CHAPTER 1

INTRODUCTION

ROBERT KIYOSAKI
 Introduction

Everyone wants to be rich, but few people want to take the time to learn the rules.
Instead, most people rely on advice that they heard growing up—mainly from people
who never become wealthy. They buy into a line of thinking that is fundamentally
flawed, and this ruins their chances of ever truly being rich.

It’s no surprise…from a young age we are taught to be employees instead of business

owners or investors. We are taught to fall in line, to not stick out and to not take risks.
This is fine if you want an average life in which you are always one layoff or recession
away from disaster.

If you want to leave a legacy, though, and if you want to be financially independent,
you need to start learning the rules that govern money. There are certain rules that
the rich know that help them to stay rich, and if you can learn these rules and then

2
put them into practice, you too can learn to not only make extraordinary amounts of
money, but keep it as well.

Before I get too far ahead of myself, I want to tell you a story about my two dads. You
may have heard this one, but whether you have or not, it’s an important story to dis-
cuss before we get into the rules of money.

This story helps to illustrate what happens when you have a rich mentality, versus a
poor mentality. These two dads both meant a lot to me, and they both taught me a
lot about life, but the advice of one father made me rich, while the advice of the other
would have led me to abject failure.

Rich Dad and Poor Dad

Growing up, I was fortunate enough to have two dads—a rich dad and a poor dad.
My poor dad was my father. My rich dad was my best friend’s father. They were both
strong men that I looked up to, but they both viewed the world in fundamentally dif-
ferent ways.

My poor dad believed the advice that was passed on to him, and that has probably
been passed on to many of you:

Work hard, stay in school, get a college degree, find a steady income, invest in mutu-
al funds or a 401 (k), retire at sixty-five.

Does this sound familiar?

The same advice that he got years ago is probably the advice you are getting today. The
problem is, over the years, the rules of money have changed. We’ll get into that later.
What’s important to see here is that he had a very traditional view of money, and that
view kept him poor.

3
My poor dad wasn’t poor because he wasn’t intelligent. In fact, he had a Ph. D and at-
tended the top schools in the country. He got his four year undergraduate in two years,
and he excelled as a scholar.

My rich dad, on the other hand, dropped out of school in the eighth grade. His edu-
cation was of a different variety. Instead studying philosophy or science, he studied
business, investments and trends.

These two different paths meant the world as far as making money went. While one
dad should have been rich, but wasn’t, the other dad succeeded with less than what is
considered the bare minimum.

Why My Poor Dad Was Never Rich

Even with all of his education, all of his planning, and all of his years of doing what he
was “supposed” to do, my dad died extremely poor. Instead of leaving an inheritance,
he left debt. Instead of leaving a legacy, he left a cautionary tale.

I loved my father, and it broke my heart to see his life fall apart. He was so intelligent,
so well-educated and such a hard worker—yet he could never really get ahead. Sure,
he became the Head of Education in Hawaii, but even that wasn’t enough to spare him
from the horrors that came from a lack of financial intelligence.

Various members of my family got

very sick in a short period, and this
led to crippling medical debt. This,
mixed with him running for lieu-
tenant governor and losing, began
the decline.

He was jobless, he was just about

broke, and then he made one of

4
the worst investments of his life into a national ice cream franchise—in which he lost
everything. Mix this with my mother passing at the age of forty-eight, and you have a
man that just never recovered.

This made him bitter, and his view of money and of the rich became even more ven-
omous. This didn’t come out of nowhere, though. His relationship with money was
always different than my rich dad’s, and this difference in values and the way that they
saw money fundamentally split their financial paths.

The Way the Rich and Poor See Money

Even before my father lost everything, he had a negative view of money. He believed
that money was the root of all evil. My rich dad, on the other hand, believed that the
lack of money was the root of all evil.

This view made my poor dad resentful when everything fell apart. When he saw his
classmates succeeding while his life fell apart, he lashed out and blamed everyone and
everything but himself. He would say, “I dedicated my life to educating the children of
Hawaii, and what did I get? Nothing. My fat-cat classmates get richer, and what do I
get? Nothing.”

He really thought that the world owed him. He thought that getting an education would
mean more opportunity, and that opportunity would lead to him becoming rich. He
was wrong.

My mother thought the same way, so when I was young she told me that I needed to
become a doctor, a lawyer or some other kind of specialist in order to make a lot of
money. She also thought school was the answer.

My poor dad would tell me, “Study hard so you can get a job at a good company.” My
rich dad would tell me, “Study hard so you can find a good company to buy.”

5
My poor dad told me, “The reason I’m not rich is because I have you kids.” My rich dad
told me, “The reason I must be rich is because I have kids.”

Poor dad told me, “Play it safe, don’t take risks.” Rich dad taught me to manage risks,
and use them to my advantage.

Really, the difference came down to a statement and a question that helped me to un-
derstand the difference between being rich and being poor. This opened my mind up
to an entirely new way of thinking, and I think it may open yours up as well.

My poor dad would tell me, “I can’t afford it.” This was his go-to. We never had the
money for anything—even tithings. We were always going to save, invest, spend and
tithe when we had the money…and we never did.

My rich dad, on the other hand, forbade me from even saying, “I can’t afford it.” In-
stead, he said I needed to reframe it as a question… “How can I afford it?”

This little distinction illustrates the difference in the approach that rich people and
poor people take to money. It is what keeps poor people poor, and has helped rich
people to become rich for centuries.

That statement is closed off.

It is an open and shut case.
“I CAN’T afford it.” It’s final,
with no wiggle room.

The question leaves space

for so many different possi-
bilities. “HOW can I afford
it?” makes it a puzzle that
you can solve. It gives you
the opportunity to find a

6
way to get whatever you want in life, and with the right level of financial intelligence,
you’ll be able to solve that puzzle.

How I Came to Know the Difference Between Rich and Poor

It was by watching my two dads that I was able to see what the difference between rich
and poor was, and (believe it or not) it’s not what you probably think.

My rich dad, even when he was broke, would always say that he was rich. He told me
that there was a difference between being “broke” and being “poor.” You can recover
from being broke, and you can still be rich while you are doing it. Recovering from
being poor is a different story.

This is because rich and poor are just mentalities. When you have the mentality that
you are rich, you will make decisions that rich people would make. You consider prob-
lems the way a rich person would.

When my rich dad was broke, he always asked himself, “How would a rich person
handle this? What would a rich person do?”

This allowed him to earn his money back, and this lead to him NEVER being perma-
nently broke.

My poor dad, on the other hand, obsessed over money. It was all he ever thought
about! He didn’t see being broke as temporary, either. He didn’t feel he was rich. He
was bitter about being poor, and he accepted his finances as his reality.

The system had failed him. Old wisdom had failed him. Everything that he had been
taught about money was fundamentally wrong, and this led to him being poor for the
rest of his days.

I learned through both my rich dad and my poor dad that being rich or poor has lit-

7
tle to do with what you have in the
bank—it’s all about your mind-
set, your relationship with mon-
ey, your financial intelligence and
your financial education.

While my poor dad spent years in

college learning more about being
an employee, my rich dad spent
his life learning about the nature
of finances, and what it took to get
and stay rich. He passed these les-
sons on to me, and he taught me
the five money rules that the rich
have mastered.

I want to teach you the lessons that my rich dad taught me. I want you to change the
way that you look at money, and your relationship with your finances. Most of all, I
want you to learn to change your mentality, and your overall philosophy of what it
means to be rich.

Yes, you are going to learn how I became rich and how you can become rich as well,
but I want you to approach everything I teach you from a new mindset. That’s where
all change begins. Let go of your old ideas of what being rich or poor means. Let go of
the idea that money determines whether you are rich or not, and don’t allow yourself
to fall prey to the idea that money is evil. Money isn’t evil.

Both of my dads were great men, and I learned a great deal about life from each of
them. When it came to being rich, though, one dad taught me everything I needed to
know, while the other repeated old and stale information that he learned from other
poor people.

8
Very early on I learned how much it matters who you take your advice from. If you
want to succeed, you need to look at what successful people do. If you want to be rich,
you need to look at what rich people do. You need to stop listening to what poor people
tell you that your life should look like, and you need to instead take the road less taken.

That is why the poem, “The Road Not

Taken,” by Robert Frost is my favorite
poem. As it states:

I took the one less traveled by,

And that has made all the difference.

I embarked on a journey led by rich dad,

and I learned to take risks. I learned that
the safe road that most people take will
never lead to being rich. Instead, it will
lead to endless hours of hard work that
may or may not lead to some form of
success.

Even when the poor become successful, though, they can never become rich. Your
income will cap, you will grow weary and you will retire with very little…if anything at
all.

I want you to take the road less traveled with me, and I want you to learn what rich
people have known for years. I want you to learn the secrets that have made the rich
wealthy, and also what has kept them wealthy.

Don’t let your poor dad, mom, teacher or anyone else tell you how to stay poor. In-
stead, join me on the road less traveled and become truly rich.