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

wants to sell. A friend was looking for a certain piece of land. He
had the money but did not have the time. I found a large piece of
land, larger than what my friend wanted to buy, tied it up with an
option, called my friend, and he said he wanted a piece of it. So I
sold the piece to him and then bought the land. I kept the remaining
land as mine for free. Moral of the story: Buy the pie, and cut it in
pieces. Most people look for what they can afford, so they look too
small. They buy only a piece of the pie, so they end up paying more

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for less. Small thinkers don’t get the big breaks. If you want to get
richer, think big.
• Think big. Retailers love giving volume discounts, simply because
most business people love big spenders. So even if you’re small,
you can always think big. When my company was in the market for
computers, I called several friends and asked them if they were
ready to buy also. We then went to different dealers and negotiated a
great deal because we wanted to buy so many. I have done the same
with stocks. Small people remain small because they think small, act
alone, or don’t act all.
• Learn from history. All the big companies on the stock exchange
started out as small companies. Colonel Sanders did not get rich
until after he lost everything in his 60s. Bill Gates was one of the
richest men in the world before he was thirty.
• Action always beats inaction.
These are just a few of the things I have done and continue to do to
recognize opportunities. The important words are “have done” and “do.” As
repeated many times throughout the book, you must take action before you
can receive the financial rewards. Act now!

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FINAL THOUGHTS
I would like to share some final thoughts with you.
The main reason I wrote this book, and the reason it has remained a
bestseller since 2000, was to share insights into how increased financial
intelligence can be used to solve many of life’s common problems. Without
financial training, we all too often use the standard formulas to get through
life: Work hard, save, borrow, and pay excessive taxes. Today, more than
ever, we need better information.
I use the following story as an example of a financial problem that
confronts many young families today. How do you afford a good education
for your children and provide for your own retirement? It requires using
financial intelligence instead of hard work.
A friend of mine was griping one day about how hard it was to save
money for his four children’s college educations. He was putting $300 away
in a college fund each month and had so far accumulated only about
$12,000. He had about 12 more years to save for college since his oldest
child was then six years old.
At the time, the real estate market in Phoenix was terrible. People were
giving houses away. I suggested to my friend that he buy a house with some
of the money in his college fund. The idea intrigued him, and we began to
discuss the possibility. His primary concern was that he did not have credit
with the bank to buy another house since he was so over-extended. I assured
him that there were other ways to finance a property rather than through the
bank.
We looked for a house for two weeks, a house that would fit all our
criteria. There were plenty to choose from so shopping was fun. Finally, we
found a three-bedroom, two-bath home in a prime neighborhood. The
owner had been downsized and needed to sell that day because he and his
family were moving to California where another job waited. The owner
wanted $102,000, but we offered only $79,000. He took it immediately and

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agreed to carry back the loan with a 10 percent down payment. All my
friend had to come up with was $7,900. As soon as the owner moved, my
friend put the house up for rent. After all expenses were paid, including the
mortgage, he put about $125 in his pocket each month.
His plan was to keep the house for 12 years and let the mortgage get
paid down faster by applying the extra $125 to the principal each month.
We figured that in 12 years, a large portion of the mortgage would be paid
off and he could possibly be clearing $800 a month by the time his first
child went to college. He could also sell the house if it had appreciated in
value.
Three years later, the real estate market greatly improved in Phoenix
and he was offered $156,000 for the same house by the tenant who lived in
it. Again, he asked me what I thought. I advised that he sell it, using a 1031
tax-deferred exchange.
Suddenly, he had nearly $80,000 to operate with. I called another friend
in Austin, Texas, who then moved this tax-deferred capital gain into a mini-
storage facility. Within three months, he began receiving checks for a little
less than a $1,000 a month which he then poured back into the college fund.
A couple of years later, the mini-warehouse sold, and he received a
check for nearly $330,000 as proceeds from the sale. He rolled those funds
into a new project that would now generate over $3,000 a month in income,
again, going into the college fund. He is now very confident that his goal
will be met easily.
It only took $7,900 to start and a little financial intelligence. His
children will be able to afford the education they want, and he will then use
the underlying asset, wrapped in his legal entity, to pay for his retirement.
As a result of this successful investment strategy, he will be able to retire
early.
Thank you for reading this book. I hope it has provided some insights
into utilizing the power of money to work for you. Today, we need greater
financial intelligence to simply survive. The idea that “it takes money to
make money” is the thinking of financially unsophisticated people. It does
not mean that they’re not intelligent. They have simply not learned the
science of money making money.
Money is only an idea. If you want more money, simply change your
thinking. Every self-made person started small with an idea, and then turned

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it into something big. The same applies to investing. It takes only a few
dollars to start and grow it into something big. I meet so many people who
spend their lives chasing the big deal, or trying to amass a lot of money to
get into a big deal, but to me that is foolish. Too often I have seen
unsophisticated investors put their large nest egg into one deal and lose
most of it rapidly. They may have been good workers, but they were not
good investors.
Education and wisdom about money are important. Start early. Buy a
book. Go to a seminar. Practice. Start small. I turned $5,000 cash into a one-
million-dollar asset producing $5,000 a month cash flow in less than six
years. But I started learning as a kid. I encourage you to learn, because it’s
not that hard. In fact, it’s pretty easy once you get the hang of it.
I think I have made my message clear. It’s what is in your head that
determines what is in your hands. Money is only an idea. There is a great
book called Think and Grow Rich. The title is not Work Hard and Grow
Rich. Learn to have money work hard for you, and your life will be easier
and happier. Today, don’t play it safe. Play it smart.