Here’s my interview with Robert Kiyosaki, Author of Rich Dad Poor Dad. We like to call it Hanging with my Rich Dad. I hope you enjoy it. Sign Up for our emails for more great free stuff like this.

Interview with ROBERT KIYOSAKI and Mack Burnett.

MACK BURNETT: I’m very excited about this week’s show we have the privilege and the honor of having ROBERT KIYOSAKI, author of “Rich Dad Poor Dad”, “The Cashflow Quadrant”, and the creator of the “Cashflow 101” game. Not only is the Rich Dad series a personal favorite of mine but I know it’s a favorite of many of yours and also many in our business circle. We would like to thank Mr. Kiyosaki for taking the time out of his day to come on the show and we hope that you enjoy it.

MACK BURNETT: I have the pleasure and the honor of having ROBERT KIYOSAKI, author of “Rich Dad Poor Dad”. He’s been on the New York Times list for over 5 years; the book has been translated into 45 languages and is available in 90 countries. He has sold over 25 million copies worldwide; he hangs out with Donald Trump. Mr. Kiyosaki, how are you?

ROBERT KIYOSAKI: Good how are you doing?

MACK BURNETT: I’m doing very well. Thank you for coming on the show today. Could you explain to some of our listeners, who may not know, what are the basic principles of Rich Dad Poor Dad?

ROBERT KIYOSAKI: My name is Kiyosaki. I’m fourth generation Japanese American. I was raised in Hawaii, and my real dad was the head of education for the state of Hawaii, very smart man, PHD. Great father, but I call him my poor dad because when you look at his financial statements, there was nothing there. And then my rich dad was my best friend’s father and he was a man who…also an immigrant and he started with nothing but he ultimately became one of the richest men in Hawaii. So, the story of Rich Dad Poor Dad is a true story of what 2 fathers tell their sons about money and we know our school system does not teach us much about money so we learn about money at home…

MACK BURNETT: Right.

ROBERT KIYOSAKI: Which is why the rich get richer and the poor get poorer.

MACK BURNETT: Right.

ROBERT KIYOSAKI: But that’s the real fun thing, like I said it’s a true story and the principal is basically that we need to teach people about money because rich or poor or smart or stupid, in school we all use money but for some reason our school system has some quasi-religious idea that the root of money or that money is the root of all evil and they don’t want to talk about it.

MACK BURNETT: Right, sure. Well I mean yeah because in school aren’t we taught to get a good job, work hard, save and invest long term, doesn’t that work anymore?

ROBERT KIYOSAKI: No, no, of course not. Well, that’s what the middle class is taught to do.

MACK BURNETT: Sure, sure.

ROBERT KIYOSAKI: There are 3 kinds of financial education for 3 groups of people. Poor people like my dad even though a PHD, he believed that the government should take care of you which is socialism and he believed in social security and Medicare. And so there is a vast majority of America who are technically poor people because they expect somebody else to take care of them.

MACK BURNETT: Right, right.

ROBERT KIYOSAKI: The middle class financial educations go to school, get good grades, get a job, save money, stay out of debt, buy a house, invest for the long term primarily in mutual funds and diversify. That is very middle class information and works about in 20% of the people, for 80% of the people that’s horrible information.

MACK BURNETT: Right.

ROBERT KIYOSAKI: And the rich know…look at the richest guys on earth, a lot of them didn’t graduate from college. Michael Dell, Bill Gates, Steve Jobs, they were all college drop outs, so that should tell you something right there. (Laughs)

MACK BURNETT: Sure, sure, exactly, exactly.

ROBERT KIYOSAKI: And so I follow my rich dad’s principal. I’m an entrepreneur, and I invest primarily in real estate plus oil and gas.

MACK BURNETT: OK, In our community I find that unfortunately we are big consumers, and we buy a lot of doodads, and could you explain what a doodad is to everyone?

ROBERT KIYOSAKI: Well I like doodads, I like my Armani’s and I like my Franck Muller watches, but those are all doodads.

MACK BURNETT: Those are all good sure.

ROBERT KIYOSAKI: I just paid $35,000.00 for a gold watch and you know a $10.00 Timex would have done. (Laughs)

MACK BURNETT: Right.

ROBERT KIYOSAKI: So I’m not against doodads except that it’s in the priority of your buy. If you buy doodads first you will never be rich.

MACK BURNETT: Right.

ROBERT KIYOSAKI: So there are a lot of people who are called looking good, you know they have the nice big house, and the nice car, and the nice designer clothing, they eat at the finest restaurants, but they are technically bankrupt, they are broke. I mean they couldn’t…You know, if their credit card company cut them off they would be in trouble. So there’s a lot of people who look rich but as you know, are poor as church mice, so that’s the problem with doodads.

MACK BURNETT: Sure, sure. What motivated you to write the first Rich Dad Poor Dad, did you see a need or was it just something inside of you that you felt you wanted to share?

ROBERT KIYOSAKI: That’s a great question. I actually saw a need for Rich Dad Poor Dad back in the 70’s. I left Hawaii and I went to school in New York, right on Long Island in Great Neck. And from Great Neck I went into the US Merchant Marine Academy and I graduated in 69.

MACK BURNETT: We are based out of Great Neck.

ROBERT KIYOSAKI: The Vietnam War was still on, so I volunteered to go to war, unlike that coward Bush. (Laughs)

MACK BURNETT: (Laughs)

ROBERT KIYOSAKI: And Cheney, and Clinton. So I went from Long Island I went to Pensacola Florida, and I flew for the Marines, you know because I was a marine and I went to Vietnam to fly. But I came back from Vietnam in 73, I found my poor dad, my school teacher dad, unemployed. He was head of Education and the reason he was unemployed is he ran for the office of Lieutenant Governor of the state of Hawaii, and he lost the election and he ran against his boss the Governor. And the Governor then said to my dad he would never get a job in government again.

MACK BURNETT: Right.

ROBERT KIYOSAKI: And then I saw my dad, here he was, well back in the 70’s he was about 50 years old. PHD, hardworking good man, educated all that stuff and he couldn’t find a job. And I went there is something wrong with school if you can’t transition from the world of the school to the world of the street. You are either school smart or street smart, and I realized my old man was school smart but not street smart. My rich dad was street smart. And at that point I saw what was going to happen in the future, not for my parents’ generation, the WW2 generation; I saw what was going to happen for the Vietnam generation.

MACK BURNETT: Right.

ROBERT KIYOSAKI: Because around 1974 was when thy passed the E.R.I.S.A act, which E.R.I.S.A led to the 401k.

MACK BURNETT: Right.

ROBERT KIYOSAKI: And the 401k was basically saying to all employees, we don’t need you, we can’t afford to pay for your retirement anymore you are on your own. So basically in 1974 the big corporations of America started basically jettisoning, you know, kicking the employee benefits out. So the idea of a job security for life and the company would take care of you after you retire at 65, I knew was an obsolete idea. See my generation of guys, the baby boom generation; we are about 6 years away from retirement. Most of my friends haven’t got a you know what to pee in…

MACK BURNETT: Right

ROBERT KIYOSAKI: You know, they aren’t going to be able to retire. That was back in the 70’s I saw that, so in the 80’s I began talking and teaching, and teaching people entrepreneurship. And then in 94 I wrote rich dad poor dad and everyone thought I was a quack then, but now, what I’ve been saying for the last 20 years is coming true.

MACK BURNETT: Absolutely, absolutely.

ROBERT KIYOSAKI: We have a country that’s bankrupt…

MACK BURNETT: Right.

ROBERT KIYOSAKI: We have a government that’s bankrupt…

MACK BURNETT: Right.

ROBERT KIYOSAKI: I’m not republican or democrat, I’m not blaming the republicans or the democrats but as you know, the laws are written for the rich, not the poor or middle class.

MACK BURNETT: Right.

ROBERT KIYOSAKI: So we have a country that’s also morally bankrupt, so I talk to all these school teachers, and school teachers at least have a union, but they don’t really have a solution as to how a person who is let’s say 55 years old today with 0 in retirement, how they going to afford to retire. They don’t know how. Because school teachers like my poor dad are broke.

MACK BURNETT: Right, right.

ROBERT KIYOSAKI: So that’s why I write and I speak, I saw this thing coming years ago. The same thing as, you know in 1996 that’s when I told everyone to get into real estate and they are all into dot coms, and now the guys who went real estate made the fortunes.

MACK BURNETT: Right.

ROBERT KIYOSAKI: So you’ve just got to be able to see the future.

MACK BURNETT: Sure. In the follow up to Rich Dad Poor Dad; Cashflow Quadrant, you talked about differentiating between an employee, someone who is self-employed, a business owner and an investor and I think a lot of people don’t understand what the difference is. Could you touch on that briefly?

ROBERT KIYOSAKI: Well the first book was Rich Dad Poor Dad and that really is actually a book on accounting. It’s really hard for people to understand that, like today as we talk, Rich Dad Poor Dad is number 1 again New York Times, how can a book on accounting be the number 1 best seller after almost 6 years now.

MACK BURNETT: Mhmm.

ROBERT KIYOSAKI: And that is just because the book is so easy to read, a kid could read it. The second book was the quadrant, the Cashflow Quadrant, and the quadrant stood for there’s four people in the world of business. “E” stands for employees. “S” stands for small business or specialist like a doctor or a lawyer or an attorney, “B” stands for big business like Bill Gates. ” I” stands for Investors like Warren Buffet. The richest people on earth are on the “B” and ”I” side and the reason there is so few of them is because our school systems train people to be “E’s” or “S’s”; on the left side. So your either an employee or you’re a specialist like a doctor or a consultant. The tax laws are different for all 4 quadrants. The tax laws are written in favor of the “B’s” and “I’s”, the business owners and investors.

MACK BURNETT: Of course.

ROBERT KIYOSAKI: The difference between a small business person and a big business person is most people, most employees, say well I’m going to do my own thing and they go from ”E” to small business or specialist and that’s one of the hardest moves of all. And the trouble is they don’t know how to grow from small business to big business. It’s a whole other way of thinking. Just this morning I was talking to my friend and I own an oil company, a gold mining company in China, a silver mining company in South America, I own real estate companies and all this but I don’t work in them. I hire employees to work for me, and that’s why I get so rich, and now I’m going to form another Canadian company probably and go after the oil in Canada, but a business owner doesn’t work. A small business owner does.

MACK BURNETT: Gotya.

ROBERT KIYOSAKI: A big business puts the deal together. That’s why the skills and the training and the intelligence of the “B” and the “I” side of the quadrant is different than the “E” and the “S” side.

MACK BURNETT: I’m an avid player of the game and I have played it can you tell everybody about “Cashflow 101” and the difference between the rat race and the fast track because I think a lot of us don’t really understand that we are actually in the rat race and how we can get out of it, and a lot of people think it is very difficult to get out of it and I think the game shows you how to do that.

ROBERT KIYOSAKI: Well the Cashflow game I devised simply because, let’s say you want to be a millionaire or you want to be financially free.  Again that problem goes back to how do you learn that information. The schools won’t teach it to you. Your schools want you to work for the rich people.

MACK BURNETT: Mhmm.

ROBERT KIYOSAKI: And because it was designed by the rich people; the school system. So when I was a kid, the reason I got out of the rat race so quickly was because as a kid my rich dad used to play Monopoly with me. He’d play Monopoly by the hours with me, and I’d say why are we playing Monopoly? And he would say because the formula for great wealth is on this game board. All of us know the formula for Monopoly is 4 green houses, 1 red hotel. So once I knew that was the formula for great wealth, today all I do is play Monopoly, I mean for real. I’m buying whole street corners and buildings and stuff like that. I mean, I never have to work for the rest of my life just by playing Monopoly, but I realized that people needed more sophistication than Monopoly, so I created the game you are talking about, Cashflow 101 and Cashflow 202. Cashflow 101 teaches you basically how to read…how to see what your eyes cannot see by looking at a financial statement. So it is a basically a game on accounting made for people who like to have fun because accounting is the most boring subject on earth.

MACK BURNETT: (Laughs)

ROBERT KIYOSAKI: And investing is the most frightening for most people, so you put boring and frightening together, you have a good game and it really teaches people to see the future. So how do you see how to get out of the rat race, how can you play all your cards and all this. And then there’s 202 which is technical trading as we know, markets move up and down. Some days it’s going up and some days it’s going down, and most people are afraid of market crashes because they don’t know how to play the market coming down. In reality the pros love market crashes. Market crashes are more fun than market games.

MACK BURNETT: Right.

ROBERT KIYOSAKI: So 101 teaches you the fundamentals and 202 is technical. Technical means ups and downs in the market. So if you are interested in becoming a business owner or an investor, Cashflow 101 and Cashflow 202 are essential for your financial education. So they are more than games, they really are. They are really the basis of financial education.

MACK BURNETT: So when we are looking at this thing and we want to change our situation, how do we evaluate if we should start our own business first, or should we invest in real estate, or invest in securities. How do we make that determination for ourselves?

ROBERT KIYOSAKI: Well the first thing is we have those Cashflow games. You go to my website Richdad.com. On Richdad.com you will find these clubs, and they are Cashflow clubs and you just join a club, or you can buy the game you know, the game is 200 bucks and some people think that’s expensive, but when you figure what’s at stake it’s pretty cheap. So I would get educated first.

MACK BURNETT: Mhmm.

ROBERT KIYOSAKI: You know there are only 2 things you can invest in life, time and money.

MACK BURNETT: Right.

ROBERT KIYOSAKI: And the reason most people think investing is risky is they invest their money but they don’t invest any time into their education. And what they do instead is they take their money and they turn their money over to these financial planners, and financial planners; I hate to speak badly about them, but most of them are not investors.

MACK BURNETT: Mhmm.

ROBERT KIYOSAKI: They are sales people.

MACK BURNETT: Right.

ROBERT KIYOSAKI: And the only way they make money is off of commission, and they will put you in mutual funds. The 2 worst investments, the 2 most terrible investments you can invest in, savings, putting in the bank is the worst, and the second are mutual funds, because you’re not going to win. It’s set up for the bank to win, and for the mutual fund company to win, not for you to win. So naturally a financial planner is going to recommend you put it in mutual funds and invest for long term because they make the better commission. So you can do what you like, it’s a free country but to me I would rather be educated and find out what better investments are there, for example when I invest in an oil well…

MACK BURNETT: Mhmm.

ROBERT KIYOSAKI: I get 70 percent tax back that year. So let’s say I put $10,000 into my oil venture, I get $7,000 dollars in tax write offs that year. You don’t get that with mutual funds.

MACK BURNETT: Mhmm. Right.

ROBERT KIYOSAKI: The second thing is when I buy an apartment house or commercial building, my banker loans me the money, now will your banker lend you money to buy Mutual funds? No.

MACK BURNETT: Right.

ROBERT KIYOSAKI: Absolutely not because they are too risky.

MACK BURNETT: Right.

ROBERT KIYOSAKI: So when I hear these poor people say well that’s easy for you to say, because I don’t have money. Well I don’t have money most of the time either because my money is all being invested. So, I look for investments that somebody else will give me the money for. So I call my banker and I say I’ve found this apartment house, its 8 million dollars, I need 7 million dollars, and I raise the other money from my friends.

MACK BURNETT: Right, Right.

ROBERT KIYOSAKI:  So why would I buy anything with my money, it doesn’t make sense to me. That’s how I get rich, other people’s money.

MACK BURNETT: Now after all you’ve accomplished what drives you today, what gets you going today, what moves you forward today, after all the books that you’ve sold after all the lessons you have taught so many millions of people, what gets you out of bed in the morning?

ROBERT KIYOSAKI: Well I think you said it earlier you know like Donald Trump and I are friends, we run around together. He is a billionaire, and I’m just a multi-millionaire, but what keeps us together is that he and I are teachers and I just think that it’s really a disgrace that our stupid public school system doesn’t teach us about money. It makes me angry.

MACK BURNETT: Right.

ROBERT KIYOSAKI: How can we do that?

MACK BURNETT: Right.

ROBERT KIYOSAKI: So I get up and I think why are we flunking kids for algebra when they are never going to use algebra, and that 3 years of calculus, I never use calculus…

MACK BURNETT: (Laughs)

ROBERT KIYOSAKI: But I use money every day.

MACK BURNETT: That’s true.

ROBERT KIYOSAKI: So Donald Trump and I, you know a lot of rich people, who give money, and I was in Sunday school and bible school and they say if you give people fish you feed them for a day, but if you teach them to fish you feed them for life. So Donald Trump and I teach people to fish.

MACK BURNETT: Right.

ROBERT KIYOSAKI: But other rich people like Warren Buffet and all that, they don’t want to tell people what they do, they don’t disclose, they just give money. So there’s a difference. Not all rich people are alike. Now the problem is there is more lazy poor people than lazy rich people, so that’s another problem too. A lot of poor people, middle class people are just happy to have their job and get their paycheck and go home and suck beer and watch football. I can’t do anything for them either. I just talk to people that want to be rich. I like being rich.

MACK BURNETT: Right.

ROBERT KIYOSAKI: I tell you what man, I like having a lot of money. Some people say money doesn’t make you happy? That’s either a very sick person or someone was giving them money. I like…it doesn’t make people happy, it’s how they make their money. Let’s say if I had to go to work every day and slaughter cattle, I don’t think I’d like to be rich that way, I would feel bad. But I like my office buildings; I like my real estate….

MACK BURNETT: Right.

ROBERT KIYOSAKI: I feel good about how I make my money. So a lot of people say well money doesn’t make you happy because what they are doing doesn’t make them happy.

MACK BURNETT: Right, Right. Mr. Kiyosaki, I would like to thank you so much for being on the show, is there any final things that you would like to…words of encouragement that you would give everybody out there trying to figure out where…the direction they are headed?

ROBERT KIYOSAKI: As I said earlier there is only 2 things you can invest, time and money. Invest some time in your financial education. Also gotta be careful who you hang out with. Birds of a feather do flock together, so if you hang out with losers, you’re a loser.

MACK BURNETT: Mhmm.

ROBERT KIYOSAKI: That’s what I’m very careful about, I have people that I love but I don’t want to talk to them anymore simply because they are basically lazy losers, you know, they are happy with their 9 to 5 job and their $150,000 a year and that’s it. That’s not my game. My game is about getting rich, I like being rich, so if you want be rich you need to hang out with people who like the game. If you don’t like the game then find another game.

MACK BURNETT: Thank you very much for being on the show, ladies and gentlemen, ROBERT KIYOSAKI, author of Rich Dad Poor Dad. You can find his website online at www.richdad.com. I’m your host Mack Burnett III and remember; if you’re not doing honest business, then you won’t be doing business at all.