Mastering Money Mindset: Rich Dad, Poor Dad Insights

[00:00:00] Alison: Hello. Hello. And welcome back to the show today. We are going to be talking about the book, rich dad, poor dad by Robert Kiyosaki. And you know, I have talked to you guys about this many, many, many times before. I love personal development. I love learning and growing. And my latest kick has been financial books.

[00:00:24] Alison: There was a, there's another podcast that I listened to the Chalene show. And which is fantastic. She does a lot of, of topics around entrepreneurship and things like that. And she had an episode that was, I think it was the 10 top financial books that everyone should read or something like that.

[00:00:44] Alison: And I was like, okay, I'm intrigued. So, so I went through and I started listening to these books. And the first one I listened to was prosperity consciousness, which. I devoured, I mean, I listened to it so quickly and I, it's just, it's all about our mindset about around money and how you think about money.

[00:01:06] Alison: And and that, that makes a big difference in. how you spend and just the whole like mental part of finances, which I think a lot of us don't really think about. But I think we, if you do, if you do take the time to look back on how you were raised, did you see your parents financially struggling? Did you?

[00:01:29] Alison: experience, you know, going without and things like that. All of that is still running in the back of your brain as you're moving through your life currently. And maybe you don't have the same issues that you saw or experienced when you were growing up, but it all kind of, it's still there. You still have these like subconscious programs that are running.

[00:01:50] Alison: So it was very interesting. So that was a great one. I don't, I didn't record anything on that one. I didn't record anything on that one, but Rich Dad Poor Dad is, it is interesting to me and the reason why is because I've actually heard about this book for quite a while and I thought I'm not, I'm not reading a financial book for dudes.

[00:02:10] Alison: Like, I'm not, I'm not going to do that. I don't need to read it. I don't need to read a financial book for guys. That's not what it is. The title is very deceiving. The title is exactly what it is is Robert is the, you know, he's telling the story from his childhood and his two dads are quote unquote two dads are his own father.

[00:02:33] Alison: who is the poor dad and then his best friend's father who is the rich dad. And he, the whole story talks about the different things that his, his poor dad is teaching him and his experience and, and how he was raised and his education. And then the other one is his rich dad and what, and, and just the, the, basically the dichotomy of the two, because Completely different philosophies.

[00:02:58] Alison: And it was so fascinating. And what's interesting too is that the poor dad is highly educated. He's highly educated. He's got secondary degrees, he's got a master's degree and he has a great job working for the government and they are paycheck to paycheck and don't have extra money and they just never seem to have enough.

[00:03:21] Alison: And then his best friend's dad, who is the rich dad never got past eighth grade and he's one of the wealthiest men in Hawaii. And it was just really fascinating to hear the different kind of life lessons from the rich dad and from the poor dad and how they completely contradicted each other. So that's kind of the premise of the book.

[00:03:42] Alison: And, and he's basically what he's, what he's trying to do between showing the. The, the differences in the two ideologies of basically the middle class, lower class to to the upper class, the difference between the upper class and middle and lower class is how we think about and use money. So middle and lower class are working for money.

[00:04:10] Alison: Right? Like I'm going to do this job for you and you're going to pay me. You're working for money. And what the rich do is they have money work for them. Right? And so he gives a bunch of different examples of how that happens and how we can. change how you're thinking about things. 

[00:04:30] Alison: So one of the big differences that he talks about between the middle to lower class and the upper class is the mindset around the differences between assets and liabilities. And we have a difference of opinion, it seems to be between what is indeed an asset and what's a liability.

[00:04:52] Alison: So for example, a lot of middle class have what the typical American dream, right? I'm going to go to school, go to college, get a good job, buy a house. That's the thing, right? And thinking that most middle class believe that their biggest asset is their home and Roberts. that is that your home is not an asset because an asset is something that pays you.

[00:05:23] Alison: Right? So for example, you have a rental property that you are that you own and that you are writing out to somebody and the income that comes from, you know, maybe you, Your mortgage payment is 1, 000 a month and you're renting the property for 1, 500 a month. So you are getting an income of 500 a month.

[00:05:46] Alison: That is an asset. It is providing you income when you own your home. Your home is not paying you anything, right? And he gives the example of, so a lot of people think my home is my asset, right? So, but your asset, it's not paying you and you can argue. And this is one of the things, so there's a, there's a couple, a couple controversial, if you will, topics that he talks about.

[00:06:09] Alison: And this is one of them. And this is why because a lot of people are like, no, that's garbage. My home is an asset to me because it is it's gaining value. Right. But I think we can all look at the markets as that we are in right now. And that is that it's very volatile. Right. So what a year and a half ago, about a year and a half ago, the market was insane and people were selling homes.

[00:06:36] Alison: Homes were selling for hundreds of thousand dollars over asking, right. And people were taking, you know, waving all of the inspections and things like it was bananas. The market was absolutely bananas. And now interest rates are crazy high. Home prices have plummeted your and then in a lot of places, property taxes have got, have shot through the roof.

[00:06:59] Alison: And one of the examples that he gives is he's like, you know, , my retired grandparents, they own their home. They're on a fixed income and they feel they're, you know, they've got their home is their asset. Right. And then the area changes property taxes increase and now their property tax. is 300 more than it was last year.

[00:07:21] Alison: Is that an asset? It's not an asset. It's actually a liability because it's costing them more money than it did before. So that's just a really interesting mindset shift. To think about and I think that he's right I think that a lot of us do think that our home is our asset and it can be right you can buy a home Somewhere and the property values change and now you have a hundred thousand dollars in equity in your home And that's fantastic if you can sell it Right if someone will pay it so but but an asset a true asset is something that's gonna pay you Right.

[00:07:56] Alison: So I think that's a really interesting mind shift, mind shift to have. And then the other part that he really dives into and talks about a lot is the fact that we have zero financial education happening in school, none. And I think we can all, if you think about it and you look back, you're like, Oh yeah.

[00:08:18] Alison: Huh. Did you learn how did you learn about checking accounts and savings accounts and the stock market and investments and Any of that stuff in school. Did you learn how to write a check? No Taxes how to do taxes. Why are we taxed? Where does the money go? Do are we ever taught? Any of that in our education, we are not.

[00:08:42] Alison: So the onus for that education comes to us is what he's saying. And that is the education that he got from his rich dad. It was that you, this is the way that most people think. Is not how you're going to get rich and be financially independent. That's the way that it's happens. The, everybody's going down that same path.

[00:09:04] Alison: That's not how you're going to get rich. You got to change your mentality. You got to change the way that you do things. And so one of the biggest proponents. Or messages that he has in the book is increasing your financial literacy, which is what we're doing right now, right? I'm telling you about this book.

[00:09:18] Alison: I hope you're gonna go get it for yourself either get the physical copy of it or get the Audible version so audible books. I really like to read or listen to books that are read by the author I just feel like it just it just hits a little bit differently. This is not read by the author, but he still did a really good job.

[00:09:40] Alison: I, I really, I still really enjoyed listening to it. And this book has been out. It's like, I think it's in 20, it's like it's 20th, 20 year anniversary, 25 year anniversary. It's been out for a long time. So this book has been, has been around for a while. And he has quite a few other books that came behind it that are, that talk about the different types of investments and things like that.

[00:10:01] Alison: And so just thinking about some of the, some of the things that he talked about in the book that I am taking action on is number one is financial education, right? What, you, if you don't understand something, Learn about it. And I think that one of the best investments that we can make in, in our lives and in ourselves is understanding our finances, like truly understanding them.

[00:10:26] Alison: So I feel, and, and, and. And I can play devil's advocate with that too, because I, we have a financial advisor because you get sent, if you've got a 401k or any kind of investments, you get sent those prospectus, right? And there's this, like it's so dense and the wording and I'm like, what in the world?

[00:10:46] Alison: That's I it's like a foreign language and I'm not interested in that. Like I want someone to say, this is what you should do. If this is your goal, this is what you should do. And then they execute it and I don't have to worry about it. I that's how I prefer to have my investments be, but What Robert points out in this in the book is we really do need to have financial literacy and understand exactly where our money is going because, you know, financial advisors and things like that are all great, but most of them are keeping us in a very safe.

[00:11:18] Alison: Investment range, right? And if you truly want to be wealthy and make money, that's not how you're going to do it. You're not going to do it with your 401k and with your small little mutual funds that you've got with an investor that or with a, you know, with a broker. That's not how you're going to do it.

[00:11:37] Alison: So a couple of the things that the way that he built his wealth is doing real estate. And so, and again, we were just talking about, well, hold on a second. Didn't you just say that your home is not, is a liability? It's not an asset. Yes, but Real estate is an incredible investment vehicle and he gives the example.

[00:12:00] Alison: And this was really interesting to me. The founder of McDonald's and heck gosh, what's his name? I completely forgot. And I was, I was telling this story to Michael the other day and he's like, Oh yeah, so and so. And I'm like, dang it. How do I not know? He was the CEO of, of McDonald's is whatever, whoever, whatever his name is.

[00:12:17] Alison: He was presenting at a panel of some sort at a, at a school or a business conference or something. And he was asked, or he said, he asked the audience, he said, what do you think I do? And everybody was kind of like you make hamburgers. And he's like, no, I'm a real estate investor and he's interested in the land that those McDonald's are sitting on. Because if you think about it, there's McDonald's everywhere, right?

[00:12:50] Alison: There's McDonald's on some of the most. expensive, like Times Square, there's a McDonald's sitting right there. Was that some of the, some of the most expensive real estate in the country? Right? Same thing in California, right? He invests in the property that the McDonald's is sitting on. The McDonald's is not the investment.

[00:13:09] Alison: The land it's sitting on is the investment. And I was like, wow, that is really fascinating. So he looks at himself as a real estate developer, not as a hamburger maker, which I thought was a really interesting, a really interesting take on that. So. So again, so with real estate, what he, he does talk about ways that he built his his wealth and it was through real estate.

[00:13:35] Alison: And so this is back in like the, you know, like the eighties and nineties, I think where he was living in a market that was really depressed. And so there were a lot of deals to be had at the time. He gives a couple of examples of how he built his wealth.

[00:13:55] Alison: And here's the other, here's the other kickback that a lot of people give is that I don't have the money. Like I'm barely paying for the house that I have right now. There's no way a bank is going to give me a loan to be able to buy another property. It's just, that's not going to happen. And he said you've got to think outside the box because you don't necessarily need to have a lender be able to be able to purchase a property.

[00:14:21] Alison: And he gives a specific example about a friend of his who has four kids that are all pretty close in age. And he's talking to him about, you know, I have college funds for them, but I'm just, I feel like I'm going to be working for the rest of my life. There's no way I'm going to make enough money to be able to put them all through school and still be saving for my retirement.

[00:14:42] Alison: Like what should I do? And Robert's suggestion to him is to look for an investment property. So, and he's like, but I don't have, I mean, he's like, I'm, I'm overextended on my current home. There's no way I'm going to be able to get a loan from the bank. And he's like, well, let's think outside the box on this.

[00:14:58] Alison: So they find a property. For 70, 000 or 79, 000 or 70, 000. And the person that they're purchasing this property from. So the property is actually worth more than what he's asking for it, which is, which are the kind of deals that Robert is suggesting you look for. Right. And he. So they approached the seller and they're like, we want to buy the property for this amount of money.

[00:15:26] Alison: And they do something. And I, and again, this is where the financial education part comes in, where he, they essentially are borrowing from the seller. So the seller is, is holding the loan and they're paying the seller. So the ownership goes to Robert's friend, but so what they did is he put 79, 79, 000 down and then the financing was through the seller.

[00:15:56] Alison: The seller was still holding the mortgage or had it, gosh, okay, I'm not explaining that very well. I can't, they, they did like some kind of buyback thing where the friend put down 7, 900 and that was it. And then he turns around and he rents the property. So he's renting the property now and it's breaking even or even making a couple hundred dollars.

[00:16:16] Alison: I think a month so he does that for For like two or three years and then the market improves by that time and then there's somebody that's living in The renters that are living in the home want to purchase the home. They purchased the home from him for a hundred and thirty thousand dollars So he had it was a seventy thousand dollar investment He's almost doubled his money.

[00:16:39] Alison: So 130, 000 from that, but he only put down 7, 900, right? So that's the only money that he came out of out of pocket for. So then when he sells that home, he takes the money that he made from that sale and he purchases a larger property. So he purchases I think it was like a condo. like a little condo building or something.

[00:17:00] Alison: So he purchases this condo building and same thing it's being, it's being paid for. And then a couple of years later it appreciates, it gets purchased by a developer and he makes another a hundred or 200, 000 or something like that. He takes that money and now he buys an apartment building. So now he's got an apartment building and through this or no, it was a storage unit place.

[00:17:20] Alison: I'm sorry. So it was a storage unit. a storage unit facility. And so in this storage unit facility that he owns, he is making 3, 000 a month in income from this investment. So he put down 7, 900, it went into this house and then he upgraded to the next house once that one sold. And then he went up to now he's in the storage unit.

[00:17:44] Alison: So he has a positive cashflow of 3, 000 a month that he is and that he has now that he can put into this fund. for his kids, right? So he just talks about, you have to think outside the box. You, there are deals to be had everywhere. You just have to be open to them. So I am highly, highly, highly intrigued by all of that.

[00:18:05] Alison: And so I'm going to continue to learn about it. I have no idea. He's like, one of the, the best things that he did for himself was invest in education. He's like, you know, I paid. He paid like 300 or 500 to go to a seminar that somebody was doing on buying foreclosures. And he's like, I've made millions of dollars buying foreclosures from that three to 500 investment on this person's seminar that he went to.

[00:18:30] Alison: So, and not to say that you have to go do that, but there's a ton of information out there that you can consume to learn how to do this stuff. So that are, those are the next steps that I'm going to be taking. Cause I am very intrigued. And you know, if you're coming to the end of your military career, or you're just, you know, looking at your life and what your retirement is going to look like, what you want your life to look like, do you have assets?

[00:18:58] Alison: Do you have assets? And for a lot of us, I think the answer is no. And so that's something that we really should probably look at and see if we can fix. And again, it's, it's coming out of the mindset of I don't have any extra money right now. There's no way I can get assets. There are ways that you can still get property in an unconventional way, right?

[00:19:19] Alison: Still completely legal. But in unconventional way, you're not going to the bank to get a loan to get a mortgage on a home. You're doing like the, his friend did with the buyback from the seller, whatever he did, how that whole thing went down. You're going to have to read the book because I don't remember all the details of it, but it was just, it's really, really, really fascinating.

[00:19:37] Alison: And then I, and then I think we w I had this conversation. We started this conversation with Ashley during our holiday series. That was a while back. So Ashley is the CEO owner, all the hats of Woman and Warrior Co. And I brought her on the show to talk for like the holiday special or holiday series on, you know, shop, small business, things like that, to talk about the products that she has in her shop.

[00:20:04] Alison: And then we ended up talking. about a lot about entrepreneurship and building a business and finding mentors and really good books to read and things like that. And so we, and she, one of the books that got her started on her entrepreneurial journey was rich dad, poor dad, which I was reading at the time, which was what serendipitous is that? Yeah, yeah, because that we were reading the same thing. I mean that she talked about a book that I was actually reading at that time that was like, like this book has just completely blown my mind. I thought it was really interesting.

[00:20:36] Alison: But anyways one of the things that we had talked about and I actually just listened to the episode because it just came out today as I'm recording this and One of the stories that I had told in the book and I didn't say it correctly so it didn't land correctly, but She so he's he's talking about building your financial education being teachable being open to learning from other people and Ashley talked about that as well.

[00:21:06] Alison: You know, just you can learn so much just by observing other people and find people that are doing what you want to do and see what you can learn from them. And you can learn a lot of stuff. Just, you don't have to necessarily be personal friends with somebody, right? To be able to learn from there's people, there's tons of podcasts out there, right?

[00:21:24] Alison: Obviously you guys listen to this one. So there's lots of podcasts out there, books seminar courses and things like that. But one of the stories that I, that I was telling at the time was. And in the view of being open minded and thinking outside the box is he met with a reporter in Singapore and she was, she respected his work and he was a bestselling author at the time.

[00:21:50] Alison: And she had written this book and he read it and it was very well written, but she was getting no traction. No publishers would buy, would take, on the book. And he asked if he could give her some advice and she said, yes. And he said, have you considered taking a course on sales?

[00:22:07] Alison: And she was completely affronted. And how dare you? I'm a writer and I have you know, I've got a master's in writing or whatever her education was and, and I'm not a salesman and I don't want to do that. That's icky. You know, all of the things that we have around sales and stuff. And he's like, well, I hear what you're saying, , but I am not.

[00:22:28] Alison: I'm not a best selling author. I'm a best. Okay. So it's the emphasis. I'm not a best selling author. I'm a best selling author, right? He's the best selling author, not an author. But the best selling author, their sales and all of the things that we do, right? So even so, and, and she just, she couldn't get her mind around that, that even if you have there, it's almost everything in every relationship that we have is an interaction in that way.

[00:23:03] Alison: And I know that a lot of us have seen really ucky and icky. Reach outs, especially in the last few years with the boom of MLMs, multi level marketing stuff. You know, we've all had the Hey girl messages and stuff like that. And, and, and for the people doing it, cause I was a Beachbody coach for awhile and I hated it.

[00:23:22] Alison: It just, it didn't feel authentic. But the thing that they say is that. If you're sharing something genuinely, and it's a genuine share and we genuinely share things with our friends all the time. Oh my gosh. I, this is like, these pants are the best things ever. You guys need to try these pants.

[00:23:39] Alison: You don't work for the clothing manufacturer. You don't, you're just telling somebody this restaurant I went to is. So good. I love that. You should really go try it out. You don't work for the restaurant. You're not getting anything for this recommendation. You just do it right. And so it's kind of similar to that when there's something that you really love.

[00:23:55] Alison: You just want to share it with people. It's just how can we do that in a non icky way? And I think that that's kind of where we get. We all have that. You know, I think we have the not the predisposition, but the Like the, the sleazy car, used car salesman, right? Like that kind of stuff. We had like, we have a preconceived notion of what that is.

[00:24:20] Alison: And so that's something that we really have to work on getting around. And that's another thing that Robert talks about in the education that he, went after as he was as he was growing up to try and continue to follow in the, in the, his mentor, his rich dads. not footsteps, but just his advice is he was seeking out what he was not good at.

[00:24:46] Alison: So leadership is a huge part of if you want to own a business or a corporation or anything like that, you need to know how to lead people, right? So taking on leadership books and figuring out how to do that. So he joined the oh gosh, what branch of service did he join? Was he a Marine? No, I can't remember.

[00:25:07] Alison: He joined a branch of service and he became a helicopter pilot. So maybe he was a Marine and because he wanted to learn how to lead people. What's one of the best ways to learn how to lead people? The military. We all know this, right? Well, not everybody's a great leader, but there's, there's a lot of good ones in there.

[00:25:23] Alison: There's some not so great ones in there too, but I think we have that everywhere. Not just in the military, but he joined that to learn that skill. How can I be a really good leader? And then after he got out of the military, he went to work for Xerox because at the time Xerox had one of the best training pipelines on sales in the, in the industry.

[00:25:43] Alison: So he went to work for Xerox so that he could learn how to sell. And he just, you know, he went and sought out jobs that would give him the skills, give him the tools in his toolbox to help him be successful and have the life that he wanted. So. Woo. That was a lot of stuff. So I highly, highly recommend that you listen to the book, read the book again.

[00:26:04] Alison: It is not for men. It is for everybody. And I would love for you to share with me. If you pick up a copy of the book and read it, let me know what you think. And then I'm going to continue on my financial, my financial learning path here. So I will continue to share the takeaways and things from what I am reading.

[00:26:28] Alison: And I hope you do the same with me. Okay. Until next time