The Rich Know How to Legally Print Money (And You Can, Too)
In today’s economy, it’s lunacy to think you’ll get ahead by getting a good job and saving money. Your money becomes less and less valuable each day.
Every time my poor dad talked to me about going to school to get a job, he was talking about security. When I listened to my poor dad, it was difficult hearing what my rich dad had to say because what he said was exactly the opposite of the lessons my poor dad was trying to teach me.
Finally, I asked my rich dad about the difference in philosophies.
I asked, “Aren’t security and freedom the same thing?”
He replied, “Security and freedom are not the same. In fact, they are opposites. The more security you seek, the less freedom you have. The people with the most security are in jail. That is why it is called ‘maximum security.’” He went on to say, “If you want freedom, you need to let go of security. Employees desire security. Entrepreneurs seek freedom.”
In the new world of money, it’s imperative that you learn how to print your own money—legally.
First, Invest in Yourself
I’ve made it my personal mission to equip the Rich Dad community to be ﬁnancially intelligent. My goal is for you to know the new rules of money so that when an opportunity comes along for you to create money, you are smart enough to recognize it. My goal is to increase your ﬁnancial IQ.
In order to become rich, you must stop thinking of wealth in terms of money. Money is simply a by-product of your true wealth—your ﬁnancial IQ. Many people were good at making money under the old rules of money. It was far easier to make money under those rules because all you had to do was work hard, save, and invest conservatively. Today, it is much more diﬃcult to make money and keep it if you do not have a high ﬁnancial IQ. That is why the gap between the rich and the poor is growing, not shrinking. That is why the middle class is being wiped out.
If you do not believe that the rules of money have changed, you’re toast. If you still think it is smart to work hard, save your money, and invest in a well-diversiﬁed portfolio of mutual funds, you will become poorer.
I commend you on working towards increasing your ﬁnancial IQ, and encourage you to form a lifelong habit of education. A ﬁnancially intelligent person will always have something to learn because there is always a new problem to be solved. And as you now know, each new problem solved is a deposit in your asset column because you are increasing the true source of your wealth—your ﬁnancial IQ.
An infinite return
To me, one of the best advantages of financial education is the ability to print your own money. The way you can do this, legally, is via a financial term known as return on investment (ROI).
When you talk to most financial experts, they’ll tell you that 5 to 12 percent is a good ROI. And it is if you don’t have a financial education. Another thing they’ll say is that the higher the return, the higher the risk. That is also true if you don’t have financial intelligence.
Personally, I always look to have an infinite return on my investments. And this can be achieved if you have a high financial IQ. The definition I use for an infinite return is “money for nothing.” More specifically, an infinite return is when you get all your money back from an investment in a cash-flowing asset, you still own that asset, and you still enjoy the cash flow month in and month out.
The higher your ﬁnancial intelligence, the more money you make without needing money. In this new capitalism, it is truly possible to make money for nothing. In the Information Age, knowledge is the ultimate leverage. The more money you make without money, the higher your ROI and IRR, and the higher your ﬁnancial IQ.
Since ﬁnancial IQ is the numerical measure of ﬁnancial intelligence, this means an inﬁnite return means an inﬁnite ﬁnancial IQ.
Printing your own money starts with being on the right side of the CASHFLOW Quadrant
The CASHFLOW Quadrant is divided into four types of people, two in each category. Simply put there are two sides to the quadrant. On the left are Employees and Self-Employed. On the right are Business Owners and Investors.
If you want to print your own money, you can’t do it on the left side of the quadrant. You can only build a money-printing machine if you eat, sleep, and breathe on the right side of the quadrant.
The reason for this is simple. Employees don’t own the machine, they work for the machine. Self-employed people also don’t own the machine. They own a job that often contracts to the money printing machine. Because they sell their hours, which are a finite resource, they cannot possibly achieve the infinite returns that come with a money-printing machine.
The ultra-rich operates solely on the right side of the CASHFLOW Quadrant, and they’re the ones who have figured out how to print their own money, legally.
The reason for this is also simple, they own the machine. Business owners build businesses specifically for the purpose of printing money legally—they easily achieve infinite returns after they get back the initial investment they used to start the business. It’s the same with investors. Once they get their initial money back and still own the investment, they are in the money printing business and are achieving infinite returns.
You can only print your own money legally if you own the machine if you operate on the right side of the CASHFLOW Quadrant.
How to print your own money with other people’s money
Using other people’s money (OPM) to achieve infinite returns quickly is a fundamental Rich Dad lesson. OPM is a form of good debt. You need high financial intelligence to use it appropriately, but when you do, you get to printing money that much faster.
The easiest example of using OPM is by looking at a real estate deal.
We work with our real estate partner, Ken McElroy, to print money through real estate all the time. We will find an underperforming apartment community, purchase it with investor money (OPM), do upgrades, raise rents, and increase the value of the property.
We can then refinance that property tax-free and pay back our investors from the loan proceeds—while still enjoying positive cash flow. Once all investors are paid back, we still enjoy the cash flow. That is an infinite return.
You can achieve infinite returns in every asset class. It’s up to you to decide which one is best for you.
Editor, Rich Dad Poor Dad Daily