] Yeah. (laughs)
- So, the reason I make more money is because,
it's not that I'm doing what I love,
I do, sometimes, what I hate,
so I can have the assets that I love.
I love having a business.
You know, if I didn't have a business, you wouldn't be here.
Darren wouldn't be here.
I wouldn't have a CEO and President.
I wouldn't have accountants.
I wouldn't have attorneys.
So the business affords me the lifestyle I want.
And then I invest in real estate.
I've never gone past a piece of land
or a building I did not love.
And then, what most people invest in from there is paper.
And that's fine, that's stocks, bonds,
mutual funds, savings, ETFs.
Not my game.
I don't love it.
I actually hate it.
But these guys, it's perfect for them to have paper,
stocks, bonds, mutual funds, ETF, and all that.
Because they're focused over here.
They wanna do what they love.
They wanna climb the ladder, they want their career,
they want this, I'm gonna become president, you know?
That's not what I wanted.
I wanted to be a football star.
But this is for the middle class here.
That's fine, you can get rich here too.
I just don't like it.
It's not exciting to me.
And then the last one are commodities.
And the four basic, there's a lotta commodities, like food.
Farmers get rich, they provide food, which is good.
I invest in food.
I invest in avocado farms that provide food.
Oil, gold, silver.
I love those things.
I love avocados.
(laughs) You know?
- [Alexandra] I love avocados. (laughs)
- Yeah, I know.
So I'm doing what I love.
I love trees, I love plants, you know, things like this.
So, I'm doing what I love here, here, and here.
I don't like stocks, bonds,
mutual funds, ETF, 401(k)s, IRAs.
It doesn't excite me.
You know?
This excites me.
So I invest in what I love rather than do what I love.
And these guys do what they love
but most of them never get over here.
And this is like Steve Jobs, Zuckerberg,
Bezos of Amazon, and they have all the money in the world.
That was my plan.
Any comments, any questions on that?
- So as you mentioned, a lot of people are talking
about how they wanna do what they love, right?
And I think you have a very valid point
on investing in what you love.
Because a lot of people, just to say
that they're entrepreneurs or investing,
they're investing in the whole Bitcoin outrage
and the cryptocurrencies.
And I felt like I wasn't actually pursuing what I loved,
or I was falling off the wagon,
because I wasn't really interested in Bitcoin.
But, I realized that that's just not my thing.
I'm not investing in what I love
if I'm doing that in Bitcoin.
What I wanna do is invest in real estate.
So I love looking at properties.
I love looking at houses, fixer-uppers,
and looking at the numbers.
That's my passion.
Maybe I got it from my mom, who knows?
But Bitcoin isn't my thing.
So I have no reason to feel like I'm not doing what I love
just because I'm not investing in Bitcoin.
- And that's kind of the attitude.
In my world, like I said, I see people,
they chase shiny objects.
And what a shiny object means is, you know,
when you're fishing you throw a lure out,
this little shiny object goes.
And the fish comes and (imitates splashing)
where they jump it.
That's what most people do.
Bitcoin today, it's a shiny object.
I'm not saying you can't make a lot of money in it.
But most people are chasing shiny objects.
They wanna make money.
They're not building an asset here.
The reason I don't do it here, this is the highest risk.
Now, this is what I know.
The higher the risk, the more education it takes.
For example, if I flew.
You know, if I wanted to just fly my little Cessna 172
around the place, not much risk in that.
But when I had to go to Vietnam to fly, the risk went up.
I had to study harder, become better, work harder at it.
The reason most people stay in paper,
401(k)s, IRAs, and chasing shiny objects like Bitcoin,
is because they don't want to take the risk here.
They're huge.
You've gotta study.
That's why we have our Rich Dad's Education,
Rich Dad's Coaching.
All of you guys are allowed to take courses
on all of this if you come here.
It takes no intelligence to be here.
It takes no intelligence to buy Bitcoin.
I mean, I have four Bitcoin.
No, five Bitcoin.
It doesn't take, you know, I don't have to do anything.
Over here, I have to know a lot.
I have to study.
So, if you wanna chase shiny objects
like the stock market and all that, you can get rich there.
It's really easy to get in here.
It's really hard here.
Any comments, any questions?
Does that make sense? - Yeah.
- They're chasing shiny objects.
- So, I do agree with you when you talk about Bitcoin
being a shiny object that everybody is chasing, right?
And one of my favorite stories that you've told
is about your mentor Frank, when he sent you to Peru
so you could learn a valuable lesson about maybe something
that wasn't such a shiny object and turned into be,
because shiny objects change every day.
- I wanted to learn, you know they have ICOs?
- Mm-hmm. - Initial coin offerings?
I wanted to learn about IPOs, initial public offering.
And it's how you take a business and turn it into paper.
You turn it into stock.
So, I went to see my friend Frank who was hardcore here.
I don't know how many companies he started taking public.
And I said, Frank, and he didn't know me from Adam,
and I said I wanna learn to do an IPO.
And he goes, yeah, you and everybody else.
He said, most guys don't have it.
They don't have the guts.
They don't have the determination.
And they're wimps.
And I said, I wanna learn.
He says, how bad?
This is up here in Scottsdale, Arizona.
I said, badly.
He says, okay, this is Wednesday.
Be in Lima, Peru on Saturday.
I went, on Saturday?
And we were shooting our video
for the CASHFLOW game, you know?
He says, how bad do you want it?
I said, badly.
He says, you know, you meet my president in Lima.
Frank never traveled.
You meet my president in Lima
and I'll find out how bad you want it.
So that was Wednesday.
Wednesday night, I was on a plane to Lima, Peru.
I had to pay full boat.
I paid my own way.
Most employees can't stand that,
'cause they don't have any money.
I flew into Lima, Peru.
I went to look at three gold mines, with Frank's president.
It was an experience, an education,
I would've never had if I hadn't shown up.
It cost me probably 15 to $20,000
just for airfare on that thing.
I get back on Tuesday to talk to Frank
and I said, Frank, there's nothing there.
He says, I coulda told you that.
So why'd you send me?
I wanted to find out how badly you wanna learn.
He says, most people don't have it.
They want a job, they want job security,
they want a paycheck, they want a 401(k).
And that's why they don't get to come here.
That's why they don't get to come over here.
Nothing right or wrong, you know?
I don't ever want to be here.
I knew when I was your age I wanted to come here,
but the higher the risk, the higher the returns,
but also the higher dedication, education,
and study you have to go through.
And I'm making millions and millions.
I make more in a day than many people make in a lifetime.
But it was worth it.
Did I lose?
Sometimes, yes.
But it was worth it.
You go to school here, you take no risk.
That's why my poor dad was poor.
He didn't like to make mistakes.
'Kay?
- I love that story, Robert.
Thank you for sharing it.
- I'll leave you one last word that's very very important
for people to understand at a young age.
And the word is called
liquidity.
The reason this is better
for most people is because it's liquid.
You can buy a stock, you make a mistake, you get out.
You buy an ETF, you make a mistake, you get out.
It's good, it's important.
The moment you go into real estate, you're not liquid.
That's why you gotta be smarter going in.
'Cause if you make a mistake, you can't get out.
You buy a bad piece of property, you ride it down.
And the same is businesses.
You're in there.
You're solid, you can't get out.
Rich Dad's gotten in trouble, you know,
with money and all businesses are.
I can't quit.
Employees just quit and they leave
and they run like little rats, you know?
But if you're in here or here, you can't get out.
So that's why liquidity is crucial.
It's very important, which means,
that's why I have Rich Dad's Coaching,
Rich Dad's Education, we have all our programs and all this.
But most people are not willing to do the study
'cause they wanna do what they love,
rather invest and acquire what they love.
That make sense to you?
- Yeah, totally.
- So stocks, bonds, mutual funds, ETFs, savings,
they're good 'cause they're liquid.
You can make a mistake and get out.
These things, hard to get out of.
Including gold, gold's hard to get out of sometimes.
Gold's more liquid than this.
Oil is tough to get out of.
You make a mistake there,
you're gonna ride that baby down, you know?
Silver's pretty easy.
But the word is liquidity.
The less liquid, the higher your financial
IQ.
You've got to be so much smarter.
And most people, they have it.
They have that ability to be that smart.
But they'd rather do what they love
rather than invest in what they love.
Got it?
- Yeah, of course.
Thank you, Robert.
And I also wanna give you thanks
for sharing this topic on investing in what you love,
because I hope that this can be a guidance
for every millennial out there
as opposed to what we're traditionally taught
in doing what you love.