Robert Kiyosaki is the most popular personal finance guru of our time, his book Rich Dad, Poor Dad, the #1 all-time best-selling book on the topic.
I’m indebted to him, myself, for much of my financial education.
But he’s controversial. In part, that’s because he upsets the proverbial applecart, cutting across, and exposing, the mainstream financial advice that is largely intended to keep people more ignorant than educated.
In part, it’s also because of his style, the brash way he puts things. “I’m a best-selling author, not a best-writing author”, he says (He hasn’t asked me to edit his stuff). It’s one reason I wrote my book Money Habits for Success, to bridge between the traditional advice and his teachings, as well as to present some of his teachings in a gentler manner.
But his efforts have transformed the financial well-being of millions of people globally, usually starting with that first book (He’s now written at least 20). I continue to get his daily emails, and, though they are heavily marketing oriented, and continue to be blunt, I find helpful gems in them.
A recent post caught my attention as valuable for everyone, from the financially uneducated (for whom the ideas might be new) to those who just need a good reminder kick in the rear.
The post prompts us to consider how we utilize our time, the most valuable commodity we have. It asks us to consider “Do we use time to get us money, or do we use money to get us time?”
So, I reprint it here, unedited, except for having removed the marketing features (bolds, underlines, font changes, etc.):
My poor dad said he could not invest because he had no money. My rich dad said, “Invest your time when you have no money.”
In most circumstances, people have no time to invest. Why? Because they think that working harder and longer will make them richer.
Of course, nothing could be further from the truth.
If you ask most people why they work so hard, they’ll tell you it’s for money.
By this, they mean a steady paycheck that provides security. Money is one of the primary reasons people take on thousands of dollars in college loans to get a degree for a high-paying job that they don’t like but which they spend most of their waking hours at–all while the things they really love in life sit on the sidelines waiting for them to finish working.
The problem with this approach is that you only make money as long as you work. The only thing of value that you have to sell is your time. So, in order to make more money, you have to work longer hours, which is physically taxing. Because you only have a finite amount of time and energy, as an employee, your earning potential is finite.
By any measure, this is a poor investment.
It is a poor mindset to think: I’ll trade my finite resource of time for money.
The rich mindset is different, and they look at time and how to invest it very differently than the poor. If you ask most rich people what they work for, they’ll tell you it’s for assets.
By this they mean investments and businesses that provide steady cash flow each month with little-to-no work. Instead of spending their life working for money, the rich work to understand how to make money work for them through financial education. Very simply, the rich don’t work for money, they make money work for them.
Working to add more assets is much different than working for a paycheck.
For instance, adding assets doesn’t require working longer or harder. In fact, the higher your financial IQ, the less you have to work to acquire high-quality assets. These assets then provide passive income, even while you’re sleeping or playing.
In other words, again, money works for the rich.
Kim and I have spent many years building our portfolio slowly and steadily and investing in our financial education. We weren’t always rich, and we didn’t always have the financial IQ’s that we do today. But, like my rich dad, we invested the time to grow our financial IQ through financial education when we had no money to speak of.
We didn’t put that time into a job; we invested it in our financial future.
Today, we make millions of dollars a year in passive income — money that works for us instead of the other way around.
Though I may not be one of the rich guys Kiyosaki talks about, I totally agree with the concept that you can either use your time to work for money, or you can use your time to get educated about money, and then have your money work for you. Do you want to be the boss or the servant of money? Who’s working for whom?
You won’t be able to read everything out there to educate yourself financially, but I suggest you at least read his first book Rich Dad, Poor Dad if you haven’t already done so. And, of course, my book, Money Habits for Success.
In fact, I’ll send a free copy of Rich Dad, Poor Dad to anyone who gives me an Amazon testimonial on my book (and then sends me an email with your contact information so that I can mail his book to you). Here is an excerpt from my book, but you’ll have to click the link to the right to get the full version from Amazon Kindle.