Welcome to the final part 4 of the review of Kiyosaki’s key thoughts from ‘Rich Dad, Poor Dad’. In this article I am going to go through quotes from ‘Overcoming obstacles’.
“The primary difference between a rich person and a poor person is how they manage fear.”
Have you heard, that there is nothing on the other side of fear? I can’t remember who said it, but they were right. Fear is a psycho-physical reaction to something we are not comfortable with. From public speaking to taking financial risks,some of us experience fear which stops us from taking the leap while others take the fear, observe it, tuck it away somewhere out of sight and take the leap anyway. While I don’t agree that this alone is a primary difference between rich and poor person, in my personal experience indeed there is a difference between how ‘the rich’ or at least ‘not poor’ handle fear in comparison to people on the poverty line.
The difference is in particular pronounced in people who achieved something, lost it and achieved it again. Why? A poor person really knows how poverty tastes like and that taste is bitter. But at the same time a person who has little will likely be terrified of having even less if this is all they know. For true success, you need to let go of the fear of failing no matter how hard it is to do. Successful people, who started a business or who had flourishing careers and then failed also know the bitter taste, but they are less fearful to toss themselves off a cliff to grab the delicious success mid-flight – they already know it’s out there and the reward will be a much greater motivator than the possibility of a hard landing.
“For most people, the reason they don’t win financially is because the pain of losing money is far greater than the joy of being rich.”
I admit, the prospect of losing money which you worked hard for is an uncomfortable one. But with every business there is a chance that it will fail just as much as there is a chance that it will succeed. This loops us back to the fear factor – are you worried for losing the life you have, even if there potentially is a reward of a much better one? MOst of us are.
“Failure inspires winners. Failure defeats losers.”
This quote requires some serious mindset training for most people – we’re not born winners or losers, we take those roles on as we develop. How you respond to failure is something you can learn to control – will you learn something from it, analyse it, understand how to do better next time? Or will you be a sore loser and any minor failure will push you off the path you tried to pursue?
My nephew is now 12 years old and slowly growing out severe ADD. When he was maybe 6, my brother taught him to play chess. It’s a family game for us which often comes out at family events. For the first few (hundred) games we were on strict orders to let him win. But frankly, you can’t order everyone to go easy on a kid who needs to learn. So the first few times he got his rear kicked he cried and overturned the chess board and did whatever else sore losers do. And then he started learning from his mistakes, analysing the playing styles of his opponents and got good at chess. He was not born a winner and I dare to say that most of us are born losers who only become winners through learning how to be one.
“Rich dad believed that the words ‘I can’t afford it’ shut down your brain. ‘How can I afford it?’ opens up possibilities, excitement and dreams.”
This quote is one of my favourites in the book. In my mind it goes side by side with the more down to earth “Pay yourself first” rule. Both come down to one thing – if you want something, figure out how to get it. Success rarely falls into our laps – instead we have to work at it and that work requires questions instead of statements, open possibilities instead of closed doors and yes, sometimes a bit of luck.
“There is gold everywhere. Most people are not trained to see it.”
My mum used to say to my dad that there is gold lying on the ground. He asked her to explain it to him because all he saw is …ground. So she sat him down and explained example by example why she saw that, from providing services to neighbours with the equipment my parents owned to setting up a market stall in the nearby town to sell organic vegetables. My parents have been owner-farmers my whole life and let me tell you that surviving as one in a country under Communist occupation first and then under anti-small-business government for another 20 or so years, you have to train your eye on that gold. I’m lucky to have a great business woman as a mother. While she taught my father how to turn profit from what he already has, she also taught my brother and me how to make small amounts of money quickly, how to think on our feet and how to survive instability. While I now have a successful career, my brother runs his own rapidly growing business. We’re both doing well in the world and I’ll be forever happy with being brought up to see some of that gold. But her perspective, my own and everybody else’s is limited to their experiences. This means that you need to keep looking until you are able to see a lot more than just one nugget of gold.
“The sophisticated investor’s first question is:’How fast do I get my money back?’”
Few years ago I hired myself to work with a corporate communications and investor relations agency. This exposed me to a whole lot of FTSE250 boardrooms. If I was a little smarter at the time, I’d probably learn more…but I can say with confidence that one thing which they all wanted to see is the ROI. Opportunity for a high and fast Return on Investment is the magic sprinkles which open pockets of VCs, shareholders and investors of all sort. And while the sophisticated investor wants to know why they should invest in your business, every question is underpinned by ‘how fast will you start making me some money’.
I am leaving the last two chapters (‘Still want more?’ and ‘Final thoughts’) out of this article as it will be more useful to you to just read and dissect them on your own. I hope you enjoyed this series of articles and if there is another book you’d like my take on, let me know which one in the comments. See you next time!