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.
My rich dad often said, “Investing is not risky. Not being in control is risky.” Many people find investing risky because they are not in control of one or more of what rich dad called the “ten investor controls of a sophisticated investor.”
People who do the hardest work have the hardest time getting ahead due to the effects of Gresham’s Law. Since money has ever-declining value, a financially wise person must constantly seek things that do have value and can also produce more and more debased money. If you don’t do that, you fall behind financially over time rather than get ahead.
Investing in stocks can seem risky to the average investor because they do not understand the difference between investing techniques. More than likely, you’ve heard horror stories about others who have tried to invest but lacked the proper knowledge to do so—and the devastating effects it may have had. But as always, knowledge is power. Rich dad used to say, “Investors need to be well versed in both fundamental analysis as well as technical analysis.”
Being rich might mean you have lots of money, but also might have lots of expenses. These could be expenses like your mortgage, your car payment, credit cards, private school tuition, and more. Most people do not understand what it means to be truly wealthy. They confuse being wealthy with being rich, that is with having lots of money to spend but no real financial independence. We discuss how to create cash flow to help lessen these worries.
Today we live in times of greater and faster change. I suspect there will be many booms and busts in the coming years that will parallel the ups and downs. I am concerned that too many people are too focused on money and not on their greatest wealth, their education. If people are prepared to be flexible, keep an open mind and learn, they will grow richer and richer despite tough changes. If they think money will solve problems, they will have a rough ride. Intelligence solves problems and produces money. Money without financial intelligence is money soon gone.
Rich dad defined money as “What we agree it is.” In the Information Age, money is increasing exponentially. A few individuals are getting ridiculously rich from nothing — just ideas, and agreements. Today, the modern forms of money are gold, paper, and the new kid on the block…Bitcoin. I have always found money — in all of its forms and functions — fascinating, and today the more invisible it is, the more fascinating it is than ever before.
For most of us, the 401(k) as an investment vehicle is all we know about retirement planning. With a lack of financial understanding and some strong misunderstandings about where their money is going, Americans have relinquished control over their future, leaving them with an absolute mess.
If people do not have sound financial education, they cannot tell if a financial advisor is a salesman or a con man, a fool or a genius. Remember, all con men are nice people. If they were not being nice by telling you what you want to hear, you would not listen to them.
Prophets of doom have always taken risks in terms of ridicule and humiliation. If you stand on a street corner holding up a sign that reads "The End Is Near," passersby will laugh and heckle. People will say you're like Chicken Little, running around telling people the sky is falling. Yet after an economic crisis like one we're experiencing now, people ask, "Why didn't someone warn us?" or "What's the government doing to save us?"