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

INCOME STATEMENT
BALANCE SHEET
Job
Assets
Income
Expenses
Liabilities
Salary
Taxes
Rent
Food
Save
Invest
People Who Pay Themselves First

---

Rich Dad Poor Dad
155
Do you see it? The diagram reflects the actions of individuals who 
choose to pay themselves first. Each month, they allocate money to 
their asset column before they pay their monthly expenses. Although
millions of people have read Clason’s book and understand the words, 
“Pay yourself first,” in reality they pay themselves last.
Now I can hear the howls from those of you who sincerely believe 
in paying your bills first. And I can hear all the responsible people who 
pay their bills on time. I am not saying be irresponsible and not pay your 
bills. All I am saying is do what the book says, which is: Pay yourself first. 
And the previous diagram is the correct accounting picture of that action. 
Job
Assets
Income
INCOME STATEMENT
BALANCE SHEET
Expenses
Liabilities
Salary
Taxes
Rent
Food
People Who Pay Everyone Else First

---

Chapter Eight: Getting Started
156
If you can truly begin to understand the power of cash flow,
you will soon realize what is wrong with the previous diagram, or why
90 percent of people work hard all their lives and need government 
support like Social Security when they are no longer able to work.
Kim and I have had many bookkeepers, accountants, and bankers 
who have had a major problem with this way of looking at, “Pay
yourself first.” The reason is that these financial professionals actually
do what the masses do: They pay themselves last. 
There have been times in my life when, for whatever reason, cash 
flow was far less than my bills. I still paid myself first. My accountant 
and bookkeeper screamed in panic, “They’re going to come after you. 
The IRS is going to put you in jail.” “You’re going to ruin your credit 
rating.” “They’ll cut off the electricity.” I still paid myself first.
“Why?” you ask. Because that’s what the story, The Richest Man In 
Babylon, was all about: the power of self-discipline and the power of 
internal fortitude. As my rich dad taught me the first month I worked 
for him, most people allow the world to push them around. A bill
collector calls and you “pay or else.” A sales clerk says, “Oh, just put it 
on your charge card.” Your real estate agent tells you, “Go ahead.
The government allows you a tax deduction on your home.” That is 
what the book is really about—having the guts to go against the tide 
and get rich. You may not be weak, but when it comes to money, 
many people get wimpy.
I am not saying be irresponsible. The reason I don’t have high
credit-card debt, and doodad debt, is because I pay myself first. The 
reason I minimize my income is because I don’t want to pay it to the 
government. That is why my income comes from my asset column, 
through a Nevada corporation. If I work for money, the government 
takes it.
Although I pay my bills last, I am financially astute enough to not 
get into a tough financial situation. I don’t like consumer debt. I actually 
have liabilities that are higher than 99 percent of the population, but I 
don’t pay for them. Other people pay for my liabilities. They’re called 
tenants. So rule number one in paying yourself first is: Don’t get into 
consumer debt in the first place. Although I pay my bills last, I set it up 
to have only small unimportant bills that are due.

---

Rich Dad Poor Dad
157
When I occasionally come up short, I still pay myself first. I let 
the creditors and even the government scream. I like it when they get 
tough. Why? Because those guys do me a favor. They inspire me to go 
out and create more money. So I pay myself first, invest the money, 
and let the creditors yell. I generally pay them right away anyway. Kim 
and I have excellent credit. We just don’t cave in to pressure and spend 
our savings or liquidate stocks to pay for consumer debt. That is not 
too financially intelligent.