What Separates the Rich from the Poor? (And How the Rich Invest Their Time Instead)

Dear Reader,

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.

Consider these facts:

  • The average U.S. worker clocks in about 1,804 hours per year at work—the highest output in the world
  • 56% of Americans report doing work from home
  • 20% report doing it every day of the week
  • 25% didn’t take any time off last year
  • 43% took less than a week off

Those numbers represent a 400% increase in productivity since 1960—and a lot of tired, time-constrained Americans chasing the almighty dollar.

Yet, the inflation-adjusted wage growth for the middle class has stayed stagnant or declined. As the Economic Policy Institute reports, “From 1973 to 2013, hourly compensation of a typical (production/nonsupervisory) worker rose just 9 percent while productivity increased 74 percent.”

Clearly, working more doesn’t mean making more.

How are you investing your time?

Today, unfortunately (but also, fortunately) many people have more time than they ever imagined. As I write this, we’re in the middle of a global pandemic caused by the coronavirus, or COVID-19 as it’s officially known. An unprecedented 36 million people have filed for unemployment as almost the entire population of the US is stuck at home waiting until infections go down.

Those that are still working, have more time than they used to as well. With nearly all social engagements off, the evenings and weekends are pretty much free. But the stress, of course, is very high…especially for those parents who both work and have the mentality, I stated above, that working harder means making more, while also trying to take care of their kids. During this crisis, however, perhaps the sentiment is more, working harder will mean keeping my job. I think many people have found that’s not true.

Interestingly, many of these highly-capable employees are spending their days on video conference calls, which make them even more tired than regular work. They’ve even coined a term for it called “Zoom fatigue.”

Those that are unemployed are spending time trying to find work or waiting it out by watching Netflix, which is experiencing record growth since the end of March, and playing video games, which are also soaring. Very few are using the time to grow. And that is the reason many people will come out of this crisis as poor or poorer than they were before it.

The poor invest their time…poorly—working for money

If you ask most people why they’re working so hard…or looking for work if they’re one of the 25 million unemployed, 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.

What separates the rich from the poor—making money work for them

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.

How To Make Money By Setting Goals

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

Each year, Kim and I sit down together and set goals as to how many new assets we want to purchase. It’s important to note, we don’t make goals to make more money. We don’t spend our time looking for a better, higher-paying job. We know that if we focus on finding high-quality assets, the money will come—and for many years, even after the work of acquiring our assets is done.

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.

Invest Your Time Like The Rich Today To Be Rich Tomorrow

Your mind is one of the only assets in the world that will never decrease in value. It has infinite returns, as you can always be improving your mind. You can always learn and grow and change your thoughts, which is incredible! There is no endpoint to the growth of your mind.

That’s why at the Rich Dad Company, we view cultivating your mind and increasing your education as the first and most important step to achieving financial freedom.

Investing in this asset means increasing your education, learning new things, trying out new experiences, and taking the time to actively grow your knowledge. The best part is, in this day and age, investing in your mind is one of the few assets that doesn’t have to cost you a dime. With the variety of online courses and free lectures available, you can invest in your mind every single day and benefit from the returns.

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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