One of the most startling differences between my rich dad and poor dad was
what kind of world they saw. My poor dad always saw a world of financial
scarcity. That view was reflected when he said, “Do you think money grows on
trees?” or “Do you think I’m made of money?” or “I can’t afford it.”
When I spent time with my rich dad, I began to realize that he saw a
completely different world. He could see a world of too much money. That view
was reflected when he said, “Don’t worry about money. If we do the right things,
there will always be plenty of money,” or “Don’t let not having money be an
excuse for not getting what you want.”
In 1973, during one of rich dad’s lessons, he said, “There are only two kinds
of money problems. One problem is not enough money. The other problem is too
muchmoney. Which type of money problem do you want?”
In my classes on investing, I spend a lot of time on this subject. Most people
come from families where the money problem was not enough money. Since
money is only an idea, if your idea is that there is not enough money, then that is
what your reality will be. One of the advantages I had, coming from two families,
was that I could see both types of problems . . . and rest assured, both are
problems. My poor dad always had problems of not enough money and my rich
dad always had problems of toomuch money.
Rich dad had a comment on that strange phenomenon. He said, “People who
suddenly become rich—by things such as inheritance, a big jackpot from Las
Vegas, or the lottery—suddenly become poor again because psychologically, all
they know is a world of not enough money. So they lose all their suddenly found
wealth and go back to repeating the only world of money they know: a world of
not enough money.”
One of my personal struggles was shaking the idea that the world was a world
of not enough money. From 1973 on, rich dad had me become very aware of my
thoughts when it came to the subjects of money, working, and becoming rich. Rich
dad truly believed that poor people remained poor simply because that was the
only world they knew. Rich dad would say, “Whatever your reality is aboutmoney
inside of you is the reality of money outside of you. You cannot change your
outside reality until you first change your inside reality about money.”
Rich dad once outlined what he saw as some of the causes of scarcity as
differences in peoples’ attitudes:
1. The more security your need, the more scarcity there is in your life.
2. The more competitive you are, the more scarcity in your life. Which is why
people compete for jobs and promotions at work and compete for grades in school.
3. To gain more abundance a person needs more skills and needs to be more
creative and cooperative. People who are creative, have good financial and
business skills, and are cooperative often have lives of increasing financial
abundance.
I could see these differences in attitudes between my two dads. My real dad
always encouraged me to play it safe and seek security. My rich dad encouraged
me to develop skills and be creative. The second half of this book is about how to
take your creative ideas and create a world of abundance rather than a world of
scarcity.
During our discussions about scarcity rich dad would break out a coin and say,
“When a person says ‘I can’t afford it,’ that person sees only one side of the coin.
The moment you say ‘How can I afford it?,’ you begin to see the other side. The
problem is, even when people see the other side, they see it with only their eyes.
That is why poor people see rich people doing what rich people do on the surface
but they fail to see what rich people are doing inside their minds. If you want to
see the other side of the coin, you have to see what is going on inside a very rich
person’s mind.” The second half of this book is about what goes on in a rich
person’s mind.
Years later, when lottery winners began going broke I asked rich dad why this
was happening. His reply was, “A person who suddenly comes into a lot of money
and goes broke, goes broke because they still see only one side of the coin. In
other words they handle the money in the same way they always did, which was
the reason they were poor or struggled in the first place. They see only a world of
not enough money. The safest thing that person can do is just put the money in the
bank and live off the interest only. People who can see the other side of the coin
would take that money and multiply it rapidly and safely. They can do that
because they see the other side of the coin, the side of the coin where there is a
world of too much money and they use their money to get to the other side faster
while everyone else uses money to become poorer faster.”
In the late 1980’s after rich dad retired and turned his empire over to Mike, he
called me in for a brief meeting. Before the meeting began he showed me a bank
statement with $39 million dollars in cash in it. I gasped as he said, “And this is
only in one bank. I am retired now because it is a full time job to keep taking this
cash out of my banks and moving it into more productive investments. I repeat it is
a full time job that becomes more challenging every year.”
As the meeting ended rich dad said, “I spent years training Mike to build the
engine that produces this much money. Now that I am retired he is running the
engine that I built. The reason I can retire with confidence is because Mike knows
not only how to run the engine, he can fix it if it breaks. Most rich kids lose their
parents’ money because although they grew up in extreme wealth, they never
really learned how to build an engine or fix it after it is broken. In fact, too many
rich kids are the very people who break the engine. They grew up on the rich side
of the coin, but they never learned what it takes to get to that side. You have a
chance, with my guidance, to make the transition and stay on the other side.”
A big part of taking control of myself was taking control of my internal reality
about money. I have had to constantly remind myself that there is a world of too
muchmoney, because in my heart and soul, I have often felt like a poor person.
One of the exercises rich dad had me do whenever I felt the surge of panic in
my heart and stomach, the panic that comes from the fear of not having enough
money, was to simply say, “There are two kinds of money problems. One problem
is not enough money and the other is too much money. Which one do I want?” I
would ask this question mentally even though my core being was in a state of
financial panic.
I am not one of these wishful-thinking people or a person who believes solely
in the power of affirmation. I asked myself that question to combat my inherited
point of view on money. Once my gut was calmed down, I would then ask my
mind to begin finding solutions to whatever was financially challenging me at the
time. Solutions could mean seeking new answers, finding new advisors, or
attending a class on a subject I was weak on. The main purpose for combating my
core panic was to allow me to calm down so I could move forward again.
I have noticed that most people let their panic about money defeat them and
dictate the terms and conditions of their lives. Hence, they remain terrified about
risk and money. As I wrote in CASHFLOW Quadrant, people’s emotions often run
their lives. Emotions such as fear and doubt lead to low self-esteem and a lack of
self-confidence.
In the early 1990s, Donald Trump was nearly $1 billion in debt personally and
$9 billion in debt corporately. An interviewer asked Trump if he was worried.
Trump replied, “Worrying is a waste of time. Worrying gets in my way of working
to solve these problems.” I have noticed that one of the main reasons people are
not rich is that they worry too much about things that might never happen.
Rich dad’s investment lesson #2 was to mentally choose to see both worlds
. . . a world of not enough money and a world of too much money. Later, rich dad
went into the importance of a financial plan. Rich dad strongly believed in having
a financial plan for when you did not have enough money as well as a financial
plan for when you will have too much money. He said, “If you do not have a plan
for having too much money, then you will lose all your money and go back to the
only plan you know, which is what 90% of the population knows: a world of not
enough money.”
Security and Scarcity
Rich dad said, “The more a person seeks security the more scarcity they will
have in their life. Security and scarcity go hand in hand. That is why people who
seek job security or guarantees are often the people with less abundance in their
life. One of the reasons the 90/10 rule of money holds true is because most people
spend their lives seeking more security instead of seeking more financial skills.
The more financial skills you have the more abundance you will have in your life.”
It was these financial skills that gave rich dad the power to begin acquiring
some of the most valuable real estate in Hawaii even though he had very little
money. These same financial skills give people the power to take an opportunity
and turn it into millions of dollars. Most people can see opportunities, they just
cannot turn that opportunity into money and that is why they often seek even more
security. Rich dad also said, “The more a person seeks security, the less they can
see of the opportunities that abound. They see only one side of the coin and never
see the other side. That is why the more they seek security the less opportunity
they see on the flip side of the coin. As the great baseball player Yogi Bera once
said, ‘Strike out just 7 out of 10 times and you’re in the Hall of Fame.’” In other
words, if he came to bat one thousand times in his baseball career, and if he could
strike out only 700 times, he would be in the Hall of Fame. After reading Yogi
Bera’s quote, rich dad said, “Most people are so security conscious that they live
their entire lives avoiding striking out just once.”
Mental Attitude Quiz
I came from a family that saw the world as a world of not enough money. My
personal challenge was to repeatedly remind myself that another kind of world
existed and that I needed to keep an open mind to see a world of both possibilities
for me.
So the mental attitude questions are:
1.Can you see that two different worlds of money can exist? A world
of not enough money and a world of too much money.
Yes___ No ____
2.If you currently live in a world of not enough money, are you willing
to see the possibility of you living in a world of too much money?
Yes___ No _____
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