Rich Dad Poor Dad is a starting point for anyone looking to gain control of their financial future

Overcoming Cynicism
“The sky is falling! The sky is falling!” Most of us know the
story of Chicken Little who ran around warning the barnyard of
impending doom. We all know people who are that way. There’s a 
Chicken Little inside each of us.
As I stated earlier, the cynic is really a little chicken. We all get
a little chicken when fear and doubt cloud our thoughts.
All of us have doubts: “I’m not smart.” “I’m not good enough.”
“So-and-so is better than me.” Our doubts often paralyze us. We
play the “What if?” game. “What if the economy crashes right after
I invest?” “What if I lose control and I can’t pay the money back?” 
“What if things don’t go as I planned?” Or we have friends or loved 
ones who will remind us of our shortcomings. They often say, “What 
makes you think you can do that?” “If it’s such a good idea, how come 
someone else hasn’t done it?” “That will never work. You don’t know 
what you’re talking about.” These words of doubt often get so loud 

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that we fail to act. A horrible feeling builds in our stomach. Sometimes 
we can’t sleep. We fail to move forward. So we stay with what is 
safe, and opportunities pass us by. We watch life passing by as we sit 
immobilized with a cold knot in our body. We have all felt this at one 
time in our lives, some more than others.
Peter Lynch of Fidelity Magellan mutual-fund fame refers to
warnings about the sky falling as “noise,” and we all hear it.
Noise is either created inside our heads or comes from outside, 
often from friends, family, co-workers, and the media. Lynch recalls 
the time during the 1950s when the threat of nuclear war was so 
prevalent in the news that people began building fallout shelters and 
storing food and water. If they had invested that money wisely in 
the market, instead of building a fallout shelter, they’d probably be 
financially independent today.
When violence breaks out in a city, gun sales go up all over the 
country. A person dies from rare hamburger meat in the state of
Washington, and the Arizona Health Department orders restaurants to 
have all beef cooked well-done. A drug company runs a TV commercial 
in February showing people catching the flu. Colds go up as well as 
sales of cold medicine.
Most people are poor because, when it comes to investing, the 
world is filled with Chicken Littles running around yelling, “The sky 
is falling! The sky is falling!” And Chicken Littles are effective, because 
every one of us is a little chicken. It often takes great courage to not
let rumors and talk of doom and gloom affect your doubts and fears.
But a savvy investor knows that the seemingly worst of times is actually 
the best of times to make money. When everyone else is too afraid to 
act, they pull the trigger and are rewarded. 
Some time ago, a friend named Richard came from Boston to visit 
Kim and me in Phoenix. He was impressed with what we had done 
through stocks and real estate. The Phoenix real estate prices were
depressed. We spent two days showing him what we thought were 
excellent opportunities for cash flow and capital appreciation.

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Kim and I are not real estate agents. We are strictly investors.
After identifying a unit in a resort community, we called an agent who 
sold it to him that afternoon. The price was a mere $42,000 for a
two-bedroom townhome. Similar units were going for $65,000. He 
had found a bargain. Excited, he bought it and returned to Boston.
Two weeks later, the agent called to say that our friend had backed 
out. I called immediately to find out why. All he said was that he 
talked to his neighbor, and his neighbor told him it was a bad deal. He 
was paying too much. I asked Richard if his neighbor was an investor.
Richard said he was not. When I asked why he listened to him, 
Richard got defensive and simply said he wanted to keep looking.
The real estate market in Phoenix turned, and a few years later, 
that little unit was renting for $1,000 a month—$2,500 in the peak 
winter months. The unit was worth $95,000. All Richard had to put 
down was $5,000 and he would have had a start at getting out of the 
Rat Race. Today, he still has done nothing.
Richard’s backing out did not surprise me. It’s called buyer’s
remorse, and it affects all of us. The little chicken won, and a chance
at freedom was lost. 
In another example, I hold a small portion of my assets in
tax-lien certificates instead of CDs. I earn 16 percent per year on my 
money, which certainly beats the interest rates banks offer on CDs.
The certificates are secured by real estate and enforced by state law, 
which is also better than most banks. The formula they’re bought on 
makes them safe. They just lack liquidity. So I look at them as 2- to 
7-year CDs. Almost every time I tell someone that I hold my money 
this way, especially if they have money in CDs, they will tell me it’s 
risky. They tell me why I should not do it. When I ask them where 
they get their information, they say from a friend or an investment 
magazine. They’ve never done it, and they’re telling someone who’s 
doing it why they shouldn’t. The lowest yield I look for is 16 percent, 
but people who are filled with doubt are willing to accept a far lower 
return. Doubt is expensive.

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My point is that it’s those doubts and cynicism that keep most 
people poor and playing it safe. The real world is simply waiting for 
you to get rich. Only a person’s doubts keep them poor. As I said, 
getting out of the Rat Race is technically easy. It doesn’t take much 
education, but those doubts are cripplers for most people.
“Cynics never win,” said rich dad. “Unchecked doubt and fear
creates a cynic.” “Cynics criticize, and winners analyze” was another 
of his favorite sayings. Rich dad explained that criticism blinded while 
analysis opened eyes. Analysis allowed winners to see that critics were 
blind, and to see opportunities that everyone else missed. And finding 
what people miss is key to any success.
Real estate is a powerful investment tool for anyone seeking
financial independence or freedom. It is a unique investment tool.
Yet every time I mention real estate as a vehicle, I often hear, “I don’t 
want to fix toilets.” That’s what Peter Lynch calls noise. That’s what
my rich dad would say is the cynic talking, someone who criticizes and 
does not analyze, someone who lets their doubts and fears close their 
mind instead of open their eyes.
So when someone says, “I don’t want to fix toilets,” I want to fire 
back, “What makes you think I want to?” They’re saying a toilet is
more important than what they want. I talk about freedom from the 
Rat Race, and they focus on toilets. That is the thought pattern that 
keeps most people poor. They criticize instead of analyze.
“I-don’t-wants hold the key to your success,” rich dad would say. 
Because I, too, do not want to fix toilets, I shop hard for a property
manager who does fix toilets. And by finding a great property manager 
who runs houses or apartments, well, my cash flow goes up. But, more 
importantly, a great property manager allows me to buy a lot more real 
estate since I don’t have to fix toilets. A great property manager is key to 
success in real estate. Finding a good manager is more important to me 
than the real estate. A great property manager often hears of great deals 
before real estate agents do, which makes them even more valuable.
That is what rich dad meant by “I-don’t-wants hold the key to 
your success.” Because I do not want to fix toilets either, I figured out 

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how to buy more real estate and expedite my getting out of the Rat 
Race. The people who continue to say “I don’t want to fix toilets” often 
deny themselves the use of this powerful investment vehicle. Toilets are 
more important than their freedom.
In the stock market, I often hear people say, “I don’t want to lose 
money.” Well, what makes them think I or anyone else likes losing 
money? They don’t make money because they choose to not lose
money. Instead of analyzing, they close their minds to another powerful 
investment vehicle, the stock market.
I was riding with a friend past our neighborhood gas station. He 
looked up and saw that the price of gas was going up and thus the 
price of oil. My friend is a worry wart or a Chicken Little. To him, the 
sky is always going to fall, and it usually does, on him.
When we got home, he showed me all the stats as to why the
price of oil was going to go up over the next few years, statistics I had 
never seen before, even though I already owned substantial shares of
an existing oil company. With that information, I immediately began 
looking for and found a new, undervalued oil company that was
about to find some oil deposits. My broker was excited about this
new company, and I bought 15,000 shares for 65 cents per share.
Three months later, this same friend and I drove by the same gas 
station, and sure enough, the price per gallon had gone up nearly
15 percent. Again, the Chicken Little worried and complained. I 
smiled because, a month earlier, that little oil company hit oil and 
those 15,000 shares went up to more than $3 per share since he had 
first given me the tip. And the price of gas will continue to go up if 
what my friend says is true. 
If most people understood how a “stop” worked in stock-market
investing, there would be more people investing to win instead of
investing not to lose. A stop is simply a computer command that
sells your stock automatically if the price begins to drop, helping to 
minimize your losses and maximize some gains. It’s a great tool for 
those who are terrified of losing.
So whenever I hear people focusing on their I-don’t-wants, rather 
than what they do want, I know the noise in their head must be loud. 
Chicken Little has taken over their brain and is yelling, “The sky is 

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falling, and toilets are breaking!” So they avoid their don’t-wants, but 
they pay a huge price. They may never get what they want in life.
Instead of analyzing, their inner Chicken Little closes their mind. 
Rich dad gave me a way of looking at Chicken Little. “Just do what 
Colonel Sanders did.” At the age of 66, he lost his business and began 
to live on his Social Security check. It wasn’t enough. He went around 
the country selling his recipe for fried chicken. He was turned down 
1,009 times before someone said yes. And he went on to become a 
multimillionaire at an age when most people are quitting. “He was a 
brave and tenacious man,” rich dad said of Harlan Sanders.
So when you’re in doubt and feeling a little afraid, just do what 
Colonel Sanders did to his little chicken. He fried it.