Shooting the Sacred Cows of Money Putting a bullet in the head of bad financial advice

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Shooting
the Sacred Cows
of Money
knowledge: the new money
™
TM
Save Yourself from the Crisis!
Rich Dad's Truth About Money
Go to school Get a job Work hard Save Money
Live below your means Your home is an asset Get out of debt
Invest for the long term in a retirement plan filled with stocks,
bonds and mutual funds
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Shooting the Sacred Cows of Money
Putting a bullet in the head of bad
financial advice
A Quick Note from Robert
roughout history, cultures have tightly grasped their “sacred cows” (dearly held beliefs so commonly accepted, so
religiously observed, that to question them is sacrilege).
Our culture is no dierent. Our beliefs are no less sacred.
Especially when it comes to money.
A year or so ago, Kim and I did something we’d never done before. We assembled all the Rich Dad advisors in one
room to talk about the common myths our culture holds about money.

ese myths include:
 •Gotoschool
 •Getajob
 •Workhard
 •Savemoney
 •Yourhouseisanasset
 •Getoutofdebt
 •Livebelowyourmeans
 •Investforthelongterminawell-diversiedportfolio
econversationswerecandid,funny,anddead-on.Welmedtheseconversationsandplacedthemonawebsite,
www.shootingthesacredcows.com.
egoalwastocreateshort,free,easy-to-watch,andeasy-to-sharevideostointroducethosenewtothe
RichDadmessageandtohelptheRichDadcommunityeducatetheirfamily,friends,andco-workersabout
Rich Dad principles.
RichDad’svisionhasalwaysbeentoprovidecomprehensivenancialeducationwithquality,freeresourceswhen
possible to as many people as we can. e mission of Sacred Cows is to take you from the established mindset about
moneytotheenlightenedmindset,toputabullettotheheadofbadnancialadvice,andtohelpyoutakecharge
ofyournancialfuture.
e videos are available for free online at www.shootingthesacredcows.com. But we thought it would be a great idea to
take the content from the videos and condense it all into a free eBook that is easy to share.
So,that’swhatwe’vedone.
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efollowingeBookisaneditedversionofthevideotranscript.Ihopeyouenjoyit.Pleaseshareitwithyourfriends,
family,andco-workers—anyoneyouknowwhocouldbenetfromthecollectiveknowledgeofthe
Rich Dad team.
Comprehensivenancialeducationisstillthesurestwaytonancialfreedom,bothpersonallyandasasociety.
Together we can make a dierence.
Rich Dad Team
Robert T. Kiyosaki
RobertisthefounderofeRichDadCompany,arecognizedbrandworldwideandagloballeaderinnancial

education,empoweringpeopletoescapetheRatRaceandndnancialfreedom.
A successful entrepreneur and investor, Robert is the author of 19 books, including Rich Dad Poor Dad—the#1
personalnancebookofalltime.He’sregularlyfeaturedonshowssuchasLarry King Live, Oprah, and Your World with
Neil Cavuto.
Robert’s bestseller, Conspiracy of the Rich: e 8 New Rules of Money, pioneered online book publishing as a free online
interactive book with contributions from over a million readers in over 167 countries. Frequent updates appear on
www.conspiracyoftherich.com
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Hislatestrelease,Unfair Advantage, addresses what schools will never teach you about money and incorporates both
audioandvideointoRichDad’srstenhancedeBook.
Atrueadvocateofeectivenancialeducation,Robertisn’tafraidtochallengethestatusquo.Heoersnancialadvice
thatexposestheabsurdityofconventionalattitudesaboutmoneyanddebunkstheso-callednancialexperts.


Kim Kiyosaki
As an internationally renowned speaker, author, entrepreneur, and real estate investor, Kim knows what it takes to
succeedandbeananciallyindependentwoman.She’sasought-afterspeaker,televisionandradiotalk-showguest,the
hostofaPBSRich Woman show, and a columnist for www.WomenEntrepreneur.com.
rough her international brand, Rich Woman, Kim draws on a lifetime of experience in business and investing
tobeanadvocateforwomeninthemarketplace.Aself-mademillionaire,Kimisahappilymarried(butercely
independent)womanandoftentravelsandspeakswithherhusband,RobertKiyosaki.Herrstbook,Rich Woman
,
was a Business Weekbestsellerandisoneofthetop50best-sellingpersonal-nancebooksofalltime.
Ken McElroy
Ken is a founding partner of MC Companies, a real estate investment company that specializes in management,
investment,development,andconstructionwithaportfolioacrossthesouthwesternUnitedStatesofover10,000
apartment units valued in the hundreds of millions of dollars.
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As a Rich Dad Advisor, Ken brings 20 years of real estate experience to the team and speaks to thousands of people
acrosstheglobeeachyear.HeistheauthoroftheRichDadAdvisorbooks e ABCs of Real Estate Investing, e

Advanced Guide to Real Estate Investing, and e ABCs of Property Management.Heisalsoacontributingauthor
to Robert’s e Real Book of Real Estate and the author of e Sleeping Giant: e Awakening of the Self-Employed
Entrepreneur. Find out more at www.KenMcElroy.com, www.mccompanies.com, and www.thesleepinggiant.com.

Andy Tanner
Andyisarenownedpaper-assetsexpertandsuccessfulbusinessownerandinvestorknownforhisabilitytoteachkey
techniquesforstock-optionsinvesting.In2008,AndywaskeyinhelpingdevelopandlaunchRichDad’sStockSuccess
Systemwhichteachesinvestorsadvancedtechnicaltradingtechniquestoprotfrombullandbearmarkets.Heserves
asacoachtoRichDad’sStockSuccessSystemtrainersandastheRichDadAdvisorforpaperassets.Heiscurrently
authoringanupcomingRichDadAdvisorbookonpaper-assetinvesting.
Anita Rodriguez
Anita homeschooled her four children before becoming a teacher and counselor in the poorest high schools of Denver’s
innercity.Later,shewasahighschooladministratorforDouglasCountyinColorado,oneofthewealthiestcounties
inthenation.Havingspentmostofherlifeineducationandseenrst-handthelackofsoundnancialeducation
intheU.S.schoolsystem,shejoinedeRichDadCompanyin2006asanEducationAdvisor.Shebringshervast
experiencetoRichDadtohelpdevelopworld-classnancial-educationcurriculumsthatchangelives.

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Blair Singer
Blairisatop-ratedandinternationallyknownspeakerandsalescommunicationstrainer.Since1987he’sworkedwith
tensofthousandsofindividualsandorganizationssuchasIBMandJPMorgantohelpthemachieveextraordinary
levels of sales, performance, productivity, and cash ow.
AsaspeakerandRichDadAdvisor,Blairhaspresentedinover20countriesacross5continentsonlife-changingsales
success, and is the author of the Rich Dad Advisor books Sales Dogs and e ABCs of Building a Business Team that
Wins. Find out more at www.salesdogs.com and www.blairsinger.com.
Tom Wheelwright
TomisthefounderandprincipalforProVisionWealthStrategies.Formorethan25years,Tomhasdevisedinnovative
tax, business, and wealth strategies for sophisticated investors and business owners. Tom is an international speaker and
anadjunctprofessorintheMastersofTaxprogramatArizonaStateUniversity.HeservesastheRichDadAdvisorfor
TaxandWealthStrategyandistheauthorofanupcomingRichDadAdvisorbookonbuildingwealththroughtax

strategies. Find out more at www.provisionwealth.com.
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Garrett Sutton
GarretisafounderandpartnerwithSuttonLawCenter,P.C.,alawrmwithocesinNevada,Wyoming,and
California.Hehasover20yearsexperienceassistingandadvisingentrepreneurs,families,andbusinessesinselectingthe
appropriatecorporatestructurestolimittheirliability,protecttheirassets,andadvancetheirpersonalnancialgoals.
AsaRichDadAdvisor,GarrettspeaksfrequentlyatRichDadeventsonthetopicofcorporateformationand
assetprotection.HeistheauthoroftheRichDadAdvisorbookse ABCs of Writing Winning Business Plans,
e ABCs of Getting Out of Debt, Own Your Own Corporation, and How to Buy and Sell a Business. Find out more
at www.garrettsutton.com and www.sutlaw.com.
Mike Maloney
Mikeistheownerandfounderofwww.goldsilver.com,anonlineprecious-metalsdealershipthatspecializesinthe
delivery of gold and silver and secured storage. Additionally, www.goldsilver.com provides research and commentary for
itsclients,assistingthemintheirwealth-buildingendeavors.
Mikehasspokentoaudiencesthroughouttheworldonthebenetsofprecious-metalsinvesting.Astudent
of economics, Mike is regarded as an expert on economic cycles and capitalizing on the opportunities they aord.
HeistheauthoroftheRichDadAdvisorbook, Guide to Investing in Gold and Silver. Find out more at
www.goldsilver.com.
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Kathy Heasley
KathyisthefounderandprincipalofHeasley&Partners,Inc.,abrandingandmarketingrm,whichpioneeredand
championsHeart&Mind™Branding.Asuccessfulauthor,entrepreneur,businesscoach,andpublicspeaker,Kathy
servesastheRichDadAdvisorformarketingandbranding.Shehasover20yearsofexperiencehelpingtoshape
brandslikeColdStoneCreameryandMassageEnvyandisaninternationalspeakeronbranding,marketing,and
communications. Find out more at www.heasleyandpartners.com.
Trina White Maduro
Trinaisabusinesswoman,investor,andsocialentrepreneur.Shegrewupinthemidstofviolence,drugs,andgangson
thesouthsideofChicagoandwasraisedinasingle-parenthomewith14othersiblingsandfamilymembers.
Trinaexcelledinsportsandinitiallyviewedprofessionalbasketballasherdestinyandvehicletosuccess.Shelaterchose

topursueacareerinsocialworkandministrythroughnon-protorganizationsandchurches,whichshe’sdoneforthe
last 21 years. Today, she is a social entrepreneur who understands how to use money to create opportunities and better
the lives of herself and those she serves.
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Rodney Anderson
RodneyistheExecutiveDirectorandSeniorManagingPartnerforRodneyAndersonwithSupremeLending.Heis
theleadinghome-loanspecialistinTexas,andhasarrangednancingforover20,000familiesoverthelast18years.He
isthe#1producerofmortgageoriginationinthestateofTexasandwasnamedthe#1FHA/VAlenderbyMortgage
Originator magazine.Rodneybringshis25yearsofexperiencetothetableastheRichDadAdvisoronlending.Visit
www.RodneyAnderson.com for more information.
Marco Antonio Regil
Marcoisasuccessfulentertainmententrepreneurandinvestor.He’sMexico’snumber-oneTVhostandhasdevoted25
yearsofhislifetoradioandtelevision.He’saspokespersonforsuchcompaniesasMcDonald’s,Pepsi,andNestleand
fornon-protorganizationsliketheAmericanRedCrossandtheMexicanTelethon.He’shelpedraisemorethan$40
million every year for these charities.
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Introduction:
Robert and Kim’s Story
In Shooting the Sacred Cows,KimandIshareourstoryabouthowwemet,weredirt-poor,andbuiltourwealthtogether
asateam.WealsosharewhywefeltcompelledtostarteRichDadCompanyandwhywefeelnancialeducationis
so important.
Robert
HelloI’mRobertKiyosaki,andI’mprobablybest-knownformybookRich Dad Poor Dad.
Kim
And I’m Kim Kiyosaki.
Robert
KimandImetinHawaiiin1984whenIwaskindofbetweenbusinesses.
Kim
Ishouldsaysomething.Wemetin1984andfellinlove,and1985wasprobablytheworstyearofourlives.

Wewerebrokeandbuildingabusiness,butwewerehomelessforaperiodoftime,westrugglednancially,anditwasa
really tough time to go through.
Robert
So,in1986IaskedKimtomarrymebecauseIguredifshehadputupwithmewithnomoney,she’dputupwithme
anytime.Iaskedherdadandhisrstquestionwas 
Kim
Mydad’srstquestionwas,“Doeshehaveajob?”
Robert
eanswerwas,ofcourse,no!Butanyway,by1994KimandIwerenanciallyfree,andwediditwithoutajob,
without a retirement plan, and without government support.
Kim
Yes,andIthinkoneofthemostbeautifulthingsaboutbeingnanciallyfreewasthatitwasthersttimewewereable
toask,“Whatdowewanttodowiththerestofourlives?”Because,upuntilthatpoint,weweresobusyworkingday
to day and paying the bills that we never had that luxury.
And that’s when we started e Rich Dad Company.
Robert
And in 1996, we created the CASHFLOW boardgametogivepeoplethesamenancialeducationmyrichdad
gave me.
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Kim
PriortomeetingRobert,Ihadvery-little-to-nonancialeducation.AndwhatRobert’srichdadtaughthimandwhat
welearnedonourjourneytobecomingnanciallyfreewasnotwhatweheardfromnancialadvisersandplanners.In
fact, it was almost the opposite.
Wefoundthatlotsofpeoplewereaskingushowweachievednancialfreedom,sowecreatedtheCASHFLOW game
toteachpeoplejustwhatwedid,whichwasquitetheoppositeofwhatmanypeoplearetaught.
Robert
Todaywe’reinanancialcrisis.KimandIsawthiscrisiscoming,andthatwasthereasonbackin1996thatwecreated
eRichDadCompany—toprovidenancialeducationsopeoplecanlearntotakecareofthemselves.
Iwasalwaystaughttheimportanceofteachingpeopletoshinsteadofgivingpeoplesh.Unfortunately,whatour
governmentsdotodayisgivepeopleshratherthanteachthemtosh.Andthemoreyougivepeoplesh,themore

poor people you create.
e Rich Dad Company was formed to teach people what my rich dad taught me, but more importantly, to teach
themhowtosh.
Kim
LikeRobertsaid,there’sahugenancialcrisisgoingonrightnow.Ifsomethingisn’tworkingforyounanciallytoday,
then maybe you need to look for new answers.
And we’re always looking for new answers. at’s what Shooting the Sacred Cows isabout—gettingnanciallyeducated,
takingchargeofyourlife,andnotdependingonthegovernmentorothernancialexperts.
Robert
Ouranswertothenancialcrisisistogetnanciallyeducated.Insteadofstartingoutwithlearninghowtosh,
nancialeducationbeginsbyshootingthesacredcowsofmoney.
Money does not start in your hands. Money actually starts in your head.
Peopleholdtosacredcows,age-oldIndustrial-Agebeliefs,suchas,“Gotoschool.”Everybodysays,“Well,youhaveto
go to school.” Unfortunately, you don’t learn anything about money in school.
InShootingtheSacred Cows of Money,we’regoingtosaysomethingsthatwillchallengeyou.Youmightevensay,
“at’s not fair!” Well, we’re not trying to be fair. ere is no fairness when it comes to money. Either you’re a winner,
or you’re a loser.
Wesayhardthingsbecausetheyarethetruth,butalsobecausewecareaboutyournancialfuture.eliesofthe
sacredcowsofmoneyactuallyhurtpeople.Asacredcowissomethingthateveryoneacceptsastruth—andit’stabooto
say anything bad about it or to the contrary. ere are many sacred cows regarding money. ey are serious, and they
hurt people.
12
Today’sworldisdierentthanitusedtobe.ewaythingsalwayshavebeendonenanciallyisn’tworking,andit’s
time that somebody stands up and shoots a few sacred cows so that people stop suering.
AgoodanalogyisthepeoplewholivedinNewOrleanspriortoHurricaneKatrina.eyknewtheylivedbelowsea
level. ey knew that it was only a matter of when, not if,adisasterlikeKatrinahit.Yet,theychosetoignorethe
potentialconsequences.Andtheypaidtheprice.Today,we’vegotalotofnancialstorms.Youneedtobeprepared.
Wehaveasolution—averystrongsolution.Byshootingthesacredcowsofmoney,wehopetowakeyouuptostart
thinkingdierently.So,lockandload.
Time Out: e 5 Elements of Financial Education

Youneedtoknowtheveelementsofnancialeducation.
Element number one is history. ere are many interesting dates, but one important one is 1913 when the Federal
ReserveBankwascreated.Alsoofimportance,in1913theInternalRevenueService(IRS)wascreatedsothatthey
could tax us. ey had to tax us if they were going to print money.
In1971,PresidentRichardNixontooktheU.S.othegoldstandard.After1971,moneystoppedbeingmoney.It
becameacurrencybackedbydebt.Oneofthereasonswe’reinthismassivenancialcrisistodayisbecause,after1971,
the Federal Reserve Bank could print as much money as it wanted.
In1974,therulesofretirementchangedwiththeEmployeeRetirementIncomeSecurityAct(ERISA),whichpaved
thewayforthe401(k).Andthat’swhytodaysomanypeopleofmygenerationareafraidofrunningoutofmoney
during retirement.
Element number two is taxes. As you know, taxes are not fair. ere are many reasons why the rich pay much less in
taxes than people who work for the rich.
Element number three is nancial vocabulary. In other words, understanding the language of money. For example,
what’sthedierencebetweenanassetandaliability,capitalgainsversuscashow,orfundamentalsversustechnicals?
at’sallpartofanancialvocabulary.
Numberfouriswealth protection. As we all know, people out there are trying to steal your money. But there are also
peoplewhomyoutrustwhoaretakingyourmoney.Becauseofthis,nancialeducationisnotonlyhowmuchmoney
you make, but how much money you keep.
Andelementnumberveisthatthere are two sides to every coin. When you put your money in the bank,
the bank gives it to somebody else. When you put your money in your retirement plan, the bank gives it to
somebody else.
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Sacred Cow #1: Go to School
Animportantpartofnancialeducationishavinganancialstatement,whichincludesanincomestatementand
abalancesheet.Whenyougotoyourbanker,yourbankeralwaysasksforyournancialstatement,notyourreport
card,becauseyournancialstatementisyourreportcardonceyouleaveschool.Yournancialstatementwilltellyou
whetherornotyou’resmartwithmoney.enancialstatementisthereportcardofyournancialintelligence.
One of the biggest sacred cows of all is go to school.ManypeoplethinkI’manti-school.atisnottrue.I’manti-
ignorance.So,I’mverypro-education.I’mjustnotproofbeingstupidaboutmoney.
Anita

Education is more important now than it’s ever been.
Robert
at’s right.
Anita
Sotheproblemisthattheschoolsfocusjustontwokindsofeducation.ere’stheacademic,whichisreally
important…Reading,writing,arithmetic.Youneedtohaveit,that’sbasic.
e second type of education they give is the professional kind of education. If you want to be a lawyer or an
accountantorateacher,thenyouneedtogotoschoolandgetthosecertications.Buttheonekindofeducationthat’s
lackingseverelyintheschoolsystemisnancialeducation.
Rodney
IputonmyFacebookonedaythatweneedtoteachourchildrennancialeducation,andIreceivedacommentback
fromateacherthatsaid,“Who’sgoingtopayforit?”We’reallgoingtopayforitifwedon’tstarteducatingourchildren
aboutnancesinschool.
Robert
isisaveryhotsubject.Ourschoolsaretrainingpeopletobeemployees,toworkfortherich.esecondthingI
don’t like about school is how they label a kid as smart or stupid at an early age. e reason I’m sensitive about that is
because I was labeled stupid right from the start!
Anditwasn’tthatIwasstupid.Iwasboredandnotinterested,andwestudiedsubjectsIwasn’tinterestedin.Nobody
could tell me how I was going use calculus.
Weretheytrainingmetobeanemployeeorstreetsmart?Mypoordadwasschoolsmart.Myrichdadwasstreetsmart.
I’d rather be street smart today.
Tom
Well, there’s a total lack of practical education. at’s really what you’re talking about, and I found that to be true. I’m
an accountant. I have a master’s degree.
14
Robert
Andyou’rean“A”student,right?
Tom
Yes,I’man“A”student.
Robert:

We’ll forgive you.
Tom
ankyou.ButwhenIwenttoschool,theonlynancialeducationIgotwasspecictomyprofession.erewasno
generalnancialeducation.Icouldhavegottenamaster’sdegreeandaPhDinmyeldwithoutanyspecicnancial
education at all about how to handle myself once I got out of school.
Robert

Right.Andpeoplesaytome,“Well,Ilearnedeconomicsinschool.Economicsisnancialeducation,right?”Notreally.
It’s not about investing. It’s not about the law. It’s not about taxes, not about history.
Garrett
Robert,asalawyer,Iseeallsortsofpeoplewalkthroughthedoor.Somearehighlyeducated,andsomehaveno
educationatall,butlikeyousaid,they’restreetsmart.AndthersttimeIsawthistypeofclient,Ithought,“Wow!He’s
doingprettywell.Hedidn’tgotocollege,buthe’sgotallthisrealestate.”Andthenthere’sapatternthatdevelopswhere
you see a lot of people who never went to college but are street smart and have done very well.
Kim
Iwastalkingtoawomantheotherday.She’sahighlysuccessfulmedicaldoctor.She’sverysmartinmanyways,but
whenweweretalking,shenallylookedatmeandsaid,“Ohmygosh.Ihavenotaclueaboutmymoney.”
She’s45yearsold,andshehasnotaclue.Manytimesyouthinkthat,becausepeoplearesuccessful,theyknow
something about money. But they really don’t because they never had the education.
Andy
Schoolcreatesacultureofdependence.Wedependonthreethings.Wedependonacorporationtotakecareofus.
Wedependongovernmenttotakecareofus.And,thescaryoneIthinkis,wedependoninstitutions—youknow,the
peoplewhorunour401(k)s—totakecareofus.
We rob ourselves of the independence to think freely as entrepreneurs or investors, and we become dependent on those
three entities. It’s brutal.
Robert

Mr.Maloney,younevernishedschool,didyou?
Mike
No,no.Ifailedschool,butmorethanthat,schoolfailedme.Iwasdyslexic.

15
eydidn’tknowwhatdyslexiawasbackthen,butbasicallyIwasjustlikeyou,Robert.Iwasboredsti.Igotputin
all the remedial classes. Basically, I was in with the dumb kids. ey weren’t teaching me anything I wanted to learn or
anything that I would ever use in my lifetime.
Robert
And the reason I’m bringing up Michael is that most people will agree he’s probably the smartest guy on this team. And
the problem for Michael was that there are three kinds of education. ere’s academic: reading, writing and arithmetic.
ere’sprofessional:becomeadoctororalawyeror,inmycase,apilot.Andthere’snancial.ButMichaelwasputback
becauseofacademics,becauseyoucan’tread,right?
Mike
Right.
Robert
So,howdidyoulearntoread?
Mike
ApplecameoutwithOSXatthebeginningofthelastdecade,andyoucanjustselecttext,hitabutton,andthe
computer reads to you.
Mostpeopledon’tknowit’sbuiltintotheoperatingsystem.Idevelopedapassionforglobalnanceandeconomicsand
monetary history especially. And passion drives you.
Robert
Nowwecan’tshuthimup,andI’mgoingtoblameAppleforthatone!
Andy
Schoolissolowgain.Ididn’tdowellinschool.Ididverywellinsports,andinsportsyoulearntocompete.Youlearn
todealwithpressure.Goalsinschoolareindividuallyfocused.You’recompetingagainsteverybody,andteamworkis
calledcheatinginschool.Someofuscheatedbetterthanothers.
Robert:
AndI’lljustsaythelastthingaboutschoolthatreallyupsetsme.InAmerica,schoolsarebasedonrealestatetax.In
other words, if you come from a rich neighborhood, the real estate tax pays for better schools. If you are from a poor
neighborhood,yougetlessmoney.So,anytimesomebodytellsmeschoolingisaboutbeingfair,whenIlookatthe
number side of it, it isn’t. If you’re poor, you’re getting the worst possible education. To me, that is cruelty.
Sohowdoesapersonlearnaboutmoney?Howdoesapersonincreasetheirnancialintelligence?Adiagramcalledthe

ConeofLearningprovidessomeinterestingclues.
16
Cone of Learning
After 2 weeks we
tend to remember
90% of what we say
and do
70% of what we say
50% of what we hear
and see
30% of what we see
20% of what we hear
10% of what we read
Source: Cone of Learning adapted from Dale, (1969)
Doing the Real Thing
Simulating the
Real Experience
Doing a
Dramatic Presentation
Giving a Talk
Participating in a Discussion
Seeing it Done on Location
Watching a Demonstration
Looking at an Exhibit
Watching a Demonstration
Watching a Movie
Looking at Pictures
Hearing Words
Reading
Nature of Involvement

Active
Passive
eConeofLearningwascreatedbyaneducationalresearchernamedEdgarDalein1969.Whathefoundisthatthe
worst way to learn is by reading or listening to a lecture. And the best way to learn is at the top of the cone, which is
simulations through games, and then doing the real thing.
e interesting thing is that my poor dad who was good at school thought that reading and lecture were the best way to
learn.Myrichdadtaughtmetobearichmanbyusingmethodsatthetopofthecone.Hetaughtmeusingthegame
of Monopoly™—youknow,fourgreenhouses,oneredhotel,fourgreenhouses,oneredhotel—andthenwewentout
and did the real thing.
So,oneoftheways,ifyouwanttolearnwithoutmuchrisk,isbysimulations,playinggames.ereasonmywifeandI
created the CASHFLOW game was so that you could play and make a lot of mistakes with play money.
Howmanypeopleinthisroomhavemadenancialmistakes?
17
Kathy
Yes,theonlythingwewereevertaughtinschoolwasmaybehowtobalanceacheckbook,howtohaveasavings
account, those basics.
Robert
Financial education is like learning another language.
Marco
I say this all the time in Mexico. If you learn English, you can do business with the whole world.
Robert
When you learn to speak the language of money, it opens up a whole new world. And unfortunately in our
school systems, we don’t teach the language of money. We teach people the language of becoming a doctor, lawyer,
or an employee.
Sacred Cow #2: Get a Job
e next sacred cow is get a job. Now the problem with getting a job is: Who do you think pays the most taxes—the owner
of the business or the worker? For that, I’ll turn to my accountant here, Tom.
Tom
Well, it’s clearly the employee who’s paying the most taxes. I started as an employee right out of school, and I was
payinghightaxes.Eventhoughmyjobistoreducetaxes,Iwaspayinghightaxes.Andthenabout15yearsago,I

startedmyownbusiness—myownCPArm—andIwasnowself-employedandpayingmoretaxes.So,itwasn’t
untilIstartedactinglikeabiggerbusiness,andwasreallyasignicant-sizedbusiness,thatIstartedpayinglessintaxes.
It’sbecausethebusinessowners,theentrepreneurs,andtheinvestors—theactiveinvestors—reallypaytheleastamount
of taxes.
Time Out: e CASHFLOW Quadrant
InthiseBook,you’llhearalotaboutE,S,B&I,alsoknownastheCASHFLOWQuadrant.Estandsforemployee;
employeeshaveajob.Sstandsforself-employed,smallbusiness,orspecialistlikeadoctororalawyer.esepeople
ownajob.Bstandsforbigbusiness,500employeesormore,andthesepeoplehaveotherpeopleworkingforthem.
And I stands for investor, and investors have their money work for them.
Nowmypoordadalwayssaidtome,“Gotoschoolandgetajob.”Hewantedmetobecomeanemployeeora
specialist like a doctor or a lawyer. My rich dad said, “If you want to be rich, you have to be a business owner on the
B-Iside.”Andthat’sthedierencebetweenmyrichdadandmypoordad.
Robert
IfyoulookattheCASHFLOWQuadrant,youhavetheE,S,B,&Iquadrants.epeoplewhogotoschoolareon
theEandSside.eSstandsforspecialistlikeadoctororalawyer,andtheE’sareemployees.Butdoctorsandlawyers
paythehighesttaxes,right?
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Tom
Oh,byfar.It’stheself-employedpeoplebecause,notonlyaretheypayingthehighestincometaxes,theyalsogetthe
privilegeofpayingSocialSecuritytaxesandMedicaretaxesoneverythingtheyearn.So,they’repayingextrataxesjust
tobeinthatSquadrant.
Robert
Right. My mother wanted me to be a doctor. If I had followed that advice, I’d be paying the highest tax possible. ey
makealotofmoney,buttheypaythehighestpercentageintaxes.Sothat’swhythisrelatesbackto“gotoschool.”
Tom
at’s right. And they actually have the fewest options to reduce their taxes. But the tax laws are really geared towards
thosepeoplewhoarecreatingjobs,theentrepreneurs—thosewhoarecreatinghousing,realestateinvestors—because
the government understands that’s what we need. ey want the private sector to do that, and so they reward them for
doing so. And that’s really all the tax law is. It’s a system of rewards for people doing what the government wants you
to do.

Blair
eotherpartofitisthiswholeideaofgettingajob.ere’ssomekindofamythouttherethatgoeswith“getthe
job,getasafe,securejob.”Andsothatbygettingajobsomehowyou’regoingtobetakencareoffortherestofyour
life.Allyouhavetodoispickupanypapertoseehowmanytensofthousandsofpeoplearelosingtheirjobs.ere
arenosafe,securejobs,andnowwe’recompetingwithIndiaandAsiaforjobsthatweresacredtoAmericaatonepoint
intime.So,thiswholeideaofhavingajobandbeingsecureisjustnottrue.It’sprobablythemostinsecurethingyou
could be doing right now.
Robert
eideaofasecurejobisanIndustrial-Ageidea.
Blair
Exactly.
Kim
eonlyoptionputintoyourheadistogogetajob,andIwasn’taround…
Robert
at’s brainwashing.
Kim
Yes.Ididn’tgrowuparoundentrepreneurs.Iwasn’taroundbusinessowners.Iwasaroundemployees.
Kathy
WhenIrststartedmycompany15yearsago,Iwentbacktomyclassreunion,whichisalwaysaninterestingthing
todo,andIremembersayingtothem,“Yeah,youknow,Istartedacompanyaboutveyearsago.”eylookedat
melike,“You’resobrave.”AndI’mthinking,“I’vehadthiscompanyforveyearsnow.at’sthelongestIhaveever
worked anywhere.”
19
Robert
See,withoutnancialeducationyouhavetogetajob.What’stragictodaywithsomanypeoplelosingtheirjobsisthat
they’regoingbacktoschooltogetanotherjob,butthey’renowcompetingwiththeirkids.at’sinsanity.So,we’renot
sayingjobsarebad.We’rejustsayingasentrepreneursthatourjobistocreatejobs.egovernmentdoesn’treallycreate
jobs.eyneedmoreentrepreneurs.
Kim
Ididn’tevenknowtherewasanotheroptiongrowingup.Ithoughtallyoucoulddowasgetajob.Soagain,it’snot

right or wrong to be an employee, but I’d like to know what my options are.
Anita
Whenyouwereinschool,didtheysay,“Gotoschool,getyourdiploma,andbecomeanentrepreneur?”No.Imean
you’ll never hear that in the school system.
Kim
No,theysaid,“Workyourwayuptheladder,getthebiggerpaycheck,getabetterjob,andhigherpay.”
Anita
Butyou’reright.Getajobistheonlyoptionthatyou’llhearinschoolasarule.
Robert
AndjobstandsforJustOverBroke,youknow.
Tom
Tome,therealissuewithajobisthatit’sthehighest-riskprofessionyoucanhavebecauseyouonlyhaveoneclient.
WhenIstartedmybusiness15yearsago,itwasafterbeingredfromajob.WhatIrecognizedwasthatIhadno
controlovermylifebecauseIhadoneclient,myemployer,whereasnowIhavethousandsofclients.Now,ifoneclient
resme,it’snottheendoftheworld.Nowmyriskhasgonedownconsiderably,almosttonothing.Whenyouhavea
job,it’sjustahigh-riskplay.
Ken
Well, the other thing is, you’re in complete control. at’s the piece that I like.
Robert
You’reanentrepreneurbecausenobodywouldhireyou!(Grouplaughter.)
Ken
Butit’snice.Ifyou’regoingtolosesomebusiness,oryoudolosesomebusiness,youcangooutanddosomething.You
cangoout,generatebusiness,andllthatgap.
Robert
Financialsecurityismoreimportantthanjobsecurity.E’sandS’sgetpunishedformakingmistakes,ortheylosetheir
job.B’sandI’sgetricherfromtheirmistakesbecausetheylearnfromtheirmistakes.
20
Sacred Cow #3: Work Hard
e next sacred cow is work hard.
My poor dad, a schoolteacher, a great guy with his PhD, always said, “I’m a good, hardworking man.”

My rich dad had a dierent point of view. He had me read this book by Mark Twain. It was a story of how Tom Sawyer got
the other kids to paint the fence for him. My rich dad said, “at’s working hard. You want other people to work hard for you,
and you want your money to work hard for you.” at was his lesson.
Robert
Alotofpeoplecan’twaituntilFridaybecausetheyhatetheirworksomuch.AndtheydreadSundaybecausetheyhave
to go back to work the next day.
Withus,Iwouldsaymostofusareworking24/7,butwe’reworkingdierently.Ilovemywork.It’schallenging,
withproblemsandallthatstu,butIloveit.So,weworkhard,butwedon’tworkhardinthenormalsenseof
working hard. e problem with working hard for money, because the rich don’t work for money, is that you pay
moreinwhat,Tom?
Tom
Taxes.
Robert
Taxes.eharderyouworkformoney,themoreyouwillpayintaxes,right?
Tom
Right. Instead of working hard for money, the rich work for assets and pay a lot less in taxes. e tax law is geared
towards building assets because, when we build assets, we build the economy.
Robert
ebigdierencebetweenE’sandS’s,andB’sandI’s,isthatE’sandS’sfocusontheincomestatement,andB’sandI’s
focus on the asset column.
Tom
Aswebuildassets,theeconomygrows.Employeesbenetalsobecausenowwehavemorejobsformoreemployees.
Robert
ButonMichael’sside,peopleareworkingsohardbecausetheFedsarealsoworkinghardprintingmoney,right?
Mike
I’vegotfriendswhojustsay,“Ineedtogetmorehours,”or“Ineedtogetasecondjob,”orsomethinglikethat.ey’re
working harder to make a few more dollars, but they don’t realize that over this entire past decade, the average income
afterinationhasfallen.Sotheharderpeoplework,thelessthey’remakingbecausethegovernmentandtheFederal
Reserve, the banking system, they’re basically stealing it from them.
Robert

Canwebringinthebagsofcoinsrightnow?ankyou.
21
Kim
I’m not going to hold that!
Robert
I’llgiveyouanexample.Intheyear2000,onegoldcoincost$300.ishugebagI’mholdingis$300in
U.S.quarters.
Today,in2010,thatsamegoldcoincoststhousandsofdollarstobuy.Sothereasonpeoplehavetoworksohardto
keepupisbecausethevalueofourdollarsisgoingdown.einsanityofgettinganotherjob,payingmoretaxes,and
workingharderwhen HowmanydollarsdidtheFedprintin2009?
Mike
FromAugustof2008through2009,theycreatedabout1.5timesmorepaperdollarsthantheyprintedintheprevious
200 years.
Robert
So,that’swhypeopleareworkingharder,becausetheirmoneyisworthless.
Mike
Anditisn’tthecointhatchanged.Peopledon’tunderstandthatitisn’tthepricegoingup.It’sthevalueofthedollar
falling. It’s the currency that’s changing. e can of Campbell’s soup in the grocery store is the same can with the same
contentsfrombackin1950whenitcost15cents.Todayit’s$1.95orwhateveritis.What’schangedisthedollar’s
value, not the can of soup.
Robert
Sothat’swhytheruleshavechanged.In1971theU.S.dollarstoppedbeingmoneyandit
Mike
It became a currency. It became debt.
Robert
It became an IOU from the federal government. And the thing is, they can print as much as they like. e more they
print, the harder you have to work.
It all takes place in your head.
Takethisglasshere.Inthiscase,theglasshereis“context.”Itholdsthe“content,”inthiscase,thewater.E’sandS’s
haveadierentcontextthanB’sandI’s.Havingadierentcontext,E’sandS’sattractthesacredcowslike“goto

school,” “work hard,” and “live below your means.” B’s and I’s, having a dierent context entirely, attract a dierent type
of content, a dierent type of information, and a dierent type of education.
Moneyiscreatedoutofyourhead.Ifyou’reatrueBandI,you’renotconcerned.It’sbecause,justliketheFed,wecan
print our own money.
22
Sacred Cow #4: Live Below Your Means
Our next sacred cow is one of our favorite ones—live below your means. Do you like living below your means? It’s no
fun. It kills people’s spirits. Why would you want to live below your means? But many people have to live below their means,
unfortunately, because the Fed is printing so much money that taxes and ination go up, which means people are forced to
live below their means. Let’s talk about what keeps people living below their means and how you can rise above yours.
Anita
Well,ifyou’reonapaycheck,youhavethatoneincomecomingin,andifyou’rejustoneperson,you’veonlygot
24hoursinadaytowork.So,thereisalimittohowmuchyoucanworktogetthosepaycheckscomingin.is
forces many to live below their means.
Tom
ekeyhereistoraiseyourmeans.at’stheideahere.It’snotthatwewanttohaveterriblecredit-carddebtor
something like that. Instead, let’s raise our means so that we can live the way we want to live instead of living at
this poverty level.
Kim
Sowhyisitthatwheneversomeadviserlooksatyournancesthattherstthinghelooksatishowyoucan
cutexpenses?
Tom
Well,whatdoesanancialplannertellyou?erstthingthattheyaskyouis,“Whatdoyouneedtoliveon
whenyouretire?”eyneverask,“Whatdoyouwant?”
Kim

RobertandIdenitelydonotbelieveinlivingbelowourmeans.
Robert
Whenwemetin1984,wehadnothing,buteveryyearwewouldgettogetheratNewYear’sandwewouldsetour
goalsforhealthandassets.So,that’swhyittookusonlyabout10yearsfrom1984to1994tobecomenanciallyfree,

because we kept adding assets every year. And we continue to do the same thing today because it’s fun and exciting.
at’soneofthebest-keptsecrets—gettingrichisfun!
Kim

Itisfun!It’salotoffun.IfRobertandIwanttobuyaluxurylikeanewcar,werstacquireanasset.Soweacquirethe
asset and the cash ow from the asset pays for the car payment.
Soit’sneverlivingbelowyourmeans.It’sexpandingyourmeansthroughacquiringassetsthatgiveyoucashowthat
gives us all those good things in life.
23
Robert
epointhereisthis:ereareassetsandliabilities.ewayyouincreaseyourmeansistoacquiremoreassets—not
housesorcars—butassets.ereasonsomanypeoplestrugglenanciallyisthattheyhavenonancialeducation.ey
may be a good doctor or lawyer or accountant or rock star, but if they don’t know the dierence between assets and
liabilities and they keep buying liabilities instead of assets, they have to keep living below their means.
Ifyou’resingleornot,ifyou’reonaxedincome,ifyou’reanEandanS,yourincomeislimited.erearefourmajor
expensesthatkeepE’sandS’spoor.
Numberoneistax,andtaxesaregoingtogoupbecausetheFedisprintingsomuchmoneyallovertheworld.
Two is debt.Peopleleavecollegewithtonsofdebt,usecredit-carddebttomakeendsmeet,andthenusedebttobuy
their house because they think it’s an asset.
ree is ination. Ination goes up because, as taxes go up and prices go up, then ination goes up.
And fourth is retirement.Youmustputsomethingawayforthedaywhenyoustopworking.
osearethefourmainreasonsE’sandS’s,asageneralrule,havetolivebelowtheirmeans.Butifyouhavenancial
educationandliveontheB-Iside,youcanincreaseyourmeansbyincreasingcash-owingassets.
Andy
I think a lot of people accept mediocrity, and in order to be able to grow in business, in order to make more money,
you have to step out of that comfort zone and stop being mediocre.
Robert
Orhopingthegovernmentisgoingtosaveyou.Ithinklivingbelowyourmeansisoneofthegreatestspirit-killersthere
is.ere’salotofpeoplewholikebeingpoor.I’mnotmakingitrightorwrong,butthat’sdenitelynotwhatIliketo
do.KimandIdenitelydon’tlivebelowourmeans.

Kim
No,Idenitelydonotlikelivingbelowmymeans.IdiditwhenIwasincollege,andthatwasexcitingtimesandall,
but I get inspired when I get put in a position where I need to create something new. I want to be bigger than I am,
not less than I am, and I think people are being taught to contract and be less than they are instead of being inspired to
expand and be more than they are.
Tom
at’stheissuewiththeideaofabudget,right?Abudgetisallaboutcutting.It’sallaboutslicing.It’sallaboutbeing
lessthanyouare.Instead,youshouldmakeastrategyandlookatprojectionsintothefuture.Ask“WhatcanIdo?”as
opposedto“Whatcan’tIdo?”at’sthebigdistinction.
Kathy
Alotofitcomesfromfear,too.Youknow,Ithinkpeopleareafraidoftheirfutures.ey’renotsurewherethefuture
is going to lead them, and they think, “I’ll live below my means. I’ll save. I won’t allow myself to have this small luxury,
that small luxury.” ey of course fall o the wagon, and then they feel bad about it, and it creates guilt.
24
Robert
eworstthingisthattheycutbackontheirexpensesandtheysavemoney.Right,Mike?at’stheworstthingthey
could do.
Mike
Right. ey’re saving depreciating money.
Anita
It all goes back to the questions you ask. When you say, “I can’t aord it. I don’t have the money for that,” you put
yourselfinabox.Abetterquestionwouldbe,“HowcouldIaordthat?HowcanIgetthemoneyforthat?”attype
of question expands your mind.
Trina
Youknow,inmycommunitywhereIgrewup,livingbelowyourmeanswasprettymuchastepup.I’mjustbeing
honest. We didn’t have any means, and we didn’t live and didn’t know how to live. It was basically survival. And some of
thewayswecreatedthosemeanswere,ofcoursebylegaldenition,illegal.atwasthewaywesurvived,andthatwas
thewaywegotby.Livingbelowyourmeansiscompletelyoppositetoabundantliving,whichiswhatIbelieveinmy
faith,abundantliving.eoppositeofthat,tome,isnotthewaythatGodintendedforustolive.
Robert

at’s why I think it’s absolutely criminal that our school system does not teach us much about money. And what
theydoteachusistoputyourmoneyinthebankwhichmeansyoulosemoremoney,andthentalktoanancial
plannerwho’llputyouintomutualfunds.atisnotnancialeducation.atiseducatingpeopletogivemore
money to the rich.
Kim
at will also cause you to have to live below your means. at’s what they’re training you to do. Create a budget.
Mike
Andwhileyou’reatit,you’regoingtopaymoreandmoreintaxesbecauseyougetnotaxbenetforlivingbelow
your means.
Robert
Andthat’saproblem.Yousaytoachild,“Gotoschoolandgetajob.Becomeadoctororalawyer.”atchildwillpay
more than his or her fair share of taxes and then will have to live below his or her means.
Marco
Ifyou’replayingdefenseinsteadofoense,you’rejusthidingandtryingtoplayitsafe,savingmoney,andyounever
manifest.Youcannotbewhoyou’resupposedtobe.
Kim

Isayit’stimetogetnanciallyeducatedandtakecareofyourself.
25
Sacred Cow #5: Save Money
e fth sacred cow is save money. In 1971 President Nixon took the dollar o the gold standard, essentially taking the world
o the gold standard, and money was no longer money. So people are no longer saving money. ey’re saving debt.
Robert
As I’ve said in my books for years, the big reason that savers are losers is very simply because in 1971 the dollar stopped
beingmoneyandbecamedebt.Right,Mike?
Mike
Yes,therulesallchangedin1971.Beforethen,whensomeonebecameworkingage,theycouldexpecttoputaway10
percent a year, and by the time they got into their 60s, they could retire on their savings account and expect to live o
that interest. In 1971, everything changed and they started creating currency on a massive scale.
Robert

Worldwide.
Mike
Worldwide.Andthatiswhatcausesinationandthelossofpurchasingpower.Backinthe1950s,ifyouhad$100,000
in the bank, you could retire on that.
Robert
Soforfolkslikemymomanddad,theWorld-War-IIgeneration,theindustrializedgeneration,itwasverysmartto
savemoney.Forourgeneration,thebaby-boomgeneration,savingmoneycouldbethestupidestthingyoucando
becausethesystemisstealingyourwealththroughtheverythingyouworkfor—moneyitself,whichisn’treallymoney
anymore.
Mike
Right. Real money is actually gold and silver. Money has to maintain its value over long periods of time. Currency
doesn’t have to. For 5,000 years, gold has been the predominant currency. It became money when somebody minted
itintocoinsinLydiainabout680BC,andeachunithadthesamebuyingpowerasthenextone.eybecame
interchangeable.
Robert
Letmeaskyouthis.isprintingofmoneyoutofjustpaper,thishasbeentriedbefore,hasn’tit?
Mike
Many, many, many times, and there’s always one result. When they start creating a whole lot of currency, you get far
higher prices for everything, but especially real money. Eventually gold and silver lie in wait. When the public senses the
ination of retail prices that is caused by the ination of the amount of currency in circulation, they rush back toward
gold and silver. ey have for 5,000 years.
Robert
Namesomegovernmentsthathaveattemptedtoprintmoney.