What does Robert Kiyosaki mean by "you don't need money to make money"
What does Robert Kiyosaki mean by "you don't need money to make money"
If he means buying stocks on margin, or using loans to invest, that seems risky at best. I tend to dislike Kiyosaki's ideas....
Re: What does Robert Kiyosaki mean by "you don't need money to make money"
He means that you can start with little or nothing. For example, you can start writing Amazon books for free. You could start an eBay business with very little money. You could scour yard sales for old Nintendos. Buy them cheap and then sell them on eBay.
Rich Dad Poor Dad is a great book. Kiyosaki definitely sells the dream more than anything else, but that book has helped many people (myself included) realize that there are ways to make money besides the old 9-5 path.
Rich Dad Poor Dad is a great book. Kiyosaki definitely sells the dream more than anything else, but that book has helped many people (myself included) realize that there are ways to make money besides the old 9-5 path.
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jacob
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Re: What does Robert Kiyosaki mean by "you don't need money to make money"
RDPD was an eye-opener for me. Probably two of the ideas in the Top-10 best ideas that I've ever encountered: 1) You can use money to make money. 2) The different cashflow diagrams. This may be obvious to many people, especially if you've grown up in an investment/business culture, but it certainly wasn't obvious to me. If I hadn't read the cashflow quadrant book it's much less likely that earlyretirementextreme would have ever existed.
http://earlyretirementextreme.com/the-t ... -life.html
I think [the] "value" [of a book] depends on where you're coming from; who you are; how your mind works!
Conceptually, the ideas are great. They're more than great. So if you're capable of thinking in terms of "the big picture" and working out the ideas and plans for yourself, I think the books (I've only only read the Cashflow Quadrant) is/are fantastic. I would put the 4HWW in the same category.
Conversely, and practically, if you're more of the "I just want a plan I can blindly copy", tread very carefully. While marketed to novices, these books are definitely not for the novice mentality.
It really depends on where you are in your personal development on the Dreyfus ladder and how you approach things.
http://earlyretirementextreme.com/the-t ... -life.html
I think [the] "value" [of a book] depends on where you're coming from; who you are; how your mind works!
Conceptually, the ideas are great. They're more than great. So if you're capable of thinking in terms of "the big picture" and working out the ideas and plans for yourself, I think the books (I've only only read the Cashflow Quadrant) is/are fantastic. I would put the 4HWW in the same category.
Conversely, and practically, if you're more of the "I just want a plan I can blindly copy", tread very carefully. While marketed to novices, these books are definitely not for the novice mentality.
It really depends on where you are in your personal development on the Dreyfus ladder and how you approach things.
Re: What does Robert Kiyosaki mean by "you don't need money to make money"
“Adapt what is useful, reject what is useless, and add what is specifically your own.” -- Bruce Lee
You can find many more references like these: http://www.wtae.com/investigations/rich ... h/20065862
You can find many more references like these: http://www.wtae.com/investigations/rich ... h/20065862
Re: What does Robert Kiyosaki mean by "you don't need money to make money"
I'm not really fan of Kiyosaki. I view him a lot like Tim Ferris. They have some good big picture themes but their implementation of the details of their big picture themes are really poor.Dragline wrote:“Adapt what is useful, reject what is useless, and add what is specifically your own.” -- Bruce Lee
What I love about being frugal and becoming FI is that its robust. You can also tailor this to your own lifestyle - spend more & be less extreme but become FI later or all sorts of options in between.
I'm not someone who needs or wants a Ferrari for instance. Fancy stuff has no real allure to me.
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SimpleLife
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Re: What does Robert Kiyosaki mean by "you don't need money to make money"
I like his idea of focusing on cashflow rather than net worth. Invest in income producing assets instead of liabilities.
Re: What does Robert Kiyosaki mean by "you don't need money to make money"
Other than the fact that Robert kiyosaki got Jacob to start ERE, which I think is great I really don't like RDPD and the whole series. Someone said he is selling dreams, and that is 100% correct. No path, or how to, just a dream that you can be rich...just like the Lottery says.
That said, I 100% do agree with the concept that you don't need money to make money per se. I mean obviously, the money has to come from somewhere, but I think the crowd he is speaking to is fixated on the fact that they can't do X because they don't have Y in dollars.
I think it was Uber that started with a 50k investment as I recall from one of my case studies and they are worth billions now. I met a dot com CEO said the same thing that money follows ideas, not the other way around. Get the concept/idea right first and the money will follow...usually. More to the point, there is no amount of money that can save a bad/poorly executed plan.
I think the problem is that a lot of people don't even try or get started because they figure they don't have say 100k in cash to do something, so why bother investigating the idea, testing the concept, planning, etc...
I think the biggest thing is that if RK can make it rich selling his basic book, almost anyone should be able to do it. He isn't the smartest guy, but he's made a lot of money, so if he can do it, heck so can I.
That said, I 100% do agree with the concept that you don't need money to make money per se. I mean obviously, the money has to come from somewhere, but I think the crowd he is speaking to is fixated on the fact that they can't do X because they don't have Y in dollars.
I think it was Uber that started with a 50k investment as I recall from one of my case studies and they are worth billions now. I met a dot com CEO said the same thing that money follows ideas, not the other way around. Get the concept/idea right first and the money will follow...usually. More to the point, there is no amount of money that can save a bad/poorly executed plan.
I think the problem is that a lot of people don't even try or get started because they figure they don't have say 100k in cash to do something, so why bother investigating the idea, testing the concept, planning, etc...
I think the biggest thing is that if RK can make it rich selling his basic book, almost anyone should be able to do it. He isn't the smartest guy, but he's made a lot of money, so if he can do it, heck so can I.
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RealPerson
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Re: What does Robert Kiyosaki mean by "you don't need money to make money"
I can't stand the RDPD series. The one useful idea that I got from them is: assets make money. If it is costs money, it is a liability, not an asset. There you have it. Saved you hours of reading the rich dad/poor dad fantasy stuff. It was painful to read hundreds of pages to get an idea that can be explained in one sentence.
@Jacob; It puzzles me that ERE may not have happened without RDPD. Still, I am glad you got that much out of it. And glad it helped you put ERE on the map.
@Jacob; It puzzles me that ERE may not have happened without RDPD. Still, I am glad you got that much out of it. And glad it helped you put ERE on the map.
Re: What does Robert Kiyosaki mean by "you don't need money to make money"
Ridiculously long post that didn't submit...nvm
Re: What does Robert Kiyosaki mean by "you don't need money to make money"
I can't speak for Jacob, but if you can try to imagine reading RDPD as someone who doesn't even have the slightest idea that they can run their own business.RealPerson wrote:@Jacob; It puzzles me that ERE may not have happened without RDPD. Still, I am glad you got that much out of it. And glad it helped you put ERE on the map.
Imagine growing up in a small town where rich people are all "lucky." Imagine spending your entire life believing that going to college, getting a degree, and getting a good job is your only chance to advance in life.
Not only that, but there is no money for college so your only option is to take on debt. You've been taught that a 4 year degree is just what you do, so you take on 50k in student loans.
When you finally get that job and you're making $20 an hour people tell you how "lucky" you are, and how they didn't make that kind of money until they were 40.
All the while you've been taught that you should want nice cars and an expensive house (luckily for me by the time I could afford these I already knew I didn't want them). You're also taught that debt is a natural way of life if you want something. Only those lucky rich people don't have debt. I even watched my parents bounce checks while buying lottery tickets.
Now imagine how eye opening RDPD and ERE both were for me
Re: What does Robert Kiyosaki mean by "you don't need money to make money"
On the original ?,
The better you are at something the more likely it is you can secure capital from some other source than yourself for a project.
The world is awash with money looking for a return. You just need to convince people you have a solid plan to get them that return with a measurable risk. RK claims he does this with large multi unit apartments. YMMV.
I liked the book. Financially it is a mess. But I learned some good stuff about how you need to mentally transform yourself if you want to get on the path to wealth accumulation. I like to think of the books as a guideline for changing the way we think about money and wealth building rather than a book about finance (where it plain stinks).
The better you are at something the more likely it is you can secure capital from some other source than yourself for a project.
The world is awash with money looking for a return. You just need to convince people you have a solid plan to get them that return with a measurable risk. RK claims he does this with large multi unit apartments. YMMV.
I liked the book. Financially it is a mess. But I learned some good stuff about how you need to mentally transform yourself if you want to get on the path to wealth accumulation. I like to think of the books as a guideline for changing the way we think about money and wealth building rather than a book about finance (where it plain stinks).
Re: What does Robert Kiyosaki mean by "you don't need money to make money"
The value of reading an author's book is ultimately if you come away with new and potentially useful ideas. It's not hard for any author to be right about some things and wrong about other things, the important thing is that we can take away the best parts.
So, you can't deny RDPD's series has introduced many good ideas, or useful rules of thumbs.
For example "An asset generates a cash flow, and a liability costs you money - therefore your own home is a liability." A lot of finance people hate Kiyosaki's definition of asset & liability, they think it is oversimplified. However, that doesn't mean it isn't a useful lens to have when dealing with your personal finances, especially as a layperson.
Reading comprehension relies on extrapolating the author's intended meaning through the imperfect medium of words. The more literal-minded and pedantic a person becomes, the lower their reading comprehension is. Unfortunately, John T. Reed thinks he read RDPD's book, but was wrong on so many counts that it's clear his reading comprehension failed. We discussed this briefly in the previous Kiyosaki's thread.
So, you can't deny RDPD's series has introduced many good ideas, or useful rules of thumbs.
For example "An asset generates a cash flow, and a liability costs you money - therefore your own home is a liability." A lot of finance people hate Kiyosaki's definition of asset & liability, they think it is oversimplified. However, that doesn't mean it isn't a useful lens to have when dealing with your personal finances, especially as a layperson.
Reading comprehension relies on extrapolating the author's intended meaning through the imperfect medium of words. The more literal-minded and pedantic a person becomes, the lower their reading comprehension is. Unfortunately, John T. Reed thinks he read RDPD's book, but was wrong on so many counts that it's clear his reading comprehension failed. We discussed this briefly in the previous Kiyosaki's thread.
Re: What does Robert Kiyosaki mean by "you don't need money to make money"
I agree that RDPD is more useful as a potential paradigm-shifter than a step-by-step manual. The reason "you don't need money to make money" is that unless you are a Rockefeller heir who is currently in a coma, money is certainly not the only asset you possess and can convert into money by applying it over time. The equation time=money is truly incorrect because time is either priceless or worthless depending on how you apply your assets and you can almost always choose whether or not to apply/spend/invest assets but you ultimately have no choice about spending your time. It just goes.
You can kind of run the 4% safe return on investment in reverse to see just how valuable all the other assets you possess are if you choose to apply them over time. For instance, you can lend somebody $18,000 that you own for a year and make around $700 or you can use just very, very minimal skills and physical abilities and walk around your neighborhood collecting returnable cans for an hour each day and make around $700 a year. You could grow your hair and sell it to a wig-maker. You can sell your plasma. You can sell your "pretty" applied over time and make $250/hr as an escort. You can train your brain and sell your technical skills over time and make $50/hr. You can sell your patience and make $12/hr caring for colicky infants. etc. etc. etc. You can convert your skills into a product and then sell that product. You can convert your assets that are attached to your body into assets that aren't attached to your body and then rent those assets out to make money in a million different ways. Just make a list of all your assets and another list of all the potential markets in the world and then try combining them in random ways. You could challenge yourself to see if you could survive "just" using your upper body strength and your shovel or "just" using your brain and the internet and never getting out of your pajamas or "just" using the contents of local dumpsters and your bartering skill or "just" using your charm and good looks or "just" using your bike and your youthful vigor. You are in possession of assets worth way, way, way more than $1,000,000 lent out at 4%. Think of yourself as being your own slave and figure out how to best leverage yourself for yourself. Also, I recommend that you give "The Adventures of Augie March" a read.
You can kind of run the 4% safe return on investment in reverse to see just how valuable all the other assets you possess are if you choose to apply them over time. For instance, you can lend somebody $18,000 that you own for a year and make around $700 or you can use just very, very minimal skills and physical abilities and walk around your neighborhood collecting returnable cans for an hour each day and make around $700 a year. You could grow your hair and sell it to a wig-maker. You can sell your plasma. You can sell your "pretty" applied over time and make $250/hr as an escort. You can train your brain and sell your technical skills over time and make $50/hr. You can sell your patience and make $12/hr caring for colicky infants. etc. etc. etc. You can convert your skills into a product and then sell that product. You can convert your assets that are attached to your body into assets that aren't attached to your body and then rent those assets out to make money in a million different ways. Just make a list of all your assets and another list of all the potential markets in the world and then try combining them in random ways. You could challenge yourself to see if you could survive "just" using your upper body strength and your shovel or "just" using your brain and the internet and never getting out of your pajamas or "just" using the contents of local dumpsters and your bartering skill or "just" using your charm and good looks or "just" using your bike and your youthful vigor. You are in possession of assets worth way, way, way more than $1,000,000 lent out at 4%. Think of yourself as being your own slave and figure out how to best leverage yourself for yourself. Also, I recommend that you give "The Adventures of Augie March" a read.
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jacob
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Re: What does Robert Kiyosaki mean by "you don't need money to make money"
@JamesR - I 100% agree with your take on authors and readers. Well said!
PS: At some point in the future, I might ask you if I can quote you on this.
PS: At some point in the future, I might ask you if I can quote you on this.
Re: What does Robert Kiyosaki mean by "you don't need money to make money"
Feel free to quote me on that, although I'd probably cut the last two sentences 
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FI Fighter
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Re: What does Robert Kiyosaki mean by "you don't need money to make money"
Robert Kiyosaki's books definitely don't provide a "how to" section or any step-by-step approaches on how to implement the ideas presented. Nonetheless, I would agree with everyone above that if you haven't been exposed to the cash flow quadrant, that alone makes it worth reading one of the books, or listening to one of his talks. The RDPD book, along with ERE really blew my mind on what was possible outside of the traditional 9-5 path.
When people say "you don't need money to make money", it always reminds me of a true story of a very successful local investor I know. This guy started off with literally nothing and learned how to house hack: buy a 4plex with a FHA loan (3.5% downpayment) and rent out the other 3 units. Back in 2009-2012, it was entirely possible to cash flow tremendously by utilizing this approach. Actually, this approach is still viable in many parts of the country... So, the guy eliminated his biggest expense in rent, and was able to generate cash flow with the other 3 units, even after all expenses (PITI). He saved up any excess, and used it to buy more property... In essence, outside of the initial 3.5% downpayment, he didn't "need money to make money". Today, he's accumulated over $1MM in real estate and is only 30 years old. I haven't talked to him about any retirement plans, but I'm guessing he's not far off... He makes more in cash flow income each month than most folks do working 9-5.
When people say "you don't need money to make money", it always reminds me of a true story of a very successful local investor I know. This guy started off with literally nothing and learned how to house hack: buy a 4plex with a FHA loan (3.5% downpayment) and rent out the other 3 units. Back in 2009-2012, it was entirely possible to cash flow tremendously by utilizing this approach. Actually, this approach is still viable in many parts of the country... So, the guy eliminated his biggest expense in rent, and was able to generate cash flow with the other 3 units, even after all expenses (PITI). He saved up any excess, and used it to buy more property... In essence, outside of the initial 3.5% downpayment, he didn't "need money to make money". Today, he's accumulated over $1MM in real estate and is only 30 years old. I haven't talked to him about any retirement plans, but I'm guessing he's not far off... He makes more in cash flow income each month than most folks do working 9-5.
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FI Fighter
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Re: What does Robert Kiyosaki mean by "you don't need money to make money"
I should also add that the cash out refi strategy is an amazing technique you can use to pull out equity to fund future investments (made possible due to appreciation). This is what that successful investor friend of mine did, and I've done 2 myself this year, pulling out ~$200k.
With a cash out refi, the money you get back is also not taxable! That's probably the best part of it all...
If you buy right when the market is near the bottom after a cataclysmic crash (easier said than done), you really only need one bull market ride back up to be able to declare early FI... Well, that is assuming you follow ERE and live a very frugal life
With a cash out refi, the money you get back is also not taxable! That's probably the best part of it all...
If you buy right when the market is near the bottom after a cataclysmic crash (easier said than done), you really only need one bull market ride back up to be able to declare early FI... Well, that is assuming you follow ERE and live a very frugal life
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RealPerson
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Re: What does Robert Kiyosaki mean by "you don't need money to make money"
If you want practical information on entrepreneurship, I highly recommend "How To Get Rich" by Felix Dennis. In spite of the cheesy title, the book has tons of very useful information in it. Felix Dennis is a British magazine publisher billionnaire. He started from scratch. His life story is similar in many ways to Richard Branson. The book is not about early retirement, but rather about accumulating wealth in the most effective manner. Obviously, you can stop working at any time and become FIRE. The book is his autobiography, but clearly written to give the reader real and actionable advice throughout the book. He points out the good, the bad and the ugly in the process of becoming rich. The book was quite an eye opener for me. A must read for any business owner.
Because he continues to be a successful publisher, he has no desire to sell you expensive seminars. He doesn't have seminars because he is too busy making money in his business. Consequently, the book is not set up to sell you anything.
http://www.amazon.com/How-Get-Rich-Grea ... lix+dennis
Because he continues to be a successful publisher, he has no desire to sell you expensive seminars. He doesn't have seminars because he is too busy making money in his business. Consequently, the book is not set up to sell you anything.
http://www.amazon.com/How-Get-Rich-Grea ... lix+dennis
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George the original one
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Re: What does Robert Kiyosaki mean by "you don't need money to make money"
Felix Dennis' book is a legend! He is nicely blunt.