Rich Dad / Robert Kiyosaki Blog

May 17, 2009

Robert Kiyosaki Interview – ‘PBS: Road to Wealth’

Filed under: Interviews — Tags: , — ~ @ 12:34 pm

Interview wth Robert Kiyosaki
This Interview was done by Tavis Simely, Presenter on PBS
Go to the Link if you want to watch a video or audio of the transcript below.

Tavis: We continue our “Road to Wealth” series tonight with best-selling author Robert Kiyosaki.

The first of his “Rich Dad, Poor Dad” books wound up on the “New York Times” bestseller list for four years. 10 books later, the series has sold more than 20 million copies. His latest is “Rich Dad, Poor Dad for Teens: The Secrets About Money That You Don’t Learn in School.” Robert Kiyosaki joins us from Phoenix, Arizona. Robert, nice to have you on the program, sir.

Robert Kiyosaki: Thank you. I appreciate it.

Tavis: I’m glad to have you on. For those who are not familiar, and I don’t know who they might be, with 20 million copies sold, but for those who are not familiar with the “Rich Dad, Poor Dad” series, it really is about two men in your life who taught you two very different lessons about money. Let’s just start with what the series is about before we get into this book.

Kiyosaki: Well, it’s exactly as you said. I had a rich dad and a poor dad. My real dad was a head of education for the state of Hawaii, very hardworking, honest, well educated, a great guy. The head of education, a candidate for Lieutenant Governor for the state of Hawaii. But the problem is, no matter how much money he made, he was broke at the end of every month and the end of the life. That’s why I call him my poor dad. And my rich dad was my best friend’s father, and he was a man started with nothing, but he wound up to be one of the richest men in Hawaii. So both dads started teaching me–My rich dad started teaching me at age 9 just by playing Monopoly. He said the formula for great wealth is found on the Monopoly board–four green houses, one red hotel. And my poor dad, the schoolteacher, kept saying, put that stupid game away. Stop wasting your time. Go back to your books. Study. Get good grades. Get a job. Different men.

Tavis: The key lessons, as I understand it, as I’ve read the stuff, one is–one man had his money working for him, and the other worked for his money.

Kiyosaki: Yeah, that’s correct. It goes back to family financial values. My poor dad really valued a job, and my rich dad valued owning your own company. My rich dad valued government pension and my rich dad valued being his own man, being an investor, and taking care of himself financially.

Tavis: How do you know which one you are, and is there one—I mean, obviously if money is your goal, then it’s clear that you want the rich man approach, but does that work for everybody?

Kiyosaki: I don’t think so. Like I said, it is a value system, and it’s something we learn as kids. So that’s what “Rich Dad, Poor Dad for Teens” is about because our school system teaches virtually nothing about money. Why, I don’t know. I studied calculus for two years at school, and I never use calculus. But whether we’re rich or poor or stupid, we’re all going to use money. But our school system seems to treat money the way my poor dad treated money–was that money was an instrument of evil, it corrupted you and made you greedy, so they just didn’t talk about money.

Tavis: But as you well know, there are so many examples of that today. From Enron to Tyco to WorldCom, I don’t have enough time to list all the companies and all the individuals–Martha Stewart—who we have seen fall in love with money and do all kinds of things that are unsavory or engage in all kinds of trickery. So maybe spending more time in school talking about money, money, money might not be sending the right message to kids. I don’t know. You tell me.

Kiyosaki: Well, it’s not money that’s the problem, it’s greedy, dishonest people that’s the problem. And it’s not money, it’s what you do for your money. In other words, if you’re working at a job, like let’s say you’re a vegetarian and you’re working in a butcher shop, that money is horrible money. So I think ignorance of money is far more damaging than education on money, or financial intelligence. Like I said, rich or poor, we’re all going to use money. There’s so many people, these bleeding heart socialists like my dad, who thought the way to solve poverty is to give a poor person money. The only problem with that is the more you give poor people money, the poorer they get. And the problem we face today is that we have baby boomers set to retire, approximately 80 million of them, and 70% don’t have enough money to retire on, so they’re going to depend upon the government. That’s really my concern. Like my poor dad, there’s so many people who expect the government to take care of them financially, social security as well as Medicare, it’s going to bankrupt a great nation.

Tavis: Speaking of bankrupt, what about the notion that we have so many bankrupt people in our society today because they think that the only way that one has value in our society is to have a lot of money?

Kiyosaki: Well, I don’t think it’s money, it’s the lack of money that’s causing problems. If you look at the federal deficit right now, “USA Today” ran a report saying that each family in America today, their share of the deficit is $480,000. That’s nearly half a million dollars for every family in America. Another statistic shows that in 2003, more young people declared bankruptcy than graduated from college. Now, bankruptcy, they tell you it’s not that big a deal, but it is a stigma that stays with you for the rest of your life. All I’m saying is that if we’re going to solve the problem of a deficit, of a poor nation, of social security and Medicare, that problem does need to start with our young in our school systems. Because young people today, those born after 1970, 1980, will face a far tougher financial world than the old guys like me ever faced.

Tavis: You mentioned earlier there are a number of things schools don’t teach. I want to get to some of those things here beyond financial literacy in just a moment, but let me ask first, at what age do you suggest that we start talking in school to kids about money? When is too early, when is too young?

Kiyosaki: As soon as they get interested in it. I have a friend who has an 8-year-old daughter, you know, and I went to her, and I wanted to test her financial I.Q. I held up a $5.00 and I held up a $20. I said, “Which one do you want?” And she already knew which was worth more. So I think the earlier, the better. The other thing my rich dad always taught me is that money doesn’t make you rich, it’s your habits that make you rich. So if you make a lot of money and you have bad habits, then your chances of being rich are very slim. So that’s why it’s not about money, it’s really about financial management and good habits and also financial literacy, so at least you know whether your banker or your stockbroker or your financial planner or real estate agent is lying to you.

Tavis: You argue in your books that there are three different types of money. The first is earned.

Kiyosaki: Right, which is the worst type of income? When you say to a child go to school and get a job, have a 401K, that’s earned income. The problem with earned income, it’s the most highly-taxed income there is. Then there’s portfolio income, and portfolio income is oftentimes called capital gains income. So I buy a stock at 5 and it goes to 10 and I sell it, then I have portfolio income, and I pay approximately 15% on that. But if I have passive income–passive income is generally from things like patents or in my case intellectual property from books and from real estate, passive income, if you know what you’re doing, you can pay zero taxes. So earned income is taxed at approximately 40%, portfolio income is taxed at 15%, but passive income is taxed at 0%, if you’re smart. So that’s what I say to people. I’m not into tax evasion, but I want to do my best to work, earn as much money as possible, and pay the least taxes possible legally. But if you say to a child, go to school, get a job, and get a 401K, they’re basically a tax mule for the federal government.

Tavis: Isn’t passive income, though, the most difficult of the three to create?

Kiyosaki: Well, anything’s difficult if you’re not educated, and that’s why I’m saying you should start at a very early age. If you’re saying to your child right now what my poor dad did, which is go to school, get a job, work hard, save money, get out of debt, buy a house and a 401K, that’s not very financially intelligent. If you’re a saver of money, you have lost so much money in the last 20 years simply because the value of your dollar has fallen faster than the interest they pay you. Even if they say, we’ll pay you 10% interest, if you’re being paid 10% interest, if you’re financially intelligent, you’ll know that inflation is probably running at 9%, so still you’re only making 1% and you’re being taxed on that 1%. So all I’m saying here is a little education gives you a better chance of getting ahead financially. But to simply work hard and turn your money over to a mutual fund or your retirement plan or put the money in savings doesn’t require much financial intelligence. So that’s why they don’t get ahead. Because they think they’re doing the right thing, but they’re not learning anything.

Tavis: Right. For teens, which is the target for this particular book in the “Rich Dad, Poor Dad” series, you recommend the piggybank approach. Can you explain?

Kiyosaki: Yeah, I recommend three piggybanks. One piggybank says savings, one says tithing or charity, and the third says investing. And what I recommend is, even if it’s just a penny a day, have your child put one penny in savings, one penny in charity, and one penny in savings. As a parent, you should do it, too, because kids copy you. It’s not the dollar amount, it’s the habit you’re developing of paying yourself first, and charity is paying, you know, your spiritual guide, be it God or give it to a church or give it to a charity, but you’re teaching a child very good habits of paying themselves first before they spend everything. And so I’ll say it again, it’s not the dollar amount, it’s the habit that make you rich or poor.

Tavis: You talk to these kids in this book, these teenagers, unapologetically and unabashedly about making money for themselves.

Kiyosaki: For the what?

Tavis: For themselves. You even talk about starting businesses when you’re young.

Kiyosaki: That’s correct, and again, it goes back to family values. My poor dad valued a safe, secure job. But my rich dad said, you’re working hard all your life but you’re not building anything. You’re taking cash, and cash is trash to him. He says what you want to do is build an asset, like Bill Gates built Microsoft. I built the Rich Dad company, a mining company, I have publication companies. I built something that’s worthwhile. Whereas some people just value a steady paycheck and job security and cash, and cash is trash. And so that’s why I really stress people get a little education and find out what the rich work hard for. They don’t work hard for cash or job security. Most are working hard for some kind of tangible asset that pays them into the future and you can pass on to future generations. Most people cannot pass their job on to their kids.

Tavis: Yeah. I got to keep saying to myself, Robert, to make myself believe it–cash is trash. Cash is trash. It’s hard to say, but I’ll keep working on it.

Kiyosaki: It’s kind of a strange thought, because I want to take that cash and move it into something tangible, like an investment in my company, an investment in real estate, or an investment in a good-performing stock or something. I want something that goes up in value, not something that’s going to trash in value. And this cash is trash idea is a new idea, because it only started in 1971 when President Nixon took us off the silver certificate. Basically, our dollar went from an instrument as an asset to an instrument of debt. And so in 1971, all the rules changed on money and most people don’t know about it, because our school systems never talked to us about it.

Tavis: Well, I’ll keep trying to learn to say that, cash is trash. The new book is “Rich Dad, Poor Dad for Teens: The Secrets About Money That They Don’t Teach In School.” Robert, nice to have you on.

Kiyosaki: Thank you very much.

Tavis: All the best to you.

Kiyosaki: Thank you.


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