Tag Archives: Rich Dad

Rich Dad, Poor Dad

Rich Dad, Poor DadRobert Kiyosaki’s Rich Dad, Poor Dad isn’t just about money, it’s about life. His dad, an educated PhD, a successful and respected academic official, spent most of his life struggling to find time and to get by financially. He was successful, but there was never enough time and never enough money. His friend’s dad never finished high school, but managed to build a financial empire. When he was a little kid, he asked his dad how to get rich. When “making money” led him and his buddy to melting lead toothpaste tubes, both their fathers were happy with the initiative, but suggested he study from the future millionaire about how to get there. This book flipped my world view. Before I read it, I never thought about my path in life. I just figured I’ll get a good degree, get a decent job, become better at it, and try to enjoy my weekends and hours after work. This book reveals, in very powerful and simple terms, that the difference between rich and poor is that the rich let money work for them and the poor work for their money. It’s very eye opening stuff.

The story started almost half a year ago. Not far from when I started my web development internship. My dad set an anchor for learning Spanish and, right on time, a new guy joined his company–fluent speaker, with software in the language. He also let my dad listen to some tapes called “Rich Dad Poor Dad

At the dinner table:
Dad: “Say you need some extra cash, what do most people do? What’s the most logical thing to do?”
B: “Get another job?”
D: “That’s what most people say. But it’s absolutely the wrong answer. To really make it, you shouldn’t work two jobs, you need to start your own business. A business can grow and make you more money, but working that second job, you’ll just be wasting your time. You won’t be getting any better at it, advancing, or getting well paid. It’s just not worth it.”

I liked this idea. Both my parents work two jobs. They make decent money, but end up stuck in the same situation, working to exhaustion and worrying about losing their jobs. Making almost nothing with the internship and learning even less, I started thinking about what to do. I realized this job was leading nowhere and perhaps school wouldn’t be so bad. I needed to study for the GRE’s or the GMAT. Since I’ll be studying, why not start a business as I do it. Tutor kids in SAT’s and practice my own stuff at the same time. It would pay just as much for like a half or third the time I spend at work, and it’d be time well spent.

For about a week I searched for a desk on craigslist. Coming home tired, I’d just look for an hour or so, then crash. One night I just had enough. I was just going to go buy a new one. It would be an investment, a place where my students would study. I ran out of the house to buy the perfect desk at Target, from the Metropolitan Collection. Sleak, simple, and comfy and tall. (Sorry for the tangent, I’m quite a fan of interior design.)

After one final check for responses to my desk inquiries, I was out the door. Right as it closed I remember the faceplace to my CD-player. I go back in and switch it with my keys and head out again. Again, I realize the keys are gone right as the door clicks locked. With my roomate out for the day and a spare car key in my wallet, the journey began.

I got the desk. Oh, so lovely. But now what? With no way to get into my place and nowhere nearby to go, why not hit up a book store? I drove the desk over to Borders and somehow ended up picking out that book. I finished a third by the time the store closed.

All my training, my programming, my getting programmed. It finally dawned on me. What am I going to do to make it? I couldn’t put down this book. It’s like picking up a manual on your life. Not just some VCR manual, but a fun one, written in real words, by real people, and about you. I just couldn’t stop.

After the store closes, I read another hour in my car, but realizing that it’ll get too cold to sleep there, I call up J, a buddy in the Mission. Just a few weeks back, my roomate and I stopped by J’s place for a chat. Back in the days, J and I would carpool to math classes at the local high school and were micro-community presidents, in high school we were both programming nerd and took classes at the JC with my dad. Toward college, we didn’t kick it as much, although I’d end up at a bunch of political rallies with his mom. He was a contractor for Y2K stuff and a waiter, while I worked at the library. He started college a semester before me, and by the time I started, he joined a frat. I joined some atheist group. Eventually realizing what a waste of time it was, I evolved to a dance group. By this time he took on a job at the Computer Center. He ran the house budget and then ran the house, while I took summer school. He eventually chose Cog Sci, and I followed in his tracks. By the time I followed him to becoming an advisor, he went to study business in Spain. While I grunted through my last year, he took a trip to Peru to teach and raise funds for an orphanage in Peru. By the time I was done with Cal, he’d joined an internet company and worked his butt off. He had a powerful work ethic and a very strong personal and leadership skills and I had only respect for him. And tonight, he saved me from the cold (the desk could take it).

That night, as he and the girl he met on match.com had some fun in his room, I kept reading the book. Around three, a few friends came back from the bars and crashed in the living room too. I took a nap and went into the bathroom to keep reading. Around six, his roommates came back from the clubs. This whole time I was reading. I couldn’t stop until I finished. I finished around six in the morning. I can’t describe what’s in the book. The first few chapters take all the things you learn in school and flip them on their head. It’s just amazing.

Reading this book was one of the biggest turning points in my life. It shook me up and made me realize that I need really sit down and really think about how I want to live my life. While this book isn’t a clear formula, it’s a big wake-up call and should be mandatory reading for people going into high school. I wish I read it then.

Rich Dad, Poor Dad and the Silicon Valley

My boss pointed out an important fact not mentioned in Rich Dad, Poor Dad: in the Silicon Valley, when you join a company, you also become an investor. It’s not the salary, but the stocks that build your wealth. They are your assets. This is the advantage of joining a start-up. You own a large percent of the company, and you’re taxes on it are on the money you invested (if it’s a founder’s stock). So when there is nothing and you buy your parts at $0.001, that’ll be what you’re taxed on. The other side of it is the company uses this to keep you in, you don’t get all your shares transfered to you right away. They come with a percentage each year. So, if you leave right away, the company can buy back the shares not transfered to you at the old price. It’s kind of a leash thing, but it’s something that Rich Dad never gave the people working at his stores.

So why do companies do this? Why give away a share? Because when a person actually owns part of something, she becomes a lot more productive. She has an interest to succeed, and an interest to stay.

Other things, joining established or not? Here’s the gamble, on one hand it takes luck but on the other without taking this risk, it’s hard to ever get passed regular income. Joining a small starting group or starting your own thing means a very high investment of time and energy and it might not succeed. If it does, you’re set. If it doesn’t you’ve lost time but learned a lot. On the other hand, say you join a big company, in fact an ideal working environment by Good Business : Leadership, Flow, and the Making of Meaning standards. You get paid a nice salary, are gauranteed a steady, and secure life. You also get stocks, but at such a high price, the exponential growth point has most likely passed (although it did grow a lot this year).

This is the tough choice. As someone just starting out, and very eager to make my first hundred thousand and go to Thailand to study (yes, that’s part of the plan now, once I make my first first hundred thousand, I’ll study for all those pesky certifications and exams in Thailand, it’s a good motivation to get myself to make it fast), I wondered if it wouldn’t be just easier to join the simple happy job, instead of working like mad and risking not getting anything. However, seeing yesterday’s events and seeing how a real passive income generation works and how a business starts to take off, I got really inspired. It may be harder right now, with little income coming in. But I’m determined to break out of the rat race. I know that a person cannot depend on an hourly wage to truly live and I want to build something, whether it’s a real estate empire, an invention, or a product. For a while, I was getting really tired and annoyed, but yesterday inspired me. I’m more eager than ever to finally get this project done, and I’m really annoyed at myself for having taken this long and for not really appreciating how great an opportunity this is.

I have an interview with the big established company next week. The phone interview was a disaster, but I guess my resume and writing helped a bit. I don’t know. I’m actually not that interested, which makes the whole idea of interviewing kind of fun. For the position and for the long term, they’d have to offer something really creative. Perhaps they will. I’m just curious at what it could be. Nearly half a dozen of my aquaintances work there right now, and they love it, and the lure of having that steady income sounds really nice when you don’t have it. But I’m just checking it out. I’m determined to finish this project first and hopefully get the chance to grow where I’m at right now.

So much going on right now: project, tutoring, real estate class. As the The ABC’s of Building a Business Team points out, now is the time to develop character. I have a few goals, very little spare time, and very little sleep. We’ll see how it all turns out.

The ABC’s of Buiding a Business Team That Wins

Rich Dad's Advisors┬«: The ABC's of Building a Business Team That Wins : The Invisible Code of Honor That Takes Ordinary People and Turns Them Into a Championship Team (Rich Dad's Advisors)Just read Blair Singer’s book on building business teams.

The chapter on leadership rocks. Looking at good leaders, it’s as if they’re following the qualities listed word for word. I love how he broke it down and the whole part about finding what people are good at and helping them improve on that, instead of telling people to work on things they’re not good at. In many situations just by changing the approach a person can accomplish the same thing through empowerment. I also love the debreifing section. How it breaks down everything and maximizes learning from every situation.

The code of honor is interesting, very similar to part of the message in Hill’s book. Looking at my friends and groups and companies, I see the code stuff is true. The only danger is when this code gets used against the employees or “friends”, when even achieving the goal offers nothing to most of the team and most of the individuals. I guess that’s the biggest thing to think about when joining a company or group, “Do I agree with the goals and with the code?” On the other hand, such a code for a group of friends trying to help each other succeed, a marriage, any kind of mutually beneficial team, as well as for every individual makes a whole lot of sense. Looking at real friendships, good marriages, and successful companies, if they didn’t follow such a code, they couldn’t perform at such a level.

I think keeping both sides in mind gives a really good picture of the dynamics in many relationships and helps one evaluate whether the relationship is a waste or worthwhile one (one that improves the community, the team, and you as person). It also gives a special sense of clarity to working under pressure. I think this is great book, but when reading it one should keep some of the previously mentioned questions in mind as well. I can’t wait to read SalesDogs.