My name is Evan Carmichael and I believe that the fastest and most effective way to build a business is to model the strategies of people who have already done what you’re trying to do. I call it Modeling the Masters. My last post with over 30 comments was 3 Success Tips from Herb Kelleher (Southwest Airlines).
Today we're going to look at how a Vietnam veteran failed with two separate businesses but was determined to become a successful entrepreneur and not have to work for someone else. He would eventually become one of the most successful business writers of all time. This is the story of Rich Dad Poor Dad creator Robert Kiyosaki and the top 3 lessons that you can learn from his success.
Must Watch Video
"The size of your success is measured by the strength of your desire; the size of your dream; and how you handle disappointment along the way." - Robert Kiyosaki
Robert Kiyosaki (born April 8, 1947) is an American investor, businessman, self-help author, motivational speaker, and financial literacy activist best known for his "Rich Dad Poor Dad" book series. After serving in the Marine Corps as a helicopter gunship pilot during the Vietnam War, Kiyosaki returned home to work as a salesman for Xerox. Not wanting to work for someone else for the rest of his life, Kiyosaki had dreams of starting his own business.
After unsuccessful stints selling Velcro wallets and T-shirts for heavy metal rock bands, Kiyosaki began promoting the personal growth seminars of Marshall Thurber called "Money & You." When Thurber decided to retire, Kiyosaki took over the business and began traveling the world to educate people about financial strategies. To reach more people he decided to write his first book which he self-published, "Rich Dad Poor Dad."
Robert Kiyosaki has written over 15 books and has sold over 26 million copies. 3 of his books have been on the best sellers lists of The Wall Street Journal, USA Today, and the New York Times simultaneously and he's a sought after speaker who continues to educate people on how to understand their money.
Action Item #1: Make Your Money Work Hard
One bit of advice that has served me well with my business is: Don't spend money until you're making it. Anybody can spend money. If I gave you a million dollars today for your business I'm sure you could come up with a million different ways to spend it. But not everyone can make money. Bootstrapping should be your mantra. Find ways to get your product or service out without spending money. Get even just a few orders and prove that people will buy what you're selling. Then spend money on expanding your marketing. Your money will be well invested because you know you have something that works. Until you start making some sales, hustle and put your sweat into drumming up some business.
Kiyosaki believes that people go to school to learn how to work hard for money while he tries to teach people how to have money work hard for them. He believes that for many people, success is working hard to land a secure job at a big company or government who will look after you until you retire. That model might have worked in the Industrial Age but now in the Information Age, people have to look after their own financial security because you can no longer rely on your employer to take care of you. One of the best ways of doing this, he believes, is to create your own business and become your own boss.
According to Kiyosaki: "The poor and middle class work for money. The rich have money work for them. The rich buy or create assets that work for them so they don't have to... An asset puts money in your pocket and a liability takes money from your pocket. The rich understand the difference and buy assets, not liabilities. "
Action Item #2: Mind Your Own Business
As entrepreneurs we have to wear many hats. You're everything from the CEO to the janitor when you start a business. If you want to grow your business properly and have confidence in your decision making, you need to understand your numbers. Yes, it may be boring and outside your core competencies at the beginning but when you can understand your balance sheet, income statement, and the numbers that run your business you'll be in a much better position to drive your company forward. It could be one of the best investments that you make into yourself and your business.
If you want to achieve financial freedom, Kiyosaki believes that there are 3 key lessons that you need to master: learn how to make money, learn how to manage it, and learn how to invest it. He encourages people to keep their day jobs until they are earning enough money on the side from their own business or investments to be able to quit. Kiyosaki also believes that money is a "base subject" and that it's never too late to start learning.
According to Kiyosaki: "Many people confuse their profession with their business. To become financially secure people need to mind their own business. Your business revolves around your asset column, as opposed to your income column. The rich focus on their asset columns while the poor and middle class focus on their income columns.”
Action Item #3: Work to Learn, Not for Money
If you haven't started your business yet, a great piece of advice is to get a job where you can learn the skills that you need to succeed as an entrepreneur. Want to set up your own auto shop? Go work for small auto shop. Learn the ins and outs of how the business runs. Ask the business owner to get involved in other projects in addition to what you were hired to do. Work extra hours and on the weekends to over deliver and really understand how the business works. You'll first figure out if that industry is for you or not and you'll also make many of your rookie mistakes while still getting paid by someone else.
Kiyosaki credits much of his success as an entrepreneur to his military education. He learned how to lead men into battle, make important decisions quickly, and be tough. He translated those skills into hiring excellent workers and leading them into business battles. He also credits working for Xerox for teaching him how to sell and how to accept and move forward from rejection.
According to Kiyosaki: "Many entrepreneurs fail to grow because they lack leadership skills. And rather than look in the mirror, they find it easier to blame others. Blame is short for be-lame, and you can’t be an effective leader if you’re lame... Work to learn. Don’t work for money… Look for jobs that can help you develop the skills of managing cash flow, systems and people rather than just pay you well."
True Story
There was once a friend of Kiyosaki’s whose 16 year old son desperately wanted a new car. His friends had all been given one by their parents, and now this son expected nothing less. But, it was not going to be that easy for the boy. His father had played Kiyosaki’s CASHFLOW board game and he wanted to teach his son a lesson in financial management. The father gave his son $3,000 but forbade him from using it to buy a car just yet. At the same time, he gave his son a subscription to the Wall Street Journal. The father told his son that only once he had earned an additional $6,000 from investments could he then use $3,000 to buy a car. The rest of the money would of course go into his college fund. “My friend said it was the best $3,000 he ever spent,” says Kiyosaki. “Not only had his son gained a new respect for the power of money, he also learned to spend money wisely instead of letting money burn holes in his pockets.”
More Quotes
"Don’t work for money; make it work for you."
"Remember, your mind is your greatest asset, so be careful what you put into it."
" If you want to go somewhere, it is best to find someone who has already been there."
What Do You Think?
Did you bootstrap your business? Do you understand the numbers that run your company? What part of Robert Kiyosaki's message impacted you the most? As always, I’d love to hear your thoughts if you leave a comment below!
Evan Carmichael
To learn more check out my list of Robert Kiyosaki articles or my website, EvanCarmichael.com.
