Solving Money Problems Makes You Smarter

Robert Kiyosaki - International Bestselling Author

Solving Money Problems Makes You Smarter, When I was a young boy, rich dad said to me, "Money problems make you smarter... if you solve the problem." He also said, "If you solve your money problem, your financial intelligence grows. When your financial intelligence grows, you become richer. If you do not solve your money problem, that problem often grows into more problems." If you want to increase your financial intelligence, you need to be a problem solver. If you don't solve your money problems you will never be rich. In fact, you will become poorer the longer the problem persists.

Rich Dad used the example of having a toothache to illustrate what he meant by a problem leading to other problems. He said, "Having a money problem is like having a toothache. If you do not handle the toothache, the toothache makes you feel bad. If you feel bad, you may not do well at work because you are irritable. Not fixing the toothache can lead to further medical complications because it is easy for germs to breed and spread from your mouth. One day you lose your job because you have been missing work due to your chronic illness. Without a job, you cannot pay your rent. If you fail to solve the problem of rent money, you are on the street, homeless, in poor health, eating out of garbage cans, and you still have the toothache."

Solving Other People's Financial Problems

Robert Kiyosaki - International Bestselling Author

Solving Other People's Financial Problems, Rich dad also said, "Many people work for rich people, solving rich people's money problems." For example, an accountant goes to work to count the rich person's money. The salesperson sells the rich person's products. The office manager manages the rich person's business. The secretary answers the rich person's phones and treats the rich person's customers respectfully. The maintenance man keeps the rich person's building and machines running smoothly. A lawyer protects the rich person from other lawyers and lawsuits. A CPA protects the rich person's money from taxes. And the banker keeps the rich person's money safe.

What rich dad was getting at was that most people work at solving other people's money problems. But who solves the worker's money problems? Most people go home and are faced with many problems, money being one of them. If a person fails to handle his or her money problems at home, the problem, like a toothache, leads to other problems.

Many of the poor and middle class work for the rich and then fail to solve their own money problems at home. Instead of looking at financial problems as opportunities to get smarter, they go home, sit in the lawn chair, have a drink, put a steak on the grill, and watch TV. The next morning, they return to work once again solving someone else's problems and making someone else richer.

Quitters Rarely Win

Robert Kiyosaki - International Bestselling Author

Quitters Rarely Win, There is a young man who worked for me a few years ago. He was very bright, charming, had his MBA, and earned a lot of money. In his spare time, he and his wife tried many business ventures. They tried real estate, and failed. They bought her a small franchise, and failed. Then they bought a nursing home, and nearly lost everything when patients died unexpectedly. Today, both are back at work with high-paying jobs, but an unsettling feeling of inadequacy.

The reason I mention this young couple is because they failed to learn. They let the learning process beat them. When the going got tough, they quit. While it's commendable that they tried new ventures, they stopped when their problems seemed too big to be solved. They failed to push through their failure and learn from their mistakes. They failed to realize that the process, not the money, made them rich.

One of the toughest lessons I had to learn from my rich dad was to stick with the process until I won. When I ran into trouble at Xerox because I could not sell, I wanted to quit. Because I could not sell, I was not making money. In fact, it was costing me more to live in Honolulu than I was earning. Rich dad said, "You can quit when you win, but never quit because you're losing." Not until 1978, after becoming the number one salesperson for Xerox, did I quit. The process had made me richer, both mentally and financially. By overcoming my problem of not being able to sell, I was able to overcome my problem of not making money.

While working at Xerox I started my nylon wallet business in my spare time. In 1978, I went full-time into my wallet business. The business took off, and then failed. Again, I wanted to quit; and again, rich dad reminded me that the process is more important than the goal. Many times he reminded me, while I was deeply in debt, without much money, that if and when I solved this problem, I would never need money again. I would know how to build a business, and I would be a little more financially intelligent. But first I had to solve the problem in front of me.

The Cause of Poverty

Robert Kiyosaki - International Bestselling Author

The Cause of Poverty, Poverty is simply having more problems than solutions. Poverty is caused by a person's being overwhelmed by problems he or she can't solve. Not all causes of poverty are financial problems. They can be problems like drug addiction, marrying the wrong person, living in a crime-ridden neighborhood, not having job skills, not having transportation to get to work, or not being able to afford health care.

Some of today's financial problems, such as excessive debt and low wages, are caused by circumstances beyond an individual's ability to solve, problems that have more to do with our government and a smoke-and-mirrors economy.

For example, one of the causes of low wages is high-paying manufacturing jobs moving overseas. Today there are plenty of jobs, but they are in the service sector, not manufacturing. When I was a kid, General Motors was the nation's largest employer. Today Wal-Mart is the nation's biggest employer. We all know that Wal-Mart isn't known for its high-paying jobs - or its generous pensions.

Fifty years ago, it was possible for a person without much education to do well financially. Even if you had only a high school degree, a young person could get a relatively high-paying job manufacturing cars or steel. Today, it's manufacturing burgers.

Fift years ago, the manufacturing companies provided health care and retirement benefits. Today, millions of workers are earning less, while at the same time needing more money to cover their own medical expenses and save enough for retirement. Every day these financial problems are not solved, they grow bigger. And they stem from a larger national problem that is beyond the power of the individual to change or solve. They stem from poor economic policies and cronyism.

Every Goal Has a Process

Robert Kiyosaki - International Bestselling Author

Every Goal Has a Process, As we all know, every worthwhile goal has a process and takes work. For example, to become a medical doctor there is a rigorous process of education and training. Many people dream of becoming a doctor, but the process gets in their way.

One of the reasons people lack financial IQ on "making more money", is because they want the money but not the process. What many people do not realize is that it's the process that makes them rich, not the money. One of the reasons many lottery winners or kids who inherit family wealth are soon broke is because they received the money, but didn't have to go through the process. Many other people fail to become rich because they value a steady paycheck more than the learning process of becoming financially smarter and richer. They are held back by the fear of being poor. It is this very fear that keeps them from taking the chances and solving the problems required to become rich.

We are All Different, and have different strengths and weaknesses. We all have different processes, different challenges, and different problems. Some people are natural salespeople. I wasn't. My first problem was my inability to overcome my fear of selling and the terror of being rejected. Some people are natural-born entrepreneurs. I wasn't. I had to learn to be an entrepreneur.

I make this point because I'm not saying you need to learn to sell, or that you need to learn to be an entrepreneur. That was my process. It may not be yours. The first step to increasing your financial IQ on "making more money", is to decide what the best way for you to make money is. If it's to become a medical doctor, get ready for medical school. If it's to become a pro golfer, start putting. In other words, choose your goal, and then choose your process. Always remember that the process is more important than the goal.

Poor Solutions to Money Problems

Robert Kiyosaki - International Bestselling Author

Poor Solutions to Money Problems, Learning at an early age that we all have money problems, no matter how rich or how poor we are, was a very important lesson for me. Many people believe that if they had a lot of money, their money problems would be over. LIttle do they know that having lots of money just causes even more money problems.

One of my favorite commercials is for a financial services company and starts with the rapper MC Hammer dancing with beautiful women, a Bentley and a Ferrari and a grossly oversized mansion behind him. In the background, high-end specialty goods are being moved into the mansion. MC Hammer's one-hit wonder, "U Can't Touch This", is playing as all this is happening. Then the screen goes black and displays the words "15 minutes later." The next scene is MC Hammer sitting on a curb in front of the same ridiculous mansion, his head in his hands, next to a sign that reads "FORECLOSED." The announcer says, "Life comes at you fast. We're here to help".

The world is full of MC Hammers. We all have heard of lottery winners who win millions and then are deeply in debt a few years later. Or the young professional athlete who lives in a mansion while he is playing and then lives under a bridge once his playing days are over. Or the young rock star who is a multimillionaire in his twenties and looking for a job in his thirties. (Or the rapper who is peddling financial services that he was probably already using when he lost his money.)

Money alone does not solve your money problems. That is why giving poor people money does not solve their money problems. In many cases, it only prolongs the problem and creates more poor people. Take for instance the idea of welfare. From the time of the Great Depression until 1996, the government guaranteed money to the nation's poor regardless of personal circumstance. All you had to do was qualify for the poverty requirements to receive a government check - perpetually. If you showed initiative, got a job, and earned more than the poverty requirement, the government cut off your benefits. Of course, the poor then had other costs associated with working that they didn't have before, such as uniforms, child care, transportation, etc. In many cases they ended up with less money than before they had a job, and less time. The system benefited those who were lazy and punished those who showed initiative. The system created more poor people.

Hard work doesn't solve money problems. The world is filled with hardworking people who have no money to show for it, hardworking people who earn money, yet grow deeper in debt, needing to work even harder for even more money.

Education does not solve money problems. The world is filled with highly educated poor people. They're called socialists.

A job does not solve money problems. For many people, the letters J.O.B stand for just over broke. There are millions who earn just enough to survive but cannot afford to live. Many people with jobs cannot afford their own home, adequate health care, education, or even set aside enough money for retirement.

What Is Financial Intelligence?

Robert Kiyosaki - International Bestselling Author

What Is Financial Intelligence?, When I was five years old, I was rushed to the hospital for emergency surgery. As I understand it, I had a serious infection in my ears, a complication from chicken pox. Althouth it was a frighening experience, I have a cherished memory of my dad, my younger brother, and my two sisters standing on the lawn outside the hospital window waving to me as I lay in bed recovering. My mom was not there. She was at home, bedridden, struggling with a weak heart.

Within a year, my younger brother was taken to the hospital after falling from a ledge in the garage and landing on his head. My younger sister was next. She needed an operation on her knee. And the youngest, my sister Beth, a newborn baby, had a servere skin disorder that continually baffled the doctors.

It was a tough year for my dad, and he was the only one out of six not to succumb to a medical challenge. The good news is that we all recovered and lived healthy lives. The bad news was the medical bills that kept coming. My father may not have become ill that year, but he did contract a crippling malady - overwhelming medical debt.

At the time, my dad was a graduate student at the University of Hawaii. He was brilliant in school, receiving his bachelor's degree in just two years, and had dreams of one day becoming a college professor. Now with a family of six, a mortgage, and high medical bills to pay, he let go of his dream and took a job as an assistant superintendent of schools in the little town of Hilo, on the Big Island of Hawaii. Just so he could afford to move our family from one island to another he had to get a loan from his own father. It was a tough time for him and for our family.

Although he did achieve tremendous professional success and was finally awarded his doctorate degree, I suspect not realizing his dream of becoming a college professor haunteed my father until his dying days. He often said, "When you kids are out of the house, I'm going back to school and doing what I love - teaching."

Instead of teach, however, he eventually became the superintendent of education for the state of Hawaii, an administrative post, and then ran for lieutenant governor and lost. At the age of fifty, he was suddenly unemployed. Soon after the election, my mom suddenly died at the age of forty-eight due to her weak heart. My father never recovered from that loss.

Once again, money problems piled up. Without a job, he decided to withdraw his retirement savings, and invested in a national ice-cream franchise. He lost all his money.

As he grew older my father felt he was left behind by his peers; his life's career was over. Without his job as the head of education, his identity was gone. He grew angrier at his rich classmates who had gone into business, rather than education as he did. Lashing out, he often said, "I dedicated my life to educating the children of Hawaii, and what do I get? Nothing. My fat-cat classmates get richer, and what do I get? Nothing."

I will never know why he did not go back to the university to teach. I believe it was because he was trying very hard to become rich quickly and to make up for lost time. He wound up chasing flakey deals and hanging out with fast-talking conmen. none of his get-rich-quick ventures succeeded.

If not for a few odds jobs and Social Security, he might have had to move in with one of the kids. A few months before he died of cancer at the age of seventy-two, my father pulled me close to his bedside and apologized for not having much to leave his children. Holding his hand, I put my head on his hand and we cried together.