Book Quotes: Rich Dad Poor Dad

February 5th, 2014

Rich Dad Poor Dad

Robert T. Kiyosaki

“One dad would say, “The love of money is the root of all evil.” The other said, “The lack of money is the root of all evil.”
Pg. 2
“Having two dads whom I loved forced me to think and ultimately choose a way of thinking for myself. As a process, choosing for myself turned out to be much more valuable in the long run than simply accepting or rejecting a single point of view.”
Pg. 3
“I had to think about each dad’s advice, and in doing so, I gained valuable insight into the power and effect of ones thoughts on ones life. For example, one dad had a habit of saying, “I can’t afford it.” The other dad forbade those words to be used. He insisted I ask, “How can I afford it?” One is a statement, and the other is a question. One lets you off the hook, and the other forces you to think. My soon-to-be-rich dad would explain that by automatically saying the words “I can’t afford it,” your brain stops working. By asking the question “How can I afford it?” your brain is put to work. He did not mean that you should buy everything you want. He was fanatical about exercising your mind, the most powerful computer in the world. He’d say, “My brain gets stronger every day because I exercise it. The stronger it gets, the more money I can make.” He believed that automatically saying “I can’t afford it” was a sign of mental laziness.”
Pg. 4
“Being a product of two strong dads allowed me the luxury of observing the effects different thoughts have on ones life. I noticed that people really do shape their lives through their thoughts. For example, my poor dad always said, “I’ll never be rich.” And that prophecy became reality. My rich dad, on the other hand, always referred to himself as rich. He would say things like, “I’m a rich man, and rich people don’t do this.” Even when he was flat broke after a major financial setback, he continued to refer to himself as a rich man. He would cover himself saying, “There is a difference between poor and being broke. Broke is temporary. Poor is eternal.”
Pg. 6
The power of our thoughts may never be measured or appreciated, but it became obvious to me as a young boy that it was important to be aware of my thoughts and how I expressed myself, I noticed that my poor dad was poor, not because of the amount of money he earned, which was significant, but because of his thoughts and actions. As a young boy having two fathers, I became acutely aware of being careful about which thoughts I chose to adopt as my own.”
Pg. 7
“Choosing not to listen to my highly educated dad’s advice and attitude about money was a painful decision, but it was a decision that shaped the rest of my life.”
Pg. 8
You’re only poor if you give up. The most important thing is that you did something. Most people only talk and dream of getting rich. You’ve done something. I’m very proud of the two of you. I will say it again: Keep going. Don’t quit.”
-Rich Dad Pg. 17
Your dad is different, Mike. He seems to be building an empire, and I suspect in a few years he will be a very rich man.”
Pg. 18
“Some just let life push them around. Others get angry and push back. But they push back against their boss, or their job, or their husband or wife. They do not know it’s life that’s pushing.”
Pg. 27
“If you’re the kind of person who has no guts and who gives up every time life pushes you, you’ll live all your life playing it safe, doing the right things, saving yourself for some event that never happens. Then you die a boring old man. You’ll have lots of friends who really like you because you were such a nice hardworking guy. But the truth is that you let life push you into submission. Deep down you were terrified of taking risks. You really wanted to win, but the fear of losing was greater than the excitement of winning.”
-Rich Dad Pg. 28
I have more than 150 employees, and not one of them has asked me what I know about money.”
-Rich Dad Pg. 29
“You’d best change your point of view. Stop blaming me and thinking I’m the problem. If you think I’m the problem, then you have to change me. If you realize that you’re the problem, then you can change yourself, learn something, and grow wiser.”
-Rich Dad Pg. 29
“It’s fear that keeps most people working at a job: the fear of not paying their bills, the fear of being fired, the fear of not having enough money, and the fear of starting over.”
-Rich Dad Pg.33
“Well, the first step is telling the truth[…]about how you’re feeling. You don’t have to say it to anyone else. Just admit it to yourself.”
-Rich Dad Pg. 42
Be truthful about your emotions and use your mind and emotions in your favor, not against yourself […] Be an observer, not a reactor, to your emotions. Most people do not know that it’s their emotions that are doing the thinking. You’re emotions are your emotions, but you have got to do your own thinking.”
-Rich Dad Pg. 45
The main cause of poverty or financial struggle is fear and ignorance, not the economy or the government or the rich.”
-Rich Dad Pg. 47
“Rich dad went on to explain that a human’s life is a struggle between ignorance and illumination. He explained that once a person stops searching for information and self-knowledge, ignorance sets in. That struggle is a moment-to-moment decision—to learn to open or close one’s mind.”
Pg. 49
“Never forget that fear and desire can lead you into life’s biggest trap if you’re not aware of them controlling your thinking. To spend your life living in fear, never exploring your dreams is cruel.”
-Rich Dad Pg. 50
“Confronting fear, weaknesses, and neediness by choosing our own thoughts is the way out.”
-Rich Dad Pg. 52
“I am concerned that too many people are too focused on money and not on their greatest wealth, their education […] Intelligence solves problems and produces money.”
Pg. 61
If you are going to build the Empire State Building, the first thing you need to do is dig a deep hole and pour a strong foundation. If you are going to build a home in the suburbs, all you need to do is pour a six-inch slab of concrete. Most people, in their drive to get rich, are trying to build an Empire State Building on a six-inch slab.”
Pg. 62
All too often, instead of trusting their inner wisdom, that genius inside, most people follow the crowd. They do things because everybody else does them. They conform, rather than question.”
Pg. 79
“It is said that the fear of public speaking is a fear greater than death for most people. According to psychiatrists, the fear of public speaking is caused by the fear of ostracism, the fear of standing out, the fear of criticism, the fear of ridicule, and the fear of being an outcast. The fear of being different prevents most people from seeking new ways to solve their problems. […] It is that same fear, the fear of ostracism, that causes people to conform to, and not to question, commonly accepted opinions or popular trends.”
Pg. 80
An intelligent person hires people who are more intelligent than he is.”
-Rich Dad Pg. 81
When we were told to follow set procedures and not deviate from the rules, we could see how school discouraged creativity. We started to understand why our rich dad told us that schools were designed to produce good employees, instead of employers.”
Pg. 82
“Understand the difference between an asset and a liability. When I want a bigger house, I first buy assets that will generate the cash flow to pay for the house.”
Pg. 87
Focus your efforts on acquiring assets instead of a bigger paycheck.”
Pg. 94
“”Ladies and gentlemen, I’m not in the hamburger business. My business is real estate.” […] Today, McDonald’s is the largest single owner of real estate in the world, owning even more than the Catholic Church.”
-Ray Crock Pg. 100
“It is secret number three of the rich. That secret is: Mind your own business. Financial struggle is often directly the result of people working all their lives for someone else.
Pg. 101
The risk is diminished if you love what the investment is, understand it, and know the game.”
Pg. 106
A true luxury is a reward for investing in and developing a real asset.”
Pg. 108
“No matter what the “take-from-the-rich” crowd came up with, the rich always found a way to outsmart them. That is how taxes were eventually levied on the middle class. The rich outsmarted the intellectuals solely because they understood the power of money, a subject not taught in schools.”
Pg. 114
If you’re ignorant, it’s easy to be bullied. If you know what you’re talking about, you have a fighting chance. That is why he paid so much for smart tax accountants and attorneys. It was less expensive to pay them than to pay the government. His best lesson to me was:Be smart and you won’t be pushed around as much.”
Pg. 118
“In less than three years, I was making more in my real estate holding corporation than I was making at Xerox. […] My money was working hard to make more money. Each dollar in my asset column was a great employee working hard to make more employees and buy the boss a new Porsche with before-tax dollars.”
Pg. 120
Often in the real world, it’s not the smart who get ahead, but the bold.”
Pg. 125
We all have tremendous potential and we all are blessed with gifts. Yet the one thing that holds all of us back is some degree of self-doubt. It is not so much the lack of technical information that holds us back, but more the lack of self-confidence. Some are more affected than others.”
Pg. 126
“As a teacher, I recognized that it was excessive fear and self-doubt that were the greatest detractors of personal genius. […] If fear is too strong, the genius is suppressed.”
Pg. 127
If you are the kind of person who is waiting for the right thing to happen, you might wait a long time. It’s like waiting for all the traffic lights to be green for five miles before you’ll start your trip.”
Pg. 134
The single most powerful asset we all have is our mind. If it is trained well, it can create enormous wealth seemingly instantaneously. An untrained mind can also create extreme poverty that can crush a family for generations.”
Pg. 135
Accounting. Investing. Understanding markets. Law.”
Pg. 143
My overall philosophy is to plant seeds inside my asset column. That is my formula.”
Pg. 149
It is not gambling if you know what you’re doing. It is gambling if you’re just throwing your money into a deal and praying. The idea in anything is to use your technical knowledge, wisdom, and love of the game to cut the odds down, to lower the risk. Of course, there is always risk.
It is intelligence that improves the odds. Thus, what is risky for one person is less risky to someone else. The smarter you are, the better chance you have of beating the odds.”
Pg. 150
Great opportunities are not seen with your eyes. They are seen with your mind.”
Pg. 152
Sometimes you win and sometimes you learn. Most people never win because they’re more afraid of losing. That is why I found school so silly. In school we learn that mistakes are bad, and we are punished for making them. Yet if you look at the way humans are designed to learn, we learn by making mistakes. […] Winners are not afraid of losing. But losers are. Failure is part of the process of success. People who avoid failure also avoid success.”
Pg. 152-153
It is what you know that is your greatest wealth. It is what you do not know that is your greatest risk.”
Pg. 156
“The obnoxious title, If You Want To Be Rich and Happy, Don’t Go to School, was chosen because we knew it would get tons of publicity. I am pro-education and believe in education reform. If I were not pro-education, why would I continue to press for changing our antiquated educational system? So I chose a title that would get me on more TV and radio shows, simply because I was willing to be controversial. Many people thought I was a fruitcake, but the book sold and sold.”
Pg. 161
Rich dad explained to me that the hardest part of running a company is managing people. […] Leadership is what you need to learn next,” he said. “If you’re not a good leader, you’ll get shot in the back, just like they do in business.”
Returning from Vietnam in 1973, I resigned my commission, even though I loved flying. I found a job with Xerox Corp. I joined it for one reason, and it was not for the benefits. I was a shy person, and the thought of selling was the most frightening subject in the world. Xerox had one of the best sales-training programs in America. Rich dad was proud of me. My educated dad was ashamed. Being an intellectual, he thought salespeople were below him. I worked with Xerox for four years until I overcame my fear of knocking on doors and being rejected. Once I could consistently be in the top five in sales, I again resigned and moved on, leaving behind another great career with an excellent company.”
Pg. 164
“My formal education was complete, and it was time to test my wings. If I failed, I would go broke. Rich dad thought it best to go broke before 30. “You still have time to recover” was his advice.
Pg. 165
“Once people are trapped in the lifelong process of bill-paying, they become like those little hamsters running around in those metal wheels. Their little furry legs are spinning furiously, the wheel is turning furiously, but come tomorrow morning, they’ll still be in the same cage. Great job.”
Pg. 166
The world is filled with talented poor people. All too often, they’re poor or struggle financially or earn less than they are capable of, not because of what they know, but because of what they do not know. They focus on perfecting their skills at building a better hamburger rather than the skills of selling and delivering the hamburger. Maybe McDonald’s does not make the best hamburger, but they are the best at selling and delivering a basic average burger.
Pg. 171
The skills of selling and marketing are difficult for most people, primarily due to their fear of refection. The better you are at communicating, negotiating, and handling your fear of rejection, the easier life is.”
Pg. 174
“If you hate risk and worry, start early.”
Pg. 178
“People are so afraid of losing that they lose”
Pg. 179
“After he had done all his due diligence and it was time to put up or shut up, he told us this story [The Alamo]. It gave him strength, for it reminded him that he could always turn a financial loss into a financial win. Rich dad knew that failure would only make him stronger and smarter. It’s not that he wanted to lose. He just knew who he was and how he would take a loss. He would take a loss and make it a win. That’s what made him a winner and others losers. It gave him the courage to cross the line when others backed out. “That’s why I like Texans so much,” he would say. “They took a great failure and turned it into inspiration . . . as well a tourist destination that makes them millions.[…]Texans don’t bury their failures. They get inspired by them. They take their failures and turn them into rallying cries. Failure inspires Texans to become winners.”
Pg. 181
“The main reason that over 90 percent of the American public struggles financially is because they play not to lose. They don’t play to win. […] If you have little money and you want to be rich, you must first be focused, not balanced. If you look at any successful person, at the start they were not balanced. Balanced people go nowhere. They stay in one spot. To make progress, you must first go unbalanced. Just look at how you make progress walking.”
Thomas Edison was not balanced. He was focused. Bill Gates was not balanced. He was focused. Donald Trump is focused. George Soros is focused. George Patton did not take his tanks wide. He focused them and blew through the weak spots in the German line. The French went wide with the Maginot Line, and you know what happened to them. If you have any desire to be rich, you must focus. Do not do what poor and middle-class people do: put their few eggs in many baskets. Put a lot of your eggs in a few baskets and FOCUS: Follow One Course Until Successful.”
Pg. 183-184
It often takes great courage to not let rumors and talk of doom and gloom affect your doubts and fears. But a savvy investor knows that the seemingly worst of times is actually the best of times to make money. When everyone else is too afraid to act. They pull the trigger and are rewarded.”
Pg. 186
Today, I often meet people who are too busy to take care of their wealth. And there are people too busy to take care of their health. The cause is the same. They’re busy, and they stay busy as a way of avoiding something they do not want to face. Nobody has to tell them. Deep down they know. In fact, if you remind them, they often respond with anger or irritation.”
Pg. 192
“When I decided to exit the Rat Race, it was simply a question of “How can I afford to never work again?” And my mind began to kick out answers and solutions. The hardest part was fighting my real parents’ dogma: “We can’t afford that.” “Stop thinking only about yourself.” “Why don’t you think about others?” and other similar sentiments designed to instill guilt to suppress my “greed.” […] Our world progresses because we all desire a better life. New inventions are made because we desire something better. We go to school and study because we want something better. […] Be a little greedy. It’s the best cure for laziness.”
Pg. 195
Time is your most precious asset. The second is learning. Having no money should not be an excuse to not learn. But that is a choice we all make daily: the choice of what we do with our time, our money, and what we put in our heads. That is the power of choice. All of us have choice. I just choose to be rich, and I make that choice every day.
Invest first in education. In reality, the only real asset you have is your mind, the most powerful tool we have dominion over. Each of us has the choice of what we put in our brain once we’re old enough. […] 90 Percent of the population buys TV sets, and only about 10 percent buy business books.
Pg. 206
“I still have the old way I used to think, and I now have a new way of looking at the same problem or situation. I have two ways to analyze a problem or trend, and that is priceless. Today, I often say, “How would Donald Trump do this, or Warren Buffett or George Soros?” The only way I can access their vast mental power is to be humble enough to read or listen to what they have to say. Arrogant or critical people are often people with low self-esteem who are afraid of taking risks. That’s because, if you learn something new, you are then required to make mistakes in order to fully understand what you have learned.”
Pg. 207
“A truly intelligent person welcomes new ideas, for new ideas can add to the synergy of other accumulated ideas.”
Pg. 207-208
“I have several friends who have generated over a billion dollars in their short lifetimes. The three of them report the same phenomenon: Their friends who have no money have never come to them to ask them how they did it. But they do come asking for one of two things, or both: a loan, or a job.
Don’t listen to poor or frightened people. I have such friends, and while I love them dearly, they are the Chicken Littles of life. To them, when it comes to money, especially investments, it’s always, “The sky is falling! The sky is falling!” They can always tell you why something won’t work. The problem is that people listen to them. But people who blindly accept doom-and-gloom information are also Chicken Littles. As that old saying goes, “Birds of a feather FUCK TOGETHER! (Flock Together)”
Pg. 209
I would say that one of the hardest things about wealth-building is to be true to yourself and to be willing to not go along with the crowd.
Pg. 210
People who hurry and catch a wave late usually are the ones who wipe out.”
Pg. 210
Most of us have heard the saying, “You are what you eat.” I have a different slant. I say, “You become what you study.” In other words, be careful what you learn, because your mind is so powerful that you become what you put in your head. For example, if you study cooking, you then tend to cook. If you don’t want to be a cook anymore, then you need to study something else.”
Pg. 211
I would venture to say that personal self-discipline is the number-one delineating factor between the rich, the poor, and the middle class.
Simply put, people who have low self-esteem and low tolerance for financial pressure can never be rich. As I have said, a lesson learned from my rich dad was that the world will push you around. The world pushes people around, not because other people are bullies, but because the individual lacks internal control and discipline.”
Pg. 213
“When I occasionally come up short, I still pay myself first. I let the creditors and even the government scream. I like it when they get tough. Why? Because those guys do me a favor. They inspire me to go out and create more money. So I pay myself first. Invest the money, and let the creditors yell. […] When you come up short, let the pressure build and don’t dip into your savings or investments. Use the pressure to inspire your financial genius to come up with new ways of making more money, and then pay your bills. You will have increased your ability to make more money as well as you financial intelligence.”
Pg. 218-219
“The real skill is to manage and reward the people who are smarter than you in some technical area.”
Pg. 222
“I had my money back in about three years. Now I own this asset, which pumps money out for me month in and month out.[…] I will move my money in for a week to a month while the stock moves up. Then I pull my initial dollar amount out, and stop worrying about the fluctuations of the market, because my initial money is back and ready to work on another asset. So my money goes in, and then it comes out, and I own an asset that was technically free.”
Pg. 224
As I said earlier, if a person cannot master the power of self-discipline, it is best not to try to get rich. I say this because, although the process of developing cash flow from an asset column is easy in theory, what’s hard is the mental fortitude to direct money to the correct use. Due to external temptations, it is much easier in today’s consumer world to simply blow money out the expense column. With weak mental fortitude, that money flows into the paths of least resistance. That is the cause of poverty and financial struggle.”
Pg. 227
“Too often today, we focus on borrowing money to get the things we want instead of focusing on creating money. One is easier in the short term, but harder in the long term. It’s a bad habit that we as individuals, and as a nation, have gotten into. Remember, the easy road often becomes hard, and the hard road often becomes easy.”
Pg. 228
“Today, I watch young kids playing basketball near my home. On the court they’re not little Johnny. They’re pretending to be their favorite basketball hero. Copying or emulating heroes is true power learning.”
Pg. 229
I have new heroes as I grow older. I have golf heroes and I copy their swings and do my best to read everything I can about them. I also have heroes such as Donald Trump, Warren Buffett, Peter Lynch, George Soros, and Jim Rogers. […] Just as it was not me when I was up to bat, when I’m in the market or I’m negotiating a deal, I am subconsciously acting with the bravado of trump. Or when analyzing a trend, I look at it as though Warren Buffet were doing it. By having heroes, we tap into a tremendous source of raw genius.
But heroes do more than simply inspire us. Heroes make things look easy. Making it look easy convinces us to want to be just like them.
“If they can do it, so can I.”
Pg. 229-230
It reminds me of the story of the guy sitting with firewood in his arms on a cold, freezing night. He is yelling at the pot-bellied stove, “When you give me some heat, then I’ll put some wood in you!” And when it comes to money, love, happiness, sales, and contacts, all one needs to remember is to give first. Often just the process of thinking of what I want, and how I could give that to someone else, breaks free a torrent of bounty. Whenever I feel that people aren’t smiling at me, I simply begin smiling and saying hello. Like magic, the next thing I know I’m surrounded by smiling people. It is true that your world is only a mirror of you.”
Pg. 231
There are many people who want to do instead of think, and then there are people who think but do not do. I would say that I am both. I love new ideas, and I love action.[…]
Stop doing what you’re doing. In other words, take a break and assess what is working and what is not working.”
Pg. 233
I buy how-to books on formulas I know nothing about. For example, in the bookstore I found the book, The 16 Percent Solution, By Joel Moskowitz. I bought the book and read it and the next Thursday, I did exactly as the book said. Most people do not take action, or they let someone talk them out of whatever new formula they are studying. My neighbor told me why 16 percent would not work. I did not listen to him because he’s never done it.
Find someone who has done what you want to do. Take them to lunch and ask them for tips and tricks of the trade. As for 16 percent tax-lien certificates, I went to the county tax office and found the government employee who worked in that office. I found out that she, too, invested in the tax liens. Immediately, I invited her to lunch. She was thrilled to tell me everything she knew and how to do it.
Pg. 234
“Make Offers […] But that’s how the game works. The game of buying and selling is fun. Keep that in mind. It’s fun and only a game. Make offers. Someone might say yes. Finding a good deal, the right investors, or whatever is just like dating. You must go to the Markey and talk to a lot of people, make a lot of offers, counteroffers, negotiate, reject, and accept.”
Pg. 236
“Profits are made in the buying, not in the selling.”
Pg. 238
Small thinkers don’t get the big breaks. If you want to get richer, think big. […] Small people remain small because they think small, act alone, or don’t act at all. […] Action Always Beats Inaction.
Pg. 239
Education and wisdom about money are important. Start early. Buy a book. Go to a seminar. Practice. Start small. […] But I started learning as a kid. I encourage you to learn, because it’s not that hard. In fact, it’s pretty easy once you get the hang of it. I think I have made my message clear. It’s what is in your head that determines what is in your hands.”
Pg. 244
“My rich dad used to say “A real investor makes money in an up market and a down market. That is why they make so much money.” One of the reasons they make more money is simply because they have more self-confidence. Rich dad would say, “They have more self-confidence because they are less afraid of losing.”
Pg. 248
“Risk comes from not knowing what you’re doing.”
-Warren Buffett Pg. 248
Invest in your mind and learn how to acquire assets, and you will be choosing wealth as your goal and your future. The choice is yours, and only yours. Every day with every dollar, you decide to be rich, poor, or middle class.”
Pg. 250
                                                                                                                                                                      February 14th, 2014