Rich Dad Poor Dad: What the Rich Teach Their Kids About MoneyThat the Poor and Middle Class Do Not!

To successfully pay yourself first, keep the following in mind:
1. Don’t get into large debt positions that you have to pay for. Keep your
expenses low. Build up assets first. Then buy the big house or nice car.
Being stuck in the Rat Race is not intelligent.
2. When you come up short, let the pressure build and don’t dip into your
savings or investments. Use the pressure to inspire your financial genius

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to come up with new ways of making more money, and then pay your
bills. You will have increased your ability to make more money as well
as your financial intelligence.
So many times I have gotten into financial hot water and used my brain
to create more income while staunchly defending the assets in my asset
column. My bookkeeper has screamed and dived for cover, but I was like a
good soldier defending the fort—Fort Assets.
Poor people have poor habits. A common bad habit is innocently called
“dipping into savings.” The rich know that savings are only used to create
more money, not to pay bills.
I know that sounds tough, but as I said, if you’re not tough inside, the
world will always push you around anyway.
If you do not like financial pressure, then find a formula that works for
you. A good one is to cut expenses, put your money in the bank, pay more
than your fair share of income tax, buy safe mutual funds, and take the vow
of the average. But this violates the pay-yourself-first rule.
This rule does not encourage self-sacrifice or financial abstinence. It
doesn’t mean pay yourself first and starve. Life was meant to be enjoyed. If
you call on your financial genius, you can have all the goodies of life, get
rich, and pay bills. And that is financial intelligence.
6. Pay your brokers well: the power of good advice
Sometimes I see people posting a sign in front of their house that says,
“For Sale by Owner.” Or I see people on TV claiming to be “Discount
Brokers.”
My rich dad taught me to take the opposite approach. He believed in
paying professionals well, and I have adopted that policy also. Today, I
have expensive attorneys, accountants, real estate brokers, and
stockbrokers. Why? Because if, and I do mean if, the people are
professionals, their services should make you money. And the more money
they make, the more money I make.
We live in the Information Age. Information is priceless. A good broker
should provide you with information, as well as take the time to educate

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you. I have several brokers who do that for me. Some taught me when I had
little or no money, and I am still with them today.
What I pay a broker is tiny in comparison with what kind of money I
can make because of the information they provide. I love it when my real
estate broker or stockbroker makes a lot of money because that usually
means I made a lot of money.
A good broker saves me time, in addition to making me money—like
when I bought the vacant land for $9,000 and sold it immediately for over
$25,000 so I could buy my Porsche quicker.
A broker is my eyes and ears in the market. They’re there every day so I
do not have to be. I’d rather play golf.
People who sell their house on their own must not value their time
much. Why would I want to save a few bucks when I could use that time to
make more money or spend it with those I love? What I find funny is that
so many poor and middle-class people insist on tipping restaurant help 15 to
20 percent, even for bad service, but complain about paying a broker three
to seven percent. They enjoy tipping people in the expense column and
stiffing people in the asset column. That is not financially intelligent.
Keep in mind that not all brokers are created equal. Unfortunately, most
brokers are only salespeople. They sell, but they themselves own little or no
real estate. There is a tremendous difference between a broker who sells
houses and a broker who sells investments. The same is true for stock,
bond, mutual fund, and insurance, brokers who call themselves financial
planners.
When I interview any paid professional, I first find out how much
property or stocks they personally own and what percentage they pay in
taxes. And that applies to my tax attorney as well as my accountant. I have
an accountant who minds his own business. His profession is accounting,
but his business is real estate. I used to have an accountant who was a
small-business accountant, but he had no real estate. I switched because we
did not love the same business.
Find a broker who has your best interests at heart. Many brokers will
spend the time educating you, and they could be the best asset you find. Just
be fair, and most of them will be fair to you. If all you can think about is
cutting their commissions, then why should they want to help you? It’s just
simple logic.

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As I said earlier, one of the management skills is the management of
people. Many people only manage people they feel smarter than and they
have power over. Many middle managers remain middle managers, failing
to get promoted, because they know how to work with people below them,
but not with people above them. The real skill is to manage and reward the
people who are smarter than you in some technical area. That is why
companies have a board of directors. You should have one too. That is
financial intelligence.