ROBERT KIYOSAKI 00:00
I thought I'd review something, I wrote a book called the 'Cashflow Quadrant.' I think it's one of the most important books for people who want to make changes in their lives.
Because as I say the 'E' stands for Employee, 'S' stands for Self-employed or Small business, 'B' stands for Big business like Bill Gates and 'I' stands for Investor like Donald Trump or Warren Buffett.
So you know my poor dad always said to me, son go to school to get a what? Job. And he was programming me – and this is the eye of the word is program – me to be an Employee ['E']. And, you know, I talked to my mom, I said you know dad I don't want to be an employee. And my dad said you must get a job, you must get a job, you got to have good education, good grades, get your PhD.
Oh my goodness, my mom says don't argue with your dad, you know, if you want to be rich, go to school to become a doctor, you know, an 'S' – Specialist. And I said to my mom is only one problem mom. She said what's that? Doctors are Smart. She said you have a good point there, you know, don't be a doctor. (Laughter)
And I talked to my rich dad and he said, you know, Robert are you basically lazy and incompetent? I said, yeah. He said good, you'll do well in Business ['B']. (Laughter) And so this here ['B'] is having other people work for you, like my advisors and things like that.
And this ['I'] is having money work for me and they're very different educational paths.
Another thing, my rich dad says – again, going to words or vocabularies – employees, always say the same words, whether they're the janitor or the president of the company, the CEO.
Employees all say the same word; I'm looking for a safe secure job with benefits. That's their whole attitude and their emotion is fear, they don't – because they don't know how to survive in the real world. They need that – they have that fear driving them.
And 'S' self-employed, their words are if you want it done right, do it by yourself. So these guys ['S'] problem with them is they may own a business, but they really own a job, they cannot quit because they don't trust other people, their emotion is trust.
And a business owner ['B'] is like me, I want to have the smartest people around me as much as possible because then I don't have to do that much work.
And as an 'I', I want to know how to have my money work hard for me, so I don't have to work hard for money.
So that's why I started off as an entrepreneur ['B']. And over here ['I'] – this is the beauty of real estate – for every dollar I make here ['B'], I bring it down here ['I']. And my banker will give me 9 more dollars as long as it's real estate, tax free money. So I'm getting ahead faster and faster and faster, very simply because for every dollar I have here ['I'], my bank is giving me 8 or 9 dollars to get ahead financially.
Does that make sense for you guys here? Tax free money. And if I sell a property, again, I do it tax-free. That's why I'm getting rich, that's why education or financial education is so important.
And I think it's really silly that our school systems keep saying to you, go to school to get a safe secure what? Job ['E']. When jobs are being exported overseas so fast right now, it's ridiculous. I mean, I think was J.P. Morgan, they just export another 4,700 jobs – and these are smart guys, guys with MBAs and all – they exported it to India. So that's what's happening in the world.
But the reason 1974 is so important was because when ERISA which we now know as 401k came out, it forced these people ['E' & 'S'] to become investors ['I'] also. And that's why this change was such an important change here.
To transcend small business to big business, first you got to trust.