How to Increase Your Financial IQ with Robert Kiyosaki

• May 21, 2021

 

If you have never heard of Robert Kiyosaki, there’s a good chance you’ve heard of his book, Rich Dad, Poor Dad. After its release more than 20 years ago, it became an international best seller, boasting more than 30 million copies sold in over 90 countries and has been translated into dozens of languages. 

 

Robert and his wife Kim have spun the success of Rich Dad into a global empire including more books, coaching, and the most popular podcast on C-Suite Radio just to name a few, but did you know it all started with a board game? It’s called CashFlowⓇ and it’s all about business. 

 

“The two most important words in money and business are cash flow,” Robert said during a recent interview on All Business with Jeffrey Hayzlett. “For most people the cash is flowing out and what entrepreneurs have the ability to do is turn the cash flow in.”  

 

“Financial intelligence and financial IQ is ‘can you redirect the flow of your cash in or out?’ The average person without a financial education, the cash is flowing out faster than it’s coming in,” Robert said. 

 

“CashFlow” became a phenomenon in its own right back in the mid-1990s. People around the U.S. formed clubs to play the game and, in the process, learn financial education.  

 

“I always ask people the same question, ‘What does school teach you about money?’ For most people, it goes flat line after that. What they’ve been programmed with is go to school, get a job, work hard, and give your money to Wall Street.” Robert said. “That worked for a while, but it’s not working today.” 

Part of the marketing of the game was a brochure that evolved into the book Rich Dad, Poor Dad. 

 

“My whole concern was on financial education and the story of my rich dad, poor dad,” Robert said. “My poor dad was an academic genius, graduate from university in two years, Ph.D. at Stanford, University of Chicago, and Northwestern. But as you know, they don’t know much about money.” 

 

“My rich dad was a guy who was an entrepreneur, who never went to school, but because his father died when he was 13 and he took over the family business, I became an apprentice to my rich dad.” 

 

He continued, “The education is completely different, it’s the opposite of academics. So, I go home and catch hell (for) not doing my homework. Then I would go to my rich dad, and he never spoke about homework. It’s a couple of different worlds.” 

 

Some of the lessons Robert learned from his rich dad, you won’t find in textbooks. 

Robert shared with me his story of returning from the Vietnam War and asking his rich dad what “else” he needed to learn. 

 

“He (rich dad) says you have to learn how employees steal from you,” Robert said. 

 

Robert couldn’t believe what he heard. Employees steal? 

 

To learn this lesson, he got a job at a bar where he offered up this challenge “if you can figure out how the bartenders steal from us, you’ll be a rich man.” 

 

“I sat there for two years, I still can’t figure out how they stole that money,” Robert recalled. 

 

Lessons like that one from the bar, inspired Robert to expand the brochure into the book. Rich Dad, Poor Dad sold well in the business community. Then in 2000, it even caught Oprah Winfrey’s attention. 

 

“I was in Australia and (Oprah) called,” Robert remembered. “My wife took the call in Phoenix. She says ‘get home now!’ I had to fly all the way from Australia to Chicago. I didn’t know who Oprah is because as Marines, we don’t watch Oprah.” 

 

Robert said he went from being a complete unknown to an overnight success after being on The Oprah Winfrey Show. While the segment is more than 20 years old now, you can find it on YouTube, and plenty of the topics Robert and Oprah covered are still relevant today. 

 

“We just talked about the philosophy of being entrepreneurs, managing money, and not needing a paycheck,” Robert said. “My poor dad was an academic Ph.D, but he couldn’t live without a paycheck or a pension. My rich dad says, one of the goals of being an entrepreneur is you’ll never need a paycheck and a pension.  

 

With all this talk of the power, freedom, and hard work of becoming an entrepreneur, I had to know his advice for those looking to strike out on their own. 

 

“The hardest thing is putting that team around you,” Robert said. “You’ve gotta have great accountants, great attorneys, and it takes a while to find those guys. Because everyone is kind of self-interested if you know what I mean. They’re interested in your money. But today one of the greatest assets I have is my team, you know, my accountants, my stock guys, my real estate guys. It’s a team sport.”   

 

Robert and I talked about his favorite investments, what he thinks of cryptocurrency, and the details of his next book. He also offered up plenty of unprompted political takes. Robert’s not afraid to tell you what he’s thinking, that’s for sure.  

 

Click the player below to listen to our full conversation.