Our guest followed his passions to create an international runaway bestseller. Robert Kiyosaki is the author of Rich Dad, Poor Dad, which was USA Today's number-one money book for 2004, and which has spent over five years on The New York Times Bestseller List. Robert's an investor, an entrepreneur, and an educator whose perspectives on money and investing fly in the face of conventional wisdom.
He has, virtually single-handedly, challenged and changed the way tens of millions around the world think about money. When I talked with him earlier today in preparation for this interview, he promised he was going to be controversial, so hang on to your seats.
Robert was born and raised in Hawaii. He's a fourth-generation Japanese-American. He graduated from college in New York and then joined the Marine Corps, serving in Viet Nam as an officer and helicopter gunship pilot. After the war, Robert went to work in sales for the Xerox Corporation, and in 1977 he started a company that brought the first nylon-and-Velcro surfer wallets to market.
He founded an international education company in 1985 that taught business investing to tens of thousands of students around the world. In 1994, he sold his business and, through his investments, was able to retire at the age of 47. During his short-lived retirement, he wrote Rich Dad, Poor Dad.
That book has now been translated into 45 languages, is available in 90 countries, and the Rich Dad series has sold over 25 million copies worldwide. Robert writes a biweekly column, "Why the Rich Are Getting Richer" for Yahoo Finance, and a monthly column titled "Rich Returns" for Entrepreneur magazine.
Chris Attwood:Rich Dad, Poor Dad has been on the bestseller list for over five years. The other day, I listened to you in San Francisco where you spoke to over 60,000 people. What role have your passions, the things that are most important in your life, played in the success that you enjoy today?
Robert Kiyosaki: I think you used the word 'passions,' and there's more than one answer to that. One thing is, I think, in many ways I'm trying to save my own family from financial demise. When I was seven years old, I remember walking around my house in Hawaii and seeing my mother crying.
She was crying because we didn't have enough money to pay the bills. I asked her, "What's wrong?" She said, "We just don't have any money." I got really angry at my dad. I said, "How can you let my mom cry like this?" Well, he was at school; he was going for his Master's Degree.
I still remember thinking, "Well, if you're so smart, why are we broke?" Ever since then, I've given a lot of thought to the subject of passion. Passion, to me, isn't love. Passion is anger and love. It is a combination of the two, where one is fire and one is softer.
I get so angry when I see people struggling financially, and I get angry when I see the school system wasting time making us study things we will never use. Then there is the love of my family, and also the love of having fun making a lot of money. Passion, to me, is anger plus love.
Chris Attwood: I appreciate the way you described it because when we talk about passions, I think we really are talking about that fire that burns inside, and sometimes it is the reactions of things we don't like outside. Other times, it's the fire to achieve or create what we want, right?
Robert Kiyosaki: Right.
Chris Attwood: Will you tell us the story of how you got involved in doing your present work? How did your career get started, and how did it lead you to where you are today?
Robert Kiyosaki: As I said, when I was seven, I saw my mother crying, and I thought that was ridiculous. When I came back from Viet Nam in '73 and '74, my dad was unemployed. He was unemployed although he was a PhD, really smart, and a great guy.
He was a tremendous man, but he was unemployed because he ran for lieutenant governor against his boss, the governor! The governor said, "You'll never work in the State of Hawaii again." All my father knew how to be was a public servant, a government employee.
So when I came back from Viet Nam-and I got very fed up with the United States out there-I said to my dad, "What are you doing?" He said, "I'm going to back to school. You should go back to school, too." I said, "For what?" He said, "Get your Master's, get your PhD, and then get a job with the government."
I said, "Yeah, I'd rather go back to Viet Nam." So there were all those really stupid things. My dad eventually died broke, and if not for a government pension, he would have been on the streets. That's when I began to get disgustingly sick every time I heard people say, "Go to school so you can get a good job, and the government's going to take care of you."
What a wimpy idea that is. That's what burns in my soul. I keep asking the school system, "Why don't we teach kids about money? Why do we study subjects that we'll never use?" They have not come up with an answer yet.
Chris Attwood: You also had a rich dad, as I recall.
Robert Kiyosaki: Yes. Rich Dad, Poor Dad is a true story of my two dads. Starting at the age of nine, after I saw my mother crying at seven, I really began to search for what I now know is a mentor. I was an apprentice to a mentor. There is a difference between a teacher (my dad was a teacher) and a mentor.
My rich dad was my mentor and my best friend's father. A teacher is somebody who teaches you a subject, and a mentor is somebody you want to grow up to be, somebody you respect. I really wanted to grow up to become a rich man. I didn't want to grow up to be a teacher, of all things. So that's the difference. I just started to listen to my rich dad more than my poor dad.
Chris Attwood: It's interesting that much of your fame and success has been built around writing. The other day, I heard you say that you hate to write, which sounds very much like it's the opposite of passion, and yet your success is built on your books.
You write several syndicated articles. You said that you spend much of your time writing. How do you reconcile your need to write with pursuing your passions?
Robert Kiyosaki: I think God is punishing me for being a bad student. That's why I spend so much time writing. I think people have heard that I flunked out of high school when I was 15 and 17 because I couldn't write. I was really a punky kid. Today, I have one of the top-three selling books in the world.
I still hate writing, but it's not because I like to write. It's because I love making money. Making money is so much fun, but I still hate it that we have such great poverty in the world. I don't mean poverty from a poor level; I mean poverty from a mental level.
How many people out there are working at a job they hate simply because they need the money? What I'm really concerned about today is that we have such financial ignorance. The President of the United States and Greenspan stand up and say there is no inflation.
You look at the cost of housing, and you look at the price of oil and of gold, and these guys have the audacity to say that there is no inflation. People sit there and think, "Oh, I believe you. I believe you." What morons can we be? So I sit there and write just because I can't stand it that people are so gullible and believe our politicians and public servants like that.
Chris Attwood: What I hear is that your writing is driven by the anger that you experience at seeing what is being put over on people.
Robert Kiyosaki: Absolutely. Again, how can people be so dumb and gullible? I don't understand. Why do people work for a living at a job that they hate or don't like, where all they dream about is retirement? There is something really sick about that. That is not passion. That is slavery.
Chris Attwood: So what is the alternative?
Robert Kiyosaki: I'd say you find out what you're supposed to be doing and get educated. I remember my dad would always ask for a pay raise. I said, "Why don't you just read a book on money instead?" He said, "Well, I'm not interested in money." I said, "Then why do you want a pay raise?"
I finally found the answer, and the answer is he didn't know. What I found out in the psychology of human beings is that when they don't understand something, they must put it down, they must denigrate it. That's why so many poor people will say they're not interested in money, where artists, intelligentsia, or academians say, "I'm interested in money."
They have to put it down because they know they don't know, so they have to make it below them. That's beyond ignorance. That's arrogance. Arrogance is anger plus ignorance. That's where arrogance comes from-anger at their own ignorance. I sit there and watch it.
Meanwhile, I make as much money as I like. I have as much money to spend as I like. I'm having a great time. The only reason I write is because I look around at all these people clinging to job security; hoping for a pension from the government, social security and Medicare; hoping in their 401K or their bloody mutual funds; trying to save money and get out of debt.
I'm thinking, "What's wrong with you guys?" I sit there and think, "There's something wrong." That was in 1994, when I sold my company for enough to retire on. I just wrote the story of how I could retire without a job, without a 401K, without a pension, without mutual funds, and without stocks.
How did I retire? I was sittng alone one night writing in my little cabin, "I had a rich dad and I had a poor dad," and that's where the book came from. It was a true story. So I sit there with anger, and that's why I write. I basically write about life's experiences, and since I didn't do that well in school, I'm able to put my ideas over simply enough that the average person can understand high finance.
Chris Attwood: Absolutely. What I hear listening to you is that for those of our readers who are not satisfied with their financial situation-and who may even find themselves putting down money or putting down people who have money-the issue is education. Is that right?
Robert Kiyosaki: The issue is that you first have to acknowledge that you don't know something.
Chris Attwood: What do you mean by that?
Robert Kiyosaki: There is nothing worse than thinking you know something that is not true, that you think is true. That's like thinking the world's flat. Your whole basis of life is operating on the flat-world theory. You think it's flat, and then you're afraid to go off the edge of the cliff or the earth, and all that stuff.
The biggest thing for most people is to say, "Well, I wasn't taught much about money, and what is it that the rich know?" At that point, you need to question everything you've been taught. For example, how many of your readers out there have been taught that it's smart to save money?
Do you know how stupid that is? Do you have any idea? We're not saving money anymore. After 1971, the U.S. dollar turned into a currency. It's not money.
Chris Attwood: Talk about that. I'm sure most of our readers don't have a clue what you're talking about right now.
Robert Kiyosaki: Money is something of real value. A currency is an I.O.U. from the Federal Government, like the Australian dollar, the Swiss franc, the euro. They're all I.O.U.s. A currency is designed to lose value over time. That's why people say there is inflation. There's not really inflation.
There is really devaluation of the currency, and the reason governments do that is simply so they can borrow a million dollars today and in 10 years, pay it back with $800,000 because the dollar's been devalued that much. Look at the last 10 years, from 1996 to 2006.
The U.S. dollar has dropped over 50% in value as compared to gold. In 1996, gold was approximately $250 an ounce. Today, it's pushing $600 an ounce. That means your dollar has dropped over 50% in purchasing power as compared to gold.
The pundits, politicians and school teachers will say there's inflation. That's not inflation. It's your dollar dropping like a rock. That's why the people who are saving money are the biggest losers of all. The second group of losers are people who are saving with a 401K or mutual funds.
Look at the really professional investors, like Warren Buffett. While most of the advisors say, "Diversify, diversify, diversify," Buffett says, "Diversification is a protection against your own ignorance." So I don't diversify, Buffett doesn't diversify, but your financial advisors will tell you to diversify.
You should question it at that point. Say, "How come the greatest investor, the richest investor in the world, says 'Don't diversify,' and my financial planner is telling me to diversify?" Until you step back and question what you've been taught and what you think is true that might not be true, you're basically a robot running upon your ideas.
Chris Attwood: What I hear is that one of the key things for our readers is to be questioning the things that they've been taught all their lives about money.
Robert Kiyosaki: They should question what they've been taught is true that might not be true. That's what I said. The earth was flat until Christopher Columbus said, "Well, maybe that's not true." Most people do something called 'group think.' You do it because everybody else is doing it.
So you line up for your 401K mutual funds and social security check, or you go to school to get a job and never question that maybe you shouldn't get a job. The reason Rich Dad, Poor Dad is such a powerful story-it's a true story, as I said-is because of the messages I heard from my two dads.
One said to go to school and get a job, and the other one said, "Don't be an idiot. You'll never get rich with a job." Until I had two different points of view, I couldn't find out who I was. At that point, I had the power to make a choice and decide for myself which thoughts were best for me.
What most people have experienced for most of their lives, is their mothers and fathers saying, "Now don't do what you think. Do what I tell you to do." We're programmed. So many people follow in their fathers' footsteps, like George Bush and other people like that. They don't think anymore.
They just do what they're told to do. I know this so well because of my experience in going to Viet Nam. I was out there shooting commies, and they said, "We're killing commies for Christ." I'm sitting out there thinking, "Wait a minute. These are human beings out here."
They said, "No, no, no. They're not going to go to heaven because they don't believe in Jesus Christ [as] a Marine Corp," and I thought, "Holy moly! What are they?" They said, "Well, they don't believe in God." I realized that one of them was Buddhist. I thought, "Wait a minute. I'd better wake up."
Once I woke up in Viet Nam, that's when I began to really question everything. I flew helicopters out there, and I would read in the newspaper about the battles we were fighting. I realized that I didn't know what battle they were in, but it wasn't the same battle I was in. That was when I realized that our news was censored.
I thought, "Holy moly!" but we're told we have freedom of speech and no censorship. I said, "Wait a minute." I was about 25 at the time, and I had to take another step backwards and then again question what I had been taught. Is there freedom of speech, or are we censored?
Is there freedom of the press? Yes or no? I'm not saying they're right or wrong. I'm not saying it's good or bad, but every so often we need to step back and question what we've been taught to think.
Chris Attwood: Then how do we make a decision about what direction will lead us to success, to fulfillment, to those things that we chose to have in our life?
Robert Kiyosaki: Again, it goes back to your subject. It's called passion, and passion is anger plus love. It's a combination of the two. There are so many problems this world faces, like AIDS or the polar ice caps melting. What massive problems those are.
But I'm not going to take on AIDS because it doesn't really resonate that much for me. The ice caps really concern me also, but the question was what challenge can I solve that I was sent here on earth to do-I think Hindus call this your dharma?
It's not about what I like doing. It's about what I hate, and I don't mean hate in a bad way. I mean, I hate it that the polar ice caps are melting. I hate it that there is AIDS. But which one of the challenges am I best equipped to handle? That's your dharma.
Chris Attwood: How did you figure that out for yourself?
Robert Kiyosaki: It was really easy: what I hated and what I loved. I just really dislike it that our school system brainwashes us into being employees of the rich, but I didn't realize that until I had another point of view, my rich dad's point of view.
Chris Attwood: You said it was based on what you hated and what you loved. So what did you love?
Robert Kiyosaki: I loved making money. I have a great time. Look at Donald Trump. That guy is having a blast. Other people will tell you that money doesn't make you happy. What moron made that story up?
The person who made that story up is somebody who had obviously never been without money, or they're so broke they don't know the difference between [happiness] and misery. When I didn't have money-and I've been without money-it was horrible. Your friends desert you, you smell.
Chris Attwood: I'm sure many of our readers would agree that being without money is horrible. Share with us some of the principles, then, that your rich dad taught you that helped you to get a financial education.
Robert Kiyosaki: A really simple one was that, instead of working for money, have money work for me. Now that makes sense to me. So when I invest today, I can get an 80% return, 100% return, an infinite return on my money. A financial planner will tell you an 8% return is good.
At that point, you've got to say, "Then I'm still working for the financial planner because they're going to take a commission anyway." You have to learn to step back and question your thoughts. In other words, are you a robot running upon embedded commands?
That's really when it begins to start for you, when you think, "Maybe what I'm thinking is not accurate any more." Let me give you another idea. From 1990 to the year 2000, the financial planners came out and said work hard, save money, get out of debt, invest in the long-term in mutual funds, and diversify.
That's when the mass of the baby-boom generation was entering the so-called stock market. They realized that the pensions weren't going to work, so they had these mutual funds and they started buying these 401Ks. From 1990 to the year 2000, this-work hard, save money, get out of debt, invest it for the long-term in mutual funds, and diversify-worked.
Suddenly, in the year 2000 it stopped working. People who followed that dogma got ripped off to the tune of seven to nine trillion dollars by following the financial planners' advice of work hard, save money, get out of debt, invest in the long-term and diversify. Buy, hold and pray.
It didn't work. There are still people hanging on. It hasn't worked. What happened instead, and took off, was real estate, oil, gas, silver and gold. Then the financial planners said, "Oh, no! Don't do that. It's too risky." The reason it's too risky is because our financial planner would lose our commission.
I'm not saying it's right or wrong, but if you sit back and look at it, ask, "Why am I doing this?" It's because someone told you that to work hard, save money, get out of debt, invest in the long-term, and diversify is good advice. Save money is the worst advice of all because you're not saving money.
After 1971, the U.S. dollar turned into a currency. That means that savers are the biggest losers of all. The dollar is dropping fast. Even Warren Buffett doesn't save money. If you read his books, he doesn't recommend saving money unless you can get a 15% return on your cash.
Chris Attwood: Warren Buffett has been getting quite a bit better return than that for a quite a long time.
Robert Kiyosaki: Yes. He averages about 22%, but if you're in real estate or entrepreneurship, you can beat the 22% all day long.
Chris Attwood: Talk to us a little bit about that, because I'm sure our readers are perking up right now.
Robert Kiyosaki: The reason for that is because Warren has no control over what he invests in. If you invest in a stock, you have no control over it. If you invest in savings, you have no control of interest rates. If you invest in mutual funds, you have absolutely no control. With bonds you have no control.
But with real estate and with businesses, you have control. You can be creative. For example-and this is an example I use in my book all the time-I bought 80 acres of land for $115,000. I chopped off 30 acres and sold them for $215,000.
I put $100,000 in my pocket, and I still have the 50 acres remaining. So what's my return on investment? It's infinite. It's very easy to get infinite returns if you have a right-brain and you're creative. But you cannot be creative with stocks because that's called cheating, and that's what the SEC was created for.
Stocks, bonds, mutual funds, and savings are for very left-brained people, those who use PCs. Mac users are the guys on the right-brain side. That's the difference. And there are two kinds of investors: open-minded investors and close-minded investors.
The close-minded investors are looking for the magic formula, so they invest in the long-term, diversify and save money. They can't think. If you're open-minded, you'll go into real estate or you'll go into business.
Chris Attwood: Whatever entrepreneurial spirit people may have, I think it has been bred out of most of them. One of the things that our readers ask us a lot is, how do you overcome the fear of stepping out on your own in that way? How do you overcome the fear of moving out into territory you don't understand or don't know?
Robert Kiyosaki: It's the oldest form of education. It's called the mentor/apprenticeship program. Go work for somebody for free. I went to work for my rich dad for free for years. What I learned from him has proven invaluable because it bought me my freedom.
I don't have a job, and I don't want a job. I pay less in taxes, and I make more money. I can start multiple companies. I've had companies all over the world. My latest companies are in China, South America, Canada, and the U.S. It's because I'm right-brained. I'm not left-brained.
The other thing is that, as an entrepreneur, I don't need a visa or a green card or to apply for immigration statuses. If I were a doctor, I'd have to get licensed before I could practice, so you're controlled again. The reason I love entrepreneurship is that I can travel the world and do what I want to do.
But it's not me saying this. The laws of the world have always been written by the rich, for the rich. I'll say it again. The laws of the world have been written by the rich, for the rich. And they've been written against the laborer, the person who sells their time, labor and skills. That's reality all over the world.
Chris Attwood: What does that mean for people?
Robert Kiyosaki: Again, step back and ask yourself if you want to sell your labor. If I'm a doctor, I'm selling my labor. If I'm a massage therapist, I'm selling my labor. If I'm an employee, I'm selling my labor. Or, do I want to sell my knowledge? That's your question.
I didn't want to sell my labor because when you sell labor, it's the highest taxed of all forms of taxation. The next highest tax is on savings. The least-highest taxed are people who are investors or who are entrepreneurs.
That's why, in the United States, the best tax rates favor the entrepreneur and the real estate investor, and they punish the person with a mutual fund 401K retirement plan. I'm not the guy saying that. Just check with your accountant.
To hear the full hour long interview for FREE ==> Click Here
