HOW TO ACHIEVE A RICH MINDSET

PREPARING YOURSELF TO BE RICH

How to Achieve a Rich Mindset | Preparing yourself to Be Rich

2

IntroductionWhen I returned from Vietnam in 1973 I knew things were going to be tough. I had no job, no money, and no assets. I was starting with nothing.

All I had in 1973 was the dream of someday being very rich and my rich dad’s guidance to become an investor.

While reading this eBook, notice when your thoughts are often 180 degrees out from the guiding thoughts of my rich dad. Rich dad said, “One of the reasons so few people become rich is that they become set in one way of thinking. They think there is only one way to think or do something. While the average investor thinks, ‘Play it safe and don’t take risks,’ the rich investor must also think about how to improve skills so he or she can take more risks.”

Rich dad called this kind of thinking, “Thinking on both sides of the coin.” He went on, saying, “The rich investor must have more flexible thinking than the average investor. For example, while both the average investor and rich investor must think about safety, the rich investor must also think about how to take more risks. While the average investor thinks about cutting down debt, the rich investor is thinking about how to increase debt. While the average investor lives in fear of market crashes, the rich investor looks forward to market crashes. While this may sound like a contradiction to the average investor, it is this contradiction that makes the rich investor rich.”

As you read through this eBook, be aware of the contradictions in thinking between average investors and rich investors. As rich dad said, “The rich investor is very aware that there are two sides to every coin. The average investor sees only one side. And it is the side the average investor does not see that keeps the average investor average and the rich investor rich.”

Do You Want to Be More Than an Average Investor?

This eBook is much more than just an eBook about investing, hot tips, and magic formulas. One of the main purposes for writing it is to offer you the opportunity to gain a different point of view on the subject of investing. In 1973, rich dad began teaching me how to acquire the same financial power he possessed, a power I first became aware of at the age of 12. While standing on the beach in front of my rich dad’s latest investment 40 years ago, I realized that when it came to investing, the difference

3

between my rich dad and my poor dad went far deeper than merely how much money each man had to invest. The difference is first found in a person’s deep desire to be much more than just an average investor. If you have such a desire, then read on.

In this eBook, I’d like to discuss what I think is a very important subject, which is how to prepare yourself emotionally to become rich.

My rich dad said, “The moment you start working for a paycheck and get in debt, money takes over your life mentally, emotionally, and spiritually because nobody wants to be thrown out on the street. Nobody wants to be called a ‘deadbeat.’” In the olden days, they put you in stocks or irons and publicly humiliated you for not paying your bills. It is that same emotional fear that keeps people in the Rat Race. They continually work hard, pay taxes, pay bills, buy liabilities they think are assets, and never get a step closer to getting ahead.

Once, when I was 9 years old and working for my rich dad, I had demanded (at my poor dad’s insistence) a raise. Not only did rich dad refuse to give me a raise, he started having me work for nothing. One of the reasons he refused to pay me the ten cents an hour I had been earning was to have me step back and look at the overall picture of money: how it was generated, where it comes from, and things like that. It’s very important to understand that money is more than just money. Money is survival itself. When somebody says to me, “Money is not that important,” I say, “Well, neither is air, water, and food, but it is important when you don’t have it.”

I constantly run into people who are arrogant or ignorant about money. They say, “Aw, money is not that important to me.” That’s like saying freedom isn’t important to them. Everyday they get up and go to work because they have bills to pay. “I owe, I owe, so it’s off to work I go.” That’s what happens to most people because they’ve never been prepared mentally or emotionally to be masters of money. Because they’re not mentally and emotionally prepared, they become a slave to money.

The Power of MistakesPart of preparing yourself emotionally to be rich is to evaluate what you learned from school. Most people believe that going to school is what you need to do. The problem with going to school is you pick up some very bad habits that prevent you from being wealthy.

One of those things is being risk adverse. When people go to school, they’re taught: Don’t make mistakes. My rich dad would say to me that there is magic found in every mistake. If you made a mistake, inside that mistake you can learn something. For

How to Achieve a Rich Mindset | Preparing yourself to Be Rich

4

example, we wouldn’t have learned to ride a bicycle if we weren’t willing to fall off a few times. In falling off, magic happens. We learn to ride a bicycle and the world opens up for us. Instead of walking, we can now join our friends and ride all over the world.

We would never have had that magic if we followed the tenet taught in school that making mistakes is bad and means you’re stupid. The reality is that the people who make the most mistakes, make the most money, period. The people who make the least mistakes make the least money. When somebody says to me, “I don’t want to take a risk. Investing is risky. I want to play it safe.” What they’re saying subconsciously is, “I don’t want to make a mistake.”

Mistakes are how we learn. People looking for security are afraid to make mistakes. They’ve been taught to play it safe, not take risks, and not trust anybody. But they don’t realize that the reason they have a hard time is because they try and do everything on their own so no one will see them make a mistake. That’s why what we learned in school oftentimes holds us back. Emotionally, school has taught you, do not take a risk. Be a coward instead of conquering your fear.

The reason I make as much money as I do is because I’ve failed more times than most people have failed. My rich dad would to say to me, “Show me somebody who has never failed, and I’ll show you a failure.” The way you can expand your world is by taking small risks and learning from them.

Unfortunately, what most people do when they make a mistake is they blame somebody else, or they pretend, and they go into denial or they justify it. They waste a very valuable experience, the experience of making a mistake. The reason I have so much money is early on in my life I was willing to take risks and lose it. Even today, I’ll take a risk knowing that I’m going to make a mistake. When somebody says, “What are the chances of you making a mistake?” I say, “Pretty high. But if I learn from the mistake, I’m going to be smarter than somebody who did not make the mistake.”

The problem with most people who did well in school is how they handle mistakes when they eventually make one. When my poor dad made a financial mistake at age 50, he couldn’t handle the failure and he never evolved. I’ve seen that happen so many times in business where really smart people get stuck because of their paradigms, their risks, and their fear of making mistakes. They don’t want to go any further for fear of making a mistake and so they stay there. They don’t go further because they don’t want the “risk.”

In the real world, you need to have street smarts as well as school smarts. The street-smart person will often go a lot farther than somebody who is just school smart. In school, your report card is your financial statement. It is an indicator of how well you’re doing. If you get all A’s, it means you did well in school. Once you leave school, your report card is your financial statement. Since you’ve never been taught how to

5

read a financial statement, you really don’t know how well you’re doing financially.

Most people by the time they’re age 45 should have at least $1 million dollars. The reason I say at least $1 million dollars by age 45 is because if you work from 25 to 65 years old, 45 is half way. If you don’t have $1 million dollars in net assets sitting in that asset column, you still have 20 years to correct, and you can start accumulating that money. Unfortunately, most people will not find out until they’re 65 years old. They have nothing in their asset column, and that’s going to be the biggest mistake of all.

Here’s my question for you: How do you think an average investor handles mistakes? Chances are they retreat. They tuck their tail and run saying that investing is too dangerous. That is a real shame, because if they could have looked at the mistakes made and learned from them, they could have been far more likely to become a rich investor must faster.

Be, Do, HaveA very important aspect of preparing yourself emotionally to be rich is understanding who you have to be before you worry about what you need to do to get what you want to have. Most people want to have money, but they don’t know what to do and that’s because they don’t know who they need to be. If I want to climb Mount Everest, it has nothing to do with the doing-ness. Climbing Mount Everest is really about who I have to be to climb the mountain. It is all about your state of mind. To me, being rich is first and foremost, a state of mind.

My rich dad said, “The biggest mistake the poor and middle class make is they think that if they have more money, it will solve their problems. My poor dad always said, “I’ll just work harder. I’ll be a better employee, and next year I’ll get a $100 pay raise per month.” My poor dad thought that having more money would solve his financial problems. The problem was his being. At his core, he was a poor man. He was a very, very poor man with poor thoughts. Unfortunately, he didn’t understand it was his thoughts that were holding him back. He didn’t know what to do. Ultimately, no matter how much money he had, he was never wealthy. The moment he was fired, he found out he had nothing. There was nothing there for him. He had nothing in his asset column. He failed to realize that being rich is a state of mind.

The biggest mistake that poor people make is thinking they need to work really, really hard and do the right things. Sure, after a while, they may have a lot of money, but if they haven’t changed their being, from a poor person to a rich person, then they’ll lose all their money. I’ll say it again. Poor people who do not change their being will still be poor even after they accumulate a lot of money.

How to Achieve a Rich Mindset | Preparing yourself to Be Rich

6

I have a friend who made $2 million this year in the stock market. He is more afraid than he was before because his being-ness is afraid of losing the $2 million he didn’t have before. He was afraid when he didn’t have it and now he’s afraid when he has it. His being is still that of a poor person. You’ve got to make the shift from being a poor person to being a rich person. If not, you’re going to lose what you get. That’s why we have lottery winners who’ll win $25 million and in less than 5 years, they’ll be deeply in debt because their being remained that of a poor person.

When you’re poor, you value a high income. In other words, you want a high paying job. You want to make a lot of money. You want to lower your expenses. That’s why so many books today tell you to cut up your credit cards and get out of debt. This speaks to those who want high income and low expenses.

Becoming a rich person means shifting your thinking. You don’t want high income. You want low income. It’s exactly the opposite thinking. You want high expenses. What the poor and middle class want is high income, low expenses. Ultimately, what the rich want—because they’re more financially intelligent and not as addicted to money–is high expenses and low income. Those are some of the shifts a person needs to make if they’re going to be rich and keep the money they make.

The average investor doesn’t work on himself or herself to become rich. The average investor just keeps looking for the “right” deal or opportunity. The average investor does not work on his/her mindset and growing his/her investor IQ. The rich investor knows that the most important ley of any investment is the investor not the investment. The rich investor works on his/her mindset and intelligence first. That is exactly what you are doing by reading this eBook.

Two Kinds of Money Problems

A person needs to be financially literate to make the shift from wanting high income/low expenses to wanting low income/high expenses. You need to be able to read a financial statement.

What the rich know is that they need to drop their income as far as they can. They want to spend as much as they can to raise their expenses. They know if they don’t spend it, the government is going to take it away.

I want to be clear here. The rich do not spend their money on trinkets and doodads.

7

Rather the rich spend their money buy assets that produce more money.

There are only two kinds of money problems. One problem is not enough money and another problem is too much money. I oftentimes hear people say, “Well, when I make a lot of money, my money problems are over.” That is exactly a poor person’s being-ness and thinking-ness. The reality is when you have a lot of money you have a different set of money problems. The problem is too much money and if you don’t understand the tax and corporate laws, you will end up giving your money away.

Often, my accountant will call me up and say, “Robert, you’re making too much money again. You need to step up your expenses and move that money someplace else.” You see, if you don’t spend it, the government is going to take it from you. What the rich do is they move that extra money into additional assets like real estate and other companies. That is why the rich get richer. They create expenses as much as they can to keep their income low.

The average investor tries to make money through working hard and raises while lowering his/her expenses. The rich investor has learned to spend more money, but on buying assets which will make more money.

Face Your FearsWhen it comes to money, emotional intelligence is far more important than academic intelligence. Emotional intelligence is how you handle yourself at all times, both good and bad. When you’re afraid, do you go forward or do you pull back? Most people back down when they’re afraid. That’s not intelligent. An intelligent person thinks logically, unemotionally, and says, “I need to learn to do this.”

I flunked out of high school because I couldn’t write. I flunked typing and I flunked accounting. I was the worst salesman in the world because I was so shy and afraid of rejection. My rich dad told me, “You have a choice. You can choose to overcome those fears and short comings or you can be a prisoner to them forever.” While advising me on similar situations, my poor dad would say, “Look, just play it safe. Don’t upset anything. Be comfortable. Take care of yourself. Be gentle.”

Because of what my rich dad taught me, when I came back from Vietnam I went and took a job. The only job I ever took was learning how to sell. Rich dad said, “If you want to be a business owner, you need to know how to sell and communicate ideas to other people. Whether it is to your employees, your accountant, your banker, your investors, or the people around you. You need to know how to sell.” That’s why he encouraged me to learn how to sell. It wasn’t that he wanted me to become a salesman. He

How to Achieve a Rich Mindset | Preparing yourself to Be Rich

8

wanted me to overcome my fears. So for two years, I was the worst salesman Xerox ever had.

After a while, my rich dad asked, “How are you doing?” I said, “I’m going to get fired. I hate sales. People keep saying ‘no’ to me. I hate rejection. I’m not any good.” To which rich dad said, “The truth is you’re scared. You’re a coward. You’ve got a choice.” That’s what kept me going. I kept selling and selling and soon I realized that what I thought of myself is more important than what others thought of me. I kept going. I found mentors to help me. I gained the skills. I learned from masters.

Then, one day I had a magical breakthrough. I wasn’t afraid anymore. I still had the fear, but the fear didn’t contain me. There wasn’t a wall in front of me anymore and I started making other breakthroughs. I went from the worst to number one in sales and this whole new world opened to me because I overcame my fear.

I still don’t like rejection, but now it doesn’t control me. I say “no” to a lot of people, but it doesn’t mean I don’t like them. It doesn’t mean I think less of them. In fact, I’m often more impressed when people come up to me and continue on after I tell them “no.” Overcoming my fear is one of the biggest breakthroughs I’ve ever had in my life. When my wife, Kim, and I first got together, I told her, “I want to become rich. I don’t want to marry somebody rich, but I want a partner who wants to become rich too.” When we first got married, she was more courageous than I was. Over the years, she’s kept me strong. When I first started chasing her, she turned me down for six months. Six months. She’s the most beautiful woman I ever saw and the first time I asked her out she said “no.” Most people would have quit. I asked her three more times after that and she still said “no.” Two months later and she was still saying “no.” Six months later, she was still saying “no,” but by then I didn’t care because if I didn’t ask, the answer was “no” anyway. Finally, one day she says, “Yes, I’ll go out with you. I can’t believe you’re such an idiot.” I said, “Thank you,” and we’ve been together ever since. Been happily married, and without her, I would never have had this life. It’s all about overcoming your emotions and not quitting.

The same goes for me and writing. Every time I sat down to write my book I could hear my two English teachers saying to me, “You can’t write. You’ll never be smart.” I had to sit at that computer day after day after day. But I was determined that it wasn’t going to get the best of me. Now my book has become the best-selling personal finance book of all time. If I had given into those fears and those self-doubts, I would never have had a book on the bestseller list.

The thing about getting ahead in life is not backing down to your fears and doubts. Each one of them is a challenge and a lesson. Rich dad said to me, “If you only do what you’re good at, you limit yourself. The way to get better is to go after what you’re not good at, and that’s how you expand yourself.”

9

The average investor embraces fear. He/she has bought into the belief that a good and reasonable excuse to not face risk is just as good as trying. The average investor has learned to justify and embrace his fear. The rich investor identifies risk, and asks how he/she can minimize the risk. The rich investor is also more willing to accept limited risks as a way to improve his/her learning.

How Prepared Are You?Finally, one of rich dad’s greatest lessons on preparing to be rich was a simple one. However, most people don’t recognize it. Rich dad taught that the way the world, the universe, God, or whatever word you want to use, set things up, it is impossible to lose. In other words, life is a no-lose universe. The only way to lose is to focus on it. People who focus on loss, especially financially, ultimately lose. That’s why I think emotional intelligence is so important.

If you do not control your emotions and are continually afraid of losing, you will lose. It might not come in the form you expect, but eventually, you will lose. Rich dad taught me that financially, it is absolutely impossible to lose if you step back and look at the big picture. Tax laws are set up for you not to lose. Corporate laws are set up for you not to lose. It’s almost impossible to lose unless you have the concept or belief of losing.

When I hear somebody say, “Investing is risky,” or “What if I lose my money?” or “What happens if I fail?” I know they aren’t ready to become rich. They are focused on losing.

Some of the highest spiritual moments in my life have come facing death. One of the greatest experiences was when I was a helicopter pilot during the Vietnam War. We were fighting for a city called Quang Tri. I was there and we were coming to the realization that we were going to lose the war.

I remember sitting on the deck of my aircraft carrier at night. You watched the sea roll below you and see the moon and the horizon. I’d sit there quietly listening to the waves lapping on the bough of the ship. I’d think to myself, “Lord, if tomorrow is my last day, so be it. All I ask is I live it to the fullest. I have four other guys in the aircraft that count on me to be the very, very best. I have prepared for three years for this moment. I have practiced. If I am not the best, then maybe I should not fly, but if I am the best, if I am prepared as possible, then let me fly to the best of my ability.”

I would always make peace with my soul before any mission. I always asked myself, “Have I lived my life to the fullest?” I didn’t ask whether I had done right or wrong. I wanted to know if I had lived life to the fullest. Once I made peace that it was okay to

How to Achieve a Rich Mindset | Preparing yourself to Be Rich

10

die, at that moment I could fly with abandon. In other words, I didn’t care if I lived or died. I also knew that the pilots who said, “I’m afraid of dying” needed to be taken right off the mission. This was because their emotions had overcome their sensibilities. Their emotions had overcome their ability to do a good job. When I tell people what it takes to become rich, I let them know they must be a leader. In other words, employees only think about themselves or their family.

As a business owner, I think about multiple families, multiple people. If I’m not the best leader possible—if I haven’t studied, if I haven’t practiced, if I’m not on the cutting edge, if I’m not doing my job—I should not be the leader of a business. The reason most people are not successful in business or investing is because they don’t take on a leadership role. A leader must be prepared.

I prepared for 3 years to be ready for the battle at Quang Tri. My job was to be my best for that moment. One of my gunnery sergeants told me, “In battle, there’s no second place. Forget about politics. Forget about whether the war was right or wrong. Forget all of that because at that moment your job is to make sure that your four men plus yourself come back alive. You make sure that what you’re doing is an integral part of a bigger operation. Do your job. There’s no second place in battle. You either win, or you lose.” I’ve carried that mentality into business and investing.Are you willing to do the same?

A Final WordWhen you look in a mirror, what do you whisper? Do you berate yourself with comments like “I’m overweight” and “I’m getting old”? Or do you stand tall and say “I look great!” A mirror reflects much more than what your eyes see. A mirror reflects your inner thoughts and your beliefs—your soul. Listen to the thoughts that come from your soul. Are they negative? You’ll never embark on the road to riches if you let such thoughts constrain you.

If you’re harboring negative thoughts, you need to understand what they really mean. For example, if you tell yourself, “I can’t stop working and start my own business. I have a mortgage and a family to think about,” you might really be saying, “I don’t have time, and I’m too tired to learn anything new.”

It’s time to dig deep down and unearth your personal truths. Don’t let buried thoughts sap your energy and motivation. Unearth them, and free yourself to move forward. Sometimes we let negative statements play over and over in our minds like endless mantras. Once you know the truth beneath your negative statements, talk back to them. Start an argument with yourself! Think of ways to counter each one.

11

You are making an important investment by reading this eBook, regardless of whether you agree with it or not. In today’s ever-changing world, the most important investment you can make is an investment in ongoing education and searching for new ideas. So keep searching, and keep challenging your old ideas. You have the power to create a world of not enough money as well as a world of an abundance of money. Creating a world of an abundance of money does require a degree of creativity, a high standard of financial and business literacy, a mindset for seeking opportunities rather than for seeking security, and the ability to be cooperative instead of competitive. Rich dad guided me in shaping my thoughts by saying, “You can choose to live in a world of not enough money or a world of too much money. That choice is up to you.”

Limited Time Offer: Take Control of your Financial Future and Increase Your Cash Flow by Working with a Certified Rich Dad Coach.

ACT NOW and Receive 6 Months of Coaching Absolutely Free -with any new program!

Discover the power of working one-on-one with your own certified Rich Dad Coach to help you invest smarter, build and protect your wealth, and create the cash flow you need to live the life you desire. Remember, Robert’s Rich Dad was his first coach and helped him become successful by teaching him how to make his money work for him — who’s helping you? Get your free introduction to Rich Dad Coaching and learn how a Rich Dad Coach can help you do the same.

Click Here or Call 1-800-240-0434 and ask for extension 6947 to receive your FREE introduction to Rich Dad Coaching and to get 6 months of FREE Coaching with any new program.