Why We Want You To Be Rich

1. The Shrinking Middle Class Threatens Stability

"We are losing our middle class, and a shrinking middle class is a threat to the stability of America and to world democracy itself."

A two-class society. The authors express deep concern that America and other G-8 nations are becoming two-class societies, where the rich get richer while the middle class disappears, leaving only the rich and the poor. This growing gap is seen as a significant threat to democratic capitalism itself, a problem acknowledged even by former Federal Reserve Chairman Alan Greenspan. The problem is global, with countries like Japan also seeing a widening disparity between "winners" and "losers."

Problems on the horizon. Several interconnected global issues exacerbate this problem, disproportionately affecting the poor and middle class. These include:

• A falling U.S. dollar and rising national debt.
• Increasing oil prices impacting everything.
• Excessive consumer and government debt.
• Disappearing pensions and inadequate retirement plans like 401(k)s.
• Jobs being exported due to globalization and technology.

Government limitations. The authors argue that governments, even the U.S. government, are increasingly unable to protect their citizens from these global problems. Relying on government entitlements like Social Security and Medicare is risky, as these systems face significant financial challenges. The problems are too big for politicians to solve alone, requiring individuals to take responsibility.

2. Financial Education, Not Government, Is the Solution

"We believe it is time to get smart with your money and become rich rather than to count on the government and politicians to care for you and your money."

Lack of financial literacy. The authors blame the lack of quality financial education in America for many of the current economic problems, including the nation's shift from the richest country to the biggest debtor. Traditional schooling focuses on preparing people for jobs (E and S quadrants) but neglects teaching them how to be entrepreneurs (B) or investors (I). This leaves most people unprepared to handle their finances effectively.

Teaching people to fish. Instead of advocating for government handouts or relying on others, the authors emphasize the importance of financial education. They see themselves as teachers, not just successful businessmen, aiming to empower individuals to solve their own financial problems. Their goal is to teach people "to fish" rather than just giving them "a fish."

Raising financial IQ. Solving today's complex financial challenges requires a higher financial IQ. This means understanding concepts like:

• The difference between assets and liabilities.
• How money works and how to make it work for you.
• The impact of historical events (like the end of the gold standard in 1971) on personal finance.
• How to navigate changing economic landscapes.
  Increasing financial intelligence is presented as the key to avoiding becoming a victim of economic problems and becoming part of the solution.

3. Invest to Win: Embrace Leverage and Control

"Donald and I invest to win. Don't you?"

Playing to win vs. not to lose. The core difference between the authors' approach and traditional financial advice is the mindset: investing to win versus investing not to lose. Traditional advice (save, get out of debt, diversify, invest long-term in mutual funds) is seen as playing it safe, focusing on avoiding losses rather than maximizing gains. The authors, conversely, play to win, seeking higher returns and enjoying the process.

Leverage is key. A fundamental concept separating savers from investors is leverage – the ability to do more with less. While savers avoid debt, active investors use "other people's money" (OPM) to amplify returns. This requires financial education and training, as using debt without knowledge is risky. Leverage extends beyond money to include other people's time (OPT) and other people's resources (OPR).

Control reduces risk. The authors argue that investing is perceived as risky primarily because most people invest in assets over which they have no control (savings, stocks, bonds, mutual funds). They prefer investments like business and real estate where they can control:

• Income and expenses.
• Asset and liability management.
• Overall management and insurance.
  Control, gained through education and experience, is presented as the true way to reduce risk and increase returns, contrary to the belief that higher returns always mean higher risk.

4. Time Investment Precedes Money Investment

"Since most people do not invest much time, they lose their money."

The two things you invest. The authors state that the only two things you can invest are time and money. The 90/10 rule applies here: the 10% of investors who make 90% of the money invest significantly more time than money, while the 90% who make only 10% invest money but little time. This highlights the crucial role of education and experience.

Education outside the classroom. While formal education (like Donald's Wharton degree) is valuable, the authors emphasize continuous learning through various means:

• Attending seminars and workshops.
• Reading books and listening to educational materials.
• Teaching others (as a way to learn).
• Finding mentors and becoming apprentices.
• Learning from real-life experience, including failures.

Financial experts vs. informed investors. Many people rely on financial experts (brokers, planners) who may have limited real-world investment experience or prioritize sales commissions. The authors encourage individuals to become their own financial experts by investing time in learning accounting, business law, and market trends. This allows them to see opportunities and risks that others miss, avoiding being a "patsy" in the financial game.

5. Creativity and Expansion Drive Wealth

"Creativity makes you rich."

Beyond linear thinking. While traditional education favors left-brain, linear thinking (logic, math), the authors emphasize the importance of right-brain creativity in building wealth. Investments like savings or mutual funds offer little room for creativity, often being regulated against it. However, real estate and business thrive on creative approaches.

Examples of financial creativity:

• Determining your own interest rate or income stream.
• Controlling taxes through strategic spending and reinvestment.
• Changing the use or zoning of a property to increase value.
• Using connections and "inside information" (legal in business/real estate, illegal in securities).
• Improving a property or business model to increase value and cash flow.
  Creativity, combined with control, allows investors to generate higher returns and manage risk more effectively than passive investors.

Think big, think expansion. Donald Trump's "Think Big" philosophy aligns with Robert Kiyosaki's concept of "expansion." This involves leveraging initial success to grow exponentially, like Ray Kroc franchising McDonald's. Building a successful business (B-quadrant) requires a strong system (B-I Triangle) and a clear mission, not just a good product. Expansion is about scaling leverage and creativity.

6. Getting Rich Is Predictable, Not Just Risky

"Getting rich is predictable."

Predictability through control. The authors argue that for those with financial education and experience, becoming rich is predictable, not risky. This predictability comes from understanding and controlling the factors that influence investment outcomes. Unlike speculating (hoping an asset goes up in value), professional investors focus on predictable income streams and value creation.

Real estate predictability. In real estate, predictability comes from multiple income streams beyond just appreciation:

• Monthly cash flow (rental income minus expenses).
• Depreciation (tax benefits).
• Amortization (tenants paying down the mortgage).
• Appreciation (often a bonus, not the primary strategy).
  By focusing on these predictable elements, investors can generate returns regardless of market fluctuations, reducing reliance on speculation.

Predicting human behavior. Predictability can also come from understanding human behavior and market trends. The authors predicted the decline of the dollar and the rise of gold/silver based on predictable government spending and borrowing habits. They also understand that basic needs like housing and energy remain constant, making investments in these areas potentially predictable over the long term.

7. Defining Moments Shape Your Financial Path

"We all have defining moments. It is in these moments that we find our true character."

Lessons from fathers. Both authors highlight the profound influence of their fathers, albeit in different ways. Robert learned from his highly educated "poor dad" the importance of education and public service, but also saw the financial insecurity that came from relying on a job and government. His "rich dad" taught him about entrepreneurship, investing, and financial freedom. Donald learned work ethic, discipline, and the importance of knowing your business thoroughly from his successful builder father.

Beyond winning and losing. Defining moments, often involving challenges or failures, reveal character and shape future decisions. These moments teach valuable lessons about perseverance, humility, and the difference between desire, drive, and discipline; ambition, ability, and attitude; education, experience, and execution; and honor, humility, humor, and happiness.

Finding your 'why'. Understanding the 'why' behind the desire to be rich is crucial. For the authors, it's not just about the money, but about the game, the challenge, the freedom, and the ability to make a difference. Their defining moments solidified their commitment to their chosen paths and fueled their drive to win.

8. Tailored Advice for Different Life Stages

"This book is for anyone who wants to move forward and get out of their comfort zone."

Advice is not one-size-fits-all. The authors reject the idea of giving generic financial advice, recognizing that different people in different situations require different strategies. Advice for someone in school differs from advice for a baby boomer without money or someone who is already rich.

For those in school: Focus on learning, making mistakes, and finding your passion. Study accounting and business law to gain financial literacy. Consider real-world exercises like budgeting and finding ways to make money with small amounts. Seek mentors and apprenticeships.

For adults without much money: Assess your desired lifestyle (simplicity vs. complexity). Consider increasing your financial complexity by becoming a student of the global economy 24/7. Read widely, travel to see the world's economic shifts, and connect with like-minded people in investment clubs or study groups. Learn fundamental and technical investing.

For baby boomers without much money: Recognize the unique challenges of being a transitional generation. Prioritize health, wealth, and happiness. Do what you love, invest in what you love, and consider hiring a coach for accountability. Understand that time is running out, requiring renewed diligence and a willingness to reinvent yourself.

For those already rich: Be grateful and careful. Understand that preserving wealth can be as challenging as making it. Invest on the "fast track" (businesses, real estate partnerships, private equity) if you have the education and experience, but be wary of unscrupulous promoters. Ensure you have essential legal documents like wills and estate plans.

9. Real Estate Offers Unique Control and Advantages

"Why do I invest in real estate? The answer is found in one word, and that word is control."

Control over the asset. Unlike paper assets (stocks, bonds, mutual funds) where investors have little control, real estate allows investors to control numerous aspects of the investment. This control is the primary reason the authors favor real estate, as it directly reduces risk and increases potential returns.

Multiple income streams. Real estate provides several predictable ways to make money, not just through appreciation:

• Monthly cash flow from rent.
• Depreciation for tax benefits.
• Amortization (tenants paying off the mortgage).
• Appreciation (often a bonus, not the main strategy).
  Focusing on cash flow and value creation makes real estate investing more predictable and less speculative than relying solely on appreciation or capital gains.

Tax advantages and leverage. Real estate offers significant tax advantages, such as the ability to defer capital gains taxes through 1031 exchanges. Additionally, bankers are often more willing to lend money for real estate investments than for paper assets, providing valuable leverage (OPM) for investors. The tangibility and perceived stability of real estate make it an attractive asset class for leveraging debt.

10. Find Your Genius Environment to Flourish

"The right environment is essential to developing your genius."

Environment shapes potential. The authors propose that everyone is born with a unique genius, but not everyone finds or develops it because they are in the wrong environment. Just as a plant needs the right soil, water, and temperature to flourish, a person needs a supportive environment for their particular talents to blossom.

Escaping poor environments. Many people who want to be rich fail because they are "rich people in a poor environment." This could be a family environment where wealth is seen as taboo or a workplace designed for employees seeking security rather than entrepreneurs seeking wealth. These environments may not support the mindset, skills, or values needed to become rich.

Creating or finding supportive environments. To develop your financial genius and increase your chances of becoming rich, you need to actively seek or create environments that support your goals. This might involve:

• Changing your social circle to include like-minded, financially ambitious people.
• Joining investment clubs or study groups (like CASHFLOW Clubs).
• Attending seminars and workshops.
• Changing your workplace or starting your own business.
  Changing your environment can be one of the fastest ways to change yourself and unlock your potential.

11. Leadership and Perseverance Are Essential

"Winners take control by accepting responsibility."

Leading yourself first. Becoming rich requires strong leadership skills, starting with the ability to lead yourself. This involves discipline, focus, controlling your fears and emotions, and taking responsibility for your own financial education and decisions. You cannot effectively lead others or manage investments if you cannot manage yourself.

Perseverance through challenges. Both authors emphasize the importance of perseverance, especially when facing setbacks or failures. Donald Trump's recovery from significant debt and Robert Kiyosaki's business failures taught them that persistence is key. Excuses are seen as the "assassin of genius," and winners refuse to give up, constantly working through problems and seeking solutions.

The winning spirit. Drawing on lessons from sports and military training, the authors highlight traits common among winners:

• Discipline and rigorous preparation ("Repetition is king").
• A competitive spirit and the desire to win.
• The ability to learn from mistakes and setbacks ("Never miss twice").
• Understanding the importance of teamwork and surrounding yourself with competent people.
• Maintaining a positive attitude and focusing on solutions rather than problems.
  These qualities, developed through challenging experiences, are crucial for navigating the complexities of business and investing and achieving lasting success.

Last updated: June 18, 2025