Robert T. Kiyosaki: Rich Dad, Poor Dad
EPISODE 152
Robert Kiyosaki’s Rich Dad, Poor Dad is one of the best-selling financial books in history. It tells the story of a boy with two fathers, one rich, one poor, to help you develop the mindset and financial knowledge you need to build a life of wealth and freedom. The two dads are a parable for two different approaches to wealth: Poor Dad recommends getting a secure job with good benefits and retiring with a pension. Rich Dad recommends amassing assets that make money for you, becoming financially literate, and practicing independent thinking.
In his book, learn how to achieve financial independence, why it’s a terrible idea to see your home as your biggest investment, and how to overcome the biggest mental blocks to becoming wealthy.
SHOW OUTLINE
INTRO
LondonReal interviewing Robert about the lesson in RDPD
The Lesson (3m07)
RESET YOUR EXPECTATIONS
SwedishInvestor and how to split your opinions of wealth
Assets and liabilities (1m41)
SwedishInvestor and how we should stop focusing on your income
Focus on your assets (58s)
TIPS ON MONEY MANAGEMENT
SwedishInvestor and how to diversify your portfolio
Learn how to manage your risk (1m25)
SwedishInvestor and how we all should learn how to manage money properly
Work to Learn (1m33)
OUTRO
LondonReal and Robert’s call to action
Break the habit to change (3m27)
CLIP CREDITS
https://www.youtube.com/watch?v=d5FVFsG8NmI
https://www.youtube.com/watch?v=zaKKQ10Di38&ab_channel=TheSwedishInvestor
TRANSCRIPT
Hello and welcome to the moonshots podcast. It's episode 152. I'm your co-host Mike Parsons. And as always, I'm joined by Mr. Money himself, Mr. Mark Pearson-Freeland. Good morning, mark. Hey, good morning, Mike. That's a good nickname, Mr. Mark money person, Freeland. I quite like that. I suppose you'd have to be the same though.
Bearing in mind that we share pretty similar initials. Good morning. I just to confuse the hell out of everyone. How many times mark have we had meetings with folks and they're like, okay, which one's mine, which one's mine and what's bizarre for our listeners is we even have the same middle name. Oh my gosh.
If you can believe it. Just to make life so confusing. I can tell you the topic of today's show is certainly anything but confusing, correct? Yeah, that's right. Hot off the track of last week's episode with Napoleon hill. We are midway through our series on money. Our [00:01:00] first series on money, Mike and today is episode 152, our second in the money series with none other than Robert Kiyosaki's rich dad, poor dad (buy on Amazon), which might, I think I've got to give a quick call out to is probably one of the best selling books and best rated books that I've found on Amazon in recent memory.
He's a total failure, Robert Kiyosaki because unlike Napoleon hill who has over 70 million copies Robert Kiyosaki's rich dad, poor dad, he's only got a cool, what is it? 30, 35 million. What is this guy? Let's see D 30, only 35 million sales of his book, rich dad, poor dad. What the rich teach their kids about money that the poor and middle class do not.
That's a pretty impressive title, nonetheless, with 35 million sales, I think it's really this is a total[00:02:00] financial collapse, anybody who wants to be, I think not only managing their money, I think finding a greater sense of prosperity and the mindset. It's not just the tactics, it's the mindset that goes with it.
And isn't it interesting mark that both Napoleon hill and Robert Kiyosaki, they both in order to get us in the right place with money, have to go right up into mindset, ethos almost. They're almost philosophical in how they think of. Yeah, I just want to remind yourself and our listeners, Mike, that one of the core themes, topics and lessons that Napoleon Hill was calling out to us in last week's show was the idea of conscious versus subconscious thinking.
And I think you're totally right. That's a really focused attitude that you've got to have. When you think about your mindset, your conscious reactions versus your subconscious reactions and your thought processes. [00:03:00] And isn't it interesting. Like you say, when you connect subconscious and conscious thinking mentality, you might be able to put that into action in your day to day working life, how you react to situations that may be test your patients, maybe stress you out a little bit, but isn't it funny that you can apply the same level of thinking both proactive actions as well as mentality into something that is as important as your finances in your money.
I didn't really expect us to go down this route when we began this cigarettes. Yeah. And what we've got ahead for you, our listeners is a really deep dive into his work at both a very practical financial management level, but also the mindset which I'm going to argue. We have an intersection between say the growth mindset that Carol Dweck really brought to life.
And that we've studied here on this show [00:04:00] and also. Robert Kiyosaki goes even further. And he says your level of prosperity is a direct result of your level of ownership of the situation. There are no excuses for anybody is where he's coming from. So he's a little bit Jaco Willink, and like it's all about you acknowledging, accepting, and taking full responsibility for your financial situation.
Very powerful stuff, mark. And it's all ahead of us in this show. This one is big and it's a great build on Napoleon hill. Isn't it great Napoleon hill. But again, like you say, it is sharp. If you're not going to take ownership of your finances, nobody else will. And the truth is, yeah, maybe it feels a little bit intimidating, but we all have the power to take a moment.
Take a look at our finances. Have confidence by understanding what's going on. And I think to be totally honest with you, Mike, it's something that [00:05:00] I've always taken for granted, and I've just allowed, I haven't really done too much. I've done a little bit of money management, but I just leave things in a saving account and all that sort of thing.
I'm not really maximizing it enough. So you'd be in trouble with him if he had money in the savings account. Exactly. So I'm really excited at the prospect of learning practical pieces of advice and tips on my money management in order to maximize the experience that I have with finance.
Fantastic. With no further ado, let's jump into the world of rich dad, poor dad by Robert Kiyosaki. And we're going to start things where he's having an interview and talking about the greatest lesson. Know I relisten to your book on the flight over from London and I hadn't listened to it maybe six years.
And the first time I read rich dad, poor dad, I thought it was a book about money, but when I listened to it a couple of days ago, [00:06:00] I saw it differently. I saw it as a book about fear, about self knowledge, about mindset, because you're just describing these people and they're there in this world that they don't want to acknowledge that they're in.
It's almost a prison in their own mind. Is that what you were trying to get across when you wrote that book? I don't know what I was trying to get across. I just, the real the fact of the matter was I created a board game called cashflow. And I couldn't sell the board game. So I had to write a brochure.
The brochure I wrote was rich dad, poor dad. So cashflow came out in 1996 and money. Rich dad, poor dad came on in 97. So the real fact of the matter is cashflow is about accounting. Rich dad, poor dad is a book on accounting income statement, balance sheet statement of cash flow. But if you've ever taken accounting courses, there is no more cores, more boring than accounting.
So to have rich dad, poor dad, be a [00:07:00] book on accounting and be the number one personal finance book of all times that says something and it at sold the cash flow game. And today there's thousands of cashflow clubs all over the world and the missions tip, and it was people teaching people. You can bypass that school system because the school system will never teach you about money.
The school system was designed to teach you to be an employee. Which is important or a doctor or a lawyer, a specialist, but never about money. So once I got old enough and I had already retired and I was rich and that was fairly well off and it was a social conscience. I said, I have to share what I know.
So that's why it took until 1996 for the cashflow board game to come out, because I could see those crash coming, which came on in 1998 and then rich dad, poor dad came in 97 and the story goes, every [00:08:00] publisher turned me down. They said, you don't know what you're talking about. Cause I said, savers were losers.
Your house is not an asset. And the rich don't work for money. And so the publishers all like my dad academics superstars a students in school. And so they turned the book down. And it took going by self published route. A lot of network marketing companies picked up the book like Amway and those guys, and they picked up the book to help recruit because it's about financial independence.
They're about the same thing I am. And then Oprah called in 2000. And then the next thing I'm on Oprah. And I went from obscurity to world famous and overnight success in 2000. And the book has been on the New York times bestsellers for seven years until the New York times took it off. They said I've been on too long.
The book that had been on the New York times bestseller [00:09:00] for too long, Mike again it's nuts how popular and significant this book, rich dad, poor dad has been over the years. Very minor. It was published back in 1997. There's still so many Africans. Lessons and recommendations that you and I and our listeners will dig into today.
But I think I just want to call out something that, that Robert Kiyosaki really specifies in that introduction clip for us. Mike, is this acknowledgement that you can take ownership. And if you don't it's possibly because you haven't been educated you don't really teach money management within schools.
So that's to be expected, I think, but what he's calling out is the books were really all about just helping you understand and achieve financial independence. And I think that's worth us calling out now [00:10:00] because I guess what you might be thinking is, okay this book is going to teach me how to get rich when actually really what it's calling out is no you're trying to achieve financial independence, which in its own way is becoming.
Yes. Yes. And I think that we had that same theme somewhat with Napoleon hill think and grow rich. I think it's the riches of life. It is prosperity of goodness, wellness, choice, optionality, as opposed to being trapped. Exactly. That's exactly it. I think that's really what it, what Robert Kiyosaki's calling out here is not necessarily saying, Hey, you're going to go out and own many big houses and drive Maseratis.
I think what he's saying is if you can understand and achieve that financial independence, you are rich because you can live the life that you want to live. And I think that in its own way is really what we're all looking [00:11:00] for. Isn't it really is. And the classic thing that. This book does, is it gives you a means for both pride and independence and options in life.
But I think it's another look in on the lesson of you must take ownership for your situation. He, what we will reveal over the course of this conversation and looking at the work and the ideas inside of rich dad, poor dad is you gotta take ownership and make better decisions. If you've got like $1, you can choose to invest that in something that's going to grow or not.
And that choice is yours. And that's what the whole book is about. Isn't it? Yeah. It's all about taking ownership and knowledging the situation, seeing it for what it truly is rather than allowing yourself to be [00:12:00] distracted or. Having your opinion taken over by things that are outside of your control, which again, Mike is very spot on with a lot of the key lessons that you and I and our listeners run into throughout the moonshot.
Totally and talking about our listeners. Boy, do we have a growing base of members who are just fantastic. They're sending us suggestions, asking us questions. Have we got something on this? And I think it is only fitting that we do as we have started to do over the last few shows. We do a bit of a rogue roll call for all of those people who have decided to become a member.
And these members, they get access to our moonshots master series. They get a chance to share ideas with each other. It's really easy to manage, just head of the moonshots.io and click on members. And that'll take you to Patrion and you can support us because boy, [00:13:00] we got lots of bills to pay on this podcast.
Don't we mark? We have various different hosting that we have for the website. We need to have a couple for podcasting. We're going to pay the bills, ladies and gentlemen, and it's all in service to use. So we would love it. If you can get out your browse ahead of it to moonshots.io and become a member and mark let's celebrate like shout outs.
Who's a member. And I saw we had some new members, so let's shout them out. Yeah. Drum roll, ladies and gentlemen, then we have a number of new. Members from the Patrion site, I'd like to call out everybody new as well as existing members from the moonshot show. We've got marsh and Yanni, Halena, mark and Byron, Tom DMR, Ken module in Sandy, Nial, Brighty, and Terry John kneels, and [00:14:00] Bob welcome, and thank you all for listening, joining us on our moonshot, lunar power dose of excitement and education that we go on every single week and month.
Thank you for being part of the moonshot team, ladies and gentlemen. Absolutely. If you're listening to the show right now, I'm thinking, huh? Do I become a member or not? There's lots of goodies over there and we'd appreciate the sport that the support, because Hey There's like over 41,000 listeners every month to our show.
So our conversion rate to members could be just a little bit better. So if you're feeling some good vibes, head of dementia study become a member. We'd certainly appreciate. We're very grateful for your support. And we really do hope that you can come to the moonshots podcast, learn out loud, be the best version of yourself.
And as far as today's show all lights, get [00:15:00] money working for us. Let's get in control. Let's have the right mindset for building our wealth and our prosperity so we can get the most out of life. And now we're going to stop breaking down some serious. Practical advice from the book, rich dad, poor dad by Robert Kiyosaki.
And we're going to start with one of our favorite YouTube channels, the Swedish investor. He's got a great breakdown coming up of the book by Robert Kiyosaki. And we're going to start with this idea of the choice between assets and liabilities and people buy assets, whore, people buy liabilities that they think are assets.
My house is my greatest investment. My house is a liability. If your house is your greatest investment, you have. If you want to be rich, this is the main thing that you need to know. It's that simple. I know that you shouting towards the screen right now in disbelief. Why aren't everyone rich then the equally simple answer is because people in general [00:16:00] don't know what an acid is.
Let's do a little test. It's you recently bought iPhone and asset it isn't it's your BMW in essence? Nope, definitely not. It's only a part of a company and that's it. Yep, absolutely. It's your house an asset? It isn't. Did he get four to four in that case? Great job. They probably already know what I'm about to say.
And asset is something that puts money in your pocket. A liability is something that takes money out of your pockets. Let's look at how a rich person acts when making money compared to a poor person. The rich gets their income and straightaway. They buy. They buy assets such as stocks, bonds, and real estate.
Now in the long run, these resources will create even more cash for them in the future. The middle-class earns their money from a good job, but the moment they get their salary, they spend it on liabilities, which they think are assets, possessions, such as TVs, cars, or vacation homes. You might look rich and your friends might admire report, but you will never actually be [00:17:00] rich practicing this, but isn't it risky to be in the stock market?
What if there's another financial collapse? People somehow justify buying an expensive car, which is a guaranteed money loss while they think that buying financial assets is stupid because you might lose money. I love how good is that? I think we were both about say it. Yeah. It's just so spot on, but it's a reality.
You just see it all around. You doing it. Yeah. Yeah. It's so tempting when you. I guess the reason why people gravitate towards personal possessions. So what I mean by that are all the liabilities car technologies like laptops, computers, phones houses is because there's something physical. I think people will gravitate because then they can hold it and they can see it.
And let's be honest, they can show off [00:18:00] about it. Yeah. There's a bit of status in there as well. And a bit of I think you probably find a lot of people justify Sort of it's a reward. And I love this this whole point around the car and what people do when they have a bit of cash is they go and buy a car.
And unless it's like a vintage Porsche, you're almost guaranteed to be making a bad investment because cars literally depreciate as soon as you drive them off the lot brand new. So you can go and pick up a car that say six months old and the haircut the owner has to take when selling that is enormous.
Any smart person if they want a new car would probably consider leasing it, not buying it and would buy a [00:19:00] car that six to 18 months old because it's so heavily discounted as soon as it's not technically. Brand new. And this is just a great example. How many times in life have either you mark or me or seeing family and friends?
When they get that? They get a little bit of cash and it goes on something like a car, like a fancy new thing. It's something you see all the time. Isn't it? It's funny how commonplace it is. Because I think as you say, it almost feels like a reward. Oh I've done the hard yards or I put up with whatever it was, so I'm going to reward my.
And for some reason, the reward always needs to be a physical item. Doesn't and I think if you were to interview or discuss a purchase [00:20:00] that is of a substantial amount let's continue with the car story for now. If you were to discuss with a colleague or a friend or family member, Hey, do you remember that car you bought 10 years ago?
When you got that money, was it really. Spending all that money. I bet a lot of people, even if they weren't set out loud would probably be thinking, I wish I'd taken an extra beat to think about that because I think you're right. The depreciation is so substantial. As soon as they drive it off the lawn.
And when they come to sell it, they're going to take another huge haircut and that's going to disappoint them. I think there's a lot of stress and expectation that goes into owning a physical product, like a car that actually, you only see the negatives of in the long run. And maybe in the short run, you just focused on.
Yeah. I want to drive really far. Yeah. And the thing is [00:21:00] let's say you do run into a little bit of money if if you just squirrel that away, put that in like a, an ETF, like even S and P 500 and just leave it, don't touch it. Don't even look at it in 10 years. That thing is going to be so much more than what you put in, like the return.
If you can wait it out, if you just let it sit and not trade it, like some crazy wall street bets kind of situation. It will accrue value and anything that grows in value, like a business or a stock or bond. This is what he's talking about. You have a choice, you can buy frivolous things or invest in things that will grow.
And the beauty is once you get this habit going and you just put yourself on this set or forget mode, you just continually get your dividends or your let's say you save a hundred bucks a month, [00:22:00] just put it away in a growth vehicle and don't go spending it and splurging and getting more clothes and more consumer electronics.
If you do this over time. And here's the important thing. If you start this early enough, you can accrue a lot of value. You can recruit a lot of wealth. So if you're only waking up to this and you're like halfway through life, no problem. Get busy. If you're a younger listener. Oh my gosh. $10 a week. Just keep doing it, putting it in assets and not liabilities.
It's such an important choice. It goes right to the heart of the mindset that Robert Kiyosaki is talking about. Don't fall victim for buying lots of nice things that are liabilities. Make sure you're investing in assets, things that grow in value that make that create value in the world [00:23:00] business, real assets that people can use that appreciate and value.
So there's a bigger picture here. It's almost like the growth mindset. Put your money into things that grow. Yeah. And it all starts by fully taking a look, taking a pause, taking a breath, and thinking about that purchase about that product, about that action that you're thinking about doing and questioning, okay, what is my intention?
Why am I making this purchase? Is it something that I think is going to make money or is it in fact something that's going to take money away and only by really fully understanding that expectation between assets and liabilities. Can we then go out and fully take ownership and control of our finances as well as our.
And it's really easy. Isn't it? This day, too, to invest, like when I started investing, it was really such a hassle, but now [00:24:00] with the likes of Robin hood, or even just regular financial providers are making it so much easy, you can just do it all on your phone. And the great thing is now there's lots of these things called ETFs, which are just indexes of the market or certain categories, verticals or segments.
So you can. You can get a very low cost fund index fund and just buy the S and P 500 just to let set it and forget it. And another good thing you can do with these new apps is that you can you can tell your investment provider that any dividend that you get from your fund to just reinvest it back into the fund.
So if your stocks have paid dividend to say, put it right back in and it just continues growing. So the base is growing, everything is growing and you can just put yourself on set and forget, and that's a really handy approach. But I think the big thing here mark is [00:25:00] you have a choice is any, and I think we forget when we spend money that every time we spend something that is a liability, that money is gone.
So it better has been worth it, which is a kind of a different way to look at it, a purchase. Isn't it? Yeah. Yeah. And I think we're going to come on to, to really dig into this idea of empowerment later on in today's show. But I think this is the crux of taking ownership of your finances, particularly in a world now where we have applications destinations online.
And arguably it's probably never been easier to take ownership of your finances than it is right here right now. Online banking cryptocurrency exchanges and all sorts of exciting platforms. The crux of it all comes down to education. The time you choose [00:26:00] how much time you want to put into it, how much time you want to spend learning about it and becoming a master of it.
We'll come on to talk about this a little bit more later, but I think it's just a really interesting as we consider assets versus liabilities, what's going to cost us. What's not, it all starts with creating that foundation of understanding the difference between the two of them and understanding what I'm capable of.
It's a choice, isn't it? And like once you're aware of that choice, like the world brings up lots of options and lots of questions. So we've got a little bit more thinking from Robert Kiyosaki on this. Don't we do this next clip that we've got a breaking down from Robert Kiyosaki's rich dad, poor dad by the Swedish investor is really all around how we should all you and I and our listeners.
We should stop focusing on our income and instead focus on those assets. So focused on your income, focus on your assets, study hard so you can get a good job at a [00:27:00] great. No, it's study hard so you can find great companies to buy it. Robert Kiyosaki's poor dad had a PhD. I was always in struggled with money, his switch that didn't even finish high school.
And yet he had an abundance. This PhD that started so many years just to get a few hundred extra in salary every month. On the other hand is rich that use those years to start acquiring assets, the rich focus on their asset column while everyone else focuses on their income statement. I find this to be an interesting subject.
If the average person would to get a pay cut by 2%. On the other hand, if you lose this 2% in the stock market, which is his assets, he shrugs it off. I'm leaving bad luck or bad asset managers yet, but some people it's a worst situation to lose 2% of their assets. That's it. It's 2% in salary levels.
So taken personal well acid levels are not, this is a common problem for poor people. Start to take responsibility of your investment decisions assets. Assets. I did you hear that line? Mark? Don't focus on getting [00:28:00] a degree so that you can go and get a job for your business, get a degree so you can buy a business.
Yeah. How great is that? I love that. And I think again, building on what we were discussing in that previous, in the first clip, the assets and liability, again, it's focusing on spending your time using it productively and proactively in order to determine how to build assets and by how to build assets.
Accumulate assets, how to accumulate those assets and take responsibility for where you're investing that time, as well as that money, rather than thinking, oh okay. Allow myself to go along with the sweep of normal day-to-day life. Instead, I want to take ownership of the flow of that cash and really think about where I'm going to go and put it and where I'm going to spend that money.
I think what [00:29:00] switched investors breaking down for us in that clip for you and I, and for our listeners is again, calling out this idea of just take responsibility, just own the choice. Yes own the choice and actually started to think more like an owner of a business, not a servant inside of a business.
Not that is wrong per se. And it's not that you wouldn't have a career working for someone else. I think his point is build assets. Don't just say, Hey, I'm getting a paycheck is in this good. He's saying where are you putting? Once you've paid some bills, like where are you putting the spare cash to work for you so that you can prosper so you can have choices and options in life?
I like it has a ring of ownership to it though. Doesn't it? When he's like focus on what businesses you can buy, what [00:30:00] businesses you can create, that all that's quite challenging. Isn't it? Don't you think? Yeah, for me it's where my mind goes is focus on. Understanding of those businesses, understanding what makes them successful, understand how those businesses can be assets for you.
So I think there's a part of it where Robert Kiyosaki's calling out. Yeah. You can go out and create a business from scratch. I think he's also calling out, look at other businesses, learn what makes them work and actually apply those techniques into your personal approach to business as well. So I think there's almost a two-sided coin in there, which is not only around those expectations that you're going to have with regards to money practices, how you utilize and see assets versus liabilities abilities, but also how [00:31:00] go out and really consider what you spend your time on.
Is it learning? Is it creating products, creating businesses or is it. Actually just putting in the hard yards, working for a big business, getting your paycheck and becoming personally offended. If you see a personal pay cut I like that story where if you've lost 2% of the assets, oh, it's just a rough day on the S and P instead, if it's a personal pay, cut, you take your personal.
Oh, is it about my performance? I quite like them freedom that would come from having less reliance on an individual more on a, on an exchange of some sort. Yeah, it's again, what we see here is the best way to approach money is really getting your mindset, right? Because then you get at these junctures where you have the choice between asset [00:32:00] liability.
You can focus on what makes a good asset. This is really the foundation, isn't it? A Robert Kiyosaki's work. It's the total foundation which again, it keeps on bringing you and I Melissa's back. Mike, it's all about mindset. Isn't it? It's all about just resetting those expectations about money. It's not this taboo.
We can all take a look at it and really break it down every single day. Now you're talking about mindset. I tell you, what will prime your mindset is the moonshot master series mark. Now this is a podcast that you and I make in addition to the moonshots podcast. It's where we go really super deep on a particular topic that we know is really big.
We've done first principles, motivation. What else? What else have we done so far on the master series? One of my particular favorites, Mike, and I know it was, it'll be a particular favorite with our moonshots members, which is all about habits, cultivating good habits that we can [00:33:00] replicate and take action in day to day.
That's a huge. Yeah, and these are 90 minute shows that we do, and we make them available to our members on Patrion and separately. We are very excited to announce that because so many of you listen on your iPhones via the apple podcast app, which has a sort of a mixed status amongst listeners.
Some people really get a bit frustrated with the app. Sometimes some people love it somewhere in between, but the reality is that a lot of us are all listening to podcasts using that apple podcast app. And we're really delighted to say that today you can go into your apple podcast app and you can actually subscribe directly to the moonshots master series as well.
So if you're not really up for Patrion while we're now making it available on the apple iOS podcast app. So just go over. Typing moonshots master [00:34:00] series, and you'll be able to subscribe to the master series. So if that's where you prefer to listen to your podcasts, you can get our master series, which just is next level.
In-depth, it's like a true master class on the topics that we know help you become the best version of yourself. So mark, we're going to be producing a new moonshot master series. What's the forthcoming episode going to be forthcoming episode is so relevant for all of us right now. It's your circle of influence.
So really delving into how you and I and our members are able to really focus on what we can control. Understand what we maybe can't control and then come to terms with the circle of influence that we have around us in order to be more productive, more efficient, as well as happier. So I'm really excited to get into this brand new episode that we'll be releasing next month [00:35:00] for our moonshot members.
Yeah. And it's funny, like your circle of control or circle of influence is exactly what Robert Kiyosaki is talking about in rich dad, poor dad, you have the choice. Do you spend your money on assets or liabilities that is totally within your control, and that can have huge influence on where you go in life and the prosperity that you enjoy, the wellbeing you enjoy, the options that you have.
And part of that journey is once you start getting your feet a little bit wet you've really gonna start diving into the world of money. Finance. And this whole idea of what is an asset is we're introduced to a very important topic, which is risk. You need to learn how to manage and accept risks, to understand risks.
Because I think if you go back to mark the introduction that we did, do you remember Robert Kiyosaki? And London real they were [00:36:00] chatting and they were talking about fear and the theory is big with money, isn't it? Yeah. Yeah. Fear is something that really, I think holds myself and probably a lot of our listeners back when it comes to taking risks.
So this next clip, we've got this next bit of advice that Swedish investors breaking down for us from Robert Kiyosaki's rich dad, poor dad is all about how we should learn to diversify our portfolios as well as manage. Don't diversify with too little money. When it comes to mind, just played safe. No, you don't have to manage your risks.
There's no reason to diversify your portfolio. If you only have a small fortune, if you want to become rich, you must first be focused. Look at the top five richest people in the world. These are rankings from 2018. Jeff basals network, 112 billion owner of Amazon. Bill gates network 90 billion. Oh no.
Microsoft Warren Buffett's network 84 billion. Oh no Berkshire Hathaway. But in order to know, [00:37:00] network 72 billion vulnerable LVMH Mach soccer book, network 71 billion. If I'm passionate, that's worth 17 billion owner of H and F these people became rich not by being diversified, but by being focused, don't do what the poor and middle class do, which is to put their few eggs into many baskets instead focused and put them in a few ones.
If you're saving so small compared to your annual salary, I think this is especially true aim to get a yield that will have an impact on your life and go for diversification as soon as you've acquired. We talked to earn back to a daily jobs in finance theory, it is argued that diversification reduces risk, but I would argue that risk is a result of uncertainty, which in turn is a consequence of lack of knowledge, stay focused, and you'll have time to gather more information about each of your investments and in turn, reduce your risk while keeping a heightened.
Yeah, managing risk or like understanding this [00:38:00] topic and how it influences you. The classic thing is everybody buys at the top and sells at the bottom. This is people who don't understand risk at all. But if you think about it, if you're buying at the top of a market, the asset is very expensive.
And if you're freaking out, because there's a dip you're selling when it's undervalued and there are all these great sayings of great investors like Warren Buffett, he talks about when when the stock market is being greeted. He should be fearful. And when the stock market is fearful, he's greedy.
That's nice. So let's unpack that for a second. What he's basically saying is when everyone's freaking out and saying, it's the end of the world, he knows that every seven to 10 years, the stock market for hundreds of years has increased in value. It just jumps around in between that seven year period.[00:39:00]
It's what they often refer to as the cycle. So he's just oh, look, when things are done. I'll just buy up all the things that are bargain prices, which I think are fundamentally good companies that are just undervalued. Whereas if you think your early stage investors or your early investors, people who are not used to it, get all excited about some growth stock.
So it's going straight through the roof and they get this jump on and then it crashes. And then they're like quick sell. This is you know what Robert Kiyosaki is saying, don't do that understand risk. And one of the key tenants to doing so is diversification. How do you think isn't it funny?
Just to coerce those out? My like nobody taught me about managing and understanding risk when I was a kid. No one was teaching that stuff where they, nobody taught me about. Really fully [00:40:00] understanding the way you approach your money. Yes, I'm sure I was taught around saving money piggy banks, putting it aside for a rainy day.
These are all the classic kind of sayings that I think all of our parents and teachers probably drilled into us, but I don't think anybody really sat down and focused me on, okay this is what it could take in order to really cultivate a rich portfolio of assets that can then become a way of supplementing your income, or in fact, maybe even replacing it as maybe this is a full-time job and nobody really.
Helped me fully understand that. And actually what ends up happening is you get a little bit older, maybe you see references in pop culture. Maybe you read books about it. Maybe you listened to a pretty popular podcast, [00:41:00] which is doing a series on money and that peaks your interest. So what ends up happening is you go away and you do your own research, but at no point, have you ever really had a sit down with a family member or a friend or a teacher, and actually being exposed to all these different lessons and techniques on whether it's managing risk or even understanding the difference between assets and liabilities, it doesn't really happen.
Does it? No. And I think we could do like a whole podcast series on risk. I think the critical, some critical things that, that I've bumped into along the way is if you're going to spend money On the stock market, it's money or crypto, it should be money that you don't need in the next year.
So if you understand, like you could have some unexpected costs, no matter how good your budgeting is, there's always things that come up, right? Yep. Yep. So you [00:42:00] should always have your buffer a great thing about managing risk is any good financial advisor will tell you have six months salary put aside in case of a rainy day, very good way to manage risk.
Let's say you got some money leftover. If you're going to put that in the stock market, you should be prepared for it to sit there for seven years. So if you think you're going to need that money over the next seven years, don't put it in there because you'll be forced to sell at a time. That is. Good.
In fact, the greatest investors, Warren Buffett, again, says he's worst decision is ever is to sell a stock. So he basically understands that the stock market over time will always go up. So he just wants to buy. So he says the act of selling is actually the worst decision you have to make. It's not all of us have that privilege of opportunity.
However, what I'm saying here, The way you can manage risk is so you don't freak out when things go up and down or sideways, is that the [00:43:00] money there, you don't need to call upon it. So you're not forced to sell. And one of the other good things you can do is don't check your stock or crypto app every day.
This is another really good way to manage risk. Just let it take away in the background. So you don't riding all the highs and lows with it. Just look at it, maybe on a monthly basis if you can have that level of self-discipline, I'm going to admit mark. I have to work hard at not checking my accounts.
I'm going to be very honest here, but the point is that if you can create that detachment, you won't be as emotional. You won't be as vulnerable to the ups and downs and it will help you manage the risks because what's in there. You can afford for it to go up and down, whatever. Cause you're not going to need it in the next coming days.
For me, that's like really practical ways to manage risk. Have you encountered. Practical kind of ways to manage risk. When you think about finance and investing and stuff like [00:44:00] that. I think a few years ago when it probably wasn't at the beginning of the crypto. Time, but it was suddenly becoming a little bit more popular.
And I remember getting involved back then and it was very it was a little bit of a mixed process for me actually, because it was probably the first time I had to go into such a volatile and slightly exciting space. And there was a time where I check it. Not only daily, I'd probably check it every hour to see how it was reacting and responding.
But what ended up happening was I just sat on it. I put it away, forgot about it to a certain extent until a number of years later. And that process was actually really handy. Just thinking about making the investment again, similar to what you were just saying about the seven years, making some form of investment, whether it's in stocks, whether it's in crypto, whether it's, whatever it might be.[00:45:00]
Putting it aside and just knowing you're not going to flip it in the next few days or the next couple of weeks, just be comfortable with sitting on it for a little bit. What's possible is it'll go. If you're lucky, it'll go up in time and with stock the majority of the time as it does. And I think that's the way I manage risk, not only from a kind of patients.
So a long-term versus short-term consideration, as I'm looking at getting into a potential, a particular opportunity. It's also about sitting back and just doing some hard work, just trying to learn about. Yeah, I know. And I think there's another great saying about how you think about assets.
It's not trying to time the market. It's about your time in Lamar. That's nice. Yeah. So let me let me break this down for you is you are a [00:46:00] crazy man. If you think you can buy a stock, it's going to go up and you sell a stock in that you can, what we call beat the market, right? You can understand the ups and downs of the market.
Any great investor will tell you that is a total falsehood. That's why so many day traders, when you actually look at it, don't make any money because they are no smarter than the market. The way to think about managing risk is not trying to what they call time. The market get in when it's low and up and high is just say, I know that long-term assets appreciate in value, and if I'm diversified enough, I can enjoy the benefits of that.
So it's not about timing the market. It's about your. In the market. Isn't that powerful because that just frees you from trying to like, oh my God, am I picking the hottest stock? Just is it a good company, buy, set and forget. And don't try and time the market. I think it doesn't it, [00:47:00] it changes everything because it reframes the situation into, is it good for the market or, Hey, does this stock work for me?
Is this what I'm looking for? And again, that's the real call-out that Kiyosaki's put into rich dad, poor dad. Isn't it. It's all about your situation. Take ownership of your management of money of your financial flow of your cash flow of the way that you're doing things. And it can begin today and you don't need to wait for the bubble to burst.
You don't need to wait for a brand new opportunities. Come into the market. You can get into. As you've already caught out, Mike there's hundreds of different reputable and authentic apps and platforms out there. Get into it, take an interest. I think that's one of the key call-outs that I had to go and personally experienced.
I had to become interested in the space in order to read the news, read reports, get into [00:48:00] the industry and get into it every day, take an interest into it. And then you can start to unlock that kind of personal feedback from actually taking part in. And it can be. Oh, it certainly can.
And Robert Kiyosaki would be so proud of you because learning is a big part of his recommendation to getting empowered and in control of your money. In fact, let's crank the clip from the Swedish investor where he breaks down this idea of work, educate in personal finance. The love of money is the root of all evil.
The lack of money is the root of all evil money is a form of power. Even more powerful though, is financial education money without financial intelligence is money soon. God, this is the reason why famous people such as 50 cent and Mike Tyson had been filing for bankruptcy, even though they earn big time.
One of the reasons why the rich get even richer, the poor get forward at a middle-class struggles in [00:49:00] depth because the subject of money is taught at home. Not in schools. Many of us learn personal finance from my parents. This means that if your parents aren't rich already, you need to start getting advice from somewhere else.
There are four clocks of financial literacy that you should focus on. According to Robert Kiyosaki, number one is accounting. Accounting is the ability to read numbers from an annual report or from your personal bank account. Number two is investing. This is the science of money. Making money.
Number three is understanding the markets athletes. You should understand the basic rules of supply and demand. And before it's the law understanding the tax advantages and personal protection provided by corporations. Don't be afraid to spend your money on education that will improve your knowledge and develop skills necessary to beat your weaknesses.
The auto spent many thousands of dollars throughout his life on seminars, books, and so on. And guess what, there are tests from these investments are unmatchable, arrogant. People often find this hard to do. They already know everything and rather talk about what [00:50:00] they know and try to learn something new listening is more important than talking.
If that weren't true, God would not have given us two years and only one month. Wow. There you go. A little deep dive very quickly through a number of key points there, Mike, about it. And we could almost have a show in each of those fall. We certainly could. We certainly could. I think from an overview perspective, before we dig into those four little items, I think the cool, the key call out there is managing money without financial education might lead to loss.
So yes, it's great. And it's important to manage money and be in control of it yourself, but make sure you take the time to learn about it, to physically understand the impact that you might experience when you're going out to invest or utilize that money because you don't want to end up [00:51:00] leading to a loss or as 50 cents.
And Mike Tyson get name-checked in that clip have to file for bank. Yeah, look the interesting thing for me, if like account, like if I was to like, look into some key subjects around these four this is how I'd break it down. Accounting for me is just understanding whether it's personal or professionally, like what profit and loss looks like for the books.
The next one is like in terms of investing, if you have a bit of money leftover at the end of every month where you're putting it and how you're going to make it work for you, understanding for me, that's where we start to get into some higher order of things. They mentioned like law and legal setups.
Big thing there is, if you invest in your pension fund, many pension funds or 401ks in the us have massive tax benefits, same thing here in Australia. If you put it, we have a pension system in Australia called superannuation. [00:52:00] If you put your money there, like a 401k in the U S you are actually your tax treatment is as a light duty.
So for me, it's about understanding all of those vehicles, understanding the benefits of them. So there's a lot of things inside of this. I think what we can do in the show right now has made you aware that you have these four key things. These are four chapters. If you will, along your own personal journey to really getting empowered around money and financial literacy.
I am still always learning about this. This whole choice of liability and asset, is it constantly something that I wrestle with? It's something that is critical in setting yourself up for success. And I love the way they paid off the idea that the reason that we should listen and learn so much is we were given two years and only one [00:53:00] mouth.
I've never heard this saying before. I think it's hilarious, man. We've heard that before and now I haven't, I think that's a great a great little visual devices. Oh wait. That's the reason you have two ears and one mouth is you should do twice as much listening than talking. I love that is so good.
That is so good. I think it's time to return to. The author himself, Mr. Robert Kiyosaki, don't you? Yes, that's right. So one final clip, Mike, for you and I, and for our listeners today, as we've dug into rich dad, poor dad by Robert Kiyosaki, it's only appropriate that we hear from the author himself, bring us home and really culminate a call to action for you as well as our listeners today.
So let's hear one more time from Robert Kiyosaki, breaking down the habit that we need to go and check. People that say why don't you give the poor money? So the only problem with that, it just creates more poor people. She fishes for the day or eats for the day. Yeah. You give a man a fish, you got a lot [00:54:00] of people want more fish but you teach them to fish.
But the Robin hood of knowledge, because I see you giving this knowledge out and do the rich people cringe and say, don't tell them yes. Don't tell people what they, what people poor. Unfortunately the poor as was in the Bible, I'm not real religious. The poor will always be amongst us because it starts up here.
It's that fear mentality. It's in their words and the words become flesh. God, I'm not really religious. I flunked out of Sunday school also. But when they say I can't afford it, or I can't do that, they go down, they become what they say. And I made so many people. I don't, I can't afford it.
You think I made them money and say that your mom used to say that my dad, my PhD dad, he says, what do you think I have made. I can't afford that. And my rich dad would say, that's why his poor people say I can't afford it. I can't do that. I don't have time [00:55:00] because this is an escape. It's an escape.
You know what I mean? It's easy to say, I can't afford it. Oh, I'm too tired. Or I can't go to the gym when you could go to the gym, but then I can show it to us. I'm just too late to the code, that gym and you play it safe and you don't introduce new risks into your life. And so I have job security, right?
And your rich dad used to say what? Instead of I can't afford it, how can I afford it? How can I do that? What would it take? Or why should I do that? He says a question opens a mind. A statement closes the mind. When you say I can't afford it. Mine shuts down and you become what you say.
No. Like I struggle with weight all the time. You would tell them that you were on a vegan diet and all that. And I go on a vegan. Three times a year. It's one of the most miserable thing on the whole world, but I have the discipline to do it for 21 days. And then I'm back to pick it out again [00:56:00] but the thing is that we become creatures of our own habits.
And until we break the habit, we don't change. So I have my retreats twice a year, three days, people come from all over the world and we studied together. And this time we went back to spirituality, Saudi, most people would, they can't believe what they're hearing from Robert Kiyosaki, the rich dad, poor dad is it should've been, it was originally about spirituality because they think it's all about the money.
It's not. Yeah. People say money is not that important to me then if money is not that important to you, money is not important to you. I don't care about money. The money doesn't care about you and I, the word does become flesh. I'll never be rich. Or the favorite one is the richer.
It's the poor that are greedy. If you think about it, because to be rich, you have to give something you have to, I have to produce books and games. And I [00:57:00] purchased real estate. I provide housing, provide jobs and all that. That's why I'm rich, but Grady people produced nothing. Oh no, it was the Richard, our Grady.
And I'm going, Hey, sports fans they point a finger forward three upright and backwards. Wow. That is big. For me, mark, what he sets up there and brings home is it is like the absolute essence of his book. It's the essence of his work. And I actually think that this is why it's so perfectly Moonshots, because what he is framing for us here is that it is more than these tactics.
It is this don't take the poor dad mindset, take the rich dad mindset. [00:58:00] And he mentioned a couple of things that play it safe. That's the poor dad approach learn to manage risks. That's the rich dad. I'm not interested in money. Money is power. That's the dichotomy here again. I can't afford it.
Poor dad thinking rich dad thinking, how can I afford it? Poor dad creates an impressive resume. Rich dad builds a solid financial plan. Mark. This to me, it is so much more than money. Isn't it? Yeah, I think the key thing that I want to call out from that final clip that we heard from Robert Kiyosaki is his reference to exercise.
And I think that sums it up perfectly for me, much like exercise much like good habits. It takes discipline and how you react to things like you say, instead of blaming others, take responsibility, instead of creating an impressive resume, build a solid financial [00:59:00] plan, it takes discipline.
It takes time to research to learn as well as to put into practice. And I think as we've seen from Napoleon hill, as well as today with Robert Kiyosaki, it's all down to taking ownership and actually just having that discipline of creating a good model around yourself in order to manage your finances a little bit better.
Yeah. And what's interesting for me is that things like this, learning and ownership are big themes for the moonshots podcasts and they come exploding out of this book. Rich dad, poor dad, ownership, learning, being resilient creating options wealth and prosperity. It's all about thriving being at your best and in this is just such a great piece of work and what a great way into the world of money, which is usually either boring or a little bit [01:00:00] off topic.
It's so good to get into it and discover that it is a classics moonshot. Isn't it? It's a perfect moonshots book. And exactly like you say, it demonstrates and brings to life. So many of the attributes, the topics, the themes that you and I and our listeners uncover each week, Mike, it all just stems from trying to be that best version of yourself.
And sometimes it comes from mindset as well as just good old fashioned day-to-day habits that we can put into. Yeah really perfect. Now we covered a lot of things both high level and very practical tactics that we can use around money, which one is sticking in your mind? Which one are you going to return to?
You know what it's a tough one actually, but I think it's the honesty that you've got to have with your expectations and how you view assets and liabilities assets, being things that make you money, liabilities being [01:01:00] things that take money away. That's a big lesson. Yeah. You're absolutely right.
It's like this big, fundamental truth that we can always come back to. It's really empowering. I love that one. I love the word to learn and going back into that big four, I feel like there's a ton of work for me to do there, but for now, I just want to say thank you to you for joining me on this adventure and joining you all of our listeners.
We are so grateful for your, for lending us your two years as we have gone on a while. Journey into the world of money here on show 152, where we studied the work of Robert Kiyosaki, rich dad, poor dad. And there were some big things for us to entertain. Number one, the big lesson is don't be tracked.
Money is a mindset game, and then we have four big tactics. We have the choice. It's either an asset or a liability we can choose where [01:02:00] we put our money. Number two, focus on your income, baby. Focus on your assets. Number three, learn to manage your risk. You've got to give it a go. So don't freak out, manage the risk, make wise decisions and keep on learning.
This is tactic number four. There's so many. Different areas of wealth, accounting, tax, investing, understanding all of those different mechanics. That's a big part of it. And most importantly, we wrapped it all up on breaking the habit to change. Don't fall for the poet dead mindset. Choose for the rich dad mentality.
You will grow. You will be the best version of yourself. And if you do it with friends and family, or as here at the moonshots podcast, you can learn out loud. What an adventure into the world of money, we've got more to come, but for now that Surratt.