The Rich’s Number 1 Enforcer: Fear

Dear Reader,

When it comes to increasing your financial intelligence, you’ll inevitably come up against obstacles that will push you to either bear down and fight through or give up. How you respond to those obstacles will set the course for whether you live a rich life or a poor one.

Fear is real.

Everyone has it.

And everyone has a fear of losing money, even the rich. But it’s not having fear is the problem. It’s how you handle your fear. No one likes losing, but often the dividing line between champions and perennial losers is how they handle failure when it does happen. Similarly, the primary difference between a rich person and a poor person is how they manage their fear.

In all my years, I’ve never met a rich person that hasn’t lost money. But I’ve met a lot of poor people who have never lost a dime—investing that is. My poor dad was like this. He feared losing money, but rather than face his fear, he ignored it. He did nothing. He simply avoided the issue, refusing to discuss the subject. Playing it safe helped him not lose money, but he never got rich either.

My rich dad, on the other hand, told me that if I wanted to be rich, I had to first acknowledge my fear and then overcome it. He said the best way to do that was to think like a Texan.

“I like Texans,” my rich dad said.

“In Texas, everything is bigger. When Texans win, they win big. And when they lose, it’s spectacular.”

“Texans like losing?” I asked.

“That’s not what I’m saying,” said rich dad. “Nobody likes losing. Show me a happy loser, and I’ll show you a loser in life. Rather, I’m talking about the Texan’s attitude toward risk, reward, and failure. They live big. They’re proud when they win, and they brag when they lose. They have a saying, ‘If you’re going to go broke, go big.'”

Rich dad used the Alamo as an example of this Texan attitude. The Alamo is a story of brave people who chose to fight, even when there wasn’t any hope of winning. They chose to die instead of surrendering … and they got their butts kicked. But, how did Texans handle this? They said, “Remember the Alamo!” They took a loss and made it a win.

“The Texans took a failure and turned it into inspiration…and a tourist destination that makes millions,” said rich dad.

Learn From Failure

“The formula for all winners,” said rich dad, “Is that failure inspires them to become winners because they learn from their failures.”

Nobody does anything great without failing. Championship bikers had to first learn how to ride a bike, and they fell off their bikes in the process. Each time they were faced with the decision to either quit or get back on. The same is true for pro golfers. I’m sure they’ve lost many golf balls over the years. The difference between winners and losers is whether they look at failure as an opportunity to learn and grow, or as an opportunity to quit.

For winners, losing inspires them. For losers, losing defeats them.

Former NFL quarterback, Fran Tarkenton, said, “Winning means being unafraid to lose.” People like Tarkenton are not afraid of losing because they know who they are. But just because they’re not afraid to lose, doesn’t mean they like losing. There is a difference between hating to lose and being afraid to lose.

People who are afraid to lose never take the field, and when they do, they play not to lose rather than to win. Unfortunately, they rarely win.

People who hate losing take the field and play to win. When they do lose, they use it as inspiration to get better. It’s that attitude that makes them champions.

If you want to be rich, stop playing not to lose and start playing to win.

Be Focused

The conventional financial wisdom is to build a balanced portfolio of stocks, bonds, and mutual funds. That is a safe and sensible portfolio. It’s a portfolio of someone playing not to lose rather than playing to win. And it’s a portfolio that won’t get you rich.

The rich don’t play it safe with balanced portfolios. Rather, the rich are focused. Balanced people go nowhere. They stay in one spot. To make progress, you must be unbalanced and focused.

Thomas Edison wasn’t balanced. He was focused.

Bill Gates wasn’t balanced. He was focused.

Steve Jobs wasn’t balanced. He was focused.

If you have any desire to be rich, you must be focused. Do not do what the poor and middle-class do: put their few eggs in many baskets. Put a lot of your eggs in a few baskets and focus.

The Upside Of Fear

Fear has its upside. It alerts us to possible life-threatening situations. You may feel fear when you hear a strange noise late at night. Thinking someone may have broken into your house, you immediately take any necessary action. Fear may set in when you find yourself walking alone through an unlit park at night, so you quickly find the safest route out. If you’re driving in a blinding snowstorm, fear will give you the sense to pull off to the side of the road until the storm subsides.

Fear, in many cases, keeps us alive; that’s a significant upside.

Fear is also helpful when it comes to investing. Whenever we enter into an arena that is unfamiliar and unknown, a little fear can be a good thing. It can motivate us to take one extra in-depth look at the numbers on that rental property or to tune in to the special TV report about the industry in which we just bought stocks. A touch of fear can keep us on our toes and sometimes avoid costly mistakes. This is where fear can serve us.

There is also a destructive side to fear. While it can warn us of life-threatening events, it can also be a killer—a killer of dreams, of opportunities, of our own personal growth and passion, of living our life to its absolute fullest.

The harmful face of fear is when it paralyzes us—when we’re immobilized and we do nothing. We say, “No,” to the opportunity automatically, without even thinking. All we can see are the things that will go wrong. When this happens, we spew out all the reasons why the investment is a bad, risky, and unwise venture to undertake. The fear of making mistakes, of losing money, and of personal disappointment wins.

Making Fear An Asset

Fear can be the greatest asset we have. Every time fear comes up, and you’re clear it’s not in a life-threatening situation, that means you have the opportunity to grow and expand yourself.

It’s often through the process of dealing with the fear that we grow the most. And when you come through to the other side, it’s exhilarating! You are not the same person you were before.

Think of it this way: Fear is how we grow. Instead of dreading fear, look it straight in the eye and know you’ve just uncovered your next level of growth.

Regards,

Robert Kiyosaki

Robert Kiyosaki,

Editor, Rich Dad Poor Dad Daily

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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.

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