Know the Two Kinds of Money Problems

Dear Reader,

One of the most startling differences between my rich dad and poor dad was the kind of world they saw. My poor dad always saw a world of financial scarcity. That view was reflected when he said, “Do you think money grows on trees?” or “Do you think I’m made of money?” or “I can’t afford it.”

When I spent time with my rich dad, I began to realize that he saw a completely different world. He could see a world of too much money. That view was reflected when he said, “Don’t worry about money. If we do the right things, there will always be plenty of money. Don’t let not having money be an excuse for not getting what you want.”

In 1973 during one of rich dad’s lessons, he said, “There are only two kinds of money problems. One problem is not enough money. The other problem is too much money. Which type of money problem do you want?”

In my classes on investing, I spend a lot of time on this subject. Most people come from families where the money problem was not enough money. Since money is only an idea, if your idea is that there is not enough money, then that is what your reality will be. One of the advantages I had, coming from two families, was that I could see both types of problems—and rest assured, both are problems. My poor dad always had problems of not enough money, and my rich dad always had problems of too much money.

Rich dad had a comment on that strange phenomenon. He said, “People who suddenly become rich—by things such as inheritance, a big jackpot from Las Vegas, or the lottery—suddenly become poor again because psychologically, all they know is a world of not enough money. So they lose all their suddenly found wealth and go back to the only world of money they know—a world of not enough money.”

One of my personal struggles was shaking the idea that the world was a world of not enough money. From 1973 on, rich dad had me become very aware of my thoughts when it came to the subjects of money, working, and becoming rich. Rich dad truly believed that poor people remained poor simply because that was the only world they knew. Rich dad would say, “Whatever your reality is about money inside of you is the reality of money outside of you. You cannot change your outside reality until you first change your inside reality about money.”

Scarcity Mindset

Rich dad connected what he saw as some of the causes of scarcity to the effect it has on peoples’ attitudes:

  • The more security you need, the more scarcity there is in your life.
  • The more competitive you are, the more scarcity there is in your life. That is why people compete for jobs and promotions at work and compete for grades in school.
  • People who are creative, cooperative, and have good financial and business skills often have lives of increasing financial abundance.

I could see these differences in attitudes between my two dads. My real dad always encouraged me to play it safe and seek security. My rich dad encouraged me to develop skills and be creative.

During our discussions about scarcity, rich dad would take a coin out of his pocket and say, “When a person says, ‘I can’t afford it,’ that person sees only one side of the coin. The moment you say, ‘How can I afford it?’ you begin to see the other side. The problem is that even when people see the other side, they see it with only their eyes. That is why poor people see rich people doing what rich people do on the surface, but they fail to see what rich people are doing inside their minds. If you want to see the other side of the coin, you have to see what is going on inside a very rich person’s mind.”

I asked rich dad why lottery winners usually go broke. His reply was, “A person who suddenly comes into a lot of money and goes broke, goes broke because they still see only one side of the coin. In other words, they handle the money in the same way they always did, which is the reason they were poor or struggled in the first place.”

In the late 1980s after rich dad retired completely and turned his empire over to Mike, he called me in for a brief meeting. Before the meeting began, he showed me a bank statement with $39 million dollars in cash and said, “And this is only in one bank. I am retired now because it is a full-time job to keep taking this cash out of my banks and moving it into more productive investments. I repeat, it is a full-time job that becomes more challenging every year.”

As the meeting ended, rich dad said, “I spent years training Mike to build the engine that produces this much money. Now that I am retired, he is running the engine that I built. The reason I can retire with confidence is because Mike knows not only how to run the engine, but how to fix it if it breaks. Most rich kids lose their parents’ money because, although they grow up in extreme wealth, they never really learn how to build an engine or fix it after it is broken. In fact, too many rich kids are the very people who break the engine. They grow up on the rich side of the coin, but they never learn what it takes to get to that side. You have a chance, with my guidance, to make the transition and stay on the other side.”

A big part of taking control of myself was taking control of my internal reality about money. I have had to constantly remind myself that there is a world of too much money, because in my heart and soul, I have often felt like a poor person.


Robert Kiyosaki

You May Also Be Interested In:

Explained: Biden’s Infrastructure Bill

Last Wednesday, President Joe Biden gave a speech in Pittsburg outlining his $2.3 trillion infrastructure plan. The proposal would make major investments in the nation’s infrastructure and includes tax increases on corporations, something strictly opposed by Republicans. The plan is headed to Capitol Hill, and today we will answer the biggest questions about what is in the bill and the challenges it faces in passing in the House and Senate.

Robert Kiyosaki

Robert Kiyosaki, author of bestseller Rich Dad Poor Dad as well as 25 others financial guide books, has spent his career working as a financial educator, entrepreneur, successful investor, real estate mogul, and motivational speaker, all while running the Rich Dad Company.

View More By Robert Kiyosaki