Paycheck to Paycheck

Dear reader,

My poor dad always said, “Work hard and save money.” My rich dad said, “Working hard and saving money is important if you want to be secure and comfortable. But if you want to be rich, working hard and saving money will probably not get you there.

How you invest your time determines how your financial future will unfold. 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.”

Unfortunately, most people have no time to invest. 


Because they think that working harder and longer will make them richer. Nothing could be further from the truth.

Whenever I talk to my friends who work for a living—as in work for other companies and not themselves—I hear a constant refrain.

“How are things?” I ask.

“I’m so busy,” they answer. “I’ve been putting in a lot of hours at work.”

In America, especially, it is a badge of honor to work a lot of hours, and most people are working a lot. 

The reality today is that the people who physically work the hardest are paid the least and taxed the most. I am not saying that you shouldn’t work hard. All I am saying is that we need to constantly challenge our older thoughts and maybe rethink new ones because clearly, working more doesn’t mean making more.

Conventional Is Poor

As I’ve said before, each of us resides in at least one of the four quadrants of the CASHFLOW® Quadrant. Where we are is determined by where our cash comes from. Many of us are employees who rely on paychecks, while others are self-employed. Employees and self-employed individuals reside on the left side of the CASHFLOW Quadrant.

If you ask most people why they work so hard on the left side of the CASHFLOW Quadrant, 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.

My rich dad believed that life was more important than money, but that money was important for supporting life. He often said, “You only have so many hours in a day, and you can only work so hard. So why work hard for money? Learn to have money and people work hard for you, and you can be free to do the things that are important.” To my rich dad, what was important was having time to raise his kids, donate to charities, and having money to take care of his health. 

Adding Assets Not Paychecks 

Conversely, 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. That’s why the first chapter in my book, Rich Dad Poor Dad, is titled The Rich Don’t Work for Money.

Adding 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.

When I hear people say, “It takes money to make money,” I always tell them the story of how Kim and I went from broke and homeless in 1985 to financially free in 1994. When people ask why Kim and I were homeless, I tell them it was because of what my rich dad taught me about money.

For me, money is important, yet I didn’t want to spend my life working for it. That is why I didn’t want a job. If we were going to be responsible citizens, Kim and I wanted to have our money work for us, rather than spend our lives physically working for money.

It didn’t take money earned from a paycheck, we increased our financial IQ and made our money work for us through assets. 

Plan To Get Rich

This is not to say that the rich don’t work. 

They just work differently.

One great thing about freedom is the freedom to choose to live the life you want to live.

In 1973 at the age of 26, I knew I did not want to live my life the way my parents chose to live. I did not want to be living below my means, living paycheck to paycheck, trying to make ends meet. To me, this was not living. It may have been good for them, but I knew in my heart that it was not right for me.

I also knew that going back to school for advanced degrees was not for me. I knew school did not make people rich because I grew up in a family of advanced degrees. Most of my uncles and aunts had master’s degrees and a few had their doctorates. 

I did not want to climb a corporate ladder in the E quadrant either, nor did I want to be a very special specialist in the S quadrant.

So I took the path less traveled and decided to become an entrepreneur and professional investor. I wanted the freedom to travel the world, do business, and invest. 

It was my choice. 

I do not recommend that path for everyone.  But I do recommend that a person choose. That is what freedom is—the power to choose.

Today, I encourage you to start investing in your financial education and building for your future through the power of assets.


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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