Kim Kiyosaki - Always Pay Yourself First: How to Take Action, Pull The Trigger & Create Wealth

Full transcript: Kim Kiyosaki on London Real

2:40 This is London Real. I am Brian Rose. My guest today is Kim Kiyosaki, the author, entrepreneur and real estate investor. You are the co-founder and CEO of the Rich Dad Company, and alongside your husband Robert, have dedicated the last 30 years of your life to providing financial education to millions of people around the world. Your investing career began in 1989 with a small rental house in Oregon, and today you own thousands of properties, including hotels, golf courses and commercial units.

3:14 You wrote the best-selling book “Rich Woman” with the goal of helping women everywhere create true independence by taking control of their financial future. You ultimately believe there remains a huge void when it comes to financial education, and your goal is to help as many people as possible understand how to take action and create long-lasting wealth. Kim, welcome back to London. Oh, thank you, Brian. I love being on your show.

3:38 I love talking with you. It’s always, it’s always an adventure. Kim, it’s great to have you back. I think last time you were here was about four years ago, but uh, we’ve hung out in many places. I know we’ve had, you know, dinner with the whole crew in Phoenix and in London, and it’s always a great time hanging out with you and obviously Robert and, like, kind of the whole crew.

3:57 So great to have you on. And you know, your stuff always cuts through, Kim, and you know, you have a different frequency, but your message, you know, sometimes you need different frequencies to get a message to the right people. And so I’m so glad you’re here. And again, you’ve lived your philosophy for the last 30 years. You know, as a quick aside, I’ve been tagging you and Robert lately on my Instagram because I have Cashflow for Kids right here in my studio.

4:27 Oh, thanks. Yeah, it’s on our conference room table, and my two sons, they’re six and seven years old, we play every Sunday Cashflow for Kids. And so thank you for doing that. I’ve loved that they, and they keep saying, you know, how do we, when do we win? When do we win?

4:43 And for me, well, I like Damon’s five, he’s almost six, and he’s got this sheet in front of him that says, you know, his income statement, and they’re talking about passive income. And so for me, every time they roll the dice, like, I’m winning as a parent, because these young boys are getting in their heads, thanks to you and Robert and building this amazing game, that it’s all about acquiring assets, the cash flow, as opposed to being in this rat race, we’re waiting for a salary. And so, you know, I played Monopoly when I was a kid, but this is like Monopoly on steroids, because they’re getting these subliminal messages.

5:19 So I’m going to keep tagging you on that. But if anybody’s curious, yeah. I love that you’re teaching your kids that. I would, more and more parents are starting to realize how important that is and just changing the mindset, because that’s really what the Cashflow game does, and the Cashflow for Kids, it just changes your mindset, because people are taught to work hard for money, and we work really, really hard for money, but we’re never taught what to do with our money.

5:39 So thank you for kind of changing that mindset of your kids. And I know they’re gonna, well, I know, being your kids, they’re going to be phenomenal as adults. So I hope so. I hope so. Because I started them off, like paying them an allowance to do chores, and then I realized I’m actually incentivizing them the wrong way, right?

5:57 That’s a paycheck. And so yeah, now I’m trying to get them back on track. But, like, maybe we start there. Kim, because you and you’ve always said couples should play the Cashflow game. Yes.

6:08 You, Robert, people don’t know you and Robert created the Cashflow game before the Rich Dad book, and ultimately I think it was your way of trying to re-educate everybody from a financial perspective. But, like, what was the philosophy of that game? Because it’s it’s a lot of what you’re about. Yeah, um, you know, a lot of people don’t realize that the game came first. So we created the Cashflow game, um, the book came as a result of Robert working on a brochure to promote the game.

6:37 That’s how that came about. But the Cashflow game came about because Robert and I, in 1994, we were financially free, and everybody thought, well, you must have had millions of dollars, or you sold your business for a lot of money, or big stock portfolios. And it’s like, no, we didn’t have any of that. Just as you’re saying, Brian, it was our assets. An asset in the Rich Dad world is something that puts money in your pocket whether you work or not.

7:00 So what we had was we had ten thousand dollars a month, every month, coming in from our investments, primarily real estate, but our living expenses at the time were only three thousand. So at that point we were financially free, and instead of traveling the world, everybody’s like, how did you do it? How did you do it? We actually took step by step, and this was interesting, how to put what we did into a game that was fun and entertaining, and we kind of tricked people into learning because they’re having fun.

7:31 So what we did is we actually took the steps that we took to become financially free and we put it in the game. So the financial statement, which is the scorecard in the game, actually is a type of financial statement that we look at every month, and you’ve got, in the game, you’ve got the income statement, you’ve got the balance sheet, and you’ve got the statement of cash flow. So we wanted people to teach people. So instead of us traveling all over the world, the game travels all over the world to places that Robert and I would never ever get to, and then people can teach one another, people can teach their kids.

8:05 We have it in businesses. I had somebody who played the game with three accountant applicants for their business to see what the behavior was, because it really is a mindset change, and you watch people’s behavior and it really comes to the surface. So it is our, it’s my passion. It’s, um, I like to be the Queen of Cashflow. And I love that this game, we’re now going to have a digital version that we’re about to launch, which is very, very exciting.

8:31 But uh, the more people out there get access to this game, I think financial literacy is the number one thing. If people could understand financial literacy, I think it’s at the root of so many of people’s problems, the lack of financial literacy. So the more financially literate, the less dependent we become on government, the less dependent we become on bosses, uh, the more control we have over our lives. And I’m all about taking control of the financial life.

9:00 Yeah, well, let’s go a little bit deeper on that. There’s a great quote from you where you said, “Entrepreneurship regrows your brain from the damage that school has done.” You know, why aren’t we financially literate? It’s a question I always ask. And you know, a couple of years ago we went heavy into the blockchain space, and when you play around with Bitcoin for a while, you start looking at the fiat currency system, you know, a scam, a little bit.

9:24 I mean, you’ve been asking these questions, like, well, how come we weren’t taught about money? And then obviously, you know, things that Robert has said so many times, schools teach you to be poor, things that you echo. But, like, why weren’t we taught financial education? Why are we still not taught financial education? That’s a great question, Brian.

9:43 Um, we have, we have hit our head against the wall trying to bring the games and books into the school system. All we get is, we don’t teach money in school. It’s like, it’s an evil subject, which I do not understand, because it’s something everybody uses every day in their life. It’s a, it’s a, like, the number one life skill, uh, yet people don’t know. We work so, so, so hard for our money, but then nobody teaches us what to do with our money.

10:11 So maybe it’s on purpose. Maybe they don’t want us to know about money. Um, I don’t know. When we created that Cashflow game, Brian, one of the first things I did is I sent it, I had a, um, a contact at Harvard, and she was a professor there, so I sent it to her and I said, play this game, see what you think, and I’ll call you in a couple of weeks. So I call her in a couple of weeks and I said, have you played the game?

10:34 She goes, this is Harvard, Kim, we don’t play games at Harvard, and we don’t teach about money. That’s, it’s like it’s below them. It was like below them. Um, so I really don’t know. Today more and more schools are starting to bring, but not really the public school system.

10:51 I see it in charter schools, I see it in homeschooling, I see it in individuals, teachers, parents who will bring financial education into the school. But I think it could just be on purpose that uh, the powers that be do not want people financially literate, because then they would have more control over their life, and I, maybe there’s forces that don’t want that to happen, unfortunately. Yeah, well, let’s go a little bit deeper on that, because there’s people that also start to criticize when the government starts sending people checks.

11:25 And yes, you know, you did a great interview with PragerU and they were dropping clips of you recently where I think you were saying, you know, you, we’ve got to stop conditioning people to expect or get used to getting that check, that unemployment check, that Covid check, that whatever check, because it conditions them, I guess, to be ultimately helpless. Yes. You know, some, some people say that all these social programs they look like you’re helping people, but other groups zoom out and they say, actually, you’re doing the opposite to these people.

11:55 You’re conditioning them to be dependent on the state, then their behaviors have to kind of align with the state. Correct. And and and sooner or later you’re actually incentivizing families not to stay together. You’re, it’s advising people not to work, and you’ve almost created these uh, anti-humans just to get that check. I don’t know, I’m curious for your thoughts on all that.

12:16 Oh, I I’ve got big thoughts on that. I think one of the worst things you can do is, is give people money. Um, one of the most important things is what it does to your soul, to your spirit, to your self-esteem. What makes countries great is production. What makes people great is getting out there and producing, um, coming up against obstacles and having breakthroughs and all of this.

12:40 I think it’s just keeping people very, very dependent on the government. And of course, if you give people money, there is a price to pay, and that price is your freedom. That price is control over your own life, control over your own body even. Um, and now they’re coming out with UBI, universal basic income. They’re experimenting with that in the U.S. where everybody gets a check.

13:00 I mean, I think it’s the worst thing you can do. I am a huge, huge proponent of capitalism, free markets, free trade. I think that’s what keeps the world running, um, not just giving people money, printing more money, giving people checks, stimmy checks. Oh my goodness. So many people right now in the U.S. are not working.

13:20 I don’t know how they afford it, but I know for a fact people who had been on welfare for a short period of time because they had a something that, you know, years ago they had a situation and they weren’t working and they needed money, they said to me it was the worst feeling ever going into that office and picking up a check without earning it. I mean, I think people in general, they want to be of contribution, they want to earn what they get. They need to be in exchange, and with stimmy checks and free money and all UBI, um, it’s just one big out of exchange for me, and I’m more concerned about what it does to a person’s soul and spirit, and what that price that they’re paying for that check, they probably have no idea.

14:08 But I will, I would never ever ever pay that price ever. Yeah, that, that, that killing the soul is really important to dwell a point to do well on. There’s a movie that just came out recently, it was the, it’s called “The Great Awakening”. It was the “Pandemic 3” movie from Mikki Willis, and you know, his first movie talked a little bit about, you know, uh, viruses and things like that, the second one talked about “Paper Trails to Wuhan”, and the third one he really went head-on with communism, and he talked about communism versus capitalism and, if you go down that route, what it leads to, how it’s kind of infecting the U.S.

14:41 I mean, Kim, my daughter’s at BU now and she came back recently and she’s like, there are actually students that think communism is better there. And I was like, they’re actually believing that? She’s like, yeah. And if you go down that route, and this movie takes people down that route, it’s all dark, and there’s always someone out there that says, yeah, but this time socialism, it’s different, it’s gonna be different. Yeah, it never works.

15:04 It never works. It’s very scary because I see the same signs, Brian. I see it here in the U.S., um, the way they’re leading people to schools, the universities and colleges, and now it’s going into high schools. They are not, they are not institutions of learning, they are institutions of indoctrination. They’re indoctrinating these students to start believing that, yeah, socialism and communism is great because everybody gets, everybody’s equal.

15:29 The world isn’t equal, it doesn’t work that way. And just the other day we did an event at Arizona State University, um, and it was, um, Robert, Dennis Prager and Charlie Kirk of Turning Point, and the subject was health, wealth and happiness, very non-controversial. It was just an educational event. It was the professors that stood up and said, we don’t want Charlie Kirk and Dennis Prager, they’re Marxists, no, they’re, um, oh, they’re KKK, they’re racist, and they used all this language and they got the students kind of revved up.

16:07 And now, what the good news is, we did the event, we put a press release out because this was getting so much attention. It was just a simple event and they’ve turned it into a political event, which it was not, but as a result this is now open the door. Um, some of the people that were involved have been doing major interviews on major networks. It’s become a kind of a test for free speech and the whole, um, narrative right now, people are using Arizona State and our event as a platform for free speech.

16:42 And if that was the effect of that event, then I am thrilled, because we’re getting knocked out of free speech right, left and center, you know, it on social media. We’ve experienced it on social media. Um, it’s, it’s once you have no free speech, you have no, you have no community, you have no, what’s the word? Yeah, you have no life, you have no life. You have, you have no freedom, that’s for sure, because it’s all propaganda then at that point.

17:12 And so you are making some progress with this event. Like, you were able to do it, and it’s become a lightning rod, and it’s not just getting buried like so many other events did at universities in the last couple of years. So we’re, it seems to be making some progress. Yes, uh, two of the women that were key people involved from ASU, one was the ASU professor and she was the one that was putting it on, as well as her go her co-worker, they both got fired.

17:37 Wow. And because of it, because of bringing Charlie Kirk and, um, Dennis Prager and Robert onto the onto their campus. So she has now been speaking out and the networks are all picking her up and all that, a lot of a lot of, um, media is picking her up nationwide right now, so it’s a, it’s a really positive thing. I think what we need to do, Brian, is people just have to keep start standing up. They have to start saying no, and a lot of times that comes from, um, saying no with your, with your wallet, and not, not, well, for me, not patronizing the institutions that are very, very, I’ll use the word woke, um, very, very, um, the values that we stand for in capitalism and free markets and free trade, against liberties and freedom.

18:30 Um, we just have to stand up and say, um, we’re not, no, we’re not going down that route. Yeah, and there’s been some great boycotts of some companies out there where people finally have pushed back and say, enough is enough. It’s nice to see it kind of turning, because from 2020 to 2021 it looked like it was only going one way, and you made reference, I mean, we were having everything taken off of YouTube and I was quite literally shocked. You know, I’d spent nine years putting anything I wanted on YouTube, and all of a sudden, you know, one conversation was deemed uh, violating guidelines, and then the next one and then the next one.

19:03 And you know, when you start taking away people’s freedom of speech, everything breaks down. Yes, and we all suffer from it. Like you, we even saw after all the pandemic, if we had actually listened to some of these ideas, we would have saved lives, we would have made progress, and it’s always the case. And so it’s interesting, Kim, that you bring that up, because you know, ownership of property and ownership of your freedom of speech are linked. They are hand in hand.

19:31 Yes. And so if people want to start talking about not owning property, about going to where the state owns things, pretty soon your free speech will be gone and there won’t be much you can do about it. Pretty soon then Big Brother comes next, and all of a sudden you’re back to some of these very dystopian states that we’ve seen in the past, and we’ve seen in the movies. Um, we are already living partial versions of those now. Yes, we need to really understand.

19:56 And isn’t communism one of the, one of the, or Marxism, one of the, one of the key components the abolition of uh, a private pro, yeah, abolition of private property. And I see that happening. I mean, taxes are going up right now, people aren’t being able to necessarily afford when the interest rates go up and their mortgage gets refinanced, they can’t afford it. People are, people are leaving their homes, so um, I see that happening, and it sound, it looks very subtle, but I’m not so sure.

20:23 The banking crisis here is far from over. I think, uh, I think there’s a plan in place for the banking crisis, which is not a healthy thing. Small banks are getting, are just getting squeezed out right and left. So we just gotta, we gotta keep the fight going. Yeah, I want to go deep and get your thoughts on what’s happening with banking right now, and um, yeah, that just that concept of private property.

20:47 You know, we went into the blockchain space, Kim, and there’s an incredible guy named Yat Siu. He runs a company called Animoca Brands, um, out of Hong Kong. They have about four billion in assets, they have a lot of gaming companies in metaverse, and he’s a huge proponent, Kim, of digital property rights. Now a lot of times we don’t think about digital property rights, we think about owning our house, owning assets they can’t take away from us, by the way, which isn’t your dollar necessarily.

21:13 Now he comes in and he says your digital property rights are just as important, and if you can’t own things like your medical data, your browsing history, your identity, your digital property online, then guess what happens: you start to lose your freedoms as well. And again, I lived that, because for YouTube had, you know, uh, two million of my subscribers, 9,000 of my videos, nine years of my life, and I had known it, they owned it, so guess what, they could take away my right to digital freedom of speech. It’s like, this is all tied and people need to understand.

21:49 Yes. And so now with with Web 3 and the blockchain, I can actually own these assets forever, and they can be on a blockchain where no company, Web 2 company, can take them away from me, which means they can’t censor me. So I would say to everybody, all of this is related. And um, if you talk to the hardcore Bitcoiners, you know, they love it, because you can’t take away an asset, you can’t print more of it and dilute it, and that gives them a freedom potentially even to speak more, because now their currency isn’t being controlled and all.

22:21 And it’s interesting, because I just one other thing is, is when we look at the assets that we want to own today, it’s it’s we want to own assets that the government can’t print. Right, the dollar is, you know, where is that? We want tangible things that we can touch, feel, that are real, not fake. You know, stock market to me is kind of fake, it’s all manipulated. Um, the dollar’s worthless, um, going to be worthless pretty soon.

22:46 Um, yeah, there’s a lot of interesting things coming up right now. Well, I want to get your thoughts on those assets, just before we do, I just want to linger on a point that you mentioned earlier when you talked about UBI. You know, you and Robert have always said that a paycheck is something close to a drug habit, it’s as bad as a drug habit, and I had a drug habit for years and I talked about it publicly in one of my movies, and it’s a very dangerous thing that’s hard to get out from under.

23:12 You tell most people, you tell most people that, they would say, oh, that’s a bit harsh, this is just the way I get paid. But if a salary is a drug habit, then what is a Covid check, and then what is UBI? You know, you go from a gateway drug to, like, the most dangerous drug on the planet, you know, fentanyl is like UBI, because, you know, if a paycheck, you have to do some work, a Covid stimulus check is every now and then, a UBI is you wake up and you get it for nothing.

23:39 Yeah, for nothing. So everything about you is ultimately controlled, you don’t own any assets, so you won’t have control, and pretty soon, consciously or subconsciously, you are doing whatever the person that wrote you the check tells you to do. And that’s why you say it steals your soul. You know it’s, yes, I mean, it’s like, you know, who owns the gold makes the rules. And you know, I, look, I teach women about money and investing, um, one of the things I see is if the husband is the one making the money um, and she is not, then she oftentimes it gets resentful, because she doesn’t want to have to ask for money, she doesn’t want to ask permission.

24:15 But it’s the same concept, it’s that whoever has, and I see, and I see money enslave a lot of people, not just women, but when you talk about a paycheck, a paycheck kind of enslaves you to your boss, into that job. I remember the day when we talk about the income statement and the balance sheet, so the income statement, you have your income and your expenses, and the job salary is always in the income column, and then you have your assets and liabilities on your balance sheet. I remember the day when I was always taught to focus on income, get a good paying job, get a raise, you know, work hourly rates and work more hours or raise your hourly rate.

24:55 It was always about income, income, income, and the lights finally went on after I had been doing a little bit of real estate investing and I had cash flow from my assets. The light finally went on that I was focused on the wrong column. I was focused on acquiring income when I should have been focused on acquiring assets, because those assets could, the give the cash flow into the income column, instead of me working so hard for money, then the assets work.

25:21 So I remember that day very clearly and I went, oh, I think I got this all backwards, and finally I, I stood, I finally realized it, and it’s like, okay, focus just on acquiring assets, and that’s, that’s what we’ve been doing ever since. All right, so let’s talk about those assets, and there’s a famous quote from you, you said, “My family thought I was crazy for focusing on assets rather than a job,” and then you say, “I was crazy successful.” So even your own financial education, you had to re-educate yourself to get you into this, but, like you said, you had that light bulb moment, and once you did, then you understood what you were doing was right, I guess.

25:54 The Cashflow game ensued. Explain to people that don’t know what you’re talking about what an asset is. Yes, okay, very good. So an asset, according to Rich Dad, a Rich Woman, an asset is something that puts money in your pocket whether you work or not. So people say, oh, my house is an asset.

26:11 Well, no, because if you, if your house, even if it’s paid for, you still have taxes, insurance, maintenance, upkeep, all of that. Oh, well, my jewelry is an asset. Well, no, maybe if you sell it, it’ll be an asset, you’ll get cash for it, but it’s not an asset. So the bank actually teach you to call your liabilities assets. So a liability is something that takes money from your pocket.

26:34 So for example, let’s say you buy a little rental, let’s say you buy a two-bedroom, one-bath house, that was my very first investment. If you’re living in it, that’s your personal residence, then again it’s going to cost you taxes, insurance, upkeep, it’s a liability, it takes money out of your pocket. But if instead I turn it into a rental property and I collect the income and I collect the um, and I pay the debt and I pay the expenses and at the end of the day I have a positive cash flow, that’s an asset, something that puts money in my pocket whether I work or not.

27:05 Same with the stock. So you could have, um, a dividends off of stocks would be an asset. You buy the stock and that pays you a dividend. If you have a business that’s generating cash flow, positive cash flow every month, that’s an asset. Um, so people are calling their liabilities, and the banks train you to do this, when you go to the bank and you list all your assets, you’re actually listing liabilities, and I think that’s one of the biggest problems people have is they are calling their liabilities assets when they’re actually not assets.

27:36 So an asset is something that throws off positive cash flow. If you have that rental house and it’s a negative cash flow, then that’s a liability. So it’s all on how you work the numbers, how smart you are with your money, and looking for things that will generate cash flow, because as I said before, we work so damn hard for our money, no matter what job you’re at, you’re working hard to generate that money, but then we’re never taught what to do with it.

28:03 So our whole, our whole mission is all about taking control of your financial life, and for us that was doing it through acquiring assets that generate cash flow. I love it. And uh, so beware of someone calling, you know, uh, something something else. So like you said, the bank is always saying, oh no, these are assets, when they’re not. And if you’re ever unsure, just look at the damn thing, look at the last 12 months or 24 months, did it cash flow or not?

28:30 And make sure you count up everything, right? Yes, because in the Cashflow game it’s funny when you watch people play it for the first time, because one of the doodads that we have is a boat. They got a boat, oh, I got a boat, that’s so great. Well, no, that boat costs you money. It cost you, you’ve got to pay for it every month, it costs you fuel, it costs you where you’re going to store it.

28:51 Um, so it’s funny to see people’s mindset just shift. We actually, Robert and I actually did own a sailboat at one point, um, and we put it into a charter company, so instead of us having to pay for it every month, we got to use it, but the charter company also rented it out on a regular basis, so it became, we turned a liability, a boat, into an asset. Yeah, that’s nice, that’s really nice. And again, a lot of people say, oh no, my home, it’s going to be an asset, and I’m going to put the money and get the new kitchen and it’s going to reflect it when I sell it.

29:20 But like, but did it? That’s a thing, but did it, or did it in your mind? And so same, people do that with their own small businesses and restaurants where it’s just a money pit for 10, 20 years of their life, but they’re running a psychological game on themselves and they’re walking around thinking they have assets when what they actually have is liabilities. Yeah, or they watch the prices of housing go up, as they did in the last few years, with especially in Phoenix, Arizona, through the roof.

29:44 Um, oh, my net worth is so great, and I’m like, net worth is, like, worth less. There’s, net worth is meaningless because unless you, until you sell it, whoops, until you sell it, then it’s really nothing. So um, I finally, I find that interesting. Now it’s another really good point. Now let’s talk about assets.

30:03 Obviously you started with real estate, you just said you have to be careful because not all assets are great, rated equal. You’re aware we have certain assets: stock market, cash, etc. Talk about the assets that you like and the ones you don’t like, and why. So there’s four asset classes. There’s business, could be your business or a business you invest in.

30:24 There’s real estate. There’s paper assets: stocks, bonds, mutual funds. And there’s commodities, uh, gold, silver, gas, oil, all of that. So we like to invest in things that are tangible, that are real. It’s like there are a lot of fake things out there, and we want to invest in real things.

30:44 So we primarily invest in rental real estate, because even with all the craziness going on today, people still need a place to live, they still need a roof over their head, and until the government taxes the heck out of it, we’re still going to own real estate. On real estate, like, you’ve diversified your real estate over the years to have not just, you know, those rental properties, but then like hotels and then commercial. And you just did you grow into that as you got more and more comfort, I guess, sub asset classes of real estate?

31:14 Yeah, that’s a great point, Brian, because I started with a little two-bedroom, one-bath house and I went to another one and another one, then we went to a six-flex, then a 12-flex, and just kept working our way up. And we always say, start small, because one of the keys of learning, one of the main keys is we’re going to make mistakes every time you start something new, and I think that’s what holds people back, they’re so afraid of making mistakes, but the only way we learn is by making mistakes. So I start small on the little ones, and then as we get more and more, I get more experience, I get more knowledge, I get more confidence, then we go bigger and bigger.

31:49 What really set us apart was we had, I think we had about 60 units at the time, and it was taking all of my time because I was managing the properties, and I couldn’t buy any more properties. And then I ran into our friend, our dear friend now, Ken McElroy, and he’s a property management company, and I’m like, oh thank God, and he had the exact same values, buy property, cash flow the property, same values as we did, and I’m like, oh thank goodness, now can you manage my properties? And he said no, and I’m like, why not?

32:22 He said, because we only manage properties of 120 units or more. I’m like, okay, so the next deal we did was 120 units, and that started us on the road of larger apartment buildings. And then of course you get more and more confident. One of the biggest mistakes I made in the world of investing, I lost out on an opportunity. It was a, it was a fitness club, uh, it was a bigger deal than I was used to, and I let this mind get in my way and tell me why I was going to make mistakes and why I was going to lose money and it’s going to be a disaster.

32:54 I brought in attorneys, it was, it was a mess. Lost that deal, but because of it, and I’d been working on it for so long, another similar deal popped up and I’m like, oh, I know this, I know the numbers, I know what it’s supposed to do. The beauty was the first deal was in Florida, I was living in Phoenix, the second deal was three blocks from my house in Phoenix. So sometimes the biggest mistakes, that big mistake turned out to be one of my, actually today it’s our best performing asset.

33:22 Wow. And so what do you, what’s your advice on that, Kim? Because like you said, as things get a little bigger and maybe a slightly different asset class, your tendency is to think, okay, it’s going to be different, or it’s going to be harder, or I can’t handle it. Like, what is your advice to people as things get bigger, that it’s just a little bit bigger, it’s just an extra zero on the income statement? Is that all it is?

33:45 Pretty much, you know, pretty much. There’s more moving parts. You have to, I think the key, the real key is, is great property management. You’ve got to have good property management. So um, because I got to the point where I couldn’t manage any more properties, and then I found some great teams and Kenny had a, had a fantastic team.

34:03 Um, even this, um, we’re now in a senior housing development that we’ve just just opened, it just opened, but we brought in some of the best managers in the U.S., companies, to manage the property. So I don’t pretend to have all the answers by any means. I have, I have little answers, but I bring in people that are have the experience and they have the knowledge and they know how to make it work. The formula, Brian, is pretty much the same, you know, it’s income less expense equals your net operating income, and that’s what the banks lend on, your net operating income, your NOI, less your debt equals your cash flow.

34:38 That’s the formula, and it’s just the bigger deals have more numbers, more expenses, more income, um, but that’s the simple formula. Do you ever ask yourself, Kim, like, why aren’t more people doing this if it’s I do. I do, I, I do, and I, I think it’s just fear that holds them back. Fear of losing money, fear of making a mistake. I mean, I was afraid the first time I did a deal.

35:03 I had to come up with five thousand dollars and I didn’t have five thousand dollars, and I think people talk themselves out of it, or they listen to people who have never done a real estate deal, who have never purchased rental properties. I think if there’s any shortcut to success, it’s to find a great mentor or a great teacher who has done what it is you want to do. I call them real teachers versus fake teachers. They’ve actually done and have experience in what it is you want to do.

35:31 I think that’s one of the keys, and too often I see, I see people talking to their relatives and husbands or wives or friends and they just get talked right out of it, but it’s really important to surround yourself with people, like-minded people who are doing that. I mean, there’s a lot of, you know, online programs, seminars, things like that where you meet people with similar goals and aspirations, people who have had the experience. I think that’s key.

35:59 I think who you surround yourself with is really, really crucial um, in terms of having success. Yeah, amen to that. All right, that’s real estate. You have businesses, you and Robert still do, uh, tell me about the other asset classes and just your thoughts on them and, you know, advice to people. Sure.

36:17 Um, so business, we have of course the Rich Dad Company, um, and that’s pretty much a machine that is operating on a daily basis. We also invest in other people’s businesses, but the key for me and that is it’s not so much the business as it is the, the, the people who are running the business. It’s the owners of the business, it’s the management team of the business that to me speaks much louder than the actual business itself in many cases. So just recently, um, I have a friend of mine, I have invested in his company, he’s expanding, they’ve, they’ve delivered on everything they said, they under-promised and over-delivered.

36:53 I love that. So as they’re expanding, I’m investing again in their company. I also, we also like companies that we can pick up the phone and talk to the owner, because that way you know we’ll get the firsthand scoop on what’s happening, what, what’s the income, what’s the expense, is what’s, what’s the problems, what are the setbacks, what are your successes. I want to be able to do that. That’s why I don’t like the stock market personally, I’m not in the stock market, because I have no control.

37:19 I can’t, I can’t pick up the phone and talk to any of these five, you know, Fortune 500 companies and tell them I don’t like how they’re running their company. Um, but I want, I want control as one of my, one of my key things. Um, I also, also like gold and silver, because as you mentioned, you know, the US dollar, they’re going to start printing probably more and more so they can have this UBI, universal basic income, to give to everybody. So as they keep printing, and there’s other factors that are happening as well, um, internationally around the US dollar, that as they keep printing money, the value of that dollar is going to keep dropping, whereby gold historically has held its value.

38:00 So we use gold as a hedge against the devaluation of the US dollar. Silver we like because silver is used in so many things, it’s used in technology, it’s used in, in so many, it’s a consumable, and so for that reason we like, we like silver as well. Okay, now those don’t cash flow per se, but you like them because they’re that you diversify an asset that holds its value better than a dollar. Correct, correct. And Robert gives a great example, um, when he shows that, you know, the, the, the silver coins that he bought in the ’60s and then where it is today, it’s a really good way to show people that this thing that was 25 cents a long time ago, it’s now worth, like, 30 bucks or something.

38:44 And like, I think he says, like, he goes to the grocery store and the old ladies kind of get it, they’re like, oh wow, that’s crazy. So I think people can see why you would have that end, and then that’s it. You leave the stocks and the bonds alone, you leave the other commodities alone, you keep it simple. We keep it real simple, we keep it real simple, it’s really not rocket science at all, Brian. People think, oh, you know, you’re so successful, or you know, you have all this experience and all this knowledge, it really is not rocket science.

39:11 Anybody can do this, absolutely anybody can do this. Um, it’s real estate is actually, we like it because it doesn’t move it stays where it, it stays where it is, it doesn’t talk back, it doesn’t, it’s really hard to manipulate it. It is what it is. Um, and people will need a roof over their head, so, and I, I like real estate. I like creating a, a nice environment for people to live in and to enjoy and to recommend to their friends.

39:38 Um, it’s, it’s an asset that I understand. Now I have friends that love the stock market because they’re more, their minds work more technically, um, so they do very well, especially in options trading, options and puts and calls and all of that. They do very, very well. My mind doesn’t work that way, um, and so I, I can’t sit in front of a computer screen all day watching a thing go up or down or, um, I just, I want control. I really want control.

40:05 You know, it’s interesting, when the whole Silicon Valley Bank was about to go down earlier this year, I watched a, a big real estate owner who came in and said, look, you know what, at the end of the day I have a deed and I own that piece of land down the thing, and until the government’s about to take it away from me, at least I got that. Now I got some savings account, I might have a million dollars in that account, but, like, you know, says who? Says somebody in Silicon Valley, and now it doesn’t exist.

40:29 So it was, and even for me during that period, Kim, I was like, I still own London Real and I’ve got my people, I’ve got my media, you know, if the bank goes under, you won’t take that away from me, right? So it was a, it was a really, I don’t know, like, visceral example of how you can own something that’s more real than something else. It could be even more real than a million dollars in the bank. Yeah, I’m, I’m nervous about the banks, Brian, I really am.

40:55 Um, when I saw, when I saw Silicon Valley Bank, and then there was, what, First Republic, there was, like, four banks that went under. Um, there was a run on the banks, so everybody started taking their money out. Of course the news didn’t report it, the media didn’t report it, but people were taking a lot of money out of the bank. What happened is, and I won’t go into the whole history, but years ago they changed the regulations so banks didn’t have to hold as much cash, and so what they held was, they held bonds, they held treasuries, um, and they held treasuries at a lower interest rate, so when they raised the interest rate, their treasuries were worth, were pretty worthless, they lost a lot of money.

41:36 So not only was there a run on the banks, but the reserves that the banks had, they had now taken losses on, so that even put them in a worse condition, crippling a lot of banks, especially small banks. Um, I’ve heard it said that part of the plan is to get rid of the small banks and really concentrate on just the five major, your banks, where everybody’s going to have a bank account at these five major banks or the Federal Reserve in the U.S. Yeah, which, it’s almost the same thing, right?

42:08 I mean, there’s been some, like, leaked memos and emails that’s saying, oh yeah, JPMorgan, aka the Fed, you know, and all these big, big national commercial banks are now so close to that entity that you might say they’re quasi-government entities. Yeah, yeah. And these, these local banks, I mean, it’s local banks to a certain extent are a lot like local businesses and local restaurants, like they have, like you say, you can, you can call someone up, they can evaluate your company, it’s like it’s more of a community feel.

42:36 We’re using capital to help a community build, and it’s really important, and it is. Yeah, it’s an essential part of the business, the small banks. Um, they’re the ones that know your business, they’ve worked with you over the years, they’ve lent you money, they know the problems you’ve had, they know, they’re like, they’re part of your business, and if they go away and now you have this anonymous entity that doesn’t know anything about you or your business, they’re only going to look at the bottom line.

43:04 Um, I think it’s, and it, it’s kind of the backbone of countries, you know, of the UK, of the US. It’s the backbone, is the small business, and I’m really concerned of what’s happening with small business right now, because I still believe small business is the way of the future. It’s just getting a little more difficult to, to operate these days because of all the regulation coming down. Yeah, it’s something to be concerned about, and uh, what the, the reality is, all these small banks are going under or they’re being taken over by these bigger banks, and whether that was the quote-unquote plan or not, it’s happening, it’s happening, it’s happening.

43:40 And um, again, during Covid we saw a lot of small businesses go out of business, we saw a lot of the big, you know, with the big players like Amazon make a lot of money, and this is all going one way, and probably not the best way. Yeah, to promote people’s financial security, owning your own business, which probably means local freedoms. You know, you’re going to get me paranoid here again, in the long run, no, I don’t want to do that, I don’t do that, because I don’t want to go down, I don’t want to go down that path.

44:06 We still, okay, on the, on the positive side, we still have control over our personal financial life, we have control over our personal economy, and so I always look at what can I do, what can I invest, where can I grow my business, because that’s still, that is still very, very viable. So I would say to people, I, I actually do not spend a lot of time looking at what, you know, I want to learn about it, I want to be aware, I want to prepare, but I don’t spend, I don’t watch TV, I don’t watch the news. I’m very picky on which news I do listen to, because it’s easy to go down that, that rabbit hole, and I don’t want to go there.

44:44 I want to focus on what I can do, what my, what my team can do, how we can, you know, be the best we can be and grow our business and grow our investments, because that’s still, that’s still probably the best way to take charge of your life. Yeah, I totally agree. Here’s a quote from you, you said, “I can’t control the US economy, I can’t control the global economy, but I can control my own personal economy.” Yes. And so many people get addicted to the media where they’re constantly reading about bad news, bad news, bad news, and it’s probably why they don’t get involved with a lot of these potential deals, because they get paralyzed and, um, then you don’t do anything about it.

45:20 The truth is, there is so much money in this world, there are so many people out there that would love to give you their money if you could provide a service for them, whether that’s a digital product, a physical product, it’s just true. And if you’re willing to think big, to solve problems, to get creative, to deliver value, like, you could 10x your income right now. I mean, that’s the beautiful thing about this new interconnected world, that there’s actually a lot of opportunity out there, but you’ve got to start thinking like an entrepreneur, don’t you, to do.

45:52 Exactly. And you said it, you said it, um, you know, the purpose of an entrepreneur is to solve a problem, and there’s a lot of problems out there, and I agree with you, there’s going to be a lot of opportunity. If you look at the trends that are coming right now, there’s going to be opportunity in real estate, there’s going to be people, every, everybody wants everything delivered, so there’s warehousing, there’s businesses around deliveries that are trending very strongly.

46:14 Um, if you can crack the education system, because that’s collapsing right around us, homeschool is going through the roof right now, charter schools are up and coming. So if you could crack two things, if you can crack the education system, because I think there’s a way, I mean, we’re doing the best we can, you and I, in terms of being online and educating people, but if we could figure out a new system for educating kids, and I think it’s starting to happen right now, that’ll be, that’ll be priceless. And if you can crack the code for commercial space, because I know in the UK, I know here, commercial space has gone vacant, their vacancy rates are through the roof because people aren’t coming back to the office, so people are looking at what opportunities can we use this vacant commercial space for, and people are starting to come up with answers right now.

47:02 So look at the problems out there, exactly as you’re saying, look at the pro, what are the problems out there, what problem can you solve, and then go do it. I think there’s going to be a lot of opportunity if you’re prepared and you know what to do. This is why I say financial education is so important, because when that opportunity comes, if you haven’t prepared, you’re going to miss out. It’s going to look like a disaster to you where a lot of people are going to be able to take advantage of those opportunities.

47:31 Yeah, the more chaos there is, the more opportunities are there, unfortunately. Yeah, not good for, not good for the global economy, but it could be good for you. Yeah, it’s funny, we have a, uh, I taught a business accelerator program for many years, and um, I just came into my head, we had a woman on there and she taught parents, you’re gonna love this, Kim, how to get their 20-something-year-old children out of the house. Okay, and I remember I was on the call with, like, 50 other students and it all, pitching me their ideas, and I was like, you know, don’t do physical products, do a digital product, nobody wants organic coffee Bob, I was going through all of them, and she told this thing and I was like, wow.

48:07 And everybody laughed at first, and I said, okay, how much money would you pay, as a parent, to get your 27-year-old out of the house? Like, what if she could say, I’m gonna sell you a digital product that gets the kid out of the house, and you’re like, I’ve been trying for seven years to get him out of the house, what would you pay? 20 grand to get the kid out of the house? Paying 40 grand to get the cat out of the house. And I told this woman, I said, you are sitting on a million dollar business, and you can really find a way to empower the kids to go create something and do something, to allow, empower the parents to help them happen.

48:38 It was just like, it was just a weird thing where someone found a very niche, or maybe not some niche problem, and when she solved it, people were willing to pay a lot of money to solve something they couldn’t solve. Now I want to know what she did. Oh my gosh. Right, and so yeah, like so many opportunities out there, but you have to start thinking like an entrepreneur and not waiting for someone to give you a check for doing something they told you what to do.

49:02 So it’s, it’s so, yeah, the mindset of an entrepreneur is very different. I mean, that was one of my aha’s, was when you think of thinking like and having the mindset of an employee is very different from the mindset of the owner of the company, and if you can start to understand that difference and kind of start to, if you are an employee, start thinking like the owner of the company, then eventually you’ll own your own company. But that mindset change is so crucial.

49:31 Start looking at what problems you can solve, how do you bring a team together, how do you, how do you have lead with a vision, all of that. Again, it’s not rocket science, it’s just a different way of thinking. Yeah, I mean, we’ve all had the employee come to us and say, I’d like a raise because, uh, I haven’t had one in a while and my expenses are getting really high at home, and no, no, no, and you’re looking at them like a CEO, like, what are you talking about?

49:57 You need to come into my office and say, I am going to make you a lot more money with this brand new project, this team, this vision, this whatever, and if I do that, I would, uh, I will be looking for, like, maybe this amount. And it’s like, now you’re on, now you’re thinking like an entrepreneur, now I’m listening to you. And so I’d say, yeah, even if you’re not an entrepreneur yet, you can start thinking about that, like in a business, it will advance you in the business and potentially get you out to do something on your own.

50:26 Yes. And the team I have now, it’s a small team, um, really it’s a small team, and we do Rich Dad all over the world. Um, and just the other day that happened, uh, one of the key people in our company said, I’ve got this great idea, um, here’s how I can, here’s how we can, here’s how we can launch it, here’s the market, here’s how, here’s the numbers. He had the numbers all written out, and he said, I’d like to be a part of it, and I’m like, okay, let’s talk.

50:50 It’s good. And you know, on the subject, entrepreneurship, Brian, I just want to bring up one thing, um, because I do talk to a lot of women about entrepreneurship, and women entrepreneur, women-owned businesses is one of the, one of the fastest growing sectors in the world of business today, but 68% of women-owned businesses make less than 24,000 US dollars a year, and of those businesses, 90% of those women-owned businesses only have one employee, her. So I think as, as you’re thinking of becoming an entrepreneur, if you are an entrepreneur, or even with your investing, I think sometimes people think too small.

51:28 It’s like, I’m going to start a business because I want, oh, you know, a couple extra thousand dollars a month. Well, if you’re gonna think like an entrepreneur, it’s like, okay, so what problem are you solving? Is there a need for it? Is there, are there other products out there like it? But start, we have a bit of a bigger vision, think bigger.

51:48 Same with investing. It’s like, oh, I just want a few, you know, extra thousand dollars a month. Well, what if it was a hundred thousand a month? Why, why limit yourself? Why, why put brakes on when what you’re gonna do, you can do it for ten thousand or you can do it for a hundred thousand, you can do it for a million.

52:06 Um, it’s the same formula. So I think sometimes I think, and especially women, I think we sometimes limit ourselves more because we, um, for whatever reason, for whatever reason, fear, time, excuses you make, and they’re all excuses. I don’t have the time, I don’t have the money, those are all just excuses. Um, if you want to do it, you do it. Just like I, I never use the word, I never use the word “try”.

52:27 If somebody comes to me and says, I’m gonna try to make the meeting tomorrow, I’m like, you’re not going to be there either. Do it or you don’t do it. Yeah, I’m gonna, I’m gonna, um, try and buy that property. Uh, you’re not gonna try, you’re either gonna buy it or you’re not gonna buy it. I hate the word “try”.

52:42 I hate that word. I’d love to see you behind the scenes and see how you operate, Kim. I really would. You make a really good point, a lot of people, you know, they’re like, I own my own business, but you basically own a job where you’re sometimes even underpaid, which you would be as an employee. So it’s important not to trick yourself into thinking something, and again, maybe go back to the cash flows, it’s like, well, is this cash flowing more than what was before?

53:07 And if not, then you want to change it. The beautiful thing about a business is, like you said, it could scale, and if you sold ten thousand dollars of the products, selling a hundred thousand is actually not that much harder, sometimes easier. Yeah, and um, you know, I used to work in banking and I would see some of the, the salespeople in the banks, and they would sell derivatives to a lot, all the people around the world, corporates, financial institutions, and then sometimes I would go out to get a watch or to get a suit and I’d meet these amazing salespeople, um, and I’d be, I’d look at them and I think, you know what, you’re a great salesperson and you sell this thing, but if you sold something a hundred thousand times more expensive, you could easily make a hundred thousand times more, and yet sometimes people just pigeonhole themselves, like, I can only do this or only do that, but you know, if you’re good at something, it can scale like that.

53:58 It’s usually your mind that’s stopping you. And I love that thought of scaling. You know, if you’re starting a business, how are you going to scale the business? You know, how are you gonna, how are you gonna grow it? It’s one of the things I was talking to some venture capitalists the other day, and um, just understanding what’s important in certain businesses and what isn’t, things that you think, for example, the Rich Dad Company, some of the things I think are valuable and a buyer is not going to think is valuable, but what they, what the number one thing that every venture capitalist seems to want in any business is growth.

54:29 How are you going to grow it? How are you going to scale it? That’s the number one question. Um, so it’s, it was a fascinating, fascinating discussion, because of course then I go back to the company, I’m like, okay, how are we gonna, how are we gonna grow this more? And so we actually have three projects right now as a result of that one meeting on how we can put more long-term growth into the company so that it does become more valuable and more, um, more attractive, not that we’re selling the company, but I want to learn about how people think to make our business better.

55:01 Yeah, really well said. A lot of those VC people sometimes will be like, where’s the technology? Because when they see you put your processes into a piece of technology, to an app or something, then they know that scales. So sometimes when you do that, your regular company becomes a tech company, and all of a sudden it gets a 20x earnings, you know, as opposed before that you had an 8x. So yeah, a lot of times they’re looking for that, and with these massive customer bases now, you know, the attack, it’s a great way to think.

55:31 And like you said, even if you’re not selling, you want to know what the market values. Right, right. Um, question for you about women, because, you know, this is, we all have women in our lives, or if you’re a woman listening this, and for me, I’ve got moms, uh, you know, I’ve got kids and daughters and and all these people in my life. What is it like when you speak to women about money, um, you know, what do we need to know on how we can empower women around us with money, and if if a woman is listening, what are some of the mindsets or the, that they’ve sometimes adopted without knowing that they have to fight through?

56:10 It’s a great question, Brian. Um, I think, I think one of the problems starts early on, and you know, nobody, none of us had financial education growing up, men or women, but women were actually taught, and I think this is still, this is still going on today, women are actually taught to be dependent on a husband, a family member, government as, as they get older. They’re, they’re not even expected to know much about money. It’s kind of pushed aside. So what happens is, especially as women get older, because of, you know, divorce, death of a death of a spouse, or poor money management, oftentimes women as they get older, they find themselves in a financial crisis.

56:55 I mean, the number of women in, um, think it was 87 percent, 87 percent, um, of people living in poverty today, 87 percent are women. But 80 percent of those women were not poor when their husband was alive. So he dies, she doesn’t know where anything is, um, Mr. Mrs. Financial Helper come along, and next thing you know, she’s broke. All right, so I think part of it starts with kind of retraining the way we’re taught as kids, and as we’re trained through fairy tales or whatever it is, that women have got to understand that money is a very, very important thing.

57:38 I hear a lot of women say, oh well, you know, my eyes glaze over when I look at the numbers, or my husband handles all that, all the finances. Or I hear the husbands say, oh, my wife handles all the money. No, that’s not true, she handles the day-to-day finances. I think it’s like 95 of the women, or 85 percent of the women handle the day-to-day finances, but almost none of them handle investments and long-term financial decisions, and we need to start including them in those discussions.

58:09 Um, and women need to start taking charge and saying, hey, I need to know about this part of the problem, if you’re in a situation where you’re not the primary money maker. And now you get excited and you’re like, yes, I want to start learning about investing and I want to start learning about real estate, or whatever asset class it is, to have that discussion with your spouse and your husband, all of a sudden, I want to understand what we have and where it is. It can sometimes be a bit threatening, and um, so he’s sometimes walking on eggshells.

58:39 But the thing I would say to women is, you got three choices. You can take charge and do something and get out there and learn and educate yourself and start investing and start learning about money. You could include your spouse, which would be the healthiest thing, because you want to learn about money and investing together. Or you can do nothing, and doing nothing is what’s going to keep you pretty much a victim. To money, so important, I mean, we’re all coming from behind when it comes to financial education, you know, we just are.

59:09 We’re coming to this world, no one’s going out of their way, matter of fact, they’re going out of their way to try to make us feel stupid about money and make us feel that the bankers are the smart ones that hold their money, just like we used to think the doctors were the ones that we should trust with our health, just like we used to think the government were the ones we used to protect our human rights. We are, because the last few years, we all know, I’d say a lot of people know those are no longer true. But like you said with women, it’s even worse because there’s this whole fairy tale narrative of, you’re going to be taken care of, and so on top of that it’s even harder.

59:40 But like you said, all the tools are out there, and so they’re all out there. And you know, I think last time Robert was on we were talking about a New York Times article that was um, trying to criticize, uh, Jared Kushner for making money in real estate and not paying taxes, and you know, perfect, classic New York Times, uh, vilifying someone for making money in the legal way, and you know, he was using the same tools that anyone in the world can use. Yeah, and so the same thing is true, I guess, with women.

1:00:13 It is, you know, they say women are risk averse when it comes to money, and I like to use the word “risk aware”. They, they, you know, you look at these women investment clubs, they do pretty well, and they do their homework and they look at what the risk level is so that they can reduce the risk. Um, I think the best investors, men or women, the best investors are ones that do their homework, understand the investment, they get educated on it. They, the worst, the worst investors are the ones that take the hot tips, just give me a hot tip and I’m going to invest.

1:00:46 I got into it the other day with somebody, um, and I was talking about starting small, and this was about real estate, starting small, you know, make mistakes, and we can talk about mistakes because that’s the key to everything in my world, um, make mistakes because that’s how you learn and then grow from there, and grow from there, but start small. He said, you don’t have to start small. I’m like, what do you mean? He’s like, well, you could just, I have this, you know, 250 unit apartment building, they could just give, they could just invest with me.

1:01:15 And I’m like, yeah, they could, but they’re not going to learn a damn thing, because you’re going to take their money and you’re going to either give them a check or not every month. Are you going to educate them about how you run the property, about how you manage the property? Well, no, I’m not going to do that. I’m like, well then I, it’s, it’s one strategy, it’s not right or wrong, it’s just not my strategy. If I’m gonna put some money into something, I want to learn about it, I want to get smart about it, because I’m probably going to want to do it again, and every time I, every time I part with money, Brian, I learned something every time.

1:01:46 It could be ten dollars, I’m gonna learn, because I hate to lose money. You know, Kim, your philosophy of start small is crucial, and it affected me in a big way. Um, in 2021 we created, um, the Crypto and DeFi Academy, and so I started taking people around the world through, like, a four-week boot camp so they could just understand the basics of, you know, what is Bitcoin, what is Ethereum, what’s a, what’s a yield farming technique, etc. And I used your philosophy, the same one you told me when you were in the studio in 2019.

1:02:17 Well, you said start small, I remember, Kim, you said buy fifty dollars worth of gold. Yeah, buy 25 worth of silver, just do this and start small and you’ll get a feel for it, and if you own a little something, you’ll now be engaged, aged, you’ll really understand it. You’ll, because you have to feel, don’t you have to feel an investment, the way it affects you emotionally, the way you get excited, the way you get scared? And so that’s what I did in my Academy, and I would tell my students, I was like, look, I want you to go buy 50 bucks worth of Bitcoin, 50 bucks for the Ethereum, I want you to send it out to Aave and get a return of four percent, and they would be going crazy, and I’d be like, look, it’s 50 bucks, like, what’s the worst that’s going to happen?

1:02:53 And sometimes they would screw it up, and sometimes they would thought they screwed up, and then it would appear back, and they always learned, and every now and then someone would lose it out in the ether, and I’d say, yeah, it was 50 bucks, it could have been 50,000 bucks. In two years it will be fifty thousand, you’ll be moving around, but now it’s 50. And I’m telling you, Kim, you know, I’ve taught over a thousand students this stuff, and it gets them over the line because they’re quickly convinced.

1:03:20 I said, you’ll spend more in the bar on Friday than that, so don’t tell me you don’t have the money. And then once they do it with a little bit, it’s just, it’s a massive education, so that advice is crucial. No, that, that is key, because, because I, my second book’s called “It’s Rising Time”, and I wrote “It’s Rising Time” because I saw women, they would read a book and they get excited, or they go to a seminar, they get excited, but they wouldn’t take that first step.

1:03:41 And so for me, every time I want to learn about a new investment or new business, I have to put a little money into it. I’ve got to put a little money down, because that gets me in the game. And as I said, if it’s ten dollars, if it’s a hundred thousand dollars, I’m gonna be interested to find out how I’m gonna get that money back. But if you just put a little, I say put your toe in the water, just get in the game a little bit. If it’s real estate, start with just a small, maybe a small property or a piece of a property, but get some money into the game, because that really will accelerate your learning tremendously.

1:04:13 And I did that myself with gold and silver. I remember this first silver coin I bought, I probably still have it because I’ve never sell, I never sell my, I never sell any of my assets. I never sell gold or silver, I never sell real estate. The only time I’ll sell real estate is if the property has kind of gotten to the point where it’s not going to produce anymore, it’s, it’s kind of reached its, its plateau, and there’s a better opportunity somewhere else.

1:04:38 That’s the only time I would sell. Right, and then you fold that value of the asset into another asset in a tax-free manner. Correct. Yeah, we have a, I had, we have a rule that says anytime a dollar enters the asset column, it stays in the asset column. So if we were, if I was to sell a property, that money stays in the asset column.

1:04:58 I never ever will take it out to buy a new car or, you know, buy a boat. No, it stays in the asset column, it’s got to keep working. And you’ll be surprised how fast, when you start small, how fast that money in the asset column starts generating, starts to churn and starts to make you more and more money, but that’s a rule that we’ve held steadfast to. And if you want to buy the car, you have to do it with your passive income. Correct.

1:05:21 Exactly. So if we have a, if we have a property that’s throwing off, let’s say, 5,000 a month, um, and this we did this because Robert wanted a Porsche, and so I’m like, well, let’s find the asset that’s going to pay for the Porsche. So we found a self-storage unit in Austin, Texas, and every month that check came in and that paid for the Porsche. Eventually the Porsche gets paid off, we still have the property, and we still have the cash flow. So important.

1:05:46 It’s so easy, it’s not rocket science. No, it’s easy, it’s so easy, like so many things in life are so easy, right? Just have to have the discipline to do them. Tell me about your mistakes, Kim. I was kind of excited to hear you mention that you’ve learned a lot from your mistakes.

1:05:59 What do you mean by that, and what were some of the ones that taught you the most? Oh, boy, so mistakes. Um, I think that’s what holds people back, you know, you go to school and you come out of school scared to death of making a mistake, because in school you’re punished for making a mistake. You get an F, you get ridiculed, um, you get red X’s all over the place. You’re taught, you’re actually programmed in school not to make mistakes.

1:06:24 The only way a person learns is by making a mistake. We talk about, you know, if you’re riding a bicycle, you have to fall off several times before you learn how to ride. Anytime you’re doing something new, you’re gonna make mistakes, you’re gonna fall down, if you’re, if it’s money, if it’s business, if it’s sports, you know, I’m learning pickleball, I’m making a lot of mistakes, but I’m getting better every, every single time. And Thomas Edison, he said, I love his thing, he said, “I failed my way to success”, and every time I have.

1:06:54 So what we do in our company is we encourage people to make mistakes. Make them faster, faster every single day, make more mistakes, more mistakes. Don’t make the same mistakes, but every time we make a mistake, we step and go, okay, what did we learn? What did we learn? Because that’s the only way.

1:07:09 When you have, when I’m up against, I hate making mistakes, I, you know, it’s still ingrained in me, but now I look at them like, okay, so what, here was the mistake, let’s sit down, let’s regroup, what did we learn, what didn’t we do? Um, and that is how you propel your growth. That’s where real learning happens, because you’re out there doing it. Every, every time, there’s a piece, Brian, to this that I didn’t understand so well until now. Every time you take an action, every time you’re in motion, every time there is feedback.

1:07:43 Every time. So you touch a hot stove and you burn your finger, that’s feedback, and whenever we take an action in our business, whenever we take, when I take an action in life, you really have to pay attention to the feedback, and I didn’t understand that so clearly as I do now, because we oftentimes, we ignore the feedback, we don’t take it, and it’s, and it’s the best gift possible. So just the other day we were putting this, um, this online Cashflow game, working on this project, this initiative, and we made an assumption that was so wrong, it was like the foundational assumption of this entire project, and we were wrong, and we’re like, oh my God, I can’t even believe we did that.

1:08:25 And so we sat down around the table and we’re like, okay, so what do we do, what did we learn, how do we regroup now? The initiative went from being this big to being this big because of that assumption, because we made that mistake. So I think people are so afraid of making mistakes that they don’t take any action and nothing happens. Einstein says nothing happens unless something moves. You gotta move, you got to stay in motion.

1:08:50 We call them precessional effects. When you’re in motion, all this other stuff, because of that motion you’re taking, all these other things are happening around it that you may or may never know about, but it’s the, it’s getting out there and doing it, allowing the failures to happen and learning from the failures. I think that’s the key. I think that’s the key to life. And yeah, and I was just going to add one other thing, Brian, is often to, um, it’s the fear, the fear of making mistakes, and it’s breaking through those fears.

1:09:23 You know, I know we all face fears every day, and when I face a fear and I break through it, that’s where real magic happens. So it’s kind of, you gotta change that mindset around fear and mistakes, and if you just make a mistake, just look and say, what did I, what did, what did, a mistake just shows you something you didn’t know, that’s all it is. It just shows you something you didn’t know. Yeah, but you, we just have to fight through the programming that we all went through in that, uh, public education system that was invented here in Britain during the Industrial Revolution to take these, uh, these pesky little things running around, which were the workers, kill it kids, and turn them into workers, right?

1:10:03 You stuck them in these classrooms, and if you could sit there for 12 hours doing repetitive tasks and doing what you’re told, then you’re the perfect worker. Yeah, don’t make a mistake, don’t challenge the authority. Uh, and I always tell my students, I’m like, do you think, you know, Elon Musk got rich by not making a mistake, by not taking chances? Like all of our heroes in business do that, and yet sometimes we go back to the default programming. So yeah, you’ve got to force yourself out of that, like you said, to make those mistakes, and taking action is always better.

1:10:33 You’re not going to learn without that action, are you? You’re just not. No, never, never. You got it, you’ve got to take action to grow, to learn, to be successful. And back to the schools, the worse, they’ve done these studies on the worst way people learn.

1:10:44 The way, worst way is make them sit down and lecture to them and read. Those are the worst, the worst ways. And what are these kids in school? They’re sitting at a desk, they can’t move, movement is really good, they can’t move, and they’re being lectured to, and they wonder why. And I think one of the, the biggest crimes of the school system is that kids come out of school thinking they’re dumb, and they’re not, or the other side of it, kids come out of school thinking they’re smart, and they’re not.

1:11:17 Right, they’re smart in the academic world, but they’re not smart in the real world. They’re so little, um, that transfers over from school to the real world. Actually, what you do in the real world is opposite of what they teach you in school. You want to make mistakes, um, you want to cooperate, learn together. In school you have to do it by yourself, you have to do it on your own.

1:11:37 Well, in the real world you’ve got, you need a team, meeting other people around you. So actually the way school teaches is opposite of what it takes to be successful in the real world. Yeah, so well said. I’m having flashbacks. I studied finance at, uh, MIT Sloan School of Business, and then I went to work on Wall Street, and my first day, I was 22 and I was on this massive trading desk, on this huge, you know, fixed income trading floor, and like, nothing they had taught me applied.

1:12:03 It was a completely different language, it was a completely different way. They were looking at me like, how are you gonna make money this month? You got to make money while you’re here. And like, I was like, what? And my professors, like, they had never probably hadn’t worked today in 20 years.

1:12:18 So again, that was in a university, and the same thing applies. Well, I had the same, I had the same situation, I was, I went to, um, business school, not just undergrad, and there was a, I was in advertising and there was a media class I had to take, this media class, and I, for the life of me, it just made no sense at all, no, no sense. The professor was so frustrated with me, I’m like, I just don’t get it. My first job out of college, in the media department of an advertising agency, within 24 hours I understood it completely.

1:12:51 Right after a semester of college never getting it, still, still left that class not knowing it, but within 24 hours of doing it and being in the, in the environment and doing the real thing, 24 hours, understood. Gosh, someone’s gonna crack the education system in the next 10 years, and it’s going to be the multi-trillion dollar opportunity. And I think, so look, I think you could learn a lot from what you guys did with Cashflow because you have to gamify something.

1:13:18 That’s why I’m going to definitely introduce you, and yes, uh, to Yat Siu. Yeah, please, he’s all about gaming and gamifying everything. Everyone loves to play games, you guys realize that, and getting people educated, it still hasn’t been done right, and when it does, it’s going to be a massive opportunity. Um, Kim, I just want to take you back to 1985, where I think you and Robert are in San Diego, California, your broke is a joke, you know, I think you spent, we were sleeping on people’s floors or in a beat up Toyota, and you were starting to maybe buy those first assets.

1:13:49 I think interest rates were probably through the roof, people here are wine in the UK because they’re six percent interest rates, you were dealing with maybe 13 interest rates. Um, just take me back to that time and what you learned and what people can learn from that. I was actually surprised, because you always see you and Robert and I assume you were always successful, you know. No, we, uh, we left Honolulu in 1985. We took a massive leap of faith, um, that’s when I quit my job, and that’s when my parents went a little nuts, um, but quit my job, went to San Diego, we were getting ready to start a new business and basically sold everything we had, which wasn’t much, but within, within like three months we were broke, and we didn’t have a business, and we didn’t have anything, and I didn’t, we talked about getting a job, like I have to still get a job, and it’s like, no, no, if you get a job, then we’ll, then we’ll never get through to our dream, which was having this business.

1:14:45 So we’re gonna, we’re gonna persevere. So it was really, it was very, very tough, um, Brian, we did, we slept on people’s floors, we did sleep in a round Toyota Celica. Um, there was one night where we, you know, at the time when you had credit cards, it wasn’t all digitized, at that point they just, they just it on the machine and ran it. So we went into this Sixpence motel and they ran the card, and I’m like, they ran the card, there’s nothing in it, but we’ll, and we’ll pay it back.

1:15:13 But that night, after sleeping on in all these different places, that night we went down to Kentucky Fried Chicken, got a bucket of chicken and a six-pack of beer, and that night was like, like a crowning glory moment, because we were like out of the storm, we were sheltered from the storm for one night. But what it really did, and this kind of goes back to, um, what we’re talking about, when people are given money, what it really did is it took its toll on my, on my spirit and my soul, and I started questioning whether I really did, I have any worth, did I have any value, because nothing is working, um, we’re arguing all the time, we’re not getting ahead, and so there was one, I mean, I actually went to, would go to sleep thinking, maybe I just won’t wake up in the morning, that would be better.

1:16:01 But then there came this one aha moment, and the aha moment said, Kim, just go out there and do something. It doesn’t matter what it is, just go do something, move, get an action, do something. So I called my friend and she had a clothing shop, and I said, let me, um, set up a, I’m gonna set up a fashion show for you at the Del Mar racetrack, which they never ever do. I’m like, I’m gonna do it. She’s like, I’ve tried, they won’t do it.

1:16:25 I’m gonna do it. Long story short, we did it, it was a big success. That, but it was getting out there and doing it. So whenever I start doubting myself, or whenever, um, I might be a little down, I’m like, just go do something, Kim, just go get out there and do something, make something happen, move, move, move, move, and it always, it always gets me out of that. So um, I don’t know if that was your question, and then how did you get there into the asset column?

1:16:54 Like, what was that like? Oh, okay, so yes, so as that column actually was, we moved to, um, Portland, Oregon, we had this company that was just, was it was, uh, probably about a year old, it was just starting to make money, but we were not, we didn’t have a lot of money at all, and Robert started to explain to me what his rich dad taught him about investing, and specifically real estate, and he’s like, so go out there and go find something, and I’m like, what are you talking about? So I just go stumbling along, I don’t even know what I’m looking for, I see for sale signs on houses, and I call the realtor and I start asking questions, and long story short, there’s this little cute little two-bedroom, one-bath house, right in our, right in the next neighborhood over, I could actually bike to it, called the realtor, started talking about, I’m like, this could be a, this could be a good rental, um, and that house was forty-five thousand dollars, it’s 1989 now, 45,000, had to come up with five thousand dollar down payment, of which we did not have, and this is why I say find the investments, don’t find the investment first, don’t think about, when I get money I’ll then invest, because when you think, when I have money, you’ll never have money, because there’s always something that takes your money, there’s always an emergency, there’s always some way, some way that money disappears.

1:18:16 So find the investment first, because then it becomes real, then it becomes tangible, then it’s like, oh my gosh, I really want this, and then you put your mind to work on how you’re going to get it, and that’s where the funds happens. So I need to come up with five thousand dollars, of which we did not have, um, we actually, so we sat down and how are we going to get the money, and we went to the banks and they’re like, no, no, no, no, no, no, no, no. So what we did is, with our company we created a product, we actually didn’t create it, we just wrote about it, and we said, we’re going to sell you this product, uh, it will be delivered in three months, but you can prepay for it now.

1:18:52 And so they did, and that’s how we got our five thousand dollars, and then we made the product and we shipped the product. But what happens is when you get in the situation where you know, I don’t have the money, so I can’t invest, the biggest lie you could tell yourself. I don’t have time, biggest lie you could tell yourself. Once you see it and it becomes real to you, then you get to be creative and use this mind of yours to make things happen. But you’ve got it, again it goes into doing, you’re gonna go do it, you’re gonna go find it, you’re gonna go make a deal, and then put your mind to work and really get creative.

1:19:26 We, I’m gonna say our first, our first 10, 12 properties, we didn’t have the money for any of it, none of it, but I got a lot of tricks in my bag of tricks now. I love that advice. Um, Kim, what’s next for you? Oh, that’s a great question. Um, well, with the Rich Dad Company we are going to launch this huge online, it looks just like the board game, um, it’s going to be a place where people can come play by themselves or bring other people in, it’s going to be global, we’re going to be launching it probably this month, so I’m very, very excited about that.

1:20:02 Um, and other than that, I’m always looking for new opportunities, new projects, um, I’ve got some real estate things that I’m doing right now, but I’m kind of looking at, um, spreading my wings in other directions right now, which is really, really fun. I feel like there’s a lot of opportunity out there and just figuring out what it is where I can, where I can be at the biggest contribution, where I can add the most value is what I want to do. So I’m talking to a lot of people, meeting a lot of people, getting out there, doing, doing, doing, doing, because nothing’s going to happen unless I’m out there doing.

1:20:35 Um, but I’m very, very excited, life, I’m loving, I’m loving a life right now, even with all the craziness going on. As I said, my own personal economy, I’m loving life, enjoying all of it. So you’re spreading your wings, that means you’re running for president. What do you think? Oh God, no.

1:20:52 I will never touch politics, ever, never. Oh my gosh, are you, are you thinking about doing something in politics, Essence, your mayor race? You know what, uh, let’s just say I’m not running back over to that, uh, that that possibility. I mean, it’s, it’s, uh, it’s pretty crazy in there, you know, uh. Yeah, definitely.

1:21:13 So all right, so you’re gonna leave us in, in, in wonder and suspense of what would come next for you, but yeah, you’re exploring different things. When I figure it out, I’ll let you, I’ll be, you’ll be the first to know. Okay, all right, that’s a beautiful thing. Uh, Kim, uh, you’re really a gift to this world when it comes to talking about money, and um, I just really appreciate all your thoughts on all these pieces. We’re really looking forward to Cashflow when it gets kind of re-released online.

1:21:39 Um, it’s just an incredible game, and this financial education, it’s just something we have to figure out and we have to solve. Um, like I said, uh, interesting enough, Yat Siu was in the studio and he said it was, quote unquote, scandalous that we don’t teach our children and our people about money, and so I look forward to you guys, you know. I will tell you one, one last thing that we are working on, Brian, and we’ll see how this goes. So in in Florida, uh, Governor DeSantis passed legislation that every high school kid, um, must take a financial literacy course.

1:22:11 I actually was on that committee, um, helping to do that, um, and I think there’s initiatives, I mean, I’m not saying I’m not getting into politics, but I think that we can make a dent since Rich Dad brand is pretty well known. I think we can make a dent to really bring financial education to high school and younger students. I’m not sure what form that will take right now, but we have, um, we’re actually about to launch what’s, what we’re calling the Rich Dad House, which is a townhouse, uh, two blocks from Capitol Hill, um, that may, we have a, um, some, some politicians that are interested in bringing financial literacy more to the forefront of the conversation.

1:22:49 So we are working on that, we’re never going to stop bringing financial literacy to the world, that’s what we do, and if we can do it and scale it, to your point, if we can scale it bigger, better, we have a, we have a saying in our company that is, the more people we serve, the more effective we become. so we’re always looking at how we serve more people, and we’ll see if something comes to fruition on Capitol Hill. Wow, I love it. Um, two final things I didn’t ask you about.

1:23:19 One was, you know, we have this Fed now coming which is, might be a CBDC in disguise, I know DeSantis is trying to outlaw in Florida, I don’t know if it’s going to happen. And also, I think recently the, it looks like some legislation passed or some judges ruled that federal agencies can’t interfere with social, like we saw them doing with the Twitter Files that were largely ignored by mainstream media and Washington, so that was amazing to see. Just your thoughts on both of those things, they’re kind of related but also very different.

1:23:49 Yeah, cursor to currency, which I think would be a disaster. To me, central bank digital currency is all about controlling your behavior. I mean, they’re going to know everything you buy. They could say, Kim, you donated to Donald Trump’s campaign, sorry, you don’t get that loan. Um, that’s maybe an extreme, I’m not sure.

1:24:13 The um, the Bank for International Settlements, which is like the central bank of all central banks, last week or maybe two weeks ago came out and said they are launching, they will be launching a global CBDC. Um, and I don’t know what exactly that means, but I think that CBDC, they’re talking about you’re not even going to be dealing in money anymore, you’re going to be dealing in tokens. So if somebody, if I want to buy a house, I’m like, I’ll just pay cash.

1:24:41 No, you can’t pay cash, because you can’t own it unless you have tokens. So there’s all these ways of controlling our behavior. Um, if they, if it becomes where you, who you donate to or what you buy isn’t, you know, the way you’re supposed to buy, or it’s not part of the New Green Deal, you’re buying gas, not electric cars, and because of that we’re going to ding you on your credit score, whatever it is, it scares the heck out of me. I don’t like it at all.

1:25:08 I don’t like, yeah, I don’t like the digital currency at all, and I don’t know how we go about making that not happen, um, but just be aware that they’re gonna, they’re gonna sell it as, it’s fast, it’s convenient, and it’s easy, and in the US I think what they want is everybody to have an account with the Fed, and that’s the ultimate control. The judge’s ruling recently that was going to keep federal agencies out of our social media, yeah, what do you know about it, and do you think it’s going to actually make that happen? I hope so.

1:25:45 I think it was a huge ruling. It was interesting, it came down on the Fourth of July, which is our Independence Day, that’s when the judge ruled and said basically FBI, CIA, Department of Justice, all of these federal agencies cannot interfere with social media’s sense, cannot, cannot force censorship and people being taken down and comments being taken down, and basically saying you cannot stop free speech from happening. Fantastic. And I hope, to your point, I hope that it goes into action.

1:26:16 I hope that legislation comes through, because we’ve seen a lot of legislation where judges are ruling but the administration is not, is saying, so what, we’re going to do it anyway. So I’m hoping that this has legs. I’m gonna, I’m gonna follow it more closely, and if I can support it in some way, I will support it however possible. I think our biggest, biggest threat right now, as we’ve talked about, the biggest threat is the loss of free speech. If we lose free speech, we lose the game.

1:26:43 So um, I will do whatever needs to be done to see that we can maintain our free speech as much as possible. Yeah, and we have direct experience with that. We’re actually about to drop a documentary film we’ve been working on for about three years that talks about everything that happened to us in 2020, and you know, I’ve been through this, and at the time I raised my hand and I said, wait a second, the First Amendment protects me, what, um, I raised my hand, I said, governments, you’re going to protect me here, and basically they said, no, no, that’s a private company, and once you sign their community agreement, they can do what they want.

1:27:16 Little did I know that that same government was going to that company and violating my First Amendment rights, you know, digitally, as almost like a proxy. And so when I saw that come full circle, I was just like, you know, this is really wrong what’s happening here, and so this legislation is crucial, because it stopped a lot of speech from happening, and like I said, it stopped a lot of, um, of great ideas being exchanged, and that’s what we need. So when I look forward to that film, Brian.

1:27:46 Yeah, we’ll get that in front of you for sure. Kim, what’s the best way for people to follow you or get in touch with you? No, I get, I have got Instagram, I’ve got Facebook, I think it’s just called Kim Kiyosaki or the real Kim Kiyosaki, um, Facebook, YouTube, all of it, all of it. Yep, come watch me. Yes, uh, in what, in what’s next for me, I’m about to launch in about three to four weeks my own podcast, and it’s called the Rich Life podcast.

1:28:15 Um, we’re gonna talk about, it gives me, in the, the tagline is, because financial freedom is just the beginning. So we will talk about everything from the economy to politics to money to investing to entrepreneurship. I’m really, really excited about it. I really like that. I love that.

1:28:34 I love, uh, I love new podcasts, always got a special place in my heart for that. And uh, um, there’s a quote I was, I was kind of meditating on recently that wealth means you being able to live your life to the fullest, and so I love this concept that, you know, and you’ve always said that wealth isn’t just about money in the bank, it really is about how you can get the most out of life, give the most back, be the most. And so yeah, looking forward to hearing that, and you know what, when you said that, that just, that makes me smile, because when I had my, I did the first show and we talked about what is a rich life, and it was all about living your life to the absolute fullest.

1:29:11 Yeah, so important, right? And that’s only going to happen if you can control your finances, and the opposite happens when someone else controls them and starts taking away from your soul. So there you go. Uh, Kim, thank you so much for everything you do. We really appreciate your voice out there.

1:29:26 We need you, the world needs you, and it doesn’t look like you’re slowing down at all, and I’m not surprised. So thank you. Please, let’s do this next time in London or in the States. All right, thank you so much, it’s been best. All right, thank you so much.

1:29:39 Follow this woman, and we’ll see you next time on London Real. Bye, everybody.