Do What The 99% Are NOT Doing
We all know that a caterpillar spins a cocoon and one day emerges as a butterfly. It is a change so profound, it is known as a metamorphosis. One of the definitions of metamorphosis is, “a striking alteration in character.”
While many people dream of quitting their job and starting their own business, only a few actually do it. Why? Because the transition from employee to entrepreneur is more than changing jobs. It is a true metamorphosis.
Financial metamorphosis is a new term at Rich Dad. We talk a lot about education and financial education, but the magnitude of the coming economic collapse due to coronavirus has convinced me that education is not enough to thrive on the other side of this crisis. Now, I’m talking about more than education. I’m talking about transformation.
The definition of metamorphosis is a transformation from an immature form to an adult mature form. Today, you need financial metamorphosis. You need to move from an immature person when it comes to your mindset about money and become a mature person. You need to stop listening to the old advice about money.
Just as we study to learn a job, I suggest you study to learn to diversify and operate in more than one quadrant. The average rich person earns 70 percent from the right side and less than 30 percent from the left side of the CASHFLOW® Quadrant. I’ve found that no matter how much money people make, they will feel more secure if they operate in more than one quadrant.
In Every One Of Us, There Is A Poor Person
Someone with a poor mindset believes in scarcity and living below their means and is often driven by fear. They are hard workers, often doing two jobs just to make ends meet, but they have a hard time getting ahead because they are treading water simply trying to stay afloat. They often think more money will solve all their problems. But money rarely solves the problem, rather it accentuates their spending habits.
Those with a middle-class mindset also live paycheck to paycheck, but for different reasons and through different means. They have high-paying jobs which afford them nice doodads like big homes, fast cars, and any number of modern-day comforts. And what they don’t buy with cash, they gladly charge with their credit cards. This is what my rich dad called the “working-class dream.” Over time, the middle-class build a lifestyle that must be maintained by either getting a higher paying job or working longer hours to afford more
Someone with a rich mindset, on the other hand, is creative and risk-averse. They don’t rely on security like someone with a poor mindset. And they don’t work for a paycheck. They don’t fear losing money like the other two mindsets. My rich dad insisted that I work for free. He did not want me to develop a poor mindset—someone who would trade my time for a paycheck.
Because my rich dad had explained the quadrants to me, I was better able to see that small differences grow into large differences when measured over the years a person spends working. Because of the CASHFLOW Quadrant, I knew it was better to decide, not so much what I wanted to do, but more who I wanted to become as my working years progressed. In the darkest hours, it was this deep knowledge, and the lessons from two powerful dads, that kept me going.
One group of people on one side with one mindset, and another group of people on the other side with a different mindset. They are all playing this one big game of money, but each quadrant is playing from a different point of view and with a different set of rules.
The big problem is that the people on the left side are unable to see what the people on the right side are doing. But the people on the right side know exactly what the people on the left side are doing.
The path from one quadrant to the next is an internal journey. It is a journey from one set of core beliefs and technical skills to a new set of core beliefs and skills. The process is much like learning to ride a bicycle. At first, you fall down a lot. Often times it is frustrating and embarrassing, especially if your friends are watching. But after a while, the falling stops and riding becomes automatic. If you fall down again, it’s not that big of a deal because you now know that you can get up and ride again. The process is the same when going from an emotional mindset of job security to the emotional mindset of financial freedom.
My Last Paycheck
I took the job with Xerox not for the pay, but to increase my ﬁnancial intelligence—especially Financial intelligence #1: making more money. I’d decided that the best way for me to earn money was as an entrepreneur, not an airline pilot or ship’s oﬃcer. I knew that if I were to become an entrepreneur, I needed sales skills.
The four years I spent working for Xerox, from 1974 to 1978, were very hard. For the ﬁrst two years, I was close to being ﬁred a number of times because I couldn’t sell. Not only was I not selling anything and in danger of losing my job, but I was also not making any money. But I had a goal to become the top salesman in the Honolulu branch, and I faced my challenges with determination.
After the ﬁrst two years, the sales training and on-the-street experience began to pay oﬀ, and I ﬁnally reached my goal of becoming number one in sales at the Honolulu branch.
I learned a valuable lesson from my experience at Xerox: Solving the problem was the path to wealth. Once I reached my goal and became number one in sales, I resigned to take on my next challenge—building a business.
Becoming an Entrepreneur
One of the most frightening days of my life was the day I quit my job and officially became an entrepreneur. On that day, I knew there were no more steady paychecks, no more health insurance or retirement plans. No more days off for being sick or paid vacations.
On that day, my income went to zero. The terror of not having a steady paycheck was one of the most frightening experiences I had ever experienced. Worst of all, I did not know how long it would be before I would have another steady paycheck. It might be years. The moment I quit my job I knew the real reason why many employees do not become entrepreneurs. It is fear of not having any money, no guaranteed income, no steady paycheck. Very few people can operate for long periods of time without money. Entrepreneurs are different, and one of those differences is the ability to operate sanely and intelligently without money.
There are two statements that kept me going personally. One was my rich dad’s words of advice when I was on the brink of quitting and turning back: “You can always quit. So why quit now?”
That statement kept my spirits higher and my emotions calm. It reminded me that I was halfway there, so why turn back? The distance going back was the same as going forward.
Editor, Rich Dad Poor Dad Daily