How to Create CASH FLOW and Become Truly RICH! | Robert Kiyosaki’s Top 10 Rules

Topic 1: Discussion

• Yeah.
• People always dump on, what do you call it?
• The fast food industry.
• If I had to do it again, I’d go work for McDonald’s.
• You don’t like to live below your means, do you?
• No.
• No, and I think when you say to somebody, “Live below your means,” you wipe their spirit out.
• Look, I have an unfair advantage.
• I went to war.
• And at war, I’m alive because other guys died for me.

Topic 2: Introduction

• He’s the author of one of the bestselling business books of all time, Rich Dad, Poor Dad.
• He has challenged and changed the way that millions of people around the world think about real estate and money.
• He’s also an investor who’s put his money into several business ventures.
• He’s Robert Kiyosaki, and here is my take on his top 10 rules for success, volume two.
• Rule number four is my personal favorite, and I’d love to know which one you guys like best.
• Also, as you’re watching the clips, if you hear something that really resonates with you, please leave it down in the comments below and put quotes around it so other people can be inspired.
• As well, when you write something down, it’s much more likely to stick with you, too.
• Enjoy.

Topic 3: Interview

• You wake up tomorrow morning, and you’re on the street.
• And you have nothing.
• You don’t have a single contact in your network.
• All you have is the knowledge and experience that you’ve had throughout your career.
• How do you build up from there?
• Well, I’ve been there, many times.
• So it’s no big deal.
• You just figure out what’s needed and wanted and you go do it.
• People always dump on, what do you call it?
• The fast food industry.
• If I had to do it again, I’d go work for McDonald’s.
• And the reason I’d go work for McDonald’s, whether it’s seven bucks an hour or 15, I don’t really care. (coughs)
• I don’t really like McDonald’s food, but they have the best business systems in the world.
• How else can a company take virtually non-college educated people and build a fast food industry across the world?
• And they have the best system.

Topic 4: Learning and Entrepreneurship

• So right inside a little McDonald’s, you can learn everything you need to learn about business except for the management side of it.
• So, I’d just go work at McDonald’s so I could learn even more.
• So I look at life as learning.
• I’m constantly learning.
• I’m reading constantly, studying constantly.
• I spend most of my time with entrepreneurs.
• I don’t spend my time with people who complain about the economy.
• So nothing would really change.
• I’d just go back to being an entrepreneur.
• Entrepreneurs have one thing in common.
• They keep going.
• They’ll change the rules.
• They’ll reinvent the rules.
• They don’t just take one answer.
• So a real entrepreneur, really it makes no difference which country you’re in.
• That’s my belief.
• I love that.
• You know what I mean?
• It’s just a mindset.
• It’s F you.
• You mess with me, I’ll find a way around it.

Topic 5: Entrepreneur’s Story

• I have a friend, he’s multi-multi-multi family rich guy from France, and France is as communistic as it gets.
• 75 percent top line for million dollar earners.
• Yeah, but that’s why he lives here.
• Yeah. (laughs)
• He started buying vineyards in Napa and Sonoma, so he went back to the French government and says, it’s his wine, he says, “I want to ship my wine “in bulk to California.”
• And the government says, “You can’t do that.”
• This is the French government saying you can’t ship–
• Yeah, and here’s a guy who’s, I think its five generations, French wine guy.

Topic 6: Entrepreneurial Creativity

• This guy is an entrepreneur entrepreneur.
• He says, “Okay, I can’t ship it in barrels.”
• The guy goes, “Yeah.”
• He says, “Okay, I’ll ship it in bottles.” (laughing)
• So he bottled all of this stuff.
• It cost him more money, but he still figured out how to do it.
• Creativity.
• Do you know what I mean?
• And now he has his wine with his California wine and all this,
• and so he went back to the French government and said, “Here, try this. “See if it’s not better.”
• And so now they’re all confused, because he didn’t break any rules.
• So I’ll say it again.
• Entrepreneur is a mindset first, a skillset, and rules, and depending upon whether you’re an employee or a small business, the rules are different.
• The mindsets are different.
• The skillsets are different.

Topic 7: Education and Learning

• ‘Cause I’m one of those kids that didn’t like school.
• School is good for people who like school.
• But here was my poor dad, head of education, PhD, on the governor’s board of Hawaii and all this stuff.
• And as a kid, me, I’m flunking out of school ’cause I can’t read, I can’t write.
• It’s not that I couldn’t read, I couldn’t write.
• I was bored out of my mind.
• I was just, “Hey.”
• So what I did instead was, that’s when I met my rich dad, who was my best friend’s father, and he used these things.
• It’s called a game.
• You see, games are the best teaching tools.
• See, when I’m playing this game, this is how the rich taught their kids battle strategies.
• It’s called chess.
• My rich dad taught me to be a rich man playing Monopoly.
• We played Monopoly hour after hour after hour.
• The formula for great wealth in Monopoly is four green houses, one red hotel.
• So today in Arizona, I own 8,000 green houses and several red hotels.
• I just play Monopoly for real.
• So that’s the power of a game, because a game engages me mentally, physically, ’cause I actually have to move things, emotionally, ’cause when somebody knocks me out, (coughs) I better wake up.
• I made a mistake.
• And spiritually, ’cause it’s spirit that wins.
• Now if you just saw Golden State play the–
• [Interviewer] Wasn’t that something?
• Oh.
• I mean, I love Lebron James, I love Cleveland, but one guy cannot take on a team.
• And I think Lebron scored 60 percent of all the points and assists and all that, but a better team beat ’em.
• So when you look at business, business is the same thing.
• Business is a team sport.
• I have to have good accountants, good attorneys,

Topic 8: Building a Great Team

• I have to have great leaders.
• The trouble with most entrepreneurs, they’re self-employed, so they quit their job.
• And in America today, the SBA, the Small Business Administration, says there’s 28 million small business owners, 28 million.
• 24 million are classified as non-employers.
• They’re a one-man team.
• They’d be like this guy saying, “Okay, I’m going to take you on.”
• Are you crazy?
• But that’s what most entrepreneurs are trying to do.
• ‘Cause that’s what they’re taught to do in school, to be the rugged individual.
• In school, I was very successful as long as I could cooperate at test time, but in school, cooperation at test time is called cheating.
• In the real world, the guys that have the biggest team win.
• So all I focus on is putting the best team together.
• Meanwhile, a lot of time, the A students in school, they’re the doctors and lawyers, they’re sitting there all by themselves.
• They’re sitting ducks.
• But they’re entrepreneurs.
• Do you know what I mean?
• It’s just a mindset, tactics, strategy.
• I went to military school.
• I’m a former marine.
• So I think like a military operation, which I love chess.
• So most entrepreneurs, they have this job.
• They’re, “Okay, I’m going to be an entrepreneur.”
• And these guys just massacre ’em.
• ‘Cause they went to school, they learned to get a job, and they take tests on their own.
• They have to be the smartest.
• That’s like the Lebron James.
• I don’t want to be the smartest guy in my team, but I want to have the best team.
• And that’s why I win most of my games.
• That’s great.
• I think like this, and the doctors think like this.
• I’m going, “Yeah, I got you, man.” (laughs)
• For some reason, I get this sense I’m going to win. (laughs)

Topic 9: Living Below Your Means

• So the other thing with when people say, “Live below your means,”
• you don’t like to live below your means, do you?
• No.
• No, and I think when you say to somebody, “Live below your means,” you wipe their spirit out.
• It’s like saying to somebody, “If you want to lose weight, go on a starvation diet.”
• It doesn’t make you healthier to starve yourself.
• So I would rather get financially educated.
• That’s why I read your books, ’cause this is my greatest asset.
• I want to feed my brain so that I can expand my means without getting into excessive debt or where I start to lose, because debt, you could say, is a two-edged sword.
• But telling somebody to live below your means is almost inhumane.
• I never felt good doing it.
• I wanted to strive to do better.
• Every day, I want to do better every day.
• I liked a good life.
• Like I tell the story of taxiing underneath your jet.
• I was in my jet, but it was a little Learjet.
• I look up and there’s a 727, and I taxi under it.
• I said, “Holy mackerel.”
• It’s big boys and their toys, but nonetheless, it inspired me.
• I said, “Okay, I’m in a Learjet now. “It’s time to step up.”
• And it doesn’t mean the jet will make me happier.
• What makes me happier is the wanting to get better, to get smarter, to do better.

Topic 10: Early Aspirations

• [Interviewer] If you did not have the rich dad in your life, what would you be doing today?
• It’s hard to say if I didn’t have my rich dad, because as a young kid, starting at probably about the age of five, six, seven, eight, nine, I really wanted to be rich.

Topic 11: Desire, Mentorship, and Education

• So I think number one is desire, and then you naturally seek your role models and teachers.
• And in my lifetime, I’ve had multiple rich dads.
• My rich dad was my best friend’s father starting the age of nine, and then today, I still seek mentors and wise men and wise women because that’s how you get wiser, is by hanging out with smart people.

Topic 12: Value of Networking and Partnerships

• Everyone says finding good real estate is hard when you’re getting started.
• What’s the value of a good network and good partnerships?
• Well, I’ll say it again.
• In 1973, I came back from Vietnam, and I was a pilot out there.
• And I took a real estate course.
• It was $385, three days long.
• And that was a lot of money back then.
• I was only making $500 a month, so 385 was all I had.
• And the instructor at the end of the program said to me, he said, well to the whole class of about 30 of us, he says, “Your education begins now that you leave the class. “You didn’t get educated while in the class.”
• So his assignment was that everybody, or 30 of us, we had to pair up in team, get up in teams, two or three to a team, and we’re to look at 100 properties in 90 days.
• And he says, “Don’t buy anything. “Just look at 100 properties. “Do your evaluation of each property. “Write a short blurb about it, why it’s good, why it’s bad.”
• And he said, “At the end of 90 days and 100 properties, “then you make up your mind “if you’re going to buy something.”
• He says, “If you haven’t found one property in 100 deals, “you start again.” You start again with another 100.
• And that’s why most people are not rich, is they’re not willing to go through that process of looking at 100 deals to find one deal.
• And there’s sometimes, and you and I know, you look at a lot of frogs to find one princess, but when you find that one princess, everybody goes, “Oh, well how did you get so lucky?”
• Well, I looked at a dirt dogs out there, you know?
• And that’s like anything in life.
• You don’t marry the first man or woman you meet.
• Hopefully you kiss a couple of ’em before you do.

Topic 13: Transition to Entrepreneurship

• 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 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 is the only problem with that.
• So I get this check, and I went, “Holy mackerel.” You know what 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, he says, “You’re going to be back.”
• I said, “Why?”
• He says, “‘Cause you’re going to fail.”
• I looked at him and said, “Look,” a few expletive words, because that’s what he did.
• He left Xerox, failed, and he came back.
• I said, “Look, duh-duh-duh, you failed 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?
• 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.
• I didn’t have a paycheck.
• But that’s what my rich dad encouraged me to do.
• He says, “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, is you really find out who you are when you don’t have anything.
• If you’re an entrepreneur and you’re going to be a big entrepreneur, leadership skills and communication skills are more important than a law degree.
• I have another book that just came out.
• It’s called The Eight Lessons in Military Leadership.
• In the military, I went to military academy and all that.
• From day one, you’re learning leadership.
• Day one at the academy, I have to stand in front of 20 18-year-old kids and go, “Section, ten-hut.”
• And naturally, they’re going to say, “Screw you.”
• So that’s when you learn to be a leader.
• Now as you said to me when we first met, the trouble with the military, you get a little rough. (laughing)
• I had a hard time when I came back from Vietnam and I went to work for Xerox.
• People didn’t like that I’d call ’em an asshole and a fuckhead, stuff like that.
• Every other word is a curse word in the military.
• Yeah.
• “Hey fuckhead, do this.” (interviewer laughs)
• But the don’t… (gasps) “I’m going to call in the HR person.” I better make some changes here. You know what I’m talking about?
• Of course I do.
• You can’t talk straight in corporate America.
• In the military you can.
• You have to.
• Yeah.
• And they love it.
• Yeah. You actually get promotions if you do it in the military.

Topic 14: Cash Flow Quadrant

• Very important diagram my rich dad showed me when I was a little boy was a diagram known as the cash flow quadrant.
• And the quadrant is made up of the four different people who make up the world of business.
• So my rich dad said, “In the world of business, there’s Es, and Es stand for employees.”
• “An employee,” he says, “You can always tell “who they are by their core values.”
• And what what the employee, whether the president or the janitor of the company, will always say the same words.
• The words are, “I’m looking for “a safe, secure job with benefits.”
• That’s what makes them an employee, ’cause their core values are security.
• The other one of the four is the S, or the small business owner or the self-employed.
• And again, their core values will ’cause them to use the same words, which are, “If you want it done right, do it by yourself.”
• S means they’re also solo.
• They’re generally a one-person act or operate by themselves.
• On the right side of the quadrant are the Bs, and what rich dad said the B stood for was big business, or like Bill Gates.
• Forbes defines big business as 500 employees or more, and their words are different.
• They say, “I’m looking for a good system, a good network, “and the smartest people I know to help run my business.”
• They’re unlike the S.
• They don’t want to run the company by themselves.
• They want smart people to run their companies for them.
• And then the fourth of the quadrant is the I, and I stands for investor.
• These are people who have money work hard for them.
• These people are people who have people work hard for them.
• And these are the people that work hard for the rich here.
• And the thing of note here is that most people who go to school are programmed for the E and the S side.
• For example, was my poor dad, who always said to me, “Son, go to school so you can get a nice, safe, secure job.”
• And so my poor dad wanted me to be an employee, and since the time I was a kid. “Get a safe, secure job, steady paycheck, and benefits.”
• I didn’t want to be an employee.
• And I said, “Mom and Dad, I want to be a rich man.”
• And I’d fight with my dad.
• So mother finally said, “Son, if you want to be rich,” my mother was a registered nurse, she said, “If you want to be rich, “the richest people I know are doctors.”
• So my mom wanted me to come over here, be a specialist or a small business person.
• I said, “There’s only one problem with that, Mom. “Doctors are really smart.”
• And she says, “You got a good point there. “You’re not going to be a doctor.”
• So I went to school.
• I have a bachelor of science degree.
• I can drive ships and I can fly planes.
• I flew for the Marine Corps.
• But I’ve never used any of that education because I wanted to become a business owner.
• So it was rich dad who basically said to me, “Become a business owner “and learn to be a professional investor.”
• So, one of the big differences here between these people is called taxes.
• See, in 1943, the US, the federal government passed a law that said employees had to pay tax before they got paid.
• So when you get your paycheck from your employer, you open it up, and voila.
• The government has already taken a sizeable chunk of it.
• And the harder you work and the more money you make, the more money they take from you.
• So that’s why it’s not that good to be an employee, ’cause you can never get ahead, ’cause the more you work, more money you make, the greater they pay in taxes.
• Now the doctors and lawyers and attorneys, accountants, would all laugh and say, “These guys, they’re going to pay a lot of taxes,” so naturally, the federal government changed the laws again.
• So in 1986 in the US, a thing called the ’86 Tax Reform Act, and it basically took a lot of the benefits away from people who are self employed, small business, doctors, and lawyers.
• So today in America, unfortunately, these guys pay the highest percentage in taxes. It is tragic.
• And a lot of people think they’re investors, but what they’re really doing is they’re just giving their money to people like mutual fund companies and all that, so they’re investing, but they’re not really investors.
• See, the big tax breaks are on this side.
• The laws are pretty tight here, but this area is very, very gray.
• So by being a business owner on the right-hand side of the quadrant, you can make a lot more money and pay a smaller percentage of taxes legally, and the key word is legally.
• In the investor quadrant, it is possible to make millions of

dollars and pay zero percent taxes legally.

• And so it was my rich dad who said to, he says, “Robert, if you really want to be rich, “learn to build businesses.”
• It made more sense to him to work hard to build a business, something you owned and something you’d pass on for generation to generation to your kids, whereas my poor dad said, “Work hard.” But my rich dad said, “Why would you work hard “for something you’ll never own “and you can get fired from right away?” Again, that was a difference in values.
• So, my rich dad suggested I learn how to be a business owner and learn how to be an investor.
• And that’s one of the big differences.
• On this side of the quadrant, these people here work for security.
• They work for money, also.
• On this side of it here, their key value that they want is they want freedom.
• They don’t want to have to work at a job anymore.
• They don’t want to have to work for the rest of their lives.
• So one of the beauties of business for the 21st century, it allows people to make the transition from the E and the S side to the B side, especially.
• And so you can become a big business owner.
• And the difference between an S and a B, small business and big business, is most of these guys can’t quit working.
• Most small business owners, if they stop working for more than a month, the business collapses.
• They don’t really have a business. Most of these people own a job.
• So the beauty of business for the 21st century, it allows these people to make the transition to the B side so that you don’t have to keep working hard for money and money can actually come in passively.
• Then once you have your business up and running, then I always recommend you then begin investing with your excess cash, paying less and less in taxes.
• And that’s the reason the rich are getting richer.