Ifyoupurchasethisbookwithoutacoveryoushouldbeawarethatthisbookmayhavebeenstolenpropertyandreportedas“unsoldanddestroyed”tothepublisher.Insuchcaseneithertheauthornorthepublisher

hasreceivedanypaymentforthis“strippedbook.”

Thispublicationisdesignedtoprovidecompetentandreliableinformationregardingthesubjectmattercovered.However,itissoldwiththeunderstandingthattheauthorandpublisherarenotengagedinrenderinglegal,financial,orotherprofessionaladvice.Lawsandpracticesoftenvaryfromcountryto

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Althoughbasedonatruestory,certaineventsinthebookhavebeenfictionalizedforeducationalcontentandimpact.

Copyright©2011byCASHFLOWTechnologies,Inc.

ThiseditionpublishedbyarrangementwithRichDadOperatingCompany,LLC.

“CASHFLOWandRichDadaretrademarksofCashflowTechnologies,Inc.visitourWebsiteatwww.richdad.com

TheBusinessSchoolForPeopleWhoLikeHelpingPeoplebyRobertT.Kiyosaki,Secondedition.

FirstpublishedinIndiaby

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Dedication

Wededicatethisbook,TheBusinessSchoolForPeopleWhoLikeHelpingPeople,tothemillionsofindividuals,couplesandfamilieswhohavebeguntheirjourneystartingandbuilding theirownbusinesses throughnetworkmarketing.Aswehavededicatedourlivestoeducatingpeopleabouthowtoattainfinancialfreedom, ithasbeen immenselygratifying toassociatewithan industry that isdedicatedtohelpingpeoplestartandbuildtheirownbusinesses.Everydayyouare educating and sharing your business opportunity with family, friends,neighborsandworkassociatesaswellascompletestrangers.Forthis,wehonorand thank you. You are seeing first hand and experiencing the benefits andfreedomsofwhatitisliketohaveyourownbusiness.AsourbestsellingbooksRichDadPoorDadandRichDad’sCASHFLOWQuadrant explain, once onelearns the truths about howmoneyworks, and the important keys to creatingwealth, it is easy to see thathavinganetworkmarketingbusiness canbe“theperfectbusiness”formanypeople.

Acknowledgements

We were humbled with the tremendous reception the first edition of thisbookreceivedwhenreleasedin2001.Thispalesincomparison,however,totheacceptance the networkmarketing industry has givenourwork since themid-1990s.AsanearlyadopterandpromoteroftheRichDadmessage,wewishtothankyou,yourupline,yourdownline,yourcrosslineand thecompanieswithwhomyouareassociated.Weareonamutualquesttohelppeopletakecontroloftheirfinanciallives.Keeplearningandteaching.Wethankyou!

Contents

Introduction WhyDoIRecommendNetworkMarketingAsABusiness?Chapter1 WhatMakesTheRich,Rich?Chapter2 ThereIsMoreThanOneWayToBecomeRichChapter3 Value#1:TrueEqualOpportunityChapter4 Value#2:Life-ChangingBusinessEducationChapter5 Value#3:FriendsWhoWillPullYouUp,NotPushYouDownChapter6 Value#4:WhatIsTheValueOfANetwork?Chapter7 Value#5:DevelopingYourMostImportantBusinessSkillChapter8 Value#6:LeadershipChapter9 Value#7:NotWorkingForMoneyChapter10 Value#8:LivingYourDreamsAppendices Value#9:MarriageandBusiness

Value#10:TheFamilyBusinessValue#11:HowYouCanUseTheSameTaxLoopholes

TheRichUse

SelectedQuotesAboutTheAuthors

INTRODUCTION

WhyDoIRecommendNetworkMarketingAsABusiness?

ThefollowingisanexampleofatypeofletterIoftenreceive.

DearMr.Kiyosaki,

Hello,hopeyouaredoingwell.

MynameisSusanandIamwritinginregardstomyhusband,Alan.Hehasreadallyourbooksandhassuchpotential tobeagreatentrepreneurandbusinessman. I told him Iwas going towrite you and ask your advice onsomething.Nowpersonally,IhaveneverreadoneofyourbookssoIdonotknowyourstandingonsuchtopics,butmyhusbandisputtingalotoftimeintoacompanycalled[companynamedeleted].Theyareapyramid-schemecompany that sells vitaminsandotherhealth-relatedproducts.Thepersononthetopgetsyoutosellforhim,anddownthechainitgoes.ItwouldnotbothermesoifIdidnotfeelitwassuchawasteofhistime.Ofallhisefforttobuildup someoneelse’snameandcompany, someoneelse in theend isgoingtoreapthebenefitsofhishardwork.Theysellhimontheideathatheisstartinghisownbusiness,butIdonotseehisnameonthecompany.Howcanitbehisbusinessifhisnameisnotonthevitamins?Ontopofthat,he’sbeenworkingatitpart-timeforoverayearandhestillhasnotmademuchmoney.

IguessthebottomlineisthatIthinkitisawasteofhisvaluabletime,andIwould like to see him investing in himself and his own name rather thensomeoneelse’s.Ratherthanbuildinganetworkmarketingbusiness,I thinkheshouldjuststarthisowncompany.Ialsobelievethepeopleheissellingfor are just using him. Knowing that he has read your books and valuesgreatlyyouropinionasabusinessman,maybehewilllistentoyourthoughtson this subject because he won’t listen to mine. Who knows, maybe I’mwrong.Thatwouldbeagoodthing,asitwouldputmymindateasetoknow.

Ifyoudorespondtothisletter,Ithankyouinadvanceforyourtime.

Sincerely,SusanM.

MyResponse

Assomeofyoumayknow,myofficeisswampedwithmail.Unfortunately,IdonothavethetimetorespondtoeverypieceofcommunicationIreceive.

Istartthebookwiththisletterbecausethisperson’sconcernsandquestionsareconcernsandquestionsIhearoftenfromothers.Theyarevalidquestionsandconcerns.Inaddition,Iwasimpressedwithherfranknessandherwillingnesstokeepanopenmind.Intoday’srapidlychangingworld,havinganopenmindisvitallyimportant.

OneofthemainreasonsIdecidedtowritethisbookisbecauseIamoftenaskedsuchquestionsandIhearsuchconcerns.ManypeoplewanttoknowwhyIrecommendanetworkmarketingbusiness,especiallysinceIamnotaffiliatedwith any one company, nor did Imakemymoneywith a networkmarketingbusiness.Therefore,Iwrotethisbooktoexpressmyansweronceandforall.Asyou can see from the number of pages in this book,my answer to the aboveletterisnotasimplerightorwronganswer.

Before closing, I do not believe a network marketing business is foreveryone. By reading this book, I think you may better know if a networkmarketing business is right or wrong for you. If you already have a networkmarketingbusiness,Ibelieveyouwillfindthatthisbookwillreaffirmwhatyoualreadyknow…andfeel.Ifyouarethinkingaboutstartinganetworkmarketingbusiness,Ibelieveyouwillfindoutaboutsomeofthehiddenopportunitiesandvalues a network marketing business can offer you, values that many peopleoften fail to see. In other words, there is far more to a network marketingbusinessthanjustthechancetomakesomeextramoney.

Ithankyouinadvanceforreadingthisbookandforkeepinganopenmind.

Sincerely,

RobertT.Kiyosaki

CHAPTER1

WhatMakesTheRich,Rich?

Onedayafterschool,Iwasworkinginmyrichdad’soffice.Iwasabout15yearsofageatthetimeandwasveryfrustratedinschool.Iwantedtolearntoberich,butinsteadofstudyingsubjectssuchas“Money101”or“HowToBecomea Millionaire 202,” I found myself dissecting frogs in science class, andwondering how this dead frog would make me rich. Feeling frustrated withschool,Iaskedmyrichdad“Whydon’ttheyteachusaboutmoneyinschool?”

Richdad smiled, lookedup fromhis paperwork and said, “I don’t know.I’vewonderedthatmyself.”Hepausedforawhileandthenasked,“Whydoyouask?”

“Well,” I said slowly, “I’m bored in school. I don’t see any relevancebetweenwhatwearerequiredtostudyinschoolandtherealworld.Ijustwanttolearntoberich.Sohowisadeadfroggoingtohelpmebuyanewcar?Iftheteacher would tell me how a dead frog can make me rich, I would dissectthousandsofthem.”

Rich dad laughed aloud and asked, “What do they tell youwhen you askthemabouttherelationshipbetweendeadfrogsandmoney?”

“Allmyteacherssaythesamething,”Ireplied.“TheysaythesamethingnomatterhowmanytimesIaskthemhowschoolisrelevanttotherealworld.”

“Andwhatdotheysay?”“Theysay,‘Youneedtogetgoodgradessoyoucanfindasafesecurejob,’”

Ireplied.“Well that is whatmost people want,” said rich dad. “Most people go to

schooltofindajobandsomekindoffinancialsecurity.”“But I don’twant to do that. I don’twant to be an employeeworking for

someoneelse. Idon’twant to spendmy lifehavingsomeoneelse tellmehowmuchmoneyIcanearn,whenIcangotoworkortakeavacation.Iwanttobe

free.Iwanttoberich.ThatiswhyIdon’twantajob.”ForthoseofyouwhomaynothavereadRichDadPoorDad,myrichdad

wasmybest friend’s father.Althoughhewas amanwho startedwithnothinganddidnothaveaformaleducation,heultimatelybecameoneofthewealthiestmen in theStateofHawaii.Mypoordad,my real dadwas ahighly educatedman, a highly paid government official, but no matter how much money hemade,hewasbrokeat theendofeverymonthandultimatelydiedbrokewithlittletoshowforalifeofhardwork.

OneofthereasonsIbeganstudyingwithmyrichdad,afterschoolandonweekendswasbecauseIknewthatIwasnotreceivingtheeducationIwantedinschool.IknewschooldidnothavetheanswersIwassearchingforbecausemyrealdad,mypoordadwastheheadofeducationfortheStateofHawaii.Iknewthatmyrealdad,theheadteacherdidnotknowmuchaboutmoney.Therefore,IknewtheschoolsystemcouldnotteachmewhatIwantedtoknow.Attheageof15, Iwanted toknowhow tobe rich, rather thanhow tobeanemployeewhoworksfortherich.

Ibegantolookforanadultwhocouldteachmeaboutmoney,afterseeingmymomanddadconstantlyfightovernothavingenoughmoney.ThatishowIcametostudywithmyrichdad.IstudiedwithhimfromtheageofnineuntilIwas38yearsofage.FormeIwaslookingfortheeducation.Formeitwasmy“BusinessSchool,” thebusiness school for real life.Becauseofmy richdad’straining,Iwasabletoretireattheageof47,financiallyfreefortherestofmylife. If I had followed my poor dad’s advice, the advice of being a goodemployeeuntilIwas65yearsold,Iwouldstillbeworkingtoday,worriedaboutmyjobsecurityandworriedaboutmypensionplanfilledwithmutualfundsthatkeepgoingdowninvalue.Thedifferencebetweenmyrichdad’sadviceandmypoordad’sadvicewassimple.Mypoordadalwayssaid,“Gotoschoolandgetgood grades, so you can find a safe secure jobwith benefits.”My rich dad’sadvicewas, “If youwant to be rich, you need to be a business owner and aninvestor.”Myproblemwasthatschooldidnotteachmetoownbusinessesortobeaninvestor.

“If you want to be rich, you need to be a businessownerandaninvestor.”

WhyThomasEdisonWasRichAndFamous

“Sowhatdidyoustudyinschooltoday?”askedrichdad.Thinkingaboutmydayforawhile,Ifinallyrepliedsaying,“Wehavebeen

studyingthelifeofThomasEdison.”“That’s an important person to study,” said rich dad. “So, did youdiscuss

howhebecamerichandfamous?”“No,”Ireplied.“Weonlydiscussedhisinventions,likethelightbulb.”Rich dad smiled and said, “Well, I hate to contradict your teacher but

ThomasEdisondidnot invent the lightbulb…buthedidperfect it.”RichdadwentontoexplainthatThomasEdisonwasoneofhisheroesandhehadstudiedhislife.

“So,whyishecreditedwithinventingit?”Iasked.“Therewereotherlightbulbsinventedbeforehislightbulb,buttheproblem

wastheywerenotpractical.Theearlybulbsdidnotburnlongenough.Also,theotherinventorscouldnotexplainhowthelightbulbcouldhaveanycommercialvalue.”

“Commercialvalue?”Iaskedinapuzzledtone.“Inotherwords,theotherinventorsdidnotknowhowtomakemoneyfrom

theirinvention…andThomasEdisondid,”addedrichdad.“So,heinventedthefirstusefullightbulbandhealsoknewhowtoturnthe

bulbintoabusiness.”Richdadnoddedhishead,“Anditwashisbusinesssensethatmadesomany

ofhisinventionssousefultomillionsofpeople.ThomasEdisonwasmorethanan inventor. He was the founder of General Electric and many other majorcompanies.Didyourteachersexplainthattoyou?”

“No,”Ireplied.“Iwishtheywouldhave.Iwouldhavebeenmoreinterestedin the subject. Instead, I was bored and wondering how Thomas Edison wasrelevanttoreallife.Iftheyhavetoldmehowhebecamesorich,Iwouldhavebeenmuchmoreinterestedandlistenedmoreclosely.”

RichdadlaughedandwentontotellmehowThomasEdisontheinventoralsobecameamulti-millionaireandfounderofabilliondollarcorporation.Richdad went on to say that, Edison dropped out of school because his teachersthoughthewasnotsmartenoughtosucceedinschool.Hethentookajobsellingcandiesandmagazinesontherailroadsasayoungboy.Therehedevelopedhissalesskills.Soonhebegan toprinthisownnewspaper in thebackof the trainandthenhiredateamofboystosellnotonlyhiscandies,butalsohisnewspaper.Whilestillaboy,hewentfromemployeetobusinessowner,employingadozenotherboys,inaboutayear.

“SothatishowThomasEdisonbeganhisbusinesscareer?”Iasked.Richdadnoddedhisheadandsmiled.

“Whydidn’ttheteacherstellmethat?”Iasked.“Iwouldhavelovedtohaveheardthatstory.”

“Thereismore,”saidrichdadashecontinuedwithEdison’sstory.Richdadcontinued explaining that Edison soon bored of his business on the train andbeganlearninghowtosendandreceiveMorsecodesohecouldgeta jobasatelegraphoperator.Soon,Edisonwasoneofthebesttelegraphoperatorsaroundandhetraveledfromcitytocityusinghistelegraphoperatorskills.“Itwaswhathelearnedfrombeingayoungentrepreneuranda telegraphoperator thatgavehimtheedgeasabusinesspersonandaninventorofthelightbulb.”

“How did being a telegraph operator help him become a betterbusinessman?”Iasked,nowconfused.“Whatdoesthisstoryhavetodowithmebecomingrich?”

“Givemetimetoexplain,”saidrichdad.“YouseeThomasEdisonwasmorethanjustaninventor.Asayoungboy,hebecameabusinessowner.Thatiswhyhebecameveryrichandfamous.Rather thangotoschool,hewasgainingthebusinessskillsrequiredforsuccessintherealworld.Youaskedmewhytherichgetrich,didn’tyou?”

“Yes,”Ireplied,noddingandfeelingalittleembarrassedforinterruptingmyrichdad.

“Whatmadehimfamousrelativetothelightbulbwashispastexperienceasa businessperson and a telegraph operator,” rich dad said. “Being a telegraphoperatorheknewthatwhatmadetheinventorofthetelegraphsosuccessfulwasbecause itwasabusiness system,a systemof lines,poles, skilledpeople, andrelay stations. As a young man, Thomas Edison understood the power of asystem.”

Ijumpedin,“Youmeanbecausehewasabusinessperson,herealizedhowimportantthesystemwas.Thesystemwasmoreimportantthantheinvention.”

Rich dad nodded. “You see, most people go to school to learn to be anemployee of a system, somany fail to see the big picture.Most only see thevalueoftheirjobbecausethatisalltheyaretrainedtosee.So,theyseethetreesandnottheforest.”

“So,mostpeopleworkforthesystemratherthanownthesystem,”Iadded.Nodding in agreement, rich dad said, “All they see is invention or the

product,butnotthesystem.Mostpeoplefailtoseewhatreallymakestherich,rich.”

“So,howdoes thisapply toThomasEdisonand theelectric lightbulb?” Iasked.

“Whatmadethelightbulbpowerfulwasnotthelightbulbbutthesystemofelectrical lines and relay stations that powered the light bulb,” said rich dad.

“What made Thomas Edison rich and famous was that he could see the bigpicture,whileotherpeopleonlysawthelightbulb.”

“Andhecouldseethebigpicturebecauseofhisbusinessexperienceonthetrainandhisexperienceasatelegraphoperator,”Ireplied.

Richdadnodded.“Anotherwordforsystemis‘network.’Ifyoureallywanttolearnhowtoberich,youmustbegintoknowandunderstandthepowerfoundinnetworks. The richest people in theworld build networks. Everyone else istrainedtolookforwork.”

“The richest people in the world build networks.Everyoneelseistrainedtolookforwork.”

“Withouttheelectricalnetwork,thelightbulbwouldhaveverylittlevaluetopeople,”Isaid.

“You’regettingtheidea,”smiledrichdad.“Sowhatmakestherich,richisthat theybuildandown the system…thenetwork.Owning thenetworkmakesthemrich.”

“A network? So if Iwant to become rich, I need to learn how to build abusinessnetwork?”Iqueried.

“You’re getting the idea,” rich dad said, “There ismore than one way tobecomerich,buttheultra-richhavealwaysbuiltnetworks.JustlookathowJohnD.Rockefellerbecameoneofthewealthiestmenintheworld.Hedidmorethanjustdrillforoil.JohnD.Rockefellerbecameoneoftherichestmenintheworldbecausehebuiltanetworkofgasstations,deliverytrucks,shipsandpipelines.He became so rich and powerful because of his network that the U.S.governmentforcedhimbreakuphisnetwork,callingitamonopoly.”

“And, Alexander Graham Bell invented the telephone which eventuallybecameatelephonenetworkcalledAT&T,”Iadded.

Rich dad nodded. “And later came radio networks and then televisionnetworks.Everytimeanewinventioncamealong,thepeoplethatgotrichwerethepeople thatbuiltandowned thenetwork that supported thenew invention.Many high paid stars and sports athletes are rich simply because radio andtelevisionnetworksmakethemrichandfamous.”

“Sowhydoesn’tourschoolsystemteachustobuildnetworks?”Iasked.Rich dad shrugged his shoulders. “I don’t know,” he replied. “I think

becausemostpeopleare justhappytofinda jobworkingasanemployeeofalargenetwork…anetworkthatmakestherich,richer.Ididnotwanttoworkfor

the rich.That iswhyIbuiltmyownnetwork. Ididnotmakeasmuchmoneyearly inmy life,because it takes time tobuildanetwork.For5years, Imademuchlessthanmypeersdid.However,after10yearsIwasfarricherthanmostofmyclassmates, even theones thatwent on tobecomedoctors and lawyers.TodayIearnfarmore than theycouldeverdreamofearning.Awelldesignedandmanaged business network will exponentially earn far more than a hard-workingindividual.”

Rich dadwent on to explain that history is filledwith stories of rich andfamous people who built networks.When trains were invented, many peoplebecamerich.Thesameistrueforairplanes,ships,carsandretailstores,suchasWal-Mart, the Gap and Radio Shack. In today’s world, the power of supercomputersandthepowerofPCsallowmanyindividualsthepowertobuildgreatwealth if they would work to build their own networks. This book and mycompany, richdad.com, are dedicated to those who want to build their ownbusinessnetworks.

TodaywehaveBillGates, the richestman in theworld,whobecame richplugginganoperatingsystemintoIBM’snetwork.TheBeatlesbecamefamousworldwidedue to thepowerof theradio, televisionandrecordstorenetworks.Sport stars earn millions of dollars due to the power of television and radionetworks. The Internet, which is the latest in worldwide networks, has mademanypeoplemillionairesandevenafewpeoplebillionaires.MywritingskillshaveearnedmillionsofdollarsnotbecauseIamagreatwriterbutbecausemybusinesspartnerswiththeAOLTimeWarnernetwork.Weatrichdad.comworkcooperativelywithTimeWarnerBooksandAOLontheInternet.Theyaregreatcompaniesandgreatpeopletoworkwith.Richdad.comisalsonetworkingwithother companies throughout the world, in countries such as Japan, China,Australia, the UK, Europe, Africa, South America, Canada, India, Singapore,Malaysia, Indonesia,Mexico, Philippines and Taiwan.As rich dad said, “Therichbuildnetworksandeveryoneelselooksforwork.”

WhyTheRichGetRicher

Mostofushaveheardthesaying,“Birdsofafeatherflocktogether.”Wellthatsayingholdstruenotonlyforbirdsbutalsoforrichpeople,poorpeopleandmiddle class people. In other words, the rich networkwith the rich, the poornetworkwithotherpoorpeople,andthemiddleclasshangsoutwiththemiddleclass.Rich dad often said, “If youwant to become rich, you need to networkwiththosewhoarerichorwhocanhelpyoubecomerich.”Healsosaid,“Manypeoplespendtheirliveshangingoutandnetworkingwithpeoplethatholdthem

back financially.” One idea this book wants to pass on is that a networkingmarketingbusinessisabusinesswithpeoplewhoaretheretohelpyoubecomericher. One question you may want to ask yourself is this question. “Is thecompanyIworkforandarethepeoplewithwhomIspendtimededicatedtomebecoming rich? Or, are the people and company more interested in mecontinuingonasahardworker?”

Bytheageof15,Iknewthatonewayformetobecomerichandfinanciallyfreewas to learnhow tonetworkwithpeople thatcouldhelpmebecome richand financially free. Tome thatmade perfect sense.Yet tomany ofmy highschoolclassmateswhatmadesensewastogetgoodgradesandgetasafe,securejob.Attheageof15,IdecidedthatIwouldseekthefriendshipoffriendswhowere interested in me becoming a rich person rather than a loyal employeeworkingfortherich.WhenIlookbackuponmylife,thedecisionImadeattheageof15wasalifechangingdecision.Itwasnotaneasydecisionbecauseattheageof15IhadtobeverycarefulwithwhomIspentmytimeandwhichteachersto whom I would listen. For those of you considering building your ownbusiness this idea, the ideaofbeingawareofwhomyouspendyour timewithandwhoyourteachersareisaveryimportantconsideration.Asayoungboyinhigh school, I beganchoosingmy friends and teachersverycarefully, becauseyourfamily,friendsandteachersareavery,very,veryimportantelementofyournetwork.

ABusinessSchoolForThePeople

Personally, I am thrilled to write this book in support of the networkmarketing industry. Many companies in this industry are offering millions ofpeople thesamebusinesseducationmyrichdad taughtme, theopportunityofbuildingyourownnetworkratherthanspendingyourlifeworkingforanetwork.

Teaching people to understand the power of building their own business,theirownnetwork,isnotaneasytask.Thereasonit isnotaneasytaskisthatmostpeoplehavebeentaughttobeloyal,hardworkingemployeesratherthantobebusinessownerswhobuildtheirownnetworks.

AfterIreturnedfromVietnam,whereIwasaU.S.MarineCorpsofficerandhelicopterpilot,IconsideredgoingbacktoschooltogetmyM.B.A.degree.Myrich dad talkedmeout of it.He said, “If you get aM.B.A. from a traditionalschool,youarestilltrainedtobeanemployeeoftherich.Ifyouwanttoberich,rather than a highly paid employee of the rich, you need to go to a businessschoolthatteachesyoutobeanentrepreneur.ThatisthetypeofbusinessschoolIhaveputyouthrough.”Richdadalsosaid,“Theproblemwithmostbusiness

schools is that they take the smartest kids and train them to be businessexecutives for the rich, rather than executives for the employees.” If youfollowed the news on Enron and WorldCom, the highly educated executiveswereaccusedofthinkingonlyofthemselves,andnottheemployeesorinvestorswhohadentrustedtheirlivesandmoneywiththem.Manyhighlyeducatedandhighlypaidexecutivesweretellingtheiremployeestobuymoreofthecompanystockwhile theexecutiveswereselling theirs.AlthoughWorldComandEnronareextremecases,thattypeofselfishbehaviorgoesoneverydayinthecorporateworldandinthestockmarket.

A big reason I support the network marketing industry is that manycompaniesintheindustryarereallybusinessschoolsforthepeople,ratherthanbusinessschoolsthattakesmartkidsandtrainthemtobeemployeesoftherich.Manynetworkmarketingcompaniesarereallybusinessschoolsthatteachvaluesnotfoundintraditionalbusinessschools…valuessuchasthebestwaytobecomerich is to teach yourself and other people to become business owners…ratherthanteachthemtobeloyalemployeesworkingfortherich.

OtherWaysOfGettingRich

Many people have acquired great wealth building a network marketingbusiness.Infact,someofmyrichestfriendshavecreatedtheirfortunebuildinganetworkmarketing business. Yet to be fair there are otherways a person canacquiregreatwealth.Therefore,inthenextchapter,thisbookwillgointootherways people have become rich and, more importantly, financially free…freefrom the drudgery of earning a living, clinging to job security, and livingpaycheck to paycheck. After reading the next chapter, youmay have a betterideaifbuildinganetworkmarketingbusinessisthebestwayforyoutocreateyour own personal fortune…and as a vehicle to pursue your dreams andpassions.

CHAPTER2

ThereIsMoreThanOneWayToBecomeRich

“Canyouteachmetoberich?”Iaskedmyteacher.“No,”mybiology teacher replied.“My job is tohelpyougraduatesoyou

canfindagoodjob.”“ButwhatifIdon’twantajob?WhatifIwanttoberich?”Iasked.“Whydoyouwanttoberich?”askedmyteacher.“BecauseIwanttobefree.IwanttohavethemoneyandtimetodowhatI

wanttodo.Idon’twanttobeanemployeeformostofmylife.Idon’twantmylife’sdreamstobedictatedbythesizeofmypaycheck.”

“That’s nonsense.You’re dreaming about the life of the idle rich and youcan’t be rich if you don’t have good grades and a high paying job,” said theteacher.“Nowgetbacktoyourfrog.”

In my other books and educational programs I often refer to the threedifferent types of education that are required if we want to be financiallysuccessfulinlife:scholastic,professionalandfinancialeducation.

ScholasticEducation

Thiseducationteachesustoread,writeanddomath.Itisaveryimportanteducation, especially in today’sworld. Personally, I did not dowell with thislevelofeducation.Iwasa“C”studentmostofmylifesimplybecauseIwasnotinterestedinwhatIwasbeingtaught.Iamaveryslowreader,andIdonotwritewell.Althoughaslowreader,Idoreadalot,Ijustreadveryslowly,andoftenhavetoreadabooktwoorthreetimesbeforeIunderstandwhatIamreading.Iamalsoapoorwriter,thoughIcontinuetowrite.

As a side note, although a poor writer, I have been fortunate to have sixbooks on The New York Times, The Wall Street Journal and BusinessWeek

bestsellerlists.AsIstateinRichDadPoorDad,Iamnotabest-writingauthor,Iamabest-sellingauthor.Myrichdad’ssalestrainingdidpayoffeventhoughitdidnotpayoffinschoolwhenitcametomygrades.

ProfessionalEducation

Thiseducation teachesyouhowtowork formoney.Duringmyyouthera,the smart kids went on to become doctors, lawyers and accountants. Otherprofessional schools teach people to become medical assistants, plumbers,builders,electriciansandautomobilemechanics.Ifyoulookintheyellowpagesofyourphonebookundereducationorschools,youwillfindthosepagesfilledwith schools that teach people professions that help them become moreemployable.

Personally, since I did not do well at the first level of education, thescholastic level, becoming a doctor, lawyer or accountantwas not encouragedforme.Instead,IattendedschoolinNewYorkwhereIbecameaship’sofficer,sailingshipssuchastankersforStandardOilandpassengerlinersliketheshiponthetelevisionprogram,TheLoveBoat.Aftergraduation,becausetheVietnamWarwason,insteadoftakingajobintheshippingindustry,IwenttoPensacola,FloridawhereIattendedtheU.S.NavyFlightSchoolandbecameapilot,flyingfortheMarineCorpsinVietnam.Bothmydadssaiditwasason’sdutytofightforhiscountry,sobothmybrotherandIvolunteeredtogotoVietnam.BythetimeIwas23,Ihadtwoprofessions,oneaship’sofficerandtheotherapilot,butIneverreallyusedeitherofthemtomakemoney.

Asasidenote,I thinkit ironictodaythat theprofessionIammostknownforisthatofawriter…asubjectIfailedtwiceinhighschool.

FinancialEducation

This is the educationwhere you learn tohavemoneywork for you ratherthanyouworkformoney.Thisthirdlevelofeducationisnottaughtinmostofourschools.

Mypoordadthoughtthatagoodscholasticandprofessionaleducationwasallapersonneededtobesuccessfulintherealworld.Myrichdadsaid,“Ifyouhave a poor financial education, you will always work for the rich.”Richdad.comhasdoneit’sbest tocreateproducts that teachthesamefinancialeducationmy rich dad taughtme.We have products such as the board gamesCASHFLOW101,202andCASHFLOWforKids,whichteachinafunway thesamefinancialeducationandfinancialmindsetmyrichdadtaughtme.

“Learn to have money work for you rather than youworkformoney.”

AFinancialDisaster

Inmyopinion,theUnitedStatesandmanyWesternnationshaveafinancialdisastercoming…afinancialdisastercausedbyoureducationalsystems’failureto provide adequately a realistic financial education program for students. Asmostofusunfortunatelyknow,wedidnotreceivemuchfinancialeducationinschool…and,inmyopinion,knowinghowtomanageandinvestmoneyisaveryimportantlifeskill.

Recently, we have seen millions of people lose trillions of dollars in thestockmarket.Inthenearfuture,Ipredictafinancialdisasterbecausemillionsofpeople born after 1950 will not have enough money for retirement. Moreimportant than money for retirement is money for medical care. I often hearfinancialadvisorssaying,“Yourlivingexpensesgodownafteryouretire.”Whatthosefinancialadvisorsoftenfailtotellyouisthatafteryouretirewhatgoesupareyourmedicalexpenses,evenifyourlivingexpensesgodown.

Mypoordadbelievedthatthegovernmentshouldtakecareofanyonewhodid not havemoney.While inmy heart I agree with him,my financialmindwondershowourgovernment can afford toprovide for themillionsofpeoplewhowill soon need financial support for living andmedical expenses.By theyear2010,thefirstof83millionbaby-boomerswillbegintoretire.Myquestionishowmanyofthemhaveenoughmoneytosurviveoncetheirworkingdaysareover? And if millions will need billions of dollars to survive, are the youngpeopleoftheworldwillingtopayforthelivingexpensesoftheoldpeople?

In my opinion, it is imperative that our school systems begin teachingfinancialeducationinourschoolsassoonaspossible.Learninghowtomanagemoneyand investmoney iscertainlyas importantas learninghowtodissectafrog.

APersonalComment

My wife and I were able to retire early in life without a job, withoutgovernmentassistance,andwithoutanystocksormutualfunds.Whydidwenothave stocks or mutual funds? The reason is for us they are very riskyinvestments. In my opinion, mutual funds are some of the riskiest of all

investments…yet they are a good investment if you do not have any formalfinancialeducationandexperience.

If you have followed the financial news lately youmay have noticed thatbefore the stock market crash which started in March of 2000 the financialadvisorswere saying, “Invest for the long-term, buy and hold, and diversify.”After the stockmarketcrash, theyareadvising, “Invest for the long-term,buyandhold,anddiversify.”Doyounoticeanythingdifferent?

“Buildingyourownbusinessisthebestwaytobecomerich.Afteryouhavebuiltyourbusiness,andyouhavestrongcashflow,thenyoucanbegininvestinginotherassets.”

So,ifyoudonothaveagoodfinancialeducation,thenyoumaywanttodoasmost financial advisors advise,which is to savemoney, buymutual funds,investforthelongtermanddiversify.Ifyouhaveastrongfinancialeducation,thenyoumaynothavetofollowsuchriskyadvice.Instead,youcandowhatmyrichdadadvisedmetodowhichistobuildfirstabusiness.Hesaid,“Buildingyourownbusiness is thebestway tobecomerich.”Richdadalsosaid,“Afteryouhavebuiltyourbusiness,andyouhavestrongcashflow,thenyoucanbegininvestinginotherassets.”

TheOtherWaysToBecomeRich

Richdadsaid,“Becausesomanypeopledonothaveanadequatefinancialeducation,theycomeupwithmanyinterestingwaystobecomerichotherthanbuildingabusinessnetwork.Forexample,millionsofpeopletrytobecomerichplayingthelotteryorworkinghardandsavingmoney.Andsomepeopleactuallydo become rich using these differentmethods.”He also said, “If youwant tobecomerich,youneedtofindthewaytobecomerichthatbestworksforyou,”Thefollowingaresomeoftheotherwayspeoplebecomerich.

1. You can become rich bymarrying someone for his or hermoney.Thisisaverypopularwayofbecomingrich.Yet,richdadwouldsay,“Youknowwhatkindofpersonmarriesformoney.”

2. You can become rich by being a crook. Rich dad said, “The troublewith being a crook is that you have to associate with other crooks.Much of

businessisbasedontrust.Howcanyouhavemuchtrust,whenyourpartnersarecrooks?” He also said, “If you are honest and make an honest mistake inbusiness,mostpeopleunderstandandgiveyouasecondchance.Inaddition,ifyoulearnfromyourhonestmistakesyouwillgrowintoabetterbusinessperson.Butifyouareacrookandyoumakeamistake,thenyoueithergotojailoryourpartnerswillpunishyouintheirownefficientways.”

3. Youcanbecomerichbybeinggreedy.Myrichdadsaid,“Theworldisfilledwithpeoplewhobecamerichbybeinggreedy.Greedyrichpeoplearethemostdespisedofallthedifferenttypesofrichpeople.”

After the stock market crash of 2000, the world feasted on stories ofcompanies that distorted their financial records, CEOs who lied to investors,insiderswhosoldstockillegally,andcorporateofficerswhotoldtheirworkerstobuyshareswhiletheyweresellingtheirs.Formonths,thenewswasfilledwithstoriesabouttheleadersofEnron,WorldCom,ArthurAndersonandWallStreetanalystswhowere lying, cheating and stealing. In otherwords, someof theserichgreedypeopleweresogreedytheybrokelawsandturnedintocrooks.Thefirstfewyearsofthe21stcenturyrevealedsomeoftheworstexamplesofgreed,corruptionandlackofmoralguidance,provingthatnotallcrooksdealindrugs,wearmasksandrobbanks.

4. Youcanbecomerichbybeingcheap.Richdadsaid,“Tryingtobecomerich by being cheap is themost popularway people attempt to become rich.”Explainingfurtherhewouldthensay,“Peoplewhotrytobecomerichbybeingcheap are peoplewho often try to live below theirmeans, rather than findingwaystoexpandtheirmeans.”Healsosaid,“Theproblemwithbecomingrichbybeingcheap is that in theendyou’restillcheap.”Wehaveallheardstoriesofpeople who spent their lives hoarding money, pinching pennies, shopping atsales, just to acquire masses of money. Yet even though they have a lot ofmoney, they live lifeaspoorlyassomeonewho is trulypoor.Tomyrichdad,havingalotofmoneyyetlivinglikeapoorpersonmadeverylittlesense.

Richdadhadafriendwholivedcheaplyallhislife,savinghismoney,neverspendingonanythingexceptforthebarenecessities.Thesadthingwasthathisthreegrownchildrencouldnotwaitforhimtodiesotheycouldgettheirhandsonallhismoney.Afterhepassedaway,his threechildrenmadeup forall theyearsoflivingcheapandspentallhismoneyinlessthanthreeyears.Afterallthemoneywasgone,thekidswerejustaspoorastheirdadwas,eventhoughheonce had lots of money. To my rich dad, people who hoard money yet livepoorlyarepeoplewhoworshipmoney,makingmoney theirmaster rather than

learntobecomeamasterofmoney.

5. Youcanbecomerichviahardwork.Theproblem richdadhadwithhardworkwas thathenoticed thathardworkingpeopleoftenhadahard timeenjoyingtheirmoneyandtheirlife.Inotherwords,hardworkwasalltheyknew.Theydidnotknowhowtohaveagoodtime.

WorkingHardForABadIncome

Rich dad also taught his son andme thatmany peoplework hard for thewrongkindof income.Hesaid,“Peoplewhophysicallyworkhardformoney,often work hard for the wrong kind of income…because income that isphysicallyworkedfor is thehighest taxedofall income.Peoplewhowork forthe wrong income often work harder and harder only to be taxed more andmore.”Inmyrichdad’smindtoworkfor incomethat is taxedmoreandmorewasnotfinanciallyintelligent.Mostpeoplewhohaveajobworkforthehighesttaxedofallincome.Inaddition,thepeoplewhoarepaidtheleast,oftenpaythehighestpercentageintaxes.

Asa littleboy,my richdad taughtme that there ismore thanonekindofincome.Hesaid,“Thereisgoodincomeandbadincome.”Inthisbook,youwillfindoutwhatkindof income toworkhard for…which is income that is taxedlessandlesseventhoughyouearnmoreandmore.

Rich dad also pointed out to his son andme thatmany peoplework veryhardalltheirlivesbuthadlittletoshowfortheirhardworkattheendoftheirlives.Inthisbook,youwillfindouthowyoumayhavetoworkhardforafewyears,buteventuallybefreetochoosenevertoworkagain…ifthatiswhatyouchoosetodo.

6. You can become rich by being exceptionally smart, talented,attractive or gifted. Tiger Woods is an example of an exceptionally giftedgolfer…agolferwhospentyearsdevelopinghisgift.Yetbeinggifted,smartortalentedisstillnoguaranteeofbecomingrich.Richdadwouldsay,“Theworldis filledwithgiftedpeoplewhoneverbecome rich. Just go toHollywoodandyoufindmanybeautiful,handsomeandtalentedactorswhoearnlessthanmostpeople.” Statistics also show that 65% of all professional athletes are broke 5years after their high paying professional careers are over. In the world ofmoney,ittakesmorethanGod-givenbrains,talentorgoodlookstobecomerich.

7. Youcanbecomerichbybeinglucky.Tryingtobecomerichbybeing

luckyisalmostaspopularastryingtobecomerichbybeingcheap.Asmostofusknow,millionsofpeoplebetbillions,maybetrillions,ofdollarsonthelottery,the race tracks, casinos and on sporting events, all hoping to strike it rich bybeing lucky.Moreover, aswe all know for there to beone luckyperson thereneedstobethousands,maybemillions,ofunluckypeople.Again,studieshaveshown thatmost lotterywinners are broke 5 years afterwinningmoremoneythantheycouldhaveearnedin5lifetimes.Therefore,evenbeingluckyonceortwicedoesnotmeanyouholdontoyourwealth.

8. Youcanbecomerichbyinheritingmoney.Bythetimeweareinourtwenties,weshouldknowifwearegoingtoinheritanything.Ifyouknowyouarenotgoingtoinheritanythingthenobviouslyyouneedtofindsomeotherwaytobecomerich.

9. You can become rich by investing. One of the most commoncomplaintsIhaveisthatittakesmoneytoinvest.Inaddition,inmostcasesthatis true.There is another problemwith investing.You can lose everything youinvestifyouarenotfinanciallyeducatedandtrainedtobeaninvestor.Asmanyofushaveseen,thestockmarketisriskyandvolatile,whichmeansonedayyoumakemoneyandthenextdayitcouldbeallgone.Withrealestate,althoughyoucanuseyourbanker’smoneytoinvest,itstilltakessomemoneyandeducationtoaccumulategreatwealth. In thisbook,youwill findouthow toacquire themoneytoinvest,butmoreimportantlylearnhowtobecomeaninvestorbeforeyouriskyourmoney.

10. Youcanbecomerichbybuildingabusiness.Buildingabusiness isthewaymostoftherichbecameveryrich.BillGatesbuiltMicrosoft;MichaelDellcreatedDellComputers inhisdormitoryroom.Theproblemisbuildingabusinessfromscratchremainstheriskiestofallthewaystobecomerich.Evenpurchasing a franchise, which is less risky, can be very expensive. Prices topurchasewell-known franchisesmay range from$100,000 to$1.5million justfor the rights to the franchise. On top of the initial fee, there are monthlypaymentstotheheadquarterscompanyfor training,advertisingandsupport.Inaddition,evenallthissupportisstillnoguaranteeofgreatwealth.Manytimesapersonmustcontinuetopaymoneytothefranchisororheadquarterscompany,even when his or her personal franchise is losing money. Although buying afranchise is less risky than starting your own business from nothing, statisticsshowthat1/3ofallfranchiseseventuallygobroke.

TheDifferenceBetweenBigBusinessOwnersAndSmallBusinessOwners

Beforemovingon to the11thwayofbecomingrich, Iwant todiscuss thedifference between a small business owner and a big business owner. Thedifference is that big business people build networks.Theworld is filledwithsmall business owners who own restaurants. The difference between a singlerestaurantownerandRayKrocwhofoundedMcDonaldsisthatMcDonaldsisanetwork of hamburger restaurants known as a franchise network. Anotherexampleincontrastisasmallbusinessownerwhoownsatelevisionrepairshopas compared to Ted Turner who built CNN, which stands for Cable NewsNetwork. Again, notice the word network. The point is that the differencebetweenasmallbusinessownerandabigbusinessownerissimplythesizeoftheir network. While many small business owners own businesses, very fewbusinessownersbuildnetworks.Simplyput,buildingabusinessnetworkishowtherichestpeopleintheworldbecamerich.

The11thWayToBecomeRich

11. You can build a network marketing business. The reason I put anetworkmarketingbusinessasthe11thortotallyseparatewayofbecomingrichis that it is a very new and revolutionary way to achieve wealth. If you willquicklyglanceoverthefirst10waysofbecomingrich,youmaynoticethatthefocusisaself-centeredfocusonwhobecomesrich.Inotherwords,itmightbeseenasagreedyfocus.Forexample,someonewhotriestobecomerichbybeingcheap isprimarily focusedon themselvesandmaybea few familyand friendsbecoming rich. Someone whomarries for money is definitely focused on themoney for himself or herself. Even a big business is focused on only a fewselectedpeoplebecomingrich.Whenfranchisescameouttheymadeitpossibleformorepeopletobecomebusinessownersandshareinthewealth,butinmostcasesfranchisesarereservedforonlythosewiththemoneytobuythefranchise,and,asIstatedearlier,aMcDonaldsfranchisetodaycostsoveramilliondollarstogetin.Therefore,Iamnotsayingthesepeoplearebadorgreedypeople,Iamsimplysaying that inmostcases, the focus isnotona lotofpeoplebecomingrich…thefocusisontheindividualbecomingrich.

“A network marketing business is a new andrevolutionarywaytoachievewealth.”

ThereasonIputnetworkmarketingasan11thwayofbecomingrichallbyitselfisbecauseitisarevolutionarynewwayofsharingthewealthwithanyonewhotrulywantstoacquiregreatwealth.Anetworkmarketingsystemissetuptomakeitpossibleforanyonetoshareinthewealth.Anetworkmarketingsystem,asystemIoftencallapersonalfranchiseoraninvisiblebigbusinessnetwork,is,inmyopinion,averydemocraticwayofwealthcreation.Thesystemisopentoanyone who has drive, determination and perseverance. The system does notreallycarewhatcollegeyouwentto,ifyouwenttoone,howmuchmoneyyoumake today, what race or sex you are, how good looking you are, who yourparents are, or howpopular you are.Most networkmarketing companies careprimarilyabouthowmuchyouarewillingtolearn,tochangeandtogrow,anddoyouhavethegutstostickitoutthroughthickandthinwhileyoulearntobeabusinessowner.

“Anetworkmarketing system, a system I often call apersonalfranchise,isaverydemocraticwayofwealthcreation.”

Recently,Ilistenedtoanaudiorecordingofaveryfamousandrichinvestor,delivering a speech to (the famous business school.) I do not mention theschool’snameorhisnamebecausewhatIamabouttosayisnotthatflattering.Hesaid,“Iamnotinterestedinteachingpeopletoinvest.Iamnotinterestedinhelping poor people get ahead in life. All I want to do is spend time withintelligentpeoplelikeyou,hereat(thefamousbusinessschool.)”

WhileIpersonallydonotagreewithwhathesaid,Istillcommendhimforhishonesty.Asapersonwhospentmuchofmy lifegrowingupwith the richfriends of my rich dad, I often heard such comments, but they were saiddiscreetlyandquietly.Tothepublictheywouldattendcharityeventsanddonatemoney to popular causes, but many of them did that only to appear sociallyacceptable.Intheirprivatemeetings,Ioftenheardtheirrealthoughts,thoughtsthat were of similar context to the famous investor speaking at the famousbusinessschool.

Obviously not all rich people share that attitude. Nonetheless, I amconstantly amazed at how many rich and successful people are rich andsuccessfulbecausetheyaregreedyandhaveverylittleinterestinhelpingthoselessfortunate.Again,Iwillstatethatnotallrichpeoplesharethisattitude,but

thepercentageissignificantfrommyexperience.A primary reason I support the network marketing industry is that their

systemsarefairerthanprevioussystemsofacquiringwealth.HenryFord,oneofthe world’s greatest businesspersons became rich by fulfilling the missionstatementofhiscompany,TheFordMotorCompany.Ford’smissionstatementwas “Democratize the automobile.” The reason thatmission statementwas sorevolutionary was because at the turn of the century automobiles were onlyavailablefortherich.HenryFord’sideawastomaketheautomobileaffordableforeveryone,whichiswhat“Democratizetheautomobilemeans.”Interestinglyenough, Henry Ford was an employee of Edison, and in his spare time, hedesignedhisfirstautomobile.In1903,theFordMotorCompanywasborn.Byslashing production costs, and adapting the assembly line to mass-producestandardized inexpensivecars,Fordbecame the largestautomobileproducer intheworld.Notonlydidhemakehiscaraffordable,hepaidthehighestwagesinthe industry as well as offering profit sharing plans for his workers,redistributing over $30 million dollars annually to them…and $30 milliondollarswasworthalotmoreintheearly1900sthanitistoday.

Inotherwords,HenryFordwasamanwhobecamerichbecausehecarednot only for his customers but because he cared for his workers. He was agenerous man rather than a greedy man. Henry Ford also came under muchcriticism and personal attack by the so-called intellectual society. Henry Fordwasnotwelleducatedand likeThomasEdisonwasoften ridiculedbecauseofhislackofformaleducation.

OneofmyfavoritestoriesofHenryFordwaswhenhewasaskedtosubmitto a test by so-called smart people from the world of academics. On theappointedday,agroupofsmartpeoplecame in togivehimanoral test.Theywantedtoprovehewasignorant.

The test began by one scholar asking him a question such as,what is thetensilestrengthoftherolledsteelheused?Ford,notknowingtheanswer,simplyreached for one of the many phones on his desk and he called in his VicePresidentwhoknewtheanswer.TheVicePresidentcamein,Fordaskedhimthequestion,andtheVicePresidentgavehimtheanswerthepanelwanted.Thenextsmart person then asked another question and again Ford, not knowing theanswer, called in someone else from his staff that did know the answer. Thisprocess went on until finally one of the smart persons on the panel shouted,“See, this proves you are ignorant.Youdon’t know the answers to anyof thequestionsweaskyou.”

HenryFordreportedlyreplied,“Idon’tknowtheanswersbecauseIdonotneed tocluttermyheadwith theanswersyou seek. Ihire smartyoungpeople

from your schools who have memorized the answers you expect me to havememorized. My job is to not to memorize information that you think isintelligence.Myjobistokeepmyheadclearofsuchclutterandtrivialfactssothat I can think.”At that point, he asked the smart people from theworld ofacademicstoleave.

For years, I have committed to memory what I believe is one of HenryFord’smostimportantsayingsandIquote,“Thinkingisthehardestworkthereis.Thatiswhysofewpeopleengageinit.”

“Thinkingisthehardestworkthereis.Thatiswhysofewpeopleengageinit.”

WealthForEveryone

Inmyopinion,thisnewformofbusiness,thenetworkmarketingbusiness,isa revolution simply because for the first time in history it is nowpossible foranyone and everyone to share in thewealth that up to nowhas been reservedonly for the chosen few or the lucky. I am aware that there has been somecontroversyoverthisnewformofbusinessandthebusinesshashaditsshareofgreedyandsometimescrookedpeopletryingtomakeaquickbuckviathisformofbusiness.Yet,ifyoustepbackandlookatthisnewformofbusiness,it isavery socially responsible system of sharing the wealth. A network marketingbusiness is not a goodbusiness for greedypeople.Bydesign, it is theperfectbusiness for peoplewho like helping other people. Saying it anotherway, theonly way a network marketing business works is by helping someone elsebecome rich as you become rich. To me that is revolutionary, just asrevolutionaryasThomasEdisonandHenryFordwereintheirdays.

Before closing, I know that most people are generous. I am also notcondemning greed, since a little greed and personal self-interest is alwayshealthy.Itiswhengreedorpersonalgainbecomesexcessiveiswhenmostofusprotestorshakeourheadsindisgust.Sincemostpeoplearegenerousandwanttohelptheirfellowhumanbeings,thisnewformofnetworkingbusinesssystemsgivesmorepeoplethepowertohelpmanymorepeople.Whilethisnewformofa business system is not for everyone, if you are a personwho trulywants tohelpasmanypeopleaspossibleachieve their financialgoalsanddreams, thenthenetworkmarketingbusinessisworthyofyourtimetolookintoit.

InSummary

Today there aremanyways for a person to become rich.Thebestway tobecomerichistofindthewaythatworksbestforyou.Ifyouareapersonwholoveshelpingotherpeople,Ibelievethisnewformofbusinesssystem—networkmarketing—isforyou.ThatiswhyIhaveentitledthisbookTheBusinessSchoolForPeopleWhoLikeHelpingOtherPeople.Ifhelpingotherpeopleisnotyourcupoftea,thenthereareatleast10othermethodstochoosefrom.

Inthefollowingchapters,IwillbediscussingthecorevaluesIhavefoundinmost networkmarketing companies. Inmy opinion, these core values are themostimportantforyoutoconsiderindecidingwhetherornotyouwillbeapartof this industry.Richdad taughthis sonandme that corevalues are farmoreimportantthanmoney.Heoftensaid,“Youcanbecomerichbybeingcheapandgreedy.Youcanalsobecomerichbybeingabundantandgenerous.Themethodyouchoosewillbe themethod thatmostcloselymatches thecorevaluesdeepinsideofyou.”

CHAPTER3

Value#1:TrueEqualOpportunity

Iamoftenasked,“Sinceyoudidnotbecomerichfrombuildinganetworkmarketingbusiness,whydoyourecommendothersgetintothebusiness?”Thereareseveral reasonsI recommendthenetworkmarketingbusiness,andtheyareexplainedinthisbook.

TheClosingOfMyMind

Itwassometimeduringthemid-1970safriendaskedmetoapresentationonanewbusiness opportunity.Being a personwhomakes it a habit of regularlyinvestigating business and investment opportunities, I agreed to attend themeeting. Although I thought it strange, the business meeting was to be at aprivatehomeratherthaninanoffice,Iwentalonganyway.Thatmeetingwastobemyintroductiontotheworldofnetworkmarketing.

I sat there patiently listening to the three-hour presentation. I agreedwithmostof thepointsonwhysomeoneshouldstart theirownbusiness.ThepartIdidnotpaymuchattentiontowashowthebusinesstheywerebuildingwassoverydifferent fromthebusiness Iwasbuilding.Simplyput Iwasbuildingmybusiness tomakemerichand theywere talkingaboutbuildingabusiness thatmademanypeoplerich.Atthatstageofmylife,mymindwasnotopentosuchradicalnewideas.Inmymind,abusinessissupposedtomakeonlytheownersrich.

Attheendoftheevening,thefriendaskedmewhatIthoughtofthebusinessopportunity presented.My replywas, “Itwas interesting but it’s not forme.”When my friend asked me why I was not interested I said, “I am alreadybuildingmyownbusiness.WhydoIneedtobuildabusinesswithotherpeople?WhyshouldIhelpthem?”Ithensaid,“Besides,Ihaveheardrumorsthatthese

networkmarketingbusinessesarejustpyramidschemesandareillegal.”Beforemyfriendcouldsayanythingfurther,Iwalkedoffintothenight,gotintomycar,anddroveaway.

At that stage of my life in the mid-1970s, I was building my firstinternationalbusiness.Therefore,Iwasverybusykeepingmydaytimejobandbuilding this business in my spare time. The business I was building was amanufacturing andmarketing business focused on bringing tomarket the firstnylonandVelcrosurferwallets.Soonaftermyfirstnetworkmarketingmeeting,mysportswalletbusinessboomed.Mytwoyearsofhardworkwaspayingoff.Success,fameandfortuneseemedtopourdownuponmytwopartnersandme.Wehadreachedourgoal,whichwastobecomemillionairesbeforewewere30.In the 1970s a million dollars was worth something. My company and myproductswerewritten about in suchmagazines asSurfer,Runner’sWorld andGentleman’sQuarterly. We were the hot new products in the sporting goodsworld, and business poured in from all over the world.My first internationalbusiness was up and running. Therefore, when presented with the businessopportunityanetworkmarketingbusinessofferedme,mymindwasclosedandIdidnotwant tohearanymore. Itwouldbeyearsbefore itwouldopenagain…openenoughtolistenandtobegintochangemyopinionabouttheindustry.Ididnotthinkaboutthenetworkmarketingindustryagainfor15years.

AChangeOfMind

Sometimeintheearly1990safriendIrespectforhisfinancialwisdomandhisbusinesssuccess,toldmehewasinthenetworkmarketingbusiness.Billwasalreadyverywealthyfromhisrealestateinvestments,soitpuzzledmewhyhewouldhaveanetworkmarketingbusiness.Nowcurious,Iaskedhim,“Whyareyouinthisbusiness?Youdon’tneedthemoney,doyou?”

Laughingaloud,Billsaid,“YouknowIlikemakingmoney,butIamnotinthebusinessbecauseIneedthemoney.Myfinancesareingreatshape.”

I knew thatBill had just completed commercial real estate projectsworthoverabilliondollarsinthelasttwoyears,soIalsoknewhewasdoingwell.Yethisvagueanswermadememorecurious,soIpressedonaskinghim,“So,whydoyouhaveanetworkmarketingbusiness?”

Bill thought for a long while and then began speaking in his slow Texasstyle, “For years, people have askedme for real estate investment tips. Theywant to know how to become rich by investing in real estate.Many want toknowiftheycaninvestwithmeorhowtheycanfindrealestatefornomoneydown.”

NoddinginagreementIsaid,“Iamaskedthesamequestions.”“The problem is,” said Bill continuing on, “most cannot invest with me

because they do not have enough money. They do not have the $50,000 or$100,000neededtogetintomylevelofrealestateinvestments.Inaddition,thereasonmany of themwant a no-money-down deal is thatmany of themhaveabsolutely no money at all. Some are two paychecks away from bankruptcy.Therefore, they look for thesecheapnomoneydowndeals that areoftenverybad deals.You and I know the best real estate deals go to the richwho havemoneyandnottothosewithoutmoney.”

NoddingIsaid,“Iunderstand.Irememberbeingsopoorthatnobankerorrealestateagentwouldtakemeseriously.Youmeantheydon’thaveanymoney,oriftheydohavemoney,theydon’thaveenoughmoneyforyoutohelpthem.Theyaren’trichenoughforyourinvestments?”

Billnodded,“Andontopof that, if theydohavea littlemoney, it isoftentheirlifesavings.YouknowIdonotrecommendinvestingeverythingyouhave.Ontopofthat,iftheyinvesttheirlifesavings,theyareoftensoafraidoflosingtheywinduplosing.AndyouandIknowthatapersonwhoisafraidoflosingoftenloses.”

MyconversationwithBillwentonforafewmoreminutes,butIsoonhadtodash for the airport. I was still not sure why he was in a networkmarketingbusiness,butmyclosedmindwasbeginningtoopen.Iwasbeginningtowanttoknow more about why someone as rich as he was had a network marketingbusiness. I was beginning to realize that there was something more to thebusinessthanjustthemoney.

OverthenextfewmonthsmydialoguewithBillcontinued.SlowlyIbegantounderstandhisreasonsforbeinginthebusiness.Hisprimaryreasonswere:

1. Hewanted to help people. This was hismain reason for having thisbusiness.Althoughaveryrichman,hewasnotagreedyorarrogantman.

2. Hewanted tohelphimself. “Youhave tobe rich to investwithme. Irealized that if I helped more people become rich, then I would have moreinvestors.”Bill continued, “The irony is that themore Ihelpedothersbecomerich building their own business, the more my business grew…and I becamericher. Now I have a thriving consumer distribution business, more investors,andmoremoneyofmyownto invest.Talkaboutwin-win.That iswhy in thelastfewyearsIhavebeguninvestinginmuchlargerrealestateprojects.Asyouknow, it’s hard toget really rich investing in small real estate deals. It canbedone,butifyoudon’thavemuchmoney,allyougetaretherealestatedealsthat

peoplewithmoneydon’twant.”

3. Heloveslearningandteaching.“Iloveworkingwithpeoplewhowanttolearn.”Hesaidtomeinoneofourlaterdiscussions,“Itisexhaustingworkingwith people who think they know everything. In my world of real estateinvesting,Iworkwithmanyofthosepeople.Workingwithsomeonewhothinksthey know all the answers is tough. For me, people who start a networkmarketingbusiness are looking fornewanswersand theyare ready to learn. Ilove learning, teaching business, and sharing new ideas with people excitedabouttheiron-goingeducation.Asyouknow,IhaveadegreeinaccountingandanM.B.A. in finance.Thisbusinessgivesmea chance to teachotherswhat Iknowandcontinue learningalongwitheveryoneelse.Youwouldbesurprisedhowmanyverysmart,well-educatedpeople fromdifferentbackgroundsare inthisbusiness.Therearealsomanypeoplewithoutaformaleducationwhoareinthisbusinesstogaintheeducationtheyneedtofindfinancialsecurityinaworldwithlessandlessjobsecurity.Wegettogetherandsharewhatwealreadyknowfromourlife’sexperiencesandwhatwearelearning.IloveteachingandIlovelearning, and that iswhy I love thisbusiness. It’s agreatbusiness andagreatreal-lifebusinessschool.”

ANewlyOpenedMind

Sosometimeduringtheearly1990smymindbegantoopenandmypointofviewonthenetworkmarketingindustrybegantochange.Ibegantoseethingsthatmy closedmind could not see. I began to see things thatwere good andpositiveabouttheindustryratherthanthethingsthatwerenegative…andtherearenegativestotheindustry.Butthenagain,thereissomethingnegativeaboutmostthings.

After retiring in 1994, financially free at the age of 47, I beganmy ownresearch into thenetworkmarketing industry.Anytime someone invitedme tooneofhisorherpresentations,Iwentalongjusttolistentowhatheorshehadtosay.IdidjoinafewofthenetworkmarketingcompaniesifIlikedwhattheysaid.However,Ijoinednotnecessarilytomakemoremoney,Ijoinedtotakealonghardlookatthepositivesandthenegativesofeachcompany.Insteadofjustclosingmymind,Iwantedtofindmyownanswers.After lookingintoseveralcompanies, Isawthenegatives thatmostpeopleseeat firstglancesuchas thestrangepeoplewhoinitiallycomeintotheindustryandpromotetheirbusiness.Itis true thatmanydreamers,hustlers, conmen, losers andget-rich-quickartistsare attracted to this type of business. One of the challenges of a network

marketingbusiness is that theyhaveanopendoorpolicy,whichallowsalmostanyonetojoin.Thisopen-doorpolicyisthefairandequalopportunitythatmostsocialists cry out for, yet I did not meet many hard-core socialists in thesebusinessesmeetings.These businesses are for capitalists or at least for peoplewhohopetobecomecapitalists.

“A network marketing business has an open doorpolicy.”

After getting through the masses of wannabes, hustlers and dreamers, Ifinallybeganmeetingtheleadersofsomeofthecompanies.TheonesImetweresome of the most intelligent, kind, ethical, moral, spiritual and professionalpeople I have met in all my years of business. Once I got over my ownprejudices andmet people I respected and related to, I found the heart of theindustry.IcouldnowseewhatIcouldnotseebefore.Icouldnowseethegoodandthebad.

Therefore,thisbookiswritteninparttoanswerthequestion,“Sinceyoudidnot become rich from building a network marketing business, why do yourecommend that othersget into thebusiness?” It is because I didnotgainmyfortune from building a networkmarketing business that I can be a bit moreobjectiveabouttheindustry.ThisbookdescribeswhatIseeastherealvalueofanetwork marketing business…a value that goes beyond just the potential ofmakingalotofmoney.Ifinallyfoundabusinesswithaheartandadeepcaringforpeople.

The primary reason I support the industry is that I have always hated thevaluesIfoundinthetraditionaleducationalsystem.Irememberbeingajuniorinhigh school, about 16 years old, and a teacher told a friend of mine namedMarthathatshewouldneveramounttomuchinlifebecauseshewasnotdoingwell in school. Martha was a shy and sensitive girl. I saw the words of ourteachergo straight toher soul.Marthadroppedoutof school,months shortofgraduatingfromhighschool.

The problem I have with school and the corporate world is that they aresimilar. It is a survival of the fittest value system. If a person begins to havetroubleorcannotunderstandsomething,thesystemsimplypassesthemby.Thesystemsseemtohavelosttheirheart.

WhileworkingatXeroxa friendofminehadabad threemonths insales.InsteadofhelpingRon, the salesmanagerbegan to threaten, rather than teach

Ron.Icanstillhearoursalesmanagersaying,“Ifyoudon’tsellsomethingsoon,you’llbefired.”Ronresignedaweeklater.

Therefore,anotherreasonIsupportthenetworkmarketingindustryisthatinmostcasesthecompaniesareverycompassionatebusinesses.Ifyouarewillingtostickitout,andlearnandstudyatyourownpace,thebusinesswillcontinueto stick by your side. Many network marketing companies are truly equalopportunitybusinesses.Ifyouwillinvestthetimeandeffort,sowillthey.Eventhough I did not make my fortune in a network marketing business, I willsupportanybusinessthatvalueshumancompassionandtrueequalopportunity.

InSummary

Betweentheagesof18and27,IwaseitherinamilitaryacademygainingmycollegeeducationortheU.S.MarineCorps.Inthosetwoorganizations,thevaluesaretrulyasurvivalofthefittestvaluesystem.Attheacademy,ifyougavetheteachertheanswersheorshewantedtohear,yougraduated.Ifyoudidn’t,you failed. In the Marine Corps, if you did as you were trained to do, yousurvivedincombat.Inwar,ittrulyissurvivalofthefittest.

WhenI returnedfromtheVietnamWar, I foundmyselfwanting tochangesomeofmyvalues.Ididnotwanttobegoodatplayingawin/lose…survivalofthefittest(smartest)gamewelearnatschool.Thatiswhyrichdad.com’smissionstatementis,“Toelevatethefinancialwell-beingofhumanity.”Webelievethatjustbecauseachilddoesnotdowellinschool,ordoesnotlandahighpayingjob,doesnotmeantheyhavetosufferfinanciallyalltheirlives.

Another reasonweat richdad.comsupportmany in thenetworkmarketingindustry is that we feel many, but not all, in the network marketing industryshareinthesamemission.Today,ratherthanbeatmyclassmatesattesttime,orkillmyenemyon thebattlefield, orwipeoutmycompetition in the corporateworld,Iwouldratherworkwiththosewhowanttohelpotherstoachievetheirfinancialgoalsanddreamswithouthurtingothers.Formethisisavalueworthsupporting.

Beginningin2003,richdad.comtakesourCASHFLOWforKidsboardgameandturnsitintoanelectronicgameonline.Theelectronicgamealsocomeswithaclassroomcurriculumforages5to12.Thiselectronicgameandcurriculumisdelivered over the internet “network” free of charge and free of commercialmessages.Itisourwayofgivingbacksomeofthegoodfortuneweasabusinesshave been blessed to receive. It is also ourway of reminding ourselves to begenerousratherthangreedy.

The fun and entertaining game and curriculum will teach young people

throughouttheworldthesamebasicfinancialeducationandskillsmyrichdadtaughtmeasayoungboy.Yearsago,theBeatlestaughttheworldtosing,“Allweare saying isgivepeacea chance.”Whatweat richdad.comare saying is,“Give all kids a chance.”Give all kids the equal opportunity to have a strongbasicfinancialeducation.Webelievethatoneofthebestwaystobringpeaceisbyactivelyworkingtoendpoverty.Wealsobelievethebestwaytoendpovertyisbyfinancialeducationratherthanbyfinancialhandouts.Asmyrichdadoftensaid,“Ifyougiveapoorpersonmoney,youonlykeepthempoorlonger.”

Today many network marketing companies are spreading peace througheconomic opportunity all over the world. Not only are network marketingcompaniesthrivinginallthemajorcapitalsoftheworld,butalsomanynetworkmarketingcompaniesareworkinginthethirdworld,bringingfinancialhopetomillions of people who live in impoverished countries. Most traditionalcorporationscanonlysurvivewherepeoplearerichandhavemoneytospend.Itistimethatpeopleallovertheworldhaveanequalopportunitytoenjoyarichandabundant life, rather thanspend their livesworkinghardonly tomake therich richer. If the gap between rich and poorwidens, itwill be harder to givepeaceachance.

TheNextValue

The next chapter is about the value of life changing education thatmanynetworkmarketingcompaniesoffer.Ifyouarereadytomakefinancialchangesinyourlife,thisnextchapterandvalueisforyou.

CHAPTER4

Value#2:Life-ChangingBusinessEducation

It’sNotAboutTheMoney

“Wehavethebestcompensationplan.”IoftenheardthiscommentwhenIwasinvestigatingdifferentnetworkmarketingcompanies.Thepeopleanxioustoshow me their business opportunity would tell me stories of people makinghundredsof thousandsofdollars amonthbecauseof thebusiness. Ihavealsometpeoplewhoreallydomakehundredsofthousandsofdollarsamonthfromtheir network marketing business…so I do not doubt the massive earningpotentialofanetworkmarketingbusiness.

Itistruethatthelureofmakingalotofmoneydrawsmanypeopleintothisbusiness.Yet I do not recommend looking into a networkmarketing businessprimarilyforthemoney.

It’sNotAboutTheProducts

“Wehavethebestproducts.”Thisstatementisthesecondmostemphasizedbenefit I was presented with when inspecting different network marketingcompanies. I also found it interesting how many product-focused companiessales presentations were based around the life changing testimonials. In onepresentation,die founderof thecompany toldmehowshe inventedher secretpotiontosaveherdyingmotherinIowa.Afterdoingsomeinvestigation,IfoundouthermotherneverlivedinIowaandtheproductshesaidsheinventedcamefrom a laboratory in California that private labels the product formany othercompanies.AsIsaidearlier,therearefakesandcon-men,andinthiscasecon-women,inanybusinessandprofession.

To be fair, I also found some network marketing companies with great

products…someofwhichIstillconsumeorusetoday.Thepointofthischapteris,whilegreatcompensationplansandgreatproductsareimportant,theyarenotthemostimportantaspectofthebusinesstoconsider.

ManyTypesOfBusinessesToChooseFrom

Inmyinvestigatingthedifferentnetworkmarketingcompanies,Iwastakenbycompletesurprisebyhowmanydifferentproductsorservicesaredeliveredviaanetworkmarketingsystem.

ThefirstnetworkmarketingbusinessopportunityIlookedintointhe1970ssoldvitamins.Itriedthemandfoundthemtobeexcellentqualityvitamins.Istilltake some of those vitamins today. As my search went on, I found networkmarketingbusinessesinthesemainstreamproductcategories:

1. Cosmetics,skincareandotherbeautyproducts2. Telephoneservices3. Realestateservices4. Financialservices/Insurance/MutualFunds/creditcards5. LegalServices6. Internetmarketdistribution, sellingcataloguedproducts at adiscount

(mosteverythingthatWal-Martsells)7. Healthcareproducts,vitaminsandotherwellnessrelatedproductsand

services8. Jewelry9. Taxservices10. EducationaltoysAnd the list goes on.At least once amonth, I hear about a new network

marketingcompanywithanewtwistonproductsorontheircompensationplan.

It’sTheEducationPlan

ThenumberonereasonIrecommendanetworkmarketingbusinessisforitssystem of education. I recommend investing the time to look past thecompensationandproductsandreallylookintotheheartofthecompanytoseeifitistrulyinterestedintrainingandeducatingyou.Thattakesmoretimethanjust listening to a three-hour sales pitch and looking at colorful productcataloguesandhowmuchmoneypeoplearemaking.Tofindouthowgoodtheireducation really ismay require you to get off your couch and look into theirtraining, educational seminars and events. If you likewhat you hear from theinitial presentation, take some time to actually meet the people who do the

educatingandtraining.Lookcarefully,becausemanynetworkmarketingcompaniessaytheyhave

great educationplans.Yet, I found that somedidnothave thegreat educationandtrainingsystemstheyclaimedtheydid.InsomecompaniesIlookedintotheonlytrainingtheyhadwasarecommendedbooklist,andthentheyfocusedontrainingyou to recruit your friends and family into thebusiness.So takeyourtime and look carefully becausemany networkmarketing companies do haveexcellenteducationandtrainingplans…inmyopinion,someofthebestreal-lifebusinesstrainingIhaveseenanywhere.

WhatToLookForInAnEducationPlan

If you have read my other books you already know that I come from afamilyofeducators.MydadwastheheadoftheschoolsystemsfortheStateofHawaii.AlthoughIcamefromafamilyofeducators,Idonotlikeourtraditionaleducation system. Although I received a Congressional Appointment to aprominent federal military academy in New York and graduated with myBachelorofSciencedegree,thetraditionalworldofeducationboredme.Iwentthrough the motions of being a student and graduated, but rarely was IchallengedorinterestedinwhatIwasrequiredtostudy.

After graduating from school, I joined the U.S. Marine Corps and wasacceptedintotheU.S.NavyFlightProgramatPensacola,Florida.TheVietnamWarwasonandtherewasanurgentneedtotrainmorepilots.Whileastudentpilot,Ifoundthetypeofeducationthatexcitedandchallengedme.Mostofushave heard the overused cliché, “turning caterpillars into butterflies.”Well inflightschool, that isexactlywhat theydo.WhenIenteredflightschool, Iwasalready a commissioned officerwith four years ofmilitary training.However,manyofthestudentsenteringflightschoolwerefreshfromciviliancollegesanddid resemble caterpillars. Being the era of the hippies, there were some verystrangecharactersstanding there in theircivilianclothes, longhair,beardsandmustaches, some in sandals rather than shoes, ready to begin a life-changingeducationalprogram.Iftheysurvivedthetraining,twotothreeyearslatertheywouldemergeasbutterflies—pilots ready to takeon the rigorsof someof thetoughestflyingintheworld.

ThemovieTopGun, starring TomCruise,was about the very best of thecaterpillarsthat theU.S.NavyFlightSchoolturnedintobutterflies.Justbeforegoing toVietnam I toowas stationed in SanDiego,Californiawhere theTopGunschoolislocated.AlthoughIwasnotagoodenoughpilottobeconsideredfor that prestigious school, the energy and confidence displayed by the young

pilotsinthemoviewasthewaymostofusfeltaswepreparedtogotowar.Wechangedfromscruffyyoungmenwhocouldnotfly…intoyoungmenwhoweretrained, disciplined, physically, mentally and emotionally ready to facechallengesmostpeoplewouldratheravoid.ThechangeIobservedinmyselfandinmyfellowstudentpilotsiswhatImeanwhenIsay,“life-changingeducation.”OnceIfinishedflightschoolandleftforVietnam,mylifewasneverthesame.Iwasnotthesamepersonwhoenteredflightschool.

Yearsafterflightschoolandthewar,manyofmyfellowpilotswentontobecome very successful in the world of business.When we get together andretell old war stories, we often remark the flight school training had atremendousimpactonourbusinesssuccess.

Therefore, when I speak of life-changing business education, I speak ofeducation powerful enough to change a caterpillar into a butterfly, a processoften called ametamorphosis. When you look into the educational plan of anetwork marketing company, I recommend an educational plan that has thepowertomakethatmuchofadifferenceinyourlife.

YetIcautionyou,justasinflightschool,noteveryonemakesitthroughtheprogram.

RealLifeBusinessSchool

OneofthebestthingsaboutflightschoolwasthatpilotsjustreturningfromthewarinVietnamtrainedus.Whentheyspoketous,theyspokefromreallifeexperience.OneoftheproblemsIhadwithtraditionalbusinessschool,whichIattended for a short period, was that many of the teachers had no real lifebusinessexperience.Iftheteachersdidhavereallifebusinessexperience,itwasasemployeesofacompany,mostlymiddlemanagers,ratherthanthefoundersofthecompany.

When I attended a traditional business school in Hawaii, going for myM.B.A.,IfoundthatIwasoftenattemptingtolearnsomemanagementtheoryoreconomic theory taught by some mid-level manager who worked for a largecorporation. If the teacher did not have business experience, the teacher wasoftensomeonewhohadneverlefttheschoolsystem.Inotherwordstheyenteredthe school system at age 5, entering kindergarten, andwere still in the schoolsystemtrying to teachstudentsabout therealworld.Tome, thatsystemwasajoke.

ThereasonIwenttobusinessschoolformyM.B.A.wasthatIwantedtobean entrepreneur, not an employee. Most of the mid-level managers or theteachersonthefacultyhadnoideawhatittooktostartabusinessfromnothing.

Most were not entrepreneurs. Most were employees. Most had no idea whatbusinessskills it takes tosurviveon thestreetsbecausenotmanyof themhadeverbeenonthestreetsoftherealworldofbusiness.Mostlefttheivorytowersof school and entered the ivory towers of the corporate world. Most wereaddictedtojobsecurityandtoasteadypaycheck.Inotherwords,mosthadgreatbusinesstheoriesbutfewhadgreatbusinessskills,skillsthatwouldallowthemtostartabusinessfromnothingandgoontoattaingreatwealthintherealworldofbusiness.Mostofthemcouldnotsurvivewithoutapaycheck.

I lasted 9 months in that business school and then dropped-out neverreceivingmyM.B.A.Forme,returning toa traditionalbusinessschoolformyM.B.A. was like returning to a school for caterpillars. After flight school, Iwantedtofindabusinessschoolthattaughtmetobeabutterfly.In1974whenIwasdischargedfromtheMarineCorps,Iwent tomyrichdadandhegavemethe business education I was looking for. Rich dad’s business school was abusinessschoolthatfocusedontheskillsthatmadeapersonrichratherthanthetheoriesofwhatmadeabusinessesandtheeconomyrun.Richdadoftensaid,“Skillsmakeyourich,nottheories.”

“Skillsmakeyourich,nottheories.”

DoIregretdroppingoutfrombusinessschool?Yes,sometimesIdo.YetIamalsoingoodcompanyofdropouts.BillGates,MichaelDell,SteveJobsandTedTurnerwerealsodropouts.EarlierentrepreneurssuchasThomasEdisonandHenryFordalsodroppedoutofschool.Ibelievethatalltheseentrepreneurssawtherealworldbusinessasamoreexcitingplacetogettheirrealworldbusinessexperience.Thesemenbecamemonsterbutterflies, foreverchangingtheworldofbusiness.

Don’tgetmewrong.MuchoftheinformationbeingtaughtinthebusinessschoolIattendedwasvaluableinformationforanyoneinbusiness.However,theschool was not teaching me the street-wise skills I knew I needed to be anentrepreneur.Instead,thetraditionalbusinessschoolwasteachingmetheskillstobeanemployee.Soonafterdroppingout,IbeganthefirstnylonandVelcrosurferwalletbusiness, and took itworldwidewithover500sales reps.By theage of thirty, Iwas amillionaire and then the companywent broke twoyearslater. While losing a business was not a pleasant experience, it was a greateducation.Ilearnedalotinthreeyears,notonlyaboutbusiness,butalsoaboutmyself.

Building a worldwide business and losing a worldwide business was

definitelynotaneducationbasedonbusinesstheory.Forme,itwasapricelesseducation, that ultimately made me rich, but more importantly it was aneducation thatsetmefree. Ididnotwantaneducation thatwouldhave turnedmeintoajob-seekingcaterpillarwithanM.B.A.Afterthecrash,richdadsaidtome,“Moneyandsuccessmakeyouarrogantandstupid.Nowwithsomepovertyandhumilityyoucanbecomeastudentagain.”

ThereasonIentitledthisbook,TheBusinessSchoolForPeopleWhoLikeHelping People, is what many network marketing business are. They arebusiness schools for people who want to learn the real world skills of anentrepreneur,ratherthantheskillsofanemployeewhowantstobecomeahighlypaidmid-levelmanagerinthecorporateworld.

Byattending someof thenetworkmarketingbusinesses trainings, I got tomeettheleaders,leaderswhowererealworldbusinessownersthatstartedtheirbusiness from scratch. Many were great teachers because they were teachingfromexperiencenotfromtheory.Sittingthroughmanyofthebusinessseminars,Ioftenfoundmyselfnoddinginagreementwiththeirstraighttalkaboutwhatittakes to survive on the streets of the real world of business. However, moreimportant than teaching just realworld business skills, the leaders taught realworldmental and emotional attitudes that are required to be successful in theworld.TheeducationIfoundinsomeoftheseminarswas,priceless…absolutelypriceless,especiallyforanyonewhowantstotransformintoabutterfly.

Aftertheseminars,Iwouldoftentalktotheinstructors.Iwasamazedathowmuch money they made not only from their businesses but also from theirinvestments. Several made much more than many top CEOs in corporateAmerica.TheydefinitelymademuchmorethantheinstructorsIhadwhileinatraditionalbusinessschool.

Yet therewassomethingelse to these instructors.Although theywere richand did not have to teach, they had a passion for teaching, for helping theirfellow human beings. One reason for their passion is because a networkmarketing business is based upon the leaders pulling people up, while atraditionalcorporateorgovernmentbusinessisbasedupononlypromotingafewand keeping the masses of employees content with a steady paycheck. Theseinstructors in the network marketing world were not saying, “If you don’tperform, you lose your job.” Instead, theywere saying, “Letme help you dobetterandbetter.”Theyalsowouldsay,“Takeaslongasyouwanttolearn.Aslongasyouwanttolearn,I’llbeheretoteachyou.We’reonthesameteam.”TomethatisthekindofbusinesseducationIwouldwant.

Sowhen you are looking into a networkmarketing business seek out thepeople at the top, thepeoplewho are successful in thebusiness, and then ask

yourselfifyouwanttolearnfromthem.Someof themore important real-life business subjects networkmarketing

companiesteachare:1. Anattitudeofsuccess2. Leadershipskills3. Communicationskills4. Peopleskills5. Overcomingpersonalfears,doubts,andlackofconfidence6. Overcomingthefearofrejection7. Moneymanagementskills8. Investingskills9. Accountabilityskills10. Timemanagementskills11. Goalsetting12. DressingforsuccessThe successful people I havemet in the networkmarketing business have

developed these skills from the network marketing training programs.Regardlessifyoureachthetopofthenetworkmarketingsystemormakemuchmoney,thetrainingisofgreatvaluefortherestofyourlife.Iftheeducationalplanisgood,itcanimproveyourlifeforthebetter,maybeforever.

WhatIsLife-ChangingEducation?

The following is the diagram I created to explain what I mean by life-changing education. Notice that it is a tetrahedron, whichmeans a four-sidedpolyhedron,morecommonlyknownasapyramid…andthepyramidsofEgypthave survived for centuries. Inotherwords, tetrahedronsorpyramids areverystable structures. Scholars have believed for centuries that universal law ornatureoperates in fours, in thiscase four sides.That iswhy thereare the fourseasons,whicharewinter,spring,summer,fall.Forthosewhostudyastrology,there are four primary signs, which are earth, wind, fire, and water. When Ispeak of life-changing education, the changes are again found in the numberfour. In other words, for true life-changing education to be effective, it mustaffectall fourpointsof theLearningPyramid:mental,emotional,physicalandspiritualeducation.

TheLearningPyramid

MentalEducation

Traditionaleducationfocusesprimarilyonmentaleducation.Itteachesyouskills such as reading,writing, and arithmetic, all very important skills.Theseareoftencalledcognitiveskills.WhatIpersonallydidnotlikeabouttraditionaleducationwashow it affected the emotional, physical, and spiritual aspectsofeducation.

EmotionalEducation

One of my complaints about traditional education is that it preys on theemotionoffear…morespecifically,thefearofmakingmistakes,whichleadstothefearoffailing.Insteadofinspiringmetolearn,theteacherusedthefearoffailuretomotivateme,sayingsuchthingsas,“Ifyoudon’tgetgoodgrades,youwon’tgetahigh-payingjob.”

Inaddition,whenIwas inschool, Iwaspunishedformakingmistakes. Inschool, I emotionally learned to fearmakingmistakes. The problem is, in therealworld,thepeoplewhogetaheadarethepeoplewhomakethemostmistakesandlearnfromthem.

Mypoor dad, the schoolteacher, thoughtmaking amistakewas a sin.Myrichdadon theother hand said, “Makingmistakes is howwe are designed tolearn.Welearntorideabicyclebyfallingoffandgettingbackonagain,falling

off andgettingbackon.”He also said, “It is a sin tomake amistake andnotlearnfromit.”

Explaining furtherhesaid,“Thereasonsomanypeople lieaftermakingamistake is because they are emotionally terrified of admitting they made amistake…hencetheywasteanopportunitytolearnandgrow.Makingamistake,admitting it without blaming your mistake on someone else, or justifying ormaking excuses is how we learn. Making a mistake and not admitting it, orblaming someone else for your mistakes, is a sin.” Recently we had a U.S.Presidentwho had extra-marital sex in theWhiteHouse. Inmy opinionwhatwasworsethanhavingextra-maritalsexwasthatheliedabouttheaffairwhencaught. Not only is lying a sign of weak character, it is a waste of a goodmistake,anopportunitytolearnsomething.

In the world of traditional business, the same attitude toward mistakesprevails.Intheworldofbusiness,ifyoumakeamistake,youareoftenfiredorpunished. In theworld of networkmarketing, you are encouraged to learn bymaking mistakes, correcting, and getting smarter mentally as well asemotionally.WhenIwaslearningtosellinthecorporateworld,thesalespeoplewhounderachievedwere fired. In otherwords,we lived in aworld of fear offailing, not of learning. That is why so many people in the corporate worldremaincaterpillars.Howcanapersonflywhentheyliveinacorporatecocoonwrappedtightlywiththefearoffailing?

Intheworldofnetworkmarketing,theleader’sfocusistoworkwiththosewhoarenotdoingwellandtoencouragethemtomoveup,nottofirethem.Youwouldprobablynever have learned to ride a bicycle if youwere punished forfallingoffandgivenafailinggradeinbicycleriding.

I am more financially successful than most people, not because I wassmarterthanmostpeople,butbecauseIfailedmorethanmostpeople.Inotherwords,IgotaheadbecauseImademoremistakes.Innetworkmarketing,youareencouraged to make mistakes, correct, learn and grow. To me that is life-changingeducation.Whenyouletgoofyourfearyoucanbegintofly.

Ifyouareapersonwhoisterrifiedofmakingmistakesandafraidoffailing,thenIbelieveanetworkmarketingbusinesswithagreateducationalprogramisespeciallygoodforyou.Ihavewitnessednetworkmarketingtrainingprogramsthat build and restore a person’s self-confidence…and once you have moreconfidence,yourlifeischangedforever.

PhysicalEducation

Simplyput,peopleafraidofmakingmistakesdon’tlearnmuchbecausethey

don’tdomuch.Mostpeopleknow that learning is reallyaphysicalprocessasmuchasitisamentalprocess.Readingandwritingarephysicalprocesses,justaslearningtoplaytennisisaphysicalprocess.Ifyouhavebeenconditionedtoknow all the right answers and not to make mistakes, the chances are youreducational process is hampered. How can you progress if you know all theanswersbutareterrifiedoftryinganything?

The network marketing companies I have studied all encourage physicallearningasmuchastheyencouragementallearning.Theyencourageyoutogoout and face your fears by taking action,making amistake, learning from themistake, and growing mentally, emotionally and physically stronger from theprocess.

Traditionaleducationencouragesyoutolearnthefactsandthenemotionallyteachesyoutobeafraidofmakingmistakes,whichholdsyoubackphysically.Livinginanenvironmentoffearisnothealthy,mentally,emotionally,physicallyor financially. As I have stated before, I havemoremoney not because I amacademicallysmarter,butbecauseImademoremistakes,admittedtomakingthemistake,andlearnedmylessonsfromthemistakes.Ithenwentontomakemoremistakes…and I am looking forward tomakingmoremistakes in the future…whilemostpeopleareworkinghardtomakenomoremistakesintheirfuture…whichiswhywehavedifferentfutures.Youcannotimproveyourfutureifyouarenotwillingtotrysomethingnewandriskmakingmistakesandlearningfromthem.

The best network marketing companies encourage their people to learnsomething newmentally, take action,makemistakes, learn, correct and repeattheprocess.Thatisreal-lifeeducation.

If you are afraid of making mistakes, but know you need to make somechangesinyourlife,thenagoodnetworkmarketingprogramcouldbethebestlong-term personal development program for you. A good networkmarketingcompany will take you by the hand and guide you to a life beyond fear andfailing.Inaddition,ifyoudon’twantyourhandheld,theywon’tholdit.

Ithasbeensaidthatifyouwanttochangewhatapersondoes,changethewaytheythink.Lately,morepeoplearesubscribingtotheideathatifyouwanttochangethewayaperson thinks, firstchangewhat theyaredoing.Thegreatthing about a networkmarketing business is that it focuses on bothwhat youthinkandwhatyoudo.

Thetroublewithtraditionaleducationalsystemsisthattheypunishyoufordoingthewrongthing,ratherthancorrectingwhatyouaredoing.

SpiritualEducation

First,IfeelitimportantthatIexplainmypersonalviewsbeforegoingintothisoftenhotandemotional topic. Iuse thewordspiritualversus religious forspecific reasons. Just as therearegoodnetworkmarketingcompaniesandbadnetwork marketing companies, in my opinion there are good religiousorganizations and bad religious organizations. More specifically, I have seenreligious organizations strengthen a person spiritually, and I have seen otherreligiousorganizationsweakenapersonspiritually.

Therefore,when I speakof spiritual education, itmayormaynot includereligious education. When I speak of spiritual education, I speak non-denominationally.When it comes to religion, I support theConstitutionof theUnitedStatesofAmerica,whichgrantsthefreedomofreligiouschoice.

ThereasonIamcautiousaboutthissubjectisthatIwastoldatanearlyage,“Neverdiscussreligion,politics,sex,andmoney.”Inaddition,Iagreewiththatstatementsimplybecausethesesubjectscanbevolatileandemotional.Itisnotmyintenttooffendyourpersonalfeelingsorbeliefsbuttosupportyourrightstohavethem.

BeyondHumanLimitations

WhenIspeakofaperson’sspirit,Ispeakofthepowerthatpropelsuspastourmental,emotionalandphysicallimitations…limitationsthatoftendefineourhumancondition.

While Iwas inVietnam, I sawyoungmenwoundedwhoknew theyweredying, yet they continued to fight on so others could live. A classmate fromschool that fought behind enemy lines formost of his time inVietnam said itmost accurately when he said, “I am alive today because dead men keptfighting.”Hewentontosay,“TwiceIwasinbattleswhereIwastheonlyonetocomeoutalive.Yourlifechangeswhenyourealizethatyourfriendsgavetheirlivessoyoucouldlive.”

Onnightsbeforeabattle,Iwouldsitatthebowoftheaircraftcarriersilentlyasthewavespassedbelow.Intheselongmomentsofsilence,Imadepeacewithmysoul.IrealizedthatinthemorningIwouldfacedeathagain.Itwasduringoneof these long evenings of quiet and solitude that I realized that to die thenextdaywas theeasywayout. I realized that livingwas inmanywaysmuchharderthandying.OnceIwasatpeacewiththepossibilityofeitherlifeordeath,IcouldthenchoosehowIwantedtolivemylife thenextday.Inotherwords,would I flywith courageorwould I flywith fear?Once Imademychoice, Icalledonmyhumanspirittocarrymethroughthenextday,toflyandfighttothebestofmyability,regardlessoftheoutcome.

Warisahorribleevent.Itcausespeopletodohorriblethingstootherhumanbeings.YetitwasinwarthatIalsosawtheverybestofhumanity.Itwasinwarthat I gained a sense of human power far beyond our human limitations.Moreover,weallhavethatpower.Iknowyouhaveit.

Thegoodnews is that youdon’t have togo towar towitness this power.Onedaywhilewatchinga trackmeetofphysicallychallengedyounggirlsandboys, the same human spirit touched me. When I saw young people, somewithoutlegs,sprintingwithprostheticlegs,runningwithalltheirheartandsoul,theirspirittouchedmyspirit.TearscametomyeyesasIwatchedoneyounggirlwith only one leg runningwith all her heart. I could see on her face the paincausedbyrunningonherreplacement leg;yetherphysicalpainwasnomatchforthepowerofherspirit.Althoughshedidnotwintherace,shewonmyheart.ShetouchedmyhumanspiritandremindedmeofwhatIhadforgotten.Atthatmoment,Irealizedthatalltheseyoungpeoplewererunningforallofusasmuchastheywererunningforthemselves.

Weare often remindedof thepowerof our spirit inmovies. In themovieBraveHeart,MelGibsonrides in frontofhis ragtagbandofScottishfarmers,terrified by the powerfulBritishArmy in front of them, andbellows fromhissoul, “They can kill our bodies, but they can’t take our freedom.” At thatmoment,heisspeakingfromhishumanspirittotheirs.Bytouchingtheirspirits,hewasoverpoweringtheiremotionsoffearanddoubtcausedbylackoftrainingand inferior weapons. He ignited their spirits to go on and defeat the mostpowerfularmyintheworld.

I havenoticed that the successful leaders innetworkmarketinghavebeentrainedtodevelopthisabilitytospeaktothehumanspirit.Theyhavetheabilitytotouchthegreatnessinthosecomingbehindthemandtoinspirethemtomoveup…to go beyond their human limitations, go beyond their doubts and fears.Thatisthepoweroflife-changingeducation.

Myrichdadoftensaidtome,especiallyintimeswhenIwasoutofmoney,outofself-confidence,andoutofanswers,“Therearethreepeopleinallofus.Thereisarichperson,apoorperson,andamiddleclassperson.Itisyourjobtofindoutwhichonescomeout.”Richdadalsosaid,“Theworldofbusinessandinvestingismadeupoftwoemotions.Theyaregreedandfear.Thereasonthatmostpeoplearenotrichisnotbecauseofgreed,itisbecauseoffear.Ifyouwanttobecomerich,youneedtoovercomeyourfearandfly.”Inmyopinion,thebestwaytoovercomeyourfearsisbygettingyoubackintouchwithyourspiritandthatiswhatmanynetworkmarketingcompaniesdo.

Theword educationmeans todrawout.One of the problems I havewithtraditionaleducationwasthatit isbasedonfear,thefearoffailing,ratherthan

thechallengesoflearning,learningfromourmistakes.Inmyopinion,traditionaleducationisdesignedtodrawoutthemiddleclasspersoninus…thepersonthatfeelsinsecure,needsajob,asteadypaycheck,livesinfearofmakingmistakes,andworriesaboutwhat their friendsmight thinkof themif theydosomethingdifferent.ThereasonIsupportmostofthenetworkmarketingcompaniesandIentitledthisbook,TheBusinessSchoolForPeopleWhoLikeHelpingPeople,isthat the kind of education I found in network marketing companies waseducationthatwasdesignedtodrawouttherichpersoninyou.Ivaluethatkindoflifechangingeducation.

Bytheway,Forbesmagazinedefinesarichpersonassomeonewhoearnsamilliondollarsormoreperyear.Apoorpersonisdefinedassomeonewhoearnslessthan$25,000ayear.Thequestionisnotwhatyouearntoday…thequestionis, “Isyour job trainingyou toearnoveramilliondollarsayearormore?” Ifnot,youmaywanttoseekbettereducation.

InSummary

WhenIlostmyfirstcompany,thenylonandVelcrosurferwalletbusiness,my rich dad congratulatedme.He said, “You’ve just paid for amulti-milliondollareducation.You’reonyourwaytobecomingveryrich.”Healsosaid,“Thereasonmostpeopleneverfindtherichpersoninsideofthemisbecausethepoorpersonstillthinksit’sbadtomakemistakes.”

Tomethedifferencebetweenthevaluesfoundintraditionaleducationandthevaluefoundinlifechangingeducationis thedifferencebetweenthevaluesplaced on learning from our mistakes, versus punishing people for makingmistakes, and placing value on the human spirit, a spirit powerful enough toovercomeanylackofmental,emotional,orphysicaltalents.

TheNextValue

Mypoordadvaluedjobsecurity.Myrichdadvaluedfinancialfreedom.Inthenextchapter,wewilldiscussthevalueofchangingfromapersonwhoseeksjob security to a person who seeks financial freedom. It begins by changingquadrants. In other words, you will find out why changing jobs is not lifechanging.

CHAPTER5

Value#3:FriendsWhoWillPullYouUp,NotPushYouDown

“Whatwillmy friends say?” is a question or concern I heardmany timeswhile attending the educational seminars put on by a network marketingcompany.“They’llthinkI’mcrazy”isanotheroften-heardconcernedstatement.

Formanypeople,eventhoughthebusinessopportunitymadesenseandtheywantedtomakechangesintheirfinanciallives,oneofthebiggesthurdlesofallwas what would their friends and family think if they started a networkmarketingbusiness.

Oneevening,therewasasinglemomstandinginfrontofagroupofaboutthirty guests who came to hear about the business opportunity she found innetwork marketing. The single mom was telling everyone about how herhusbandleft,leavingherwiththejobofraisingfourchildrenonherown.Ratherthangoonwelfarethisbraveyoungmothertoldthegroupabouthowshestartedanetworkmarketingbusinessandwastodayearningover$60,000ayearpart-time, raisingheryoungchildrenfull-time.She told thegroup that thebusinesshadgivenhersecurity,hope,controlofherlifeandmostimportantlytimewithher kids. In closing she said, “On top of that, in 10 more years I’ll be amillionairebecausethebusinesskeepsgrowing.IcouldneverhavedonethatifIhad keptmy old job. I could never have done thatwithout the support of thepeopleinthisbusiness.”

Forher, themoneywasnotthemostimportantthing.Forher, thebusinesshadgivenherlifeback.Shecouldonceagaindreamdreamsshehaddarednotdream for years. In a question and answer period she said, “I can provide thecollegeeducationformykids,andtheywillnotneedto takecareofmewhenI’molder.Iwillnotbeaburdentothem.Thatissucharelief.Thatissuchpeaceofmind.”

Astheeveningbrokeup,Ithankedthepersonwhowasinthebusinesswhoinvited me. Walking out the door I was asked by a young male businessexecutive,whowasalsoaguest,“Whatdidyouthink?”heasked.

“Ithoughtitwasagreatpresentation,”Ireplied.“Yesitwas.Butitsoundstoogoodtobetrue,”hesaidashesearchedforhis

keysinhisbriefcase.“Why don’t you invest a little time and find out if it is true or not?” I

suggested.“Itmightbejustwhatyou’relookingfor.”“No, I couldn’t do that.Do you knowwhatmy friends back at the office

wouldthinkifItoldthemIwasstartinganetworkmarketingbusiness?They’dlaughtheirheadsoff.Youknowhowguysare.”

Nodding,Ismiledandreplied,“YesIknowhowguysare.”Heclimbedinhiscar,Iclimbedinmine,andwedroveoffintothenight.

TheHardestJobOfAll

In1976,mynylonandVelcrosurferwalletwaslaunched.TwofriendsandIhadstarteditfromscratch,part-time,whileworkingfull-timeforXerox.IknewI could not stay with Xerox for long because the surfer wallet business wasbeginningtotakeoffandmoreandmoretimewasrequired.IcanstillremembertellingafewofthepeopleattheofficethatIwouldsoonhavetoquitmyjobatXeroxandrunthesurferwalletbusinessfulltime.

“You’recrazy!”saidoneofthemoreseniorsalespersons.“You’regoingtofail.”

“YouknowhowmanypeoplewanttoworkforXerox?”saidanotherseniorsalesperson. “You have a great job, great benefits, good pay and lots ofpromotionopportunities.Ifyoukeepyournoseclean,somedayyoucouldbeasalesmanager.Whywouldyourisklosingsuchagreatjob?”

“You’llbeback,”saidanothersalesperson.“I’veseencountlesspeoplelikeyou.Peoplewhothinkthey’rehotshots.Theyleavethecompany,failandcomebackwiththeirtailbetweentheirlegs…iftheyhaveanytailleft.”

Thegroupofsixsalesmenandtwosaleswomenlaughedwiththatcommentandwentontalkingaboutthenewcopierthecompanywascomingoutwith,andafterthattheytalkedaboutwhowasgoingtowinthebaseballgamethatnight.Irealized I had talked to the wrong people about my business and about mydreams.IrealizedIwastalkingtopeoplewhowouldpullmedownratherthanpushmeup.

Yearslater,afterthenetworkmarketingmeetingwhenthatyoungmansaidtome, “No, I couldn’t do that.You knowwhatmy friends back at the office

wouldthinkifItoldthemIwasstartinganetworkmarketingbusiness.They’dlaughtheirheadsoff.Youknowhowpeopleare.”Iknewexactlywhathewastalkingabout.

Forme,thehardestpartofleavingasecurejobandstartingabusinesswasdealingwithwhatmy friends, family and co-workerswould say or think. Forme,thatwasthehardestjobofall.

AChangeOfQuadrants,NotAChangeOfJobs

How many times have you heard people say some of the followingstatements?

1. “IwishIcouldquitmyjob.”2. “I’mtiredofgoingfromjobtojob.”3. “IwishIcouldmakemoremoney,butIcan’taffordtoquitandstartall

overwithanewcompany.AndIdon’twanttogobacktoschoolandlearnanewprofession.”

4. “EverytimeIgetapayraise,mostofmyraiseiseatenupbytaxes.”5. “I’mworkinghard,buttheonlypeoplegettingricharetheownersof

thecompany.”6. “I’mworking hard, but I’mnot getting ahead financially. I’ve got to

startthinkingaboutretirement.”7. “I’mafraidtechnologyorayoungerworkerwillmakemeobsolete.”8. “Ican’tkeepworkingthishard.I’mgettingtoooldforthis.”9. “Iwenttodentalschooltobeadentist,butIdon’twanttobeadentist

anymore.”10. “Ijustwanttodosomethingdifferentandmeetnewpeople.I’mtired

ofwastingmy time, hanging around peoplewithoutmuch ambitionand who aren’t going anywhere. I’m tired of spending time withpeoplewhoworkjusthardenough…sotheywon’tbefired,andI’malsotiredofworkingforacompanythatpaysusjustenough…sowewon’tquit.”

These are often statements made by individuals trapped in one of thequadrants of the CASHFLOWQuadrant. These are comments oftenmade bypeoplereadytochangequadrants.Unfortunately,rather thanchangequadrants,theyjustchangejobs.

WhatIsTheCASHFLOWQuadrant?

My second book in the Rich Dad series is Rich Dad’s CASHFLOW

Quadrant.Many people say that it ismymost important book, especially forpeople ready tomake changes in their life…a change far greater than simplygoingfromjobtojob.

Thediagrambelowismyrichdad’sCASHFLOWQuadrant.

TheEstandsfor“employee.”TheSstandsfor“self-employed”or“smallbusinessowner.”TheBstandsfor“businessowner.”TheIstandsfor“investor.”

HowDoYouKnowWhichQuadrantYouAreIn?

The way you know which quadrant you are in is simply from whichquadrantyourcashflows.Forexample, ifyoureceiveyour incomefromajobandyoureceivearegularpaycheckfromacompanyorbusinessyoudonotown,then your cash flows out of the E quadrant. If you receive the bulk of yourmoney from your investments, then you are an investor, a person from the Iquadrant. If you are a small business owner, a specialist such as a doctor orlawyer, a commission-only person such as a real estate agent, then you areprobablyintheSquadrant.Inaddition,ifyouownabigbusiness,acompanyorbusinessthatemploysover500people,thenyouareintheBquadrant.

DifferentQuadrants,DifferentValues

Years ago rich dad explained to me that different quadrants had differentvalues.Forexample,eventhoughapersonintheEquadrantcanbeajanitororthepresidentofthecompany,theyareunitedbythesamesetofcorevalues.ApersonintheEquadrant,regardlessiftheyarethejanitororthepresident,oftenthinksorsayswordssuchas,“Iamlookingforasafe,securejobwithbenefits.”Or,“Howmuchdowegetforovertime?”Or,“Howmanypaidholidaysdowehave?”Inotherwords,securityisaveryimportantcorevalueforsomeoneintheEquadrant.

SQuadrantValues

ForpeopleintheSquadrantthecorevalueisindependence.Theywanttheirfreedomanddowhattheywant.Whenapersonsays,“I’mgoingtoquitmyjobandgooutonmyown.”Theyareoftenheading from theEquadrant to theSquadrant.

People found in the S quadrant are small business owners,mom and popbusinesses,specialistsandconsultants.Forexample,Ihaveafriendwhoinstallsbig screen televisions, phone systems and security systems for rich people’shomes.Hehasastaffofthreeandishappytobethebossofjustthreepeople.Heisahardcore,hard-workingS.Commissionedsalespeoplesuchasrealestateand insurancebrokersare in theSquadrant.TheSquadrant isalsofilledwithprofessionalpeoplesuchasdoctors,lawyersandaccountantswhodonotbelongtoalargemedical,legal,oraccountancyfirm.

ThewayyouknowapersonintheSquadrant,isagainbytheirwords.AnSquadrant person will often say, “If you want something done right, do ityourself.”Or,“Ihavethebestproducts.”Iftheyhadathemesong,itwouldbe,“Nobodydoesitbetter.”AtthecoreoftheS,behindthefacadeofindependence,isoftenalackoftrustofotherpeople…trustthatsomeonecandoitbetterthantheycan.

ThewayanSgetspaid is oftenby commissionorby the amountof timetheyspendonajob.Forexample,anSmaybeheardsayingwordssuchas,“Mycommissionis6%ofthetotalpurchaseprice.”Or,“Icharge$100anhour.”Or,“Myfeeiscostplus10%.”

TheSquadrant person is the JohnWayneof business.Youcanhear themsaying,“I’mgoingtodoitonmyown.”

BQuadrantValues

People who start from nothing and build great B quadrant businesses areoftenpeoplewithpowerful lifemissions,valueagreat teamandefficientteamwork,andwant to serveandworkwithasmanypeopleaspossible.Earlier inthisbook,ImentionedThomasEdison,founderofGeneralElectric,HenryFord,founderofFordMotorCompany,andBillGates,founderofMicrosoft.

While a person in the S quadrant wants to be the best in their field, a Bquadrantpersonoftenislookingforotherpeoplewhoarethebestintheirfieldtojoinhisorherteam.InthepreviousexampleofHenryFord,Fordsurroundedhimselfwithpeoplesmarterthanhewas.AnSquadrantbusinesspersonisoftenthesmartestpersononasmallteam,forexampleadoctororaconsultant.

Whenitcomestobeingpaid,atrueBquadrantpersoncanleavehisorherbusiness and still get paid. Inmost cases, if someone in the S quadrant stopsworking, their income stops also. Therefore, a question youmaywant to askyourselfnowis,“IfIstopworkingtodayhowmuchincomecontinuestocomein?”Ifyourincomestopsinsixmonthsorless,thenchancesare,youareintheEorSquadrants.ApersonintheBorIquadrantcanstopworkingforyearsandthemoneywillcontinuetocomein.

IQuadrantValues

TheIquadrantvaluesfinancialfreedom.Theinvestorlovestheideaoftheirmoneyworkinginsteadofthemworking.

Investorsinvestinmanythings.Theymayinvestingoldcoins,realestate,businesses,orpaperassetssuchasstocks,bondsandmutualfunds.

Ifyourincomecomesfromcompanyorgovernmentretirementplans,ratherthan your own personal investing knowledge, then that is income from the Equadrant.Inotherwords,yourbossorthebusinessisstillpayingitsbillforyouryearsofservice.

Wordsaninvestormightbeheardsayingare,“I’mreceivinga20%returnonmyassets.”Or,“Showmethecompany’sfinancials.”Or,“Howmuchdeferredmaintenanceisontheproperty.”

DifferentQuadrants,DifferentInvestors

Intoday’sworld,weallneedtobeinvestors.However,ourschoolsystemsdonotteachusmuchaboutinvesting.Oh,Iknowthatsomeschoolsteachstockpicking,but tomethat isnot investing.Tomepickingstocks isgambling,notinvesting.

Yearsago,richdadpointedouttomethatmostemployeesinvestinmutual

fundsorsavings.Healsosaid,“Doctorsareoftentheworstinvestors.”Healsosaid, “Just because you’re successful in one quadrant, such as the E, S, or BquadrantdoesnotmeanyouwillbesuccessfulintheIquadrant.”

Richdadalsopointedout tome thatdifferentquadrants invest indifferentways.Forexample,apersonintheSquadrantmightbeheardsaying,“Idon’tinvest in real estate because I don’t want to fix toilets.” A person in the Bquadrantaddressingthesameinvestmentchallengemightsay,“Iwanttohireapropertymanagementcompanytofixmytoiletsatnight.”Inotherwords,anSquadrant investorwill think theyhave todo thepropertymaintenanceon theirownandaBquadrant investorwillhireanothercompany todo theirpropertymaintenanceforthem.Differentpeople,differentmindsets,differentquadrants,differentvalues.

If you would like to find out more about the different people who areattracted to thedifferentquadrants,youmaywant toreadbooknumber twointheRichDadseries,RichDad’sCASHFLOWQuadrant,forgreaterinsights.Asstated earlier, many people sayCASHFLOWQuadrant is the most importantbookforpeoplereadytomakechangesintheirlives.

ANetworkMarketingBusinessIsABQuadrantBusiness

Anetworkmarketingbusinessisforpeoplewhowanttoentertheworldofthe B quadrant.Why is it a B quadrant business? The answer is because thenetwork marketing business system is designed to expand to well over 500people.Also,theincomepotentialinanetworkmarketingbusinessis,intheory,unlimited,whiletheincomepotentialfortheEandSquadrantsareoftenlimited,limitedtohowmuchyouasanindividualcanproduce.Inanetworkmarketingbusiness, you can earn asmuch as your network can earn. If you build a bignetwork,youcanearnamassiveamountofmoney.

AfteryouhavebuiltalargenetworkbusinessthenextstepistomovefromtheBquadranttotheIquadrant.AtleastthatiswhatmyrichdadrecommendedIdo,andthatiswhatIdid.MyfellowsalespersonswhoscoffedatmeleavingXerox and starting my own business are still salespersons today. They neverchanged their mindset, their core values, and hence they never changed theirquadrant.TodayIknowsomeofthemareworriedaboutlosingtheirjobsandafew of them do not have enoughmoney for retirement. In other words, theyspenttoomuchtimeintheEandSquadrants.

WhatDoYouWantToBeWhenYouGrowUp?

When I was a kid, my poor dad often said, “Go to school and get goodgrades, so you canget a safe secure job.”Hewasprogrammingme for theEquadrant.

Mymotheroftensaid,“Ifyouwanttoberich,youshouldbecomeadoctoror lawyer.Thatwayyou’llalwayshaveaprofession tofallbackon.”ShewasprogrammingmefortheSquadrant.

My rich dad said, “If you want to be rich… you should mind your ownbusiness.”Richdad recommended I learn tobecomeabusinessowner and aninvestor.

WhenIreturnedfromVietnam,IhadtomakeupmymindonwhichdadIwouldlisten.LookingattheCASHFLOWQuadrant,

Ihadtoaskmyselfthisquestion,“InwhichquadrantdoIhavethemostchanceoffinancialsuccess?”KnowingthatIdidnotwanttobeanemployeeallmylife,nordidIwanttogotoschooltobecomeadoctororlawyerintheSquadrant,Iknewthatformemybestchanceswere in theBandIquadrant. IknewtheBand I quadrants were best for me simply because I wanted to be a multi-millionaireandIdidnotwanttotakeordersorworkhardallmylifeinordertoearnthosemillionsofdollars.Today,Iearnmillionsofdollarswithouthavingtogotoworkorworkharderandharder.IworklessandearnmorebecauseIusethepowerofnetworks.

Nowitisyourturntolookatthequadrants.Thequestionyoumaywantto

askyourselfis,“Whichquadrantorquadrantsarebestforme?”Oneof the reasonsmanypeople fail tobecomesuccessful in their lives is

because theydonotchangequadrants…mostpeopleonlychange jobs.That iswhyyouhearofpeoplegoingfromjobtojob,orpeoplesaying,“I’vefoundtheperfect job.” Even if they find the perfect job, they haven’t changed muchbecausetheyhaven’tchangedquadrants.

AChangeOfQuadrantsMeansAChangeOfValuesAndFriends

Oneoftheadvantagesofanetworkmarketingbusinessisthatthebusinessisfilledwithnewpeople,someofwhichmaybecomeyournewbestfriends.Forme the hardest part of leavingXeroxwas thatmost ofmy friends and familywere in the E quadrant. They had different values than I did. They valuedsecurity and a steady paycheck and I valued freedom and financialindependence.

Ifyouareconsideringmakingachangeofquadrantsandareconsideringanetworkmarketingbusiness,youhaveatremendousadvantageoverme.Atleasta network marketing business provides a large support group of like-mindedpeople,peoplewiththesamecorevalues,thevaluesoftheBquadrant,toassistyouwhileyoumakeyour transition.All Ihadwasmyrichdadandhisson toencourageme.EveryoneelsethoughtIwascrazy,andmaybeIwas.However,tostay at theXeroxCorporation just because I needed job security and a steadypaycheckwasnotenoughofareasonformetostaythere.

ThefriendsIleftbehindatXeroxarestillgreatfriends.Theywillalwaysbegreat friends because theywere there forme at a transition phase ofmy life.However,formeitwastimetomoveon.IfitistimeforyoutomoveonandtheBquadrant iscallingyou,youmaywant to joinanetworkmarketingbusinessandbegintomeetnewfriends.

WhichQuadrantAreYourFriendsIn?

Today,Ihavefriendsinallfourquadrants.YetmycorefriendsareintheBandIquadrants.OneofthechallengesincommunicatingbetweenpeopleisthatIamalwaysawareoftheirvaluesandtheirquadrant.IhavenoticedthatwhenItalkaboutbusinessorinvestingtoapersonintheEquadrant,theydonotfullyunderstandmeorwhatIsayfrightensthem.Forexample,ifIsaytosomeoneintheEquadrant,“Ilovestartingmyownbusinesses.”Theymayreply,“Isn’tthatrisky?” The point I am making is that we are speaking from different corevalues.What is exciting forme is frightening to someone else. So rather than

frightenthoseintheEandSquadrants,Italkabouttheweather,sports,orwhatisontelevision.

Manypeoplewhoarealreadyinthenetworkmarketingbusinessusemyrichdad’sCASHFLOWQuadrant as awayof explaining their business.TheywilldrawthequadrantasIhavebelow.

Theywillthenexplainthedifferencesincorevaluestoapersonwhomightbeinterestedinstartingtheirnetworkmarketingbusiness.Manyofthemreportthatbyusingthisdiagram,thepotentialnewbusinessownerfindsitmorecomfortingandmoreunderstandable.Thenewpersonhasachancetounderstandthattheyaremakingcorevaluechangesandareenteringabusinessschooltolearnhowtobeabusinessownerratherthananemployee.

Whilenotallpeoplewillstartabusiness,manypeoplewillappreciateyouruseofthequadrant,addressingthecorevalues,andofferingthemtimetomakeuptheirmind,ratherthanthehardsalespressuretostartabusiness.Ifyouwilltaketimetolookatthequadrantandweightheprosandcons,Ithinkyouwill

know that making the change from one quadrant to another is more than achangeofmind…itreallyisachangeofcorevaluesandchangingvaluesoftentakestime.

“Changingfromonequadranttoanotherisachangeofcorevalues.”

OneofthereasonsIbelievenetworkmarketingissodifficult toexplainissimplybecausethereareveryfewpeoplewhoaresuccessfulintheBquadrant.Most people, due to our schools and family values, are in either the E or Squadrants.Infact,Iwouldestimatethat80%ofthepopulationisintheEorSquadrant.Iwouldalsosay15%areintheIquadrantandthatlessthan5%ofthepopulationaregenuinely in theBquadrant. Inotherwords, thereareveryfewThomasEdison’sandBillGates’runningaroundtheplanet.ManyfamousCEOsare E quadrant, people not B quadrant. For example, the famous JackWelch,former CEO of General Electric, was still an employee of General Electric.Granted, hewas a brilliant leader, but the business owner, the founder ofGE,was a school drop out named Thomas Edison. Edison had the vision and thedrivetostartsomethingfromnothingandturnitintoagiantofabusiness.

Repeatingwhat I have said, very few people have actually been around atrueBquadrant leader.Therefore,whenpeople come tohear about abusinessopportunityfromanetworkmarketingbusiness leader, theyoftenhavenoideahowbiganopportunitytheyarelookingat.BeingaroundEsandSsmostoftheirliveshasnotallowedthemtheluxuryofthinkingthatbigsomanyfailtoseethetrue size of the opportunity being offered. At an early age, I was fortunateenough tohavemyrichdad toexpandmymind to thepowerofaBquadrantbusiness.ThatiswhyIhaveonlyhadajobforfouryearsofmylife.IhadnoplansonbeinganEoranSwhenIgrewup.IknewthequadrantsIwantedtoliveinweretheBandIquadrants.

If you decide to start a network marketing business and are talking to afriend, take the time toexplain to themthequadrantsandwhyyoumadeyourownpersonalquadrantchange.Ifyoutakethetimetoexplainthequadrantstothem,theymaybefarmoresupportivethanifyoujustblurtout,“Iamstartingapart-timebusinesswithanetworkmarketingcompany.”AsIsaid,thereasonthebusinessisoftensohardtoexplainisthatsofewpeopleknowanyoneintheBquadrant.Allmostpeoplehavearound themareEandSquadrant friendsandfamily.Sobepatientandusethequadrantstoexplainyournewperspectiveon

life.Inaddition,whoknows,ifyouarepatientanddoagoodjobexplainingthechangesyouaregoingthrough,theymightjustjoinyouonyourjourney.Justletthemknow that the journey is aprocess,not aget richquick scheme, and thejourneymaytakeyears.Ifyouareserious,Irecommenda5-yearplan.

5-YearPlan

Iamoftenasked,“Whya5-yearplan?”Thefollowingaremyreasons.Reason #1: It took years for Starbucks to be built. It took years for

McDonaldstobebuilt.ItwasyearsbeforeSonybecameanentertainmentgiant.In other words, it takes years to build great companies and great businessleaders.Mostpeopledonotthinkintermsofyears.Mostpeoplethinkintermsof immediategratificationandgettingrichquick.That iswhytherearesofewpeople in theBquadrant.Mostpeoplewantmoneybutareunwilling to investtheirtime.

As stated earlier, learning is a physical process…and physical learningsometimestakeslongerthanjustmentallearning.Forexample,youmaydecidetolearntorideabicycle,butthephysicallearningprocessmaytakelongerthanthementaldecision to learn to rideabicycle.Thegoodnews is thatonceyoulearnphysically,yougenerallyhavelearnedsomethingforever.

Reason#2:Ontheotherside,unlearningisalsoaphysicalprocess.Thereisastatementthatgoes,“Youcan’tteachanolddognewtricks.”Wellthankfully,wearehumansandnotdogs.Yetthereissometruthtotheideathattheolderweget,itissometimeshardertounlearnthingswehavespentyearslearning.OneofthereasonssomanypeoplefeelmorecomfortableintheEandSquadrantsisbecause they feel comfortable and secure there…after all, they spent yearslearninghowtobethere.So,manypeoplereturntherebecauseitiscomfortable,eventhoughthatcomfortisnotgoodforthemintheend.

Takeyourtimetobothunlearnaswellaslearn.Forsomepeople,thehardestpart of switching from the left side of the Quadrant to the right side of theQuadrant is to unlearn the point of view of theE and S quadrants.Once youhaveunlearnedwhatyouhave learned, I think thechangewillgomuch fasterandeasier.

Reason #3: All caterpillars make a cocoon before becoming butterflies.Flightschoolwasmycocoon.Ienteredflightschoolasacollegegraduateandexited flight school,apilot ready togo toVietnam. If Ihadgone toacivilianflight school, Idoubt if Iwouldhavebeen ready forwareven though Iwasapilot. What we had to learn as military pilots is different from what civilianpilotshavetolearn.Theskillsaredifferent,theintensityoftrainingisdifferent,

andtherealityofgoingtowarattheendofthetrainingmakesthingsdifferent.It tookmenearly twoyears toget throughbasic flightschool inFlorida. I

receivedmywings, whichmeant I was a pilot, and I was then transferred toadvancedflighttrainingatCampPendleton,California.Thereweweretrainedtofight more than to fly. I will not bore you with the details, but at CampPendleton,thetrainingescalatedinintensity.

Afterwehad finished flightschoolandbecamepilots,wehadoneyear toprepare to go toVietnam.To preparewe flew constantly, flying in conditionsthat tested usmentally, emotionally, physically and spiritually…again all fourpointsoftheLearningPyramid.

About eight months into the program at Camp Pendleton, somethingchanged insideofme.Duringone training flight, I finallybecameapilotwhowas ready to go to war. Up to that point in time, I was flying mentally,emotionallyandphysically.Somepeoplecall it“flyingmechanically.”On thatone training mission, I changed spiritually. The mission was so intense andfrightening that suddenly, allmydoubts and fearswere forcedoutof theway,andmyhumanspirittookover.Flyinghadbecomeapartofme.Ifeltatpeaceandathomeinsidetheaircraft.Theaircraftwaspartofme.IwasreadytogotoVietnam.

Itwasnot that Ihadnofear…forIdid.Thesamefearaboutgoing towarwasstill there.Thesamefearofdyingor,evenworse,becomingcrippledwasstillthere.ThedifferencewasthatIwasnowreadytogotowar.Myconfidenceinmyselfwasgreaterthanthefears.Inaddition,thissametypeoflife-changingeducationisfoundinmanynetworkmarketingbusinesses.

Myprocessofbecomingabusinesspersonandinvestorhasfollowedmuchthesameprocessasbecomingapilotreadytogointobattle.Ittookmyfailingtwice in business before I suddenly foundmy spirit…a spirit often called the“entrepreneurialspirit.”ItisaspiritthatkeepsmeontheBandIsidenomatterhowtoughthingsget.IstayontheBandIsideratherthanslippingbacktothesafetyandcomfortoftheEandSside.Iwouldsayittookme15yearstogaintheconfidencetofeelcomfortableintheBquadrant.

IStillUseThe5-YearPlan

WhenIdecidetolearnsomethingnew,forexample,investinginrealestate,Istillallowmyselffiveyearstolearntheprocess.WhenIwantedtolearnhowto invest in stocks, I again gavemyself five years to learn the process.Manypeople investonce, losea fewdollars,and thenquit.Theyquitafter their firstmistake,whichiswhytheyfailtolearn.Myrichdadwouldsay,“Atruewinner

knowsthat losingispartof theprocessofwinning.It isonly the losersof lifewho think thewinnersnever lose.A loser is someonewhodreamsofwinninganddoeseverythingpossibletoavoidmakingmistakes.”

TodayIstillgivemyselffiveyearstomakeasmanymistakesaspossible.Ido this because I know that the more mistakes I make and learn from…thesmarterIwillbeinfiveyears.IfImakenomistakesforfiveyears,thenIamnosmarterthanIwasfiveyearsago.Iamonlyfiveyearsolder.

MyJourneyInTheBAndIQuadrantsHasNotEnded

Personally,IhavebeenonthejourneyforyearsandIstillhavelotstolearn.Iwillprobablybeonthejourneyfor therestofmylife.Thegoodthingis themoreIlearn,themoreIearnandthelessIhavetowork.IfyouoryourfriendshavetheideathatyoucanstartanetworkmarketingbusinessandexpecttostartmakingmoneyrightawaythenyouarestillthinkinglikeapersonfromtheEorSquadrants.People in theEandSquadrantsare theoneswhomostoftenaresuckedintothegetrichquickschemesandscamsoflife.Ifyouareseriousaboutstarting your journey, I would recommend committing to a minimum of fiveyearsoflearning,growing,changingyourcorevaluesandmeetingnewfriends.Tome,thosechangesarefarmoreimportantthanafewextrabucks.

InSummary

Insummary,theadvantageofanetworkmarketingbusinessisthatnotonlydoesthebusinessprovideagreatbusinesseducation,thebusinessoftenprovidesawholenewworldoffriends,friendswhoaregoinginthesamedirectionasyouand share the same core values as you do. In addition, to me, that kind offriendshipispriceless. IknowthatIwouldnothavemadethe journeyifIhadnotmetsomegreatfriendsalongtheway.

P.S. If you should use the CASHFLOWQuadrant in your explanations, Iwouldappreciateitifyougavecredittomyrichdadforcomingupwithsuchasimple explanation of the four different people found in the world ofmoney,business and life.Years ago,my rich dad’s quadrant showedme theway to aworldmypoordaddidnotknowexisted.Ihopethequadrantdoesthesameforyou.

WhatQuadrantsAreYou,YourFriends,AndYourFamilyIn?

Beforemovingon to thenext chapter,youmaywant to takeamoment to

assessthoseclosesttoyouandtheirquadrants.

Person Quadrant(E,S,BorI)FatherMotherSpouseBrothers(listbyname)

Sisters(listbyname)

Friends(listbyname)

Whatquadrantareyouintodayandwhichquadrant(s)doyouwanttobeintomorrow?

What is your plan to change quadrants…how do you plan to gain theeducation,experience,andchangeincorevalues?

TheNextValue

The next chapter contains the value of building a network of friendswhobecomebusinessowners.

CHAPTER6

Value#4:WhatIsTheValueOfANetwork?

In1974,whileworkingfortheXeroxCorporationinHawaii,Iwashavingadifficult time selling a product known as the Xerox telecopier. I was havingtrouble selling the telecopier because itwas a newproduct.Not onlywas it arelativelynewproduct,butacommonlyaskedquestionwas,“Well,whoelsehasone?” In otherwords, having a telecopier had no valuewithout someone elsehaving a telecopier…a network of other telecopiers. Todaymost people haveneverheardofatelecopier,butmostpeoplehaveheardofafaxmachine.

Asmoreandmorepeoplebeganusingthesenewfaxmachines,thevalueofthetelecopierwentup…andsalesbecamemucheasier.Ispent4yearsstrugglingtosellthesenewmachines,investingalotoftimeexplainingwhattheywereandhowabusinesscoulduseone.Todayeverybusinessandmanyhomeshaveone.Today, insteadof spendinghours trying to explain thebenefitsof a telecopier,peoplejustchoosethemodeltheywant.Verylittleexplanationisneededexcepton how to use the machine. The point of this discussion is that the value oftelecopier,orfaxmachine,wentupinvalueonceitbecameanetwork.That iswhythischapterisonthevalueorthepowerofanetwork.

Metcalf’sLaw

RobertMetcalf is one of the people credited for creating theEthernet.Healso more recently founded the technology company 3Com Corp. He is alsocreditedfordefiningMetcalf’sLaw,whichis:

ANetwork’sEconomicValue=NumberofUsers2

StatingMetcalf’sLawinsimplerterms:

If there exists just one telephone, that single telephone really has noeconomicvalue.Themoment thereare two telephones,according toMetcalf’sLaw, theeconomicvalueof thephonenetwork isnowsquared.Theeconomicvalueofthenetworkwouldgofromzerototwo(squared)orfour.Addathirdphoneandtheeconomicvalueof thenetwork isnownine. Inotherwords, theeconomicvalueofanetworkgoesupexponentially,notarithmetically.

“The economic value of a network goes upexponentially,notarithmetically.”

TheJohnWayneBusinessman

Duringmyfather’sgeneration,JohnWaynewastherolemodelforsuccess.JohnWayneportrayedtheruggedindividualwhoneedednooneelsetogetthejobdone.EventhewayJohnWaynetreatedwomenwasinthe“MeTarzan…youJane” stereotype of relationships. Television programs during that period,programs such asLeave It ToBeaver, showedWardCleaver (Beaver’s father)goingoff toworkwithJuneCleaver(Beaver’smother)waitingathome,beingthe dutifulwife, cooking and cleaning until her knight in shining armor—herhusband—camehomewiththepaycheck.

Whilemany thingshave changed since those1950smovies and televisionshows,manyoldbusinessideasfromthaterastillexist.Today,Istillhearpeoplesay, “I’mgoing intobusiness and I’mgoing todo it onmyown.”Tome, thedoingitonyourown idea is theJohnWayne ideaofhowtoget intobusiness.Earlier Iwrote thatwhenmost people say they are going into business to dotheirownthing,theyoftenmovefromtheEquadrantintotheSquadrantratherthantheBquadrant.TodaytheSquadrantisthehomeoftheruggedindividual,theJohnWaynequadrantofbusiness.

AFranchiseIsANetwork

In the 1950s a new type of business model began to emerge, a businessmodelknownasafranchise.SomeofthemorefamousnamesinfranchisingareMcDonalds,Wendy’s,etc.Todayfranchisesarewidelyaccepted.Yetbackinthe1950s many old thinking business people, the John Wayne’s of business,criticizedfranchises,someevencallingthemillegal.Today,whereverItraveltheworld,IseethefamousfranchisessuchasMcDonaldsinBeijing,SouthAfrica,andinveryremoteplaces.Todaytheworldhasembracedfranchises.

Simplyput,afranchiseisaformofbusinessnetwork,anetworkmadeupofmultiple business ownersworking together.Todaywe all knowaMcDonald’sfranchise owner has much more horsepower than the rugged individual whostartshisorherownhamburgerstand.IfaMcDonald’slocatesneartheruggedindividual’s independenthamburgerstand,chancesare theruggedindividual issoonoutofbusinesseventhoughJohnWaynecanfryabetterhamburger.

Asinanynewbusinessstartup,anewfranchiseisnotveryvaluableuntilithasmoreandmorefranchisees.IrememberseeingthefirstMailBoxesEtc.andwonderingwhat it was. Suddenly the company had explosive growth throughaddingfranchises.ThesameistruewithStarbucks.Yearsago,IbeganhearingaboutthistinycoffeecompanywithafunnynamethatoperatedcoffeecartsinSeattle.TodayIseeStarbuckseverywhereIgo.InNewYork,theyseemtohavea Starbucks on every corner.While this incredible growth has been primarilythrough company-owned stores, not franchises, this is another example ofMetcalf’sLawatwork.

In my neighborhood, a small packaging and mail shop that had been inbusinessforyearswasforcedoutofbusinesswhenaMailBoxesEtc.franchiseopened up in the same shopping center. The same thing happened to a smallcoffee shop operator. The small coffee shop went out of business, losing toStarbucks,eventhoughthesmallcoffeeshophadgreatcoffee.Again,theruggedindividuallosestothenetworker.

TheSecondTypeOfNetworkedBusiness

In the 1970s, a new type of networked business began to take off. Thatbusiness is thebusiness thisbook is about, anetworkedbusiness that today isknownasnetworkmarketing.Insteadofanetworkoffranchisedbusinesses,itisanetworkof franchised individuals. Inotherwords,apersonal franchise.Thisnew type of networked business has also come undermuch criticismwhen itfirstbecamepopularandmillionsofpeoplebegantogetintothebusiness.Thebusinesscontinuestobecriticized.Yetinspiteofallthecriticism,thenetworkmarketing industry continues to grow faster than franchises or traditional bigbusinesses.

One of the reasons most people cannot see the rapid growth of networkmarketing is simply because network marketing is in most cases an invisiblebusiness. Unlike signs that shout McDonalds or Starbucks, most networkmarketingfranchisesoperatediscreetlyoutofhomesorsmalloffices.Ontopofthat,manysuccessfulnetwork-marketingfranchisesmakefarmoremoneythanmostfranchises.

BigBusinessIsNowInTheNetworkMarketingBusiness

At the startof thisbook, I listed someof theproductsor services that arenow delivered through a network marketing distribution system. This listincludes products such as legal services, tax services, telephone services,cosmetics, vitamins, clothing and even real estate.One of themore surprisingthingsIfoundoutonceIopenedmymindisthenumberofmajorcorporationssuchasCitibank,AOLTimeWarnerandBerkshireHathawaythathavenetworkmarketing business operations. Once I openedmymind, I realized that I hadonlybeenhearingthecriticismsofnetworkmarketingfrompeoplewhowerenotinthebusiness.Icouldnotseethebusinessasitistrulyavirtualbusiness,whichmeansitisinvisible,Icouldnotseethegrowthoftheindustry.Icouldonlyhearthecomplaintsfromoldstylebusinesspeople,ortheJohnWayne’sofbusiness.ThereasontheindustrycontinuestogrowisduetothepowerfoundinMetcalf’sLaw.

HarnessThePowerOfMetcalf’sLaw

Thebeautyofnetworkmarketingisthatithasmadeavailabletotheaverageindividual,peoplelikeyouandme,thepowerofMetcalf’sLaw…butyoumustobey the law. If you follow the principle of the law, just affiliating with anetworkmarketingcompany isagoodstart,but thatact alonedoesnotentitleyoutoharnessthepower.Itwouldbelikeyourbuyingatelephone,butyouaretheonlyonewiththetelephone.

“Your job is to clone or duplicate someone just likeyou.”

In order for you to harness the power, your job is to clone or duplicatesomeonejustlikeyou.Themomenttherearetwoofyou,youreconomicvalueissquared.Thevalueofyournetworkhasjustgonefromzerotofour.Themomentthere are threeof you, the economicvalueof your networkgoes from four tonine. If the two people you bring in also develop twomore people each, theeconomicvalueofyournetworkbegins to look likearocket takingoff for themoon. Instead of working hard arithmetically, your economic value begins togrowexponentially.Thatisthepowerandthevalueofanetworkedbusiness.

Over time, a successful networker has the potential to out-earn mostprofessional people such as doctors, lawyers, accountants, and other rugged

individuals. The difference and the power are explained through Metcalf’sLaw…averyimportantvalueofanetworkmarketingbusiness.

Inthepreviouschapter,Italkedaboutthevalueofnewfriends.IfyouwillinvestalittletimeandexplaintothemfirsttheCASHFLOWQuadrant,askingthemwhichquadranttheywanttoinvesttheirtimein,andthenexplaintothemthepowerofMetcalf’sLaw, Ibelieveyouwillhaveapersonwho is farmorereceptivetothebusinessopportunityyouarepresenting.Youmayalsowanttoexplainthefactthatnetworkmarketingisthefastestgrowingbusinessmodelintheworldtoday,eventhoughtheycannotseeitbecauseitisvirtualorinvisible.

Building a networkmarketing business is simply looking for friends, newandold,whowanttogointhesamedirectionyouwanttogo.Justlookatitasifsolvingamathproblem.Let’ssayyoubringin10people,tennewfriendsintothebusiness.Thevalueofyournetwork isnowworth100,not10. If those10peoplebringin10peopleeach…thevalueofyourbusinessexplodes.AsIsaidatthestartofthisbook,mymindwasclosedtonetworkmarketingwhenIfirstwenttoabusinessopportunitymeetingintheearly1970s.Mymindwasclosed,myeyescouldnotsee,soIdidnotrealizethepowerofthebusinessopportunitysittinginfrontofme.TodayIhaveseenthelight.IfIhadtodoitalloveragain,rather thanbuildanoldstyle typeofbusiness, Iwouldhavestartedbuildinganetworkmarketingbusiness.

ABetterIdeaThatCostsLessToGetInto

Insteadofbuildinganetworkmarketingbusiness,Ispentmillionsofdollars,and sometimes lostmillions of dollars, building an old style type of business.While Idonot regretmy journey, the journeyof learninghow tobuildanoldworldtypeofbusinessfromscratch,Icannowfaithfullysaytoyouthatbuildinganetworkmarketingbusinessmakesmoresenseformostpeople…especiallyifyou do not havemillions of dollars to build an old style type of business orhundreds of thousands of dollars to buy a famous franchise. Simply put, anetwork marketing business, with its low cost of entry and great trainingprograms,isafarbetteridea…itisanideawhosetimehascome.Thenetworkmarketing business is exploding worldwide. All you have to do is open yourmindandyouwillseeit.Youcannotseeitwithyoureyesbecausethereisverylittle to see. There are no golden arches or greenmermaids beckoning you tocome into their place of business. The business of network marketing hasexplodedthroughouttheworldandveryfewpeoplecanseeit.

TheFutureOfNetworking

Althoughthebusinesshasgrownimmensely,nowisthetimetogetintothenetworkmarketingbusiness.WhydoIsaythat?IsaythatbecausetheworldhasfinallyawakenedtotheideathattheIndustrialAgeisoverandweareofficiallyenteringtheInformationAge.BigbusinessessuchasGeneralElectricandFordMotorCompanyare IndustrialAgebusinesses.Franchises suchasMcDonaldsare transition businesses, the transition between Industrial Age and theInformation Age. Network marketing businesses are truly Information Agefranchisessimplybecausemostnetworkmarketingbusinessesrunalmostsolelyoninformation,ratherthanland,factoriesandemployees.

When I was a kid my parents always said, “Go to school, and get goodgrades, soyoucangeta securehighpaying jobwithbenefits.”That isclassicIndustrialAge thinking.My parents truly believed in job security, a companypension andmedical care aswell as government Social Security andMedicalcare.ThosearealloldideasfromtheIndustrialAge.Todaymostofusknowjobsecurityisajoke,andlifetimeemploymentwithonecompanyisnotarealityformostpeople.Thenyouaddinretirementplanssuchasa401k,filledwithriskystocks andmutual funds, the idea of retirement security is also a joke. Todaypeopleneednewideasandsystemsviawhichtheycanfindthefinancialsecurityourparentsoncehad.Oneanswerisnetworkmarketing.Themorepeoplewakeup,andmanyareaftertheSeptember11thterroristattackandthestockmarketcrash,themorepeoplewillrealizethatnetworkmarketingisanewanswerforaworldwith less and less security.Networkmarketinggivesmillions of peoplethroughout the world the opportunity to take control of their lives and theirfinancial future. That is why the networkmarketing industrywill continue togrow,eventhougholdworldthinkersfailtoseeitgrowing.

InSummary

YearsagowhenIwasayoungsalesman trying tosell the first telecopiers,todayknownasfaxmachines,Ihadalotoftroublesellingthemachinessimplybecausesofewpeoplehadone.Asthenumbersgrew,thesalebecameeasierandeasier. The more fax machines there were, the more valuable the machinebecame.ThatisthepowerofMetcalf’sLaw.

Todaythesamestrugglesinsellingtheideaaretruewithnetworkmarketing.Years agomanypeople laughedatnetworkmarketing,manybadmouthed theindustrygivingitabadname.IknowIdid.Today,withall thechanges in theworld,thefutureforthenetworkmarketingindustryisonlygettingbrighter.Asstatedearlier,manymajorcorporationstodayhaveanetworkmarketingdivision.Networkmarketinghasfinallybecomeamainstreambusinesseventhoughvery

fewpeoplerealizeit…yet.Soeventhoughyourfriendsorco-workerscannotseetheopportunity,allyouhavetodoisopenyourmindandyouwillseethepowerofMetcalf’slaw…youwillseethepowerofnetworks…thepowerthatisrightinfront of you now. All you have to do is say, “I want the power of networksworkingforme.”

TheNextValue

In the next chapter, Iwill discuss the number one business skill a personmusthaveiftheyaretobesuccessfulintherealworldofbusiness.Thebeautyofnetworkmarketing is that it teachesyou thisveryvaluableskill,askillyoucanusetoincreaseyourwealthfortherestofyourlife.

CHAPTER7

Value#5:DevelopingYourMostImportantBusinessSkill

Theyear1974wasa turningpointyear inmylife. IwasbeingdischargedfromtheU.S.MarineCorpsandwasabouttoentertherealworld.Myproblemwaswhichworldwas I going to enter?Was I going to enter theworldofmypoordadandbecomeanemployeeintheEquadrant,orwasIgoingtoentertheworldofmyrichdadandentertheworldoftheBquadrant?

As stated earlier, I had two professions with which I could have easilyentered the E quadrant. I could have gone back to the shipping industry andbecomeashipsofficer,sailingoiltankersforStandardOil,orIcouldbecomeacommercialairlinepilotasmanyofmyclassmatesdid.Bothprofessionsweretempting,butIknewIdidnotwanttobeaship’sofficerorapilotfortherestofmy life. Those days were behind me. Although a lot riskier and with fewerguarantees, Idecided to follow inmyrichdad’s footsteps rather thanmypoordad’s.

Inearly1974,beforeIwastobereleasedfromtheMarineCorps,Iwenttomyrichdadandaskedhim to trainme for theworldof theBquadrant. I stillrememberwalking intohisoffice inWaikikiandaskinghimforhisadviceforthenextphaseofmylife.Iwas26yearsoldandIknewIneededguidanceintoaworldwhere very few people have gone, theworld of theB quadrant. “WhatshouldIdo?”Iaskedhim.“WhatkindoftrainingdoIneed?”

Lookingupfromhisdesk,withoutanyhesitation,richdadsaid,“Gogetajobinsales.”

“Sales?”Iyelpedlikeadogthathadbeenkicked.“IwanttogointotheBquadrant.Idon’twanttogointosales.”

Richdadstoppedwhathewasdoing,pulledoffhisglasses,andgavemeastarefromhisupliftedeyes,andsaid,“Youaskedmewhatyoushoulddonext.I

justtoldyouwhattodonext.Ifyoudon’twanttodowhatIrecommend,getoutofmyoffice.”

“But I want to become a business owner. I don’t want to become asalesman.”Iarguedback.

“Look,” said richdad. “Howmany timesdo I have to tell you that if youcome looking for advice, then have the courtesy to listen to the advice I giveyou?Ifyoudon’twanttolistentomyadvice,thendon’taskforit.Gotit?”

“Sothenexplaintome,whysales?”Irepliedinamorehumbletone.Bothmydadsweretoughmen,andIknewthatifIwastolearnsomethingIhadbetterlistenwithrespect.“Tellmewhylearninghowtosellissoimportant?”

“Theabilitytosellisthenumberoneskillinbusiness.”

“Theabilitytosellisthenumberoneskillinbusiness,”saidrichdad.“Theability to sell is themost important skillof theBquadrant. Ifyoucannot sell,don’tbotherthinkingaboutbecomingabusinessowner.”

“Thenumberoneskill?”Iasked,repeatingwhathehadsaid.“Thebestsalespeoplearethebestleaders,”saidrichdad.“LookatPresident

Kennedy.HewasoneofthegreatestspeakersIhaveeverheard.Whenhespoke,people were inspired. That is because he had the power to speak to people’sspirits.”

“Youmeanwhen you’re speaking from the stage or on television, that issellingtoo?”Iasked.

“Ofcourse,”saidrichdad.“Andwhenyou’rewriting,orspeakingone-on-one, or speaking to your child, asking them to pick up their toys, that is allselling.Yourhighschoolteachersweretryingtoselleveryday.”

“Somedidn’tdoaverygoodjob,”Irepliedwithasmirk.“Well,thatiswhytheymaynothavebeengreatteachers.Allgreatteachers

havebeengreatsalespeople.LookatChrist,Buddha,MotherTheresa,Gandhi,Mohammed. They were all great teachers, which means they were greatsalespeople.”

“SothebetterIamatsales,themoresuccessfulinlifeIbecome?”Iasked.“Andlookatittheotherway,”repliedrichdad.“Lookatpeoplewhoarethe

leastsuccessfulinlife.Theyarethepeoplenoonewantstolistento.”“Cananyonebegoodinsales?”Iasked.“Ofcourse.Weareallbornsalespeople.Justwatchababyoryoungchild.

Iftheyarehungryandaren’tgettingwhattheywant,whatdotheydo?”

“Weareallbornsalespeople.”

“Theystartcrying,”Ireplied.“Theycommunicate.Theystartselling.”“That’sright,”saidrichdad.“Haveyouevertriedtellingachildtheycan’t

havesomething?Ifthefatherwon’tgivethemwhattheywant,theygototheirmother.Iftheirmotherwon’tgivethemwhattheywant,theygetonthephoneandcall thegrandparents.Somehow,aswegrowolder,someofus lose that ‘IcanhaveanythingIwantattitude.’Aswegrowolder,wearetoldtostopaskingforthings.Wearetoldtostopnagging,stopcomplaining,andstopbeingapest.Sowelearntostopselling.”

“Soasadultswehavetorelearnwhatwealreadyknew,”Isaid.“Ifwewant tobe able tohavewhatwewant inour lives,” said richdad.

“When Iwas about30yearsold, I realized Iwas fallingbehind in life. Iwaslacking something. I was working hard but things were not comingmy way.Soon I realized that working harder and harder was not working. I finallyacceptedthatifIdidnotmakechangesinme,Imightendupwithanemptylife.Therefore,IknewIhadtochangemyself.ItslowlydawnedonmethatIdidnotknowhow tocommunicatewithpeople.Myemployeesdidnot listen tome. Iwouldtellthemtodosomethingandtheywouldeitherdosomethingelseordonothingatall.Mycustomersdidnotunderstandme.Iwouldtellthemwhymyproductswerebetterandtheywouldstillbuyfromsomeoneelse.Iwasawkwardwhentalkingtostrangers.Iwasboringatparties.WhatIwantedtosaywasn’tbeingsaid.Mycommunicationskillswerepoor.Itsoonbecameobvioustomethat if Iwanted tobesuccessful inbusiness, Ihad to learn tosell. Ineeded tolearnbeabettercommunicator.Ineededtocomeoutofmyshell.Ihadtolearnto stopbeing afraidof people. I had to relearnwhat I onceknewas a child.”Richdadpaused for awhile,hismind seeming togoback in time.Finallyhelookedupandsaid,“Doyourememberanumberofyearsago,whenbothyouandMikewerestillinelementaryschool,IwenttoHonolulutotakeaweeklongsalescourse?”

“Iremember,”Isaid.“Mydadthoughtyouwereafoolfortakingacourseonselling.”

“Hedid?”askedrichdad.“Whatdidhesay?”“He said, ‘Whywould anyone spend somuchmoney taking a course that

youdonotgetcollegecreditfor?’”Withthat,richdadburstoutlaughing.“Ispentmylast$200attendingthat

course.However,thatcoursehasmadememillionsofdollars.Andyourdadwasonlythinkingaboutcollegecredits?”

“That’sright,”Isaidcringingalittle.“Differentvalues.Mydadwantsmorecollegedegreesandyouwantmorefinancialsuccess.”

Still chuckling, rich dad broke out his yellow legal tablet and wrote thefollowingwords.

Buy/Sell

Pointingtothewordsonthetabletrichdadsaid,“Inbusiness,thesearetwovery important words. In the stockmarket and in real estate they are alwaystalkingaboutbuy/sellagreements.Amarketaswellasabusinessrunsonbuyersandsellers.IfIhadnobuyers,Iwouldbeoutofbusiness.ThatmeansI’vegottobe continually selling.” I sell to my employees, my investors, throughadvertisingonTVandthenewspaper,inmyletters,andtomyaccountantsandattorneys.Alldaylong,I’mselling.I’vegot tokeepmyteammovingforwardandIhavetokeephappycustomerscominginandgoingoutevenhappier.Sosellingismorethantryingtogetsomebodytogivemesomemoney.”

“Iunderstandthat,”Ireplied.“Butwhyislearningtosellsoimportant.WhyistheabilitytosellthenumberoneBquadrantskill?”

“Greatquestion,”saidrichdad.“Whatmostpeoplefailtorealize,isthatthemoreyoucansell,themoreyoucanbuy.”

“What?” I asked, seeking greater clarity, knowing that I had just heardsomethingveryimportant.“ThemoreIcansellthemoreIcanbuy?”

IfYouWantToBuyYouHaveToSellSomethingFirst

Rich dad nodded, lettingme think aboutwhat I was saying and learning.“Youcanonlybuyasmuchasyoucansell,”saidrichdad.“Ifyouwanttobuysomething,youhavetosellsomethingfirst.Thatiswhyyourabilitytosellisthenumber one skill. You have to sell something first before you can buysomething.”

“SoifIcannotsell,Icannotbuy?”Iasked.Nodding,richdadsaid,“Poorpeoplearepoorbecausetheycannotsell…or

theyhavenothingtosell.Thesameistruewithpoornations.Apoornationisanationwithnothingtoselloranationthatcannotsellwhatithas.Thesameistruewithpeople.Therearemanyverytalentedpeople,buttheycannotselltheirtalents. A business that cannot sell is out of business even if it has tons ofinventory. When I find a business that is struggling financially, it is oftenbecausetheleaderofthatbusinesscannotsell.Theymaybesmart,buttheyaresimplypoorcommunicators.Ihavemetmanymiddlemanagersthatfailtoclimb

the corporate ladderbecause they cannot sell.Howmany single lonelypeoplehave you met who cannot find the man or woman of their dreams…simplybecausetheyfailtocommunicatewhatagoodpersontheyare?”

“YoumeanwhenIaskagirloutforadate,youconsiderthatselling?”“Very important selling,” said rich dad. “The world is filled with many

lonelypeopleandpoorpeople, simplybecause theywerenever taughthow tosell…how to communicate…how to overcome their fear of rejection…how tostandupagainafterbeingrejected.”

“Sosellingaffectseveryaspectoflife,”Iadded.“Thatiscorrect.ThatiswhyIspentmylastdollaranumberofyearsagoto

takeacoursetolearnhowtosell.TodayIhavemoremoneythanyourdaddoesbecausehehascollegecreditsandIhavebettersellingskills.ThatiswhyIamsayingtoyouthatifyouwanttobecomeabusinessperson,golearnhowtosell,andkeepimprovingyourabilitytosell.Thebetteryouareatselling,thericheryoubecome.”

Richdadwentontoexplainthathisaccountantsellshisprofessionalskillsforasteadypaycheck.Hesaid,“Whenapersonisapplyingforajob,heorsheisinfactselling theirprofessionalservices.”Hethenadded,“Everyoneissellingsomething.When you go back to your house, everything you have there, thestove,therefrigerator,thesofa,televisionset,beds,everything…someonesoldittoyou.Whenyoudrivedownthestreet,lookateverythingyousee.Everythingyouhave,someonesold it toyouoryoustole it. Ifyoustole it,getoutofmyoffice because I donot dobusinesswithpeoplewho steal, I dobusinesswithpeoplewhosell.”

“I did not realize sellingwas so important in business,” I said. “I did notrealizethatifIwantedtoberich,Ineededtolearnhowtosell.”

“Ifyouwanttobesuccessfulinlife,youneedtolearnhowtosell,”richdadadded. “Look at the real world. Politicians who win elections are great salespeople. Themost successful religious leaders are great sales people. The bestteachers are the best sales people. Kids are born great sales people. Get mypoint?”

“Igotit,”Isaid.“ButIamterrifiedofselling.”With that statement of truth, rich dad nodded and thought silently for a

moment. “Thank you for your honesty,” he said finally. “Most people areterrifiedofselling.Mostpeopleareterrifiedofrejection.Ratherthanadmittheirfear,theyspeakbadlyaboutsalespeoplesayingsuchthingsas,“I’mnotasalesperson,I’maneducatedprofessional.”

“Youmeanmostpeoplelieabouttheirfears,”Isaid.“Theypretendthattheactofsellingisbelowthem.”

“That’scorrect.Somanypeoplewhoareafraidofsellingwillnotadmitit.So they lookdownuponpeoplewho sell and theprofessionof sales,” repliedrichdad.“Andthepeoplewhodothatareoftenpoorpeople,poorinoneortwoareas of their lives. Often they are poor in some personal success or in love.Most peoplewho cannot sell are peoplewho have to live below theirmeans,shopatsales,orlivefrugallysimplybecausetheyareafraidofselling.Theirfearandlackofsellingskillskeepsthempoor.”

“Butaren’tmostpeopleafraidofrejection?”Iasked.

“People learn to overcome their fears rather than lettheirfearsruntheirlife.”

“Yes. Of course,” said rich dad. “That is why successful people learn toovercometheirfearsratherthanlettheirfearsruntheirlife.ThatiswhyIflewtoHonoluluwithmylastfewdollarstotakeasalescourse.Inaddition,whyIgiveyou thesameadviceIgavemyself.Myadvice is togo learn tosell. I’ll say itagain,whensomeoneispoor,unsuccessful,orlonely,itisbecauseheorshehasfailed to sell something. If you want to get what you want, you have to sellsomethingfirst.”

“SoIcanbuyanythingIwant…ifIcansell?”Iadded.Richdadnodded,“Thatiswhysellingisyourmostimportantskill.Areyou

readytolearnhowtosell?”

MySalesEducationBegins

Afterthattalk,Itookrichdad’sadviceandwassoonapplyingtobothIBMandXeroxforajob.Iappliedtothosetwocompaniesnotfortheircompensationplan but for their sales training. Many network marketing companies alsoprovide excellent training programs for their people. To me learning to sell,learningtoovercomemyfearofrejectionandlearningtogetmypointacrossisthe best education I have ever received. Learning to sell changed my life.Learningtosellchangedmyfuture.

BringingOutTheWinnerInYou

Thereismoretosalestrainingthanlearningtosell.WhenIfirststartedoutwithXerox,Iwasextremelyshy.EventhoughIhadgreattrainingwithXerox,myfearsstillpreventedmefromknockingondoorsorgettingon thephone. I

still have the same fears today. The difference is I eventually gained the self-confidencetoovercomemypersonalfears,andmakethatphonecallorknockonthedoor.IfIhadnotlearnedhowtogetovermyownpersonalfears, theloserinsideofmewouldhavewon.Richdadoftensaid,“Thereisarichpersonandapoorpersoninsideeachofus.Thereisalsoawinnerandaloserinsideofeachofus.Every timewe letour fears,ourdoubtsorour lowself-esteemwin, theloser wins. Learning to sell is learning to overcome the loser inside of you.Learningtosellalsobringsoutthewinnerinyou.”

Oneofthebeautiesofnetworkmarketingisthatitgivesyoutheopportunitytofaceyourfears,dealwithyourfears,overcomeyourfears,andletthewinnerinyouwin.Thebeautyofnetworkmarketingcompaniesisthattheleadersintheorganizationhavethepatiencetoworkwithyouwhileyouare learning.In therealworldofbusiness, ifyoucannotsell in three tosixmonths,youare fired.Xeroxwasa littlemoregenerous.Theygavemeayear to learnandayearofprobation. If I did not have the two years, I know I would have been fired.Finally, just before being fired, my self-confidence began to grow, my salesimproved,andtwoyearslater,Iwasconsistentlynumberoneornumbertwoinmy office. More important than my paycheck increasing my self-esteem wasrebuilt.Togetbackmyself-confidenceandmyself-esteemhasbeenpriceless…andithashelpedmeearnmillionsofdollars.Forthat,Iwillalwaysbegratefulto the Xerox Corporation and the staff that taught me how to sell, but moreimportantly, how to overcomemydemons, doubts and fears.Today I stronglyrecommendnetworkmarketingbecausetheindustryoffersthesameopportunityto strengthen and rebuild your self-confidence that the Xerox Corporationofferedme.

SalesTrainingHelpedMeMeetTheWomanOfMyDreams

As a side note, without my sales skills and more importantly my self-confidence,IdoubtifIwouldhavemetandmarriedthewomanofmydreams.WhenIfirstmetmywifeKim,Ithoughtshewasthemostbeautifulwomanintheworld.TodayIfindherevenmorebeautifulbecausesheisbeautifulontheoutsidebutevenmorebeautifulontheinside.

When I first saw her, I was speechless. I was afraid to walk up to her.However,thesalestrainingonhowtoovercomemyfearswasgoingtopayoff.Insteadofhidingin thebackof theroom,stuffingmyfaceat thechipanddiptable,staringatherfromafarandnottalkingtoher,whichIusedtodowheneverIsawawomanIwasattractedto,Iwalkedboldlyforwardandsaid,“Hi.”Mysalestrainingwaspayingoff.

Kimturned,smiledherbeautifulsmile,andIwasinlove.Shewasfriendly,charmingandwecould talkaboutanything.We just seemed togetalong.Shewas right out ofmy dreams. However, when I asked her out she said, “No.”Being agood salesman, I askedherout again and again she said, “No.”Eventhoughmyself-confidencewasbruisedandmymaleegofading,Iaskedheroutagain. Again the answer was, “No.” This went on for six months. For sixmonths, she said, “No.” If I hadnot learnedhow to overcomemy self-doubtsabout myself, I could never have kept asking for six months. I was hurtinginside.Each time she said, “No.” Iwent intohiding to lickmywoundedego.Aftersixmonthsofbeingrejected,myfragilemaleegowasdeflated,yetIkeptasking.Finallyonedayshesaid,“Yes”andwehavebeentogethereversince.

Whileweweredating,manyofmymalefriendskeptsaying,“Ican’tbelieveshegoesoutwithyou.She’safoxandyou’readog.Youlook like thebeautyand the beast.” Silently I could hearmy rich dad saying, “Selling is themostimportantskillinbusiness.Itisalsoyourmostimportantskillinlife.”

YoucanseeapictureofKimandmeonthebackofthebook,RetireYoungandRetireRich.ItisapictureofKimandmeonanislandinFiji,onhorseback,smiling from ear to ear, because that was the day, we celebrated becomingfinancially free. Inmyheart, I know Iwouldnot havemade it in lifewithoutKim.Sheisthewomanofmydreamsandshehasmademylifecomplete.Thisyear,2003,wecelebrate17yearsofmarriage.

AWordOnRejection

The other day I heard a commercial on the radio saying, “It’s a greatbusiness.Thereisnoselling.”Ithoughttomyself,“Whatkindofpersonwouldbeattractedtoajob,muchlessabusiness,withoutselling?”Ithenrealizedthatmost people are attracted to a job without selling…even though we all sellsomething.ThemoreIthoughtaboutit,Irealizedthatmostpeoplearen’tagainstselling,mostpeopledislikerejection. IknowIdo. Ihatebeingrejected.Sincemostpeoplehaterejection,IthoughtIwouldaddthisthought,adifferentpointofviewonthewordrejection.

OvertwentyyearsagowhenIwasastrugglingsalesrepforXerox,IwenttomyrichdadandtoldhimIhatedrejection.Isaid,“Morethanhaterejection,Ilive in fear of rejection. I findmyself doing everything possible to avoid anysituationwhereImightberejected.IsometimesthinkIwouldratherdiethanberejected.EverytimeIknockedonadoorandasecretarysaid,“Wealreadyhavea copier.” Or, “We are not interested in a new copier, especially one fromXerox.”Or,“Thebossdoesnot talk tosalesmen.”Or,“Welikeyourproposal,

butwearegoingwithyourcompetitorIBM.”Iwantedtocrawlintoaholeanddie.ThemoreIthoughtaboutbeingrejected,themoreIwanttoquitsellingandrunaway.ThemoreIrunawayfromrejection,themoremybossatXeroxsaysheisgoingtofireme.”

Rejection=Success

For me, my fear of rejection, my low self-esteem and my lack of self-confidence was ruining my life. On the surface, I appeared confident andoutgoing. I came across as JohnWayne the U.S. Marine on the outside, yettruthfully,ontheinside,IwasPeeWeeHerman.Itwasatthislowpointinmylife just before Iwas to be fired that rich dad handed down some of his bestwords ofwisdom forme.On that day, the day Iwas put on probation bymysalesmanageratXerox,richdadsaidtome,“Themostsuccessfulpeopleintheworldarethemostrejectedpeopleintheworld.”

“What?” I asked not sure if I heard the right thing. “Themost successfulpeopleintheworldarethemostrejected?”

“Youheardme,”saidrichdad.“Andontheflipside,thepeoplewhoaretheleastrejectedaretheleastsuccessful.”

“SoifIwanttobesuccessfulinlife,Ineedtoberejectedmoreandmore,”Isaid.

“Yougotit,”smiledrichdad.“Idon’tunderstand.Pleaseexplain.”Iasked.“LookatthePresidentoftheUnitedStates.Forty-ninepercentofthevoters,

millions of them, voted against him. They rejected him. Have you ever hadmillionsofpeoplerejectyou?”

“No,”Isaid.“Well,whenyoudo,youwillbefamousandsuccessful.”“Buthealsohadmillionsofpeopleaccepthim,”Iadded.“That is true,”saidrichdad.“ButcouldheeverhavebecomePresidentof

theUnitedStatesifhewasafraidofrejection?”“No,Iguessnot.Iknowtherearemanypeoplewhomorethanrejecthim.

Manypeoplehatehim.Hehastohaveguardsaroundhimbecausepeoplewanttokillhim.Idon’tthinkIcouldtakethatkindofpressure.”

“Andthatmaybewhyyoumaynotattainthekindofsuccessyouwantorarecapableof.Thepointisnoonelikesbeingrejected.Yetthelessonofthedayis thepeople thatare runningfromrejectionare the least successfulpeopleontheplanet.Thatdoesnotmeantheyarenotnicepeople, it justmeanstheyarenotassuccessfulaspeoplewhoarerejectedalot…peoplewhodonotrunfrom

rejection.”“So if Iwant to become successful in life, I need to risk beingmore and

morerejected?”Iasked.“Thatiscorrect,”saidrichdad.“LookatthePope.Heisagreatmananda

great religious leader andyet he is greatly rejected.Millions of people donotlikewhathesaysorwhathestandsfor.”

“Thatmeansratherthanactlikeawimpandletmysalesmanagerfireme,Ishouldgooutandstartgettingrejected.”

“Wellifyoudon’tstartgettingrejected,youdefinitelywillgetfired,”smiledrichdad.“Look,don’tbeafoolandrunoutintotheworldandsplatteryourfaceupagainstthewallsoflife.Yes,youdoneedtoriskbeingrejected,butyoumustalsolearnfromyourrejectionandthatmeanscorrection.”

“Rejectionandcorrection,”Isaid.Nodding,richdadwroteout theformulahelearnedfromhissales training

yearsbeforeinHonolulu,thetrainingforwhichhepaid$200.

RejectionandCorrection=EducationandAcceleration

“I have followed this formula for years. Each time I am rejected, I askmyself,‘WhatdidIdowrong?WhatcouldIhavedonebetter?IfIdon’tcomeupwith a good answer, I’ll then talk to someone about the sales call, reviewwhathappened,mayberole-play,repeatingthesituation,wheremyfriendisthebuyerandIamtheseller.ThepointisIdon’tcallthepersonwhorejectedmea“jerk,”“bum,”“cheapskate,”or“loser.”Isuspendsuchnonsenseandmentallythank the person for givingme an opportunity to learn, correct, and improvemyself,’ I ask myself. ‘Next time, how could I have handled the situationdifferentlyandbetter.’”

“Andthatleadstoyoureducationandyouraccelerationinlife,”Iadded.“Inmyopinion,itistheformulaforsuccessforanythinginlife,”saidrich

dad.“ButifIavoidrejection,theprocessdoesnotbegin?”Iasked.“Rejectionis

thestartofeducation.”Nodding,richdadsmiledandsaid,“You’vegotit.Thatiswhypeoplewho

avoid rejection are, in the long run, less successful in life than those that facerejection.Most people are not successful because they have not been rejectedenough.”

“ThemoreIriskbeingrejected,thebettermychances

areofbeingaccepted.”

“Igotit,”Isaidwithasmiletorichdad.Afewdayslater,Ivolunteeredtowork for a non-profit charitydialing for dollars on their phone team. Iwasn’tdoingitforthemoney.IwasdoingitsoIcouldhelpaworthycauseandtogetrejectedmore.IrealizedthatworkingforXerox,myrejectionsperdayweretoofew.Bydialing for dollars at night, I couldget thenumberof rejectionsup. IknewthemoreIwasrejected,themoreIcouldcorrect.ThemoreIcorrected,themoreeducatedIbecame.AndthemoreeducatedIbecame,themoresuccessfulIbecame.Threenightsaweek,afterworkatXerox,Iworkedattheofficeofthischarity.Forayear,Idialedfordollarsforfree.Inthatyear,IwentfromnearlybeingfiredfromXeroxtobecomingtheirnumberonesalespersonfor thenexttwoyears.OnceIhadachievedsalessuccessatXerox,Iresignedandwentfulltime into my then part-time nylon and Velcro surfer wallet business. I wasbeginningmy journey into the B quadrant. The lesson I learnedwas that themoreIriskbeingrejected,thebettermychancesareofbeingaccepted.

98%Rejection

Beforemovingonfromthissubjectofrejection,Ithoughtitbesttoofferyousome real world realities on the subject.When I was temporarily in businessschool,oneoftheprofessorssaid,“Tobesuccessfulinbusiness,youneedtoberightatleast51%ofthetime.”Inmyopinion,thatisinaccurateinformation.Inreality,apersoncanbeverysuccessfulwithamuchlowerpercentageofsuccess.

Forexample, in thedirectmailbusiness, ifacompanymailsout1millionpieces of mail and gets back a 2% response, that is often considered verysuccessful.Whatthatreallymeansisthat98%ofthepeoplesaid,“No.”Ninety-eight percent rejected themailing and that can still be successful. In fact, formostmass-marketcampaigns,a98%rejectionwouldbeconsideredgreat.

The lesson for you is this: if youwant to becomemore successful in life,simply seek more rejection and then correction. The beauty of a networkmarketing business is that the leaders encourage you to go out and get somerejection.Whatanopportunity.Ifyoutrulydesiregreatersuccessinlife,joinanetworkmarketing company and learn to overcome your fears of rejection. Ifyou spend 5 years doing that I would bet that the rest of your life would bevastlymore successful.At least it hasbeen forme. In fact, I continue to seekmoreandmoreopportunitiesforrejection.ThatiswhyIlearnedtobeapublicspeakerandgoontelevisionwithmyinfomercials.Todaymillionsofpeopleall

overtheworldarerejectingme.ThatiswhyIamgettingricherandricher.

TeachingVersusSelling

Network marketing offers greater challenges than Xerox did for me. ThereasonIsaythatisbecauseatXeroxallIhadtodowaslearntosell.Innetworkmarketingnotonlydoyouhavetolearntosellyoualsohavetolearntoteachotherstosell.Ifyoucansell,butyoucannotteachotherstosell,youwillnotbesuccessful in network marketing. That means the great thing about networkmarketing is that if you are going to be successful, you have to be a greatteacher.Ifyouloveteaching,youwilldowellinnetworkmarketing.

Personally, teaching is far more rewarding than just selling. To me, thebeautyof anetworkmarketingbusiness is that thebusiness trainsyou tobeateacher, not just a salesperson. If you love learning and teaching a networkmarketingbusinessisagreatbusinesstojoin.ThatiswhyIentitledthisbook,TheBusinessSchoolForPeopleWhoLikeHelpingPeople.

SalesManagersDon’tSell,TheyTeach

While Iwasdoingmymarket researchon thedifferentnetworkmarketingbusinesses,Ifoundmanysuccessfulpeoplewhoworkedveryhardandcouldsellbut they were not successful with their business. The reason they were notsuccessfulisthattheyweresellingforthosewhocouldnotsell.Forexample,Iwenttothismeetingandanewbusinessownerhadinvitedseveralofhisfriendsand family to come learnabout thebusinessopportunity.As I sat in the roomlistening to the presentation, I realized that the new business owners uplinesponsordidtheentirepresentation.Thenewbusinessownersaidnothing.

Afterthemeeting,Iaskedthenewbusinessownerifhisuplineleaderspentanytimeteachinghimthenutsandboltsofselling.Hesaid,“No.Myuplinejustwants us to get people to themeeting.He’s the only one that does the sellingbecauseheisthebestsalesperson.”

Right there I knew there was a flaw in this particular networkmarketingcompany’seducationalsystem.First,thetrainingwasajoke.Thiscompanyhada reading listbutnooneever readanyof thebooks.Secondly, itonlywantedpeople starting businesses to bring their friends and family so the bettersalespeoplecouldsellthem.Itwasnotabusinessschool.Itwasasalesschool.

WhileIwasatXerox,mysalesmanager,CharlieRobinson,wasoneofthebestteachersIhaveeverhad.IwouldmaketheappointmentsandCharliewouldgoalongonthesalescallwithme.Duringthecall,hesaidverylittle.Afterthe

call,wewouldgobacktohisofficeandwewouldanalyzethesalespresentation.We would then discuss my strong and weak points. After the lessons andcorrections,Charliewouldthenrunseveralsalestrainingdrillsandexercisestostrengthenmysales skills, especially theskillofovercoming rejection.That ishow I became a sales person. I became a sales person because I had a greatteacher. Although a great salesman himself, once Charlie became a salesmanager,hehadtobecomeateacher…andagreatteacherhewas.Thatiswhyhesatsilentlyonmostofmysalescalls.Occasionallyhewouldstepintoshowmewhattodobutmostofthetimehesatsilentlylettingmemakemymistakes.The message is: to be successful in network marketing, you have to be likeCharlieRobinson…agreatsalespersonandagreatteacher.Onceyoulearntodothat,thebusinessbecomesadreamcometrue.

SalesDogs

My dear friend of over 20 years, Blair Singer, a RichDad’sAdvisor andauthorofSalesDogs,andIhavebeensellingforyears.Webothstartedout inHawaii as junior sales representatives. He joined the Burroughs Corporation,todayknowasUnisys,aboutthesametimeIjoinedtheXeroxCorporation.Wewent through theworld of corporate sales training.One thing thatBlair and Ihave observed is thatmany networkmarketing business ownersmay learn tosell,buttheyfailbecausetheyfailtobecomegreatsalesmanagers.IntheworldofcorporateAmerica,salesmanagersareteachers,notjustsalespeople.

InhisbookSalesDogs,Blair discusses thedifferent typesof sales peoplefoundinanysalesorganizationandhoweachdogneedstobetraineddifferently.Blair says, “The reason sales training is so important in a networkmarketingbusinessisbecausenotonlydoyouhavetolearnhowtosell,youalsohavetolearnhowtoteachotherstosell.Ifyoudonotteachotherstosell,youwillnotbesuccessfulinanetworkmarketingbusiness.”

CreditCardDebt

Oneofthereasonssomanypeopleareincreditcarddebttodayisbecausethey cannot sell.When people buy things on credit, they are in reality sellingtheirfuture,sellingtheirfuturelabor.Inmanycaseswhencreditcardsareused,peoplearesellingtheirtomorrowsinordertobuysomethingtoday.Thereasonmost people are in credit card debt is that they have been taught to be greatbuyers,butnottobegreatsellers.

Ratherthansellyourtomorrows,Irecommendjoininganetworkmarketing

businessandlearnhowtosell.Ifyoulearntosellandbuildasuccessfulnetworkmarketing business, youwill be able to use your credit card to buywhat youwantandpaythecreditcardbilloffattheendofeachmonth.Tomethatmakesmoresensethansellingyourtomorrows.YouandIknowthatthereisnotmuchofafuturewhenyousellyourtomorrows.

InSummary

Simply said, the ability to sell is a very important life skill for everyone.Evenmycatsells.Infact,mycatisbetteratsalesthanmostpeopleare.Everymorning,ifIdonotfeedherwhenshe’shungry,thatlittlecatwillletmeknowwhat shewants andwhen shewants it.Humans are trained not to do that.Anetworkmarketingbusinesscanrestoreyournaturalabilitytogetwhatyouwantinlife…byteachingyouhowtosellandteachingyouhowtoteachothershowtosell.

TheNextValue

Inthenextchapter,wewillgointohowanetworkmarketingbusinesshelpsyou develop your leadership skills. My rich dad said, “In the B quadrantleadershipskillsarenotoptional.”

CHAPTER8

Value#6:Leadership

Bothmyrichdadandmypoordadweregreatleaders.MyrealdadwastheheadofeducationfortheStateofHawaii.Hewasagreatspeakerandheworkeddiligentlytoimprovethequalityofeducationforchildreninthestate.Myrichdadwasalsoagreatleader.Heinspiredhisworkersandhisinvestorstohelphimbuild a great business empire. When I returned from Vietnam, my rich dadremindedmeoftheimportanceofworkingtodevelopmyleadershipskills.Hesaid,“Leadersdowhatmostpeopleareafraidofdoing.”ThatmaybewhytherearesofewbusinessleadersintheBquadrant.Inthischapter,Iwilldiscussthevalueoftheleadershipskillsapersondevelopsinanetworkmarketingbusiness.

OneofthereasonsmyrichdadencouragedmetogointotheMarineCorps,and then on to Vietnam, was to develop my leadership skills. In Vietnam, Idiscoveredthatgreatleaderswerenottoughpeoplewhoyelledandscreamedorwere physically abusive. In the heat of battle, I found that great leaderswereoftenquiet,brave,andwhentheyspoke,theyspoketooursoulsandourspirits.One of great values of a network business is that it helps build that kind ofleadershipskillintheirleaders.

LeadershipSkillsAreNotOptional

My rich dadwould also say, “There are leaders found in every quadrant.However,youdonothave tobea leader tobesuccessful ineveryquadrant…exceptfortheBquadrant.IntheBquadrant,leadershipskillsarenotoptional.”Hewouldcontinue,“Moneydoesnotgotothebusinesswiththebestproductsor service. Money flows to the business with the best leaders and the bestmanagementteam.”

If you look at theCASHFLOWQuadrant, there are leaders found in each

quadrant.

Mypoordad,forinstance,wasadynamicleaderintheEquadrantwhilemyrichdadwasaleaderintheBandIquadrants.Fromaveryearlyage,bothdadsstressed the importance of developingmy leadership skills. That is why bothdadsrecommendedIjointheBoyScouts,playsports,andgointothemilitary.WhenIlookbackonwhattrainingbestsupportedmyprofessionalandfinancialsuccess,IwouldsayitwasnotthesubjectsIstudiedinschool,butthetrainingIreceivedinscouting,sportsandthemilitary.

In1974,asIdroveofftheMarineCorpsAirStationforthelasttime,leavingtheworldofthemilitaryandenteringtheworldofbusiness,Irememberaskingmyself,“Iwonder ifmyleadershipskillswillbegoodenough?”Thoseofyouwhoknowwhathappenedtomeafterleavingthemilitaryalreadyknowthattheleadership training I received in the scouts, sports and the military was notenoughfor thechallengesof theBquadrantbusinessworld thatawaitedme. Ihadalotmoretolearn.

Thereasonmymilitaryleadershipskillswereinadequateissimplybecausetherules,thecontextandtheenvironmentsaredifferentbetweenthemilitaryandthe business world. When preparing for war, we knew that if we were poorleaders,peopledied.Intheworldofbusiness,ifyouareapoorleader,youaresuedor someone files a complaintwithhis or her union representative. In themilitaryweweremotivatedbythefearofdying,thevalueofourteam,andthe

importance of ourmission. In the civilianworld, I often found exact oppositevaluesofmotivation.Intheworldofbusiness,itwassecurity,notfreedom,thatmotivatedpeople,moneynotmission,individualnotteam,andmanagementnotleadership.ItisduetothesedifferencesinvaluesthatIhadatoughtimeintheworldofbusinessandcontinuetostrugglewiththedifferencestoday.

Oh,Iknowthatwhenanemployeegoestothecompanyrally,themanagerstalkaboutthecompanymission,theimportanceofteamspirit,andallthoseloftyideals. Yet, in most businesses today, I have found the money, benefits andsecurityaretherealglue.WhenIbeganlookingatdifferentnetworkmarketingcompanies, I began to findmany leaders, again not all of them,who had thesamecorevaluesIfoundinmilitaryleaders.Theyvaluedtheimportanceofthemission, the team, and the importance of freedom.Most of the leaders in thenetworking business Imet, young or old,were truly inspiring. Theywere notlikemostofthemanagers,managerswhothoughttheywereleaders,Ifoundinthecorporateworld.

ManagersAreNotLeaders

Tome, one of the biggest values of a network marketing business is theleadership training you receive…a training that gives you the education, thetime, and the opportunities to develop one of your most important businessskills…the leadership skills essential for success in the B quadrant. Thoseleadership skills are very different from the management skills most oftenrequiredfortheEandSquadrants.Nowdon’tgetmewrong.Managementskillsare very important skills…but one must know the difference betweenmanagementskillsandleadershipskills…andifyouhavedevelopedthem,whentouse them.Asmyrichdadwouldsay,“Managersarenotnecessarily leadersandleadersarenotnecessarilymanagers.”

Whenever I meet someone from the E or S quadrant having difficultiesmaking the transition to the B quadrant, I often find someone with greattechnicalskills,ormanagementskills,butlittleleadershipability.Forexample,afriendofafriendcametomebecausehewantedtoraisesomemoneytostarthisownrestaurant.He isabrilliantandwell-trainedchefwithmanyyearsof finedining experience. He had a unique new concept for his restaurant, a well-written business plan, great financial projections, a great location alreadyselected,andaclientelethatwouldfollowhimtohisnewrestaurant,ifhecouldjustgetsomeonetoinvestthe$500,000heneeded.

Ithasbeenfiveyearssincehewrotehisbusinessplan…anditisagreatplan,buteveryonehehasaskedto invest inhisbusinessplan, includingmyself,has

turned him down. Today, he is still working in the same restaurant as anemployee,heisstillagreatchef,andheisstilllookingforthe$500,000instart-upcapital.Idonotknowwhytheotherinvestorsdidnotinvestwithhim,butIcantellyouwhyIdidnotinvest.ThefollowingarethereasonsIdidnotinvest.

Reason#1:Althoughhehadexperience,charm,andcharisma,helackedtheleadershipskillstoinspireconfidence.Althoughhecouldstartarestaurantandrunitsuccessfully,Idoubtedifhecouldmakeitabigrestaurantchain.Hislackof confidence said, “I’ll be successful, but I will always be small.” In otherwords,hehasgreatmanagementskills,butIdoubtifhehastheleadershipskillsrequired to make his plan work. I do not doubt that he could manage 10restaurants, but I doubt if he has the leadership skills to build a business thatbuilt10 restaurants.Heneedsabusinesspartnerwith the leadershipskillsandthe business skills, but being a typical person moving from the E to the Squadrant,hedoesnotwantpartners.Hewantstobuildhisdreambusinessonhisown.

Reason #2:When you look at the CASHFLOWQuadrant, the differencebetweentheSandBquadrantsissize.Forexample,ifyouheardsomeonesay,“Iwanttoopenahamburgerstandoncornerof6thStreetandVineStreet,”youwouldknowthatthispersonwouldmostlikelybestuckintheSquadrantforalong time.Now if you heard someone else say, “Iwant to open a hamburgerstandoneverymajorstreetcornerineverymajorcitythroughouttheworld,andIwillcallthisbusinessMcDonalds,”youwouldinstantlyknowthatthispersonplanstoopenthesamehamburgerstand,butthispersonplanstobuildabusinessin theBquadrant. Inotherwords, it is thesamehamburgerbusiness,butfromdifferentquadrants.Myrichdadwouldhavesaid,“Thedifferenceinthenumberofstreetcornersisthedifferenceofleadership.”

Therefore,Ididnot investbecauseIdoubtifIwouldhaveevergottenmyinvestmentback.Notbecausethebusinesswouldfail,IdoubtedthatIwouldgetmymoneybackbecausehewouldhaveprobablyalwaysremainedsmall,thoughsuccessful.Inaddition,ifhedidpayitback,itmighttakealongtimetogetitback.Ifyouaskmostprofessionalinvestors,theyarenotinterestedinhowgoodarestaurantis,theywanttoknowhowbigtherestaurantchainwillgrowto.

Reason #3: The third reason I did not invest is that if he was to remainsmall,thenwhyshouldIinvest?Iwouldbeexcitedtoinvestifhewasgoingtobe big, and possibly turn my $500,000 into tens of millions of dollars. Bylacking the leadershipskills tomake therestaurantbig, itwasdoubtful thathecouldturnmy$500,000intomillionsofdollars.ThatisthepriceoflackingtheleadershipskillstotakeabusinessfromtheSquadrantintotheBquadrant.Asmyrichdadsaid,“Moneydoesnotgotothebusinesswiththebestproductsor

service. Money flows to the business with the best leaders and managementteams.”

Reason#4:Thefourthreasonfornotinvestingwithhimwasbecausehehadtobethesmartestmemberonhisteam.Hehadanegoproblem.Asmyrichdadoftensaid,“Ifyou’retheleaderoftheteamandyou’realsothesmartestpersonontheteam,yourteamisintrouble.”WhatmyrichdadmeantwasthatinmanySquadrantbusinessestheheadofthebusinessisoftenthesmartestperson.Forexample, you go to see the doctor or dentist, not the receptionist, for yourmedicalanddentalneeds.

InaBquadrantbusiness,leadershipskillsareimportantsimplybecausetheBpersonhastodealwithpeoplewhoaremuchsmarter,moreexperienced,andmorecapablethanheisorsheis.Forexample,Isawmyrichdad,amanwithoutany formal education deal with bankers, lawyers, accountants, investmentadvisors, etc., in order to do his job.Most of them hadmaster’s degrees andsomedoctoratedegrees.Inotherwords,todohisjob,hehadtoleadanddirectpeoplewhowerefarmoreeducatedandeducatedinmanydifferentprofessionalfields.Inordertoraisemoneyforhisbusiness,heoftenhadtodealwithpeoplewhowerefarricherthanhewas.

“A”StudentsWorkFor“C”Students

Inmanycases,anSquadrantpersondealsonlywiththeclient,peers,suchasotherdoctorsandlawyers,andthensubordinates.Inordertomaketheswitchto the B quadrant, a quantum leap in leadership skills, not technical skills, isoftenrequired.Inotherwords,ifyouhavegreatleadershipskills,youcanaffordto hire the smart technical people a business needs to grow, people such aslawyers, accountants, CEOs, presidents, vice-presidents, engineers andmanagers. As I stated in earlier books, the “A ”students work for the “C”studentsandthe“B”studentsworkforthegovernment.Ifyouarea“C”student,and“C”standsforcommunicator,andyouhavegreatleadershipskills,youcanaffordtohirethe“A”studentswhohavegreattechnicalskills.

LeadershipIsNotOptional

OnedaythissamefriendofafriendcalledtoaskmewhyIdidnot investwith him. Imore or less told him the four reasons discussed above.Hurt anddefensive,hesaid,“ButIhavethebesttrainingintheworld.Chefsfromalloverthe world dream of attending the culinary school I attended. I have years ofexperiencenotonlyinthekitchenbutalsoinmanagingtherestaurant.Howcan

yousayIlackleadershipskills?”

“In growing a business, leadership skills are anecessity.”

Afterabitofpatientexplaining,sayingtohimthatmoney,confidenceandleadership,gohand inhand,hebegan tounderstandmypoint…yet I thinkhestillmissedalot.Finally,hesaid,“ButwhydoIneedleadershipskillswhenIhave such a great education and years of experience?”When I recommendedthathejoinanetworkmarketingcompanythattaughtbusinesseducationaswellas leadership development, he got angry and said, “I am in the restaurantbusiness. I do not need any more business education and leadershipdevelopment.”Irealizedthattohim,lifelongbusinesseducationandcontinuingleadership development were optional. To my rich dad, growing businessleadershipskillsareanecessity.Tohim,leadershipskillsarenotoptionalintheBquadrant.

TheBestTrainingInTheWorld

AsIstatedatthestartofthisbook,oneofthemostimportantvaluesIfoundin some network marketing businesses was their life-changing businesseducation. I also found someof the best business and leadership developmentprogramsintheworld.TomethevalueofthoseprogramsispricelessforthosewhowanttomovefromtheEandSquadrantintotheBquadrant.

Sincedoingmyresearch,anddroppingmyprejudicesagainsttheindustry,Ihavemetmanysuccessfulentrepreneurswhoreceivedtheirbusinesseducationin a network marketing business. Recently I met a young man who madehundredsofmillionsofdollars fromhis computerbusiness.He said tome, “Iwasjustayoungcomputerprogrammerforyears.OnedayafriendtookmetoameetingandIsignedupinhisnetworkmarketingbusiness.For6years,allIdidwasgotomeetings,attendevents,readbooksandlistentotapes.TodayIhavehundredsoftapesandpilesofbooksinmyclosetfromthosedays.NotonlydidIeventuallybecomesuccessfulinthenetworkmarketingbusiness,butalsofromwhat I learned, Iquitmyprogramming jobonce the incomefrommynetworkmarketingbusinessprovidedmeenoughresidual incomeandIstartedmyowncomputer business. Three years ago, I tookmy computer business public andmade over 48 million dollars net after tax profit. I could not have done thatwithoutthetrainingIgotfromthatnetworkmarketingcompany.Itwasthebest

businessandleadershipdevelopmenttrainingintheworld.”

LeadersSpeakToYourSpirit

In doing my research, I went to many meetings and large events. At theevents I heard some of the best business leaders speak…speaking to inspireotherstofindtheirownpersonalgreatness.AsIheardmanyoftheseindividualstell their stories of starting with nothing and eventually becoming wealthybeyond their wildest dreams, I realized that the business was doing the samethingmyrichdadtoldmetodo…andthatwastobecomealeader.Whiletheyseemedtobetalkingalotaboutmoney,theywerereallyinspiringpeopletogetoutoftheirshells,gobeyondtheirfears,andgofortheirdreams…dreamsthatmake lifeworth living.Todo that required leadership skillson thepartof thespeaker. The reason it takes leadership is becausemany people use the sametypes ofwords,words aboutdreams,more timewith family, freedom, but fewpeople are inspired enough to trust and follow the speaker of these over-usedwords.

KillingYourSpirit

Earlierinthisbook,thisdiagramwasusedinthechapteronthevalueoflifechangingeducation.Thatchaptertalkedaboutthepowerofeducationneedingtoinfluence more than just your thoughts. Life changing education affects youmentally,emotionally,spirituallyandphysically.Thefollowingisadiagramofsomeoneusingemotiontomotivateapersonintodoingsomethingphysically.

CommunicatingEmotion-To-Emotion

School for me used many mental tricks to frighten me emotionally intostudyinghardandgettinggoodgrades.AsIgrewup,Ialsofoundmanypeoplewhocouldmotivateyouusingdifferenttypesofemotionalploysinordertogetyoutodosomethingtheywantedyoutodo.

Thefollowingareexamplesofapersonusingsometypeofemotionalployintheircommunication:

1. “Ifyoudon’tgetgoodgrades,youwon’tgetagoodjob.”2. “Ifyoudon’tcometoworkontime,you’llbefired.”3. “Ifyouelectme,Iwillmakesureyoudon’tloseyourSocialSecurity

benefits.”4. “Playitsafe.Don’ttakeunnecessaryrisks.”5. “Joinmybusiness.Youcanmakealotofmoney.”6. “Letmeshowyouhowtogetrichquick.”7. “DoasItellyou.”8. “Asyouknow,thecompanyishavingaroughtime.Ifyoudon’twant

togetfired,you’dbestnotaskforaraise.”9. “Youcan’taffordtoquit.WhowillpayyouasmuchasIdo?”10. “You’ve only got eight more years to retirement. Don’t make any

waves.”

In my opinion, too much of communication today uses fear or greed to

motivatepeopleintodoingsomething.Whentheemotionsoffearandgreedaretheprimarymotivators,itkillsourspirits.

TrueLeadersInspireTheSpirit

When I was in Vietnam, there was a lot of emotionally-basedcommunication.Yetwhat ultimatelymade some of our leaders greatwas thattheycouldspeaktoourspirits.Theycouldspeakbeyondourfearsofdyingandspeakdirectly tooursouls, thatpartofus that ispowerfuland invincible.Thefollowingarewordsspokenbygreat leaders,words thatgobeyondourdoubtsandfearsandspeaktoourspirits,asthediagrambelowdepicts:

CommunicatingSpirit-To-Spirit

Youmayremembersomeof thesewords that touchedoursoulsandmanyarerecordedinhistory.

1. “The time is near at handwhichmust determinewhetherAmericansaretobefreeortobeslaves.”—GeorgeWashington

2. “Givemelibertyorgivemedeath.”—PatrickHenry3. “RemembertheAlamo.”—ATexasbattlecry4. “Fourscoreandsevenyearsago.”Andalso,“AmInotdestroyingmy

enemieswhenImakefriendsofthem?”—AbrahamLincoln

5. “You can’t hold a man down without staying down with him.”—BookerT.Washington

6. “Asknotwhatyourcountrycandoforyou…”—JohnF.Kennedy7. “Ihaveadream…”—MartinLutherKing8. “Winningisahabit.Unfortunately,soislosing.”—VinceLombardi9. “Only our individual faith in freedom can keep us free.” —Dwight

Eisenhower10. “Cowardscanneverbemoral.”—Gandhi11. “Don’tbehumble;you’renotthatgreat.”—GoldaMeir12. “Beingpowerfulislikebeingalady.Ifyouhavetotellpeopleyouare,

youaren’t.”—MargaretThatcher13. “Do not letwhat you cannot do interferewithwhat you can do.”—

JohnWooden14. “My best friend is the onewho brings out the best inme.”—Henry

Ford15. “Trynottobecomeamanofsuccess,butrathertrytobecomeamanof

value.”—AlbertEinstein

InSummary:ThreeDifferentTypesOfLeaders

Thebeautyofanetworkmarketingleadershipprogramisthatitbringsoutadifferent type of leader. Themilitary developed a type of leader that inspiredmenandwomentodefendtheircountry.Theworldofbusinessdevelopsatypeof leader that builds teams to beat the competition. In the networkmarketingworld, the typeof leader that isdevelopedisa leader that influencesothersbybeing a great teacher, teaching others to fulfill their life’s dreams by teachingothers to go for their dreams. Instead of beating the enemy or beating thecompetition,mostnetworkmarketingleaderssimplyinspireandteachotherstofindthefinancialbountythisworldofferswithoutharmtoothers.

Insummary,allthreetypesofleadershipspeaktothehumanspirit,butthedifferentleadershipstylesbringoutadifferenttypeofleader.Ifyoulovetoleadbyteaching,influencingandinspiringotherstofindtheirownworldoffinancialabundance without having to beat the competition, then a network marketingbusinessmayberightforyou.

TheNextValue

Thenextchapterisaboutthedifferenceinvaluebetweenmoneyandwealth.Unfortunately,mostpeoplehavebeentrained toworkformoneywheninstead

theyshouldbeworkingtobuildwealth.Oneofthereasonsmanypeoplearenotsuccessfulinanetworkmarketingbusinessisbecausetheycometothebusinesslooking formoney, rather than looking for an opportunity to buildwealth.Asrich dad said, “The rich don’twork formoney.Thepoor andmiddle class dothat.”

CHAPTER9

Value#7:NotWorkingForMoney

Onatalkradioprogramin2002,acalleraskedmethisquestion.

“IamanelectricalengineerwhoworksforalargeSiliconValleycomputercompany.As you know, the high-tech industry has been devastated, especiallyhereinCalifornia.IhavenotbeenfiredbutIhavebeenaskedtotakeacutinpayandworkfewerhours.YouknowhowexpensiverealestatehasbeenhereintheBayArea.Mymortgagepaymentisalmostasmuchasmyreducedpaycheck.IamafraidImight losemyhouse if Ihave to takeanotherpaycut.Ontopofthat,my retirement plan,my 401k, has been nearlywiped out.What should Ido?”

“Haveyoutriedsellingyourhouse?”wasmyfirstquestion.“Ihave,”said thecaller.“Theproblemis thevalueof thehousehasgone

downsofarthatIowemorethanthehouseisworth.IfIweretosellit,Iwouldhave to pay the buyermoney rather than them payingmemoney. Then I stillhave the same problem of where to live. Rents are as high as mortgagepayments.”

“Whatdoesyourwifedo?”Iasked.“Sheworks forachildcarecenter.They’rehaving trouble toobecause so

manyfamilieshavemovedoutofthearea.Herjobissecurebuttheydon’tpayhermuch.”

“Whydoesn’tshelookforahigherpayingjob?”Iasked.“She’dliketobutoneofthebenefitsofworkingatthechildcarecenteris

thatourtwochildrengettogothereforfree.Ifshehadtopayforchildcare,thechildcarewouldbealmostasmuchashersalaryatanothercompany.”

“Haveyouconsideredstartingapart-timehome-basedbusiness?”Iasked.“Itoldyouwedon’thaveanymoneyleft.HowcanIstartabusinesswithout

anymoney?”“Haveyouandyourwifelookedintostartinganetworkmarketingbusiness

athome?Theydon’trequiremuchmoneytogetstartedandtheywilltrainyou.”Iasked.

“Ohyeah,welookedintothosescams.Theydon’tpayanything.Theyexpectustoworkfortwotothreeyearsbeforewecanmakeanymoney.Weneedmoneytoday,nottwotothreeyearsfromnow.”

Thehostof theradioprograminterrupted to letusknowhisprogramwasout of time and the program ended. The caller and I never had a chance tocompleteourdialogue.

The reason I mention this broadcast interview is that it illustrates thedifference in core values. The caller obviously is in need ofmoney and I doempathize. As some of you know,mywife and I have been flat broke, evenhomelessforafewweeks…soIdoknowhowitfeelstoneedmoney.

YetthereasonKimandIwereabletobecomefinanciallyfreeinfewerthan10yearswassimplybecauseweknewthedifferencebetweenmoneyandwealth.If youwould like to knowmore about howKim and I went from nothing tofinanciallyfreeinfewerthan10years,thatstoryistoldintheRichDadbook,RichDad’sRetireYoungRetireRich.Inaddition,theRichDadbook,RichDad’sCASHFLOWQuadrant, beginswithKimandmebeinghomeless in 1985, theworstyearofour lives. Imention those twobooks for thoseofyouwhomayquestionmyunderstandingofhowitfeelstobebrokeandbusted.Bothbooksgointohowwegotoutofourfinancialmess.LetmeassureyouthatKimandIdoknowwhatitfeelsliketohavenothingandthatiswhyweprefertoberichandfinanciallyfree.Tous,nothavingenoughmoneytoliveonwasahorriblewaytolive.Ithurtusmorethanfinancially.Beingoutofmoneytestedourmarriage,ourself-confidence,andourself-worth.

ThreeWaysToLive

Longafterthatradioprogramwasover,thefeelingthatIwasleftwithafterthe phone call with the young father ended disturbed me. As stated in theprevious chapter, we can speak to each other spirit-to-spirit or emotion-to-emotion.Inthiscase,ourcommunicationwavelengthwastheemotionoffear.Icouldfeelhisfearandithurtformetofeelit.Iknewexactlyhowthatfearfeels.

The value described in this chapter is really about feelings. Kim and Ipersonallyknowthatwhenitcomestomoney,therearethreefeelingsandthreedifferentwaystolivewiththosefeelings.Theyare:

1. Thefeelingoffear.WhenKimandIwerehomelessandwithoutmoney,

thefeelingoffearwas,paralyzing…itwassointensethatitnumbedourentirebodies. That was the feeling I was receiving over the phone with the youngfather. Itwas also the same feeling I had as ayoungchild, growingup inmyfamily.Mymomanddadwerepoorandoutofmoneyformostoftheirmarriage.Thefeelingofnothavingenoughmoneyhungoverourfamilyformostofmychildhood.

2. Thefeelingofangerandfrustration.Thesecondwayoflivingislivingwiththeemotionofangerorfrustrationfromhavingtogetupandgotowork…especiallywhenyouwouldratherbedoingsomethingelse.Apersonwholiveswith this feelingmaybe someonewhohas a good job andhighpay, but theycannot afford to stopworking…and that is where the frustration comes from.They know if they stop, the world they live in would come crashing down.Peoplelikethismaysay,“Icannotaffordtoquit.IfIquit,thebankswouldcomeand take everything away.”These people often say, “I can’t,wait tillmynextvacation.”Or,“Only10moreyearstoretirement.”

3. Thefeelingofjoy,peaceandcontentment.Thethirdwayoflivingistolivewiththepeaceofmindofknowingthatregardlessifyouworkornot,thereis plenty of money coming in. Ever since 1994, when Kim and I sold ourbusinessandretired,thisisthefeelingwehavelived.Kimwas37andIwas47.Tomeitisafeeling,awayoflifethatisworthworkingtoattain.Whilewestillworktoday,thefeelingofnothavingtowork,tobeabletoquitanytime,andstillhave more than enough money coming in for as long as we live, is a greatfeeling.

TheDifferenceBetweenMoneyAndWealth

WhatIwantedtosaytothatyoungfatherduringtheradiointerviewwasthathis problemswould not go away if he continued towork formoney.When Isuggestedtohimthathestartanetworkmarketingbusiness,part-timeandwithhiswife,itwasthatitmightbetimeforthemtostartworkingtoacquirewealth,rather than abigger paycheck.Whenhe said, “Ohyeah,we looked into thosescams.Theydon’tpayanything.Theyexpectustoworkfortwotothreeyearsbeforewecanmakeanymoney.Weneedmoneytoday,not twoto threeyearsfromnow.”Iknewthat inorderfor thequalityofhis life tochange,hewouldneedtochangehisvalues.Inotherwords,Ihadnodoubt,thatheandhiswifewouldultimatelyfindmoremoneyandthattheywouldfindanewlife.Isuspectthat if theydidnotchange theircorevalues, theywouldremainfor therestoftheir lives in Life #2, living with anger and frustration all their lives simplybecausetheychosetoworkformoneyratherthanwealth.

WhatIsWealth?

Inpreviousbooksandotherrichdadproducts,Imentionthatwealthisnotmeasuredinmoney,insteadwealthismeasuredintime.Ourdefinitionis:

Wealthistheabilitytosurvivesomanynumberofdaysforward.

AsIsaid, it ismeasured in time.Forexample, ifall Ihave tomynameis$1,000insavingsandmylivingexpensesare$100aday,thenmywealthis10days.Ifmylivingexpensesare$50thenmywealthis20days.Thatisanoverlysimplified example explaining this definition of wealth; and again wealth ismeasuredintimeratherthanmoney.Healthandwealtharesimilarbecausebotharemeasuredintime.Wehaveallheardstoriesofadoctorsayingtosomeone,“Youhavesixmonthstolive.”Thedoctorisgivingthepatientanassessmentofhis or her health asmeasured in time. I know a personwho is so far behindfinancially that he measures his wealth saying, “I am negative two monthswealthy.” In other words, he is truly living on borrowed time and borrowedmoney.

It has been said that the average American family is less than threepaychecksawayfromfinancialdisaster.Iftheaveragepayperiodistwoweeks,or14days, thatmeans, theaverageAmericanfamilyis44dayswealthy.Afterthat, their standardof livinggoesdown.That is theproblemwithworking formoney,ratherthanforwealth.

Beforemovingon,youmaywanttoaskyourselfthisquestion.“IfI(andifmarried, your spouse and you) stopworking today, how long could I survivefinancially?” Your answer is your wealth today. The good news is that yourwealthcanbegreatlyincreasedevenifyoudonotmakemuchmoneytoday.

NetworkMarketingTeachesYouToWorkForWealth

Duringmyperiodofresearchingthedifferentnetworkmarketingcompanies,oneof thehardest valuepoints the speakers had to explainwas thedifferencebetweenworkingformoneyandworkingforwealth.

In one of the opportunitymeetings Iwent to, a guest raised his hand andasked, “Howmuchmoneywill I earn?”Unfortunately, the person leading themeeting did not do an adequate job explaining to the group the differencebetween building a business and working at a job and more importantly, thedifferencebetweenmoneyandwealth.Iamafraidthatmostpeopleleftpuzzledorfrustratedattheanswerstheygot.

Oneanswerthespeakergavewas,“Yourincomeisunlimited.”Theproblemwiththatansweristhatmostpeopleattendingthemeetingwerenotlookingforunlimitedwealth, but for theopportunity tomakean extra$1,000 to$3,000amonth. In my opinion, they are still thinking in terms of money rather thanwealth.Inotherwords,therearetwokindsofmoney.Oneismoneythatcomesfromlaborandtheotherismoneythatcomesfromassets.Ifyouwanttobecomewealthy,youneedmoneythatcomesfromassets.Ifyouwanttoworkhardallyourlife,thenjustworkformoney,whichis,whatmostpeopledo.

The next point of confusion camewhen the speaker said, “OK, if all youwant is anextra$3,000amonth, canyou imagine it coming in for the restofyour life, regardless if youworkornot?”Whilemostof theguests respondedpositively to that idea, Idoubtmost thought itpossibleandbesides, it seemedthatmostjustwantedanextra$3,000amonthnextmonth,ratherthanhavingtoworkforafewyearsforfree,buildingabusiness,andthenlateronhavingthemoneycomeinforever.Itismyguessthatmostpeopletherewerestillthinkinglike employees of self-employed people, people who work for money, ratherthanbusinessownersandinvestors,peoplewhoworkforwealthfromassets.

ADifferentKindOfMoney

Oneofthereasonstherichgetricherissimplybecausetherichworkforadifferent kind ofmoney. The following diagram of a financial statementmayhelpexplainthedifference.

If you are not familiar with this diagram, the diagram of a financialstatement,orwishafurtherexplanationofit,IsuggestyoueitherreadRichDadPoorDad,ortalktoafriendwhohasreadthebookandaskthemtoexplainittoyou.It isaveryimportantdiagramtounderstandandiscentraltomanyofthelessons frommy rich dad. Asmy rich dad often said, “My banker has neveraskedme formyreportcard.Mybankerasksme formyfinancial statement.”Richdadalsosaid,“Yourfinancialstatementisyourreportcardafteryouleaveschool. Your financial statement measures your financial IQ.” That is howimportantthisdiagramistoanyonewhowantstoachievefinancialfreedomorgreatwealth.

ADifferenceInFocus

OneofthewaystobetterexplainthedifferencebetweenanEandSandBandIisbyusingthefinancialstatement.Thedifferencebetweentheleftsideofthe quadrant and the right side of the quadrant is a difference in focus. ThefollowingexplainswhatImean:

Simplyput,peopleintheEandSquadrantfocushere:

AndpeopleintheBandIquadrantsfocushere:

AreYouStillWorkingForMoney?

Theprimarydifferenceshownbythefinancialstatementisthatthepeopleinthe E and S quadrants work formoney. The people in the B and I quadrantsfocus on building or acquiring assets rather than working for money. That iswhy,thewealthofaBorIpersonishigherthananEorSquadrantpersonis.IftheBorIpersonstopsworking,theassetscontinuetowork,continuingtomakemoneyfortheBorIquadrantperson.

TheThreeTypesOfAssets

Thethreemaintypesofassetsfoundinanassetcolumnare:

ASimplePlanToFinancialFreedom

ThesimpleplanmywifeKimandIusedtoretireyoungandretirerichwastofirstbuildabusinessandsecondtoinvestinrealestate.AsIsaid,ittookusfrom1985to1994,startingwithnothingandretiringfinanciallyfreewithoutasingleshareofstockormutualfunds.Thatwasoursimpleplanandwefollowedourplan.

Therehavebeenpeoplewhohaveaskedme,“Whydidyoubuildabusinessfirst?”Therearethreeanswerstothatquestion.Thefirstansweristhatbuildingabusinessallowedustogeneratealotofmoney.Atthestartofthisbook,Ilistedthe11differentwaysapersoncanbecomerich,wayssuchasmarryingsomeoneformoney.ForKimand I, the bestway for us to become richwas to build abusiness.The second answer is because the tax laws of theUnited States arevery favorable to peoplewho earn their income in theB quadrant and punishpeople who earn their money in the E quadrant. Lastly, the third answer isbuildingabusinessandinvestinginrealestate.Theplanthatmostof thetruly

richfollow.

HowCanIAffordToBuyRealEstate?

Afterthestockmarketcrashof2000,manypeoplebegantowakeuptotherealizationthatstocksandmutualfundsarerisky.Afterthecrash,manypeoplebegan towonderabout investing in realestate.Theproblemwasmanypeopledidnothaveenoughmoneytoinvest inrealestateor liveinplaceswhererealestate isexpensive.AquestionIamoftenaskedtodayis,“HowcanIbuyrealestatewhenIbarelyearnenoughmoneytopaytherent?”

Myanswerisalwaysthesame.Ialwayssay,“Keepyourdaytimejobandstart building a part-time business. Once the business is making money, thesecondstepistokeepyourdaytimejobandbegintobuyinvestmentrealestatewiththeextra-incomefromthebusiness.Thatwayyoubegintobuildtwoassetsclassesratherthanspendingyourlifeworkingformoney.

ThreeTypesOfIntelligences

Just as there are three different types of education required for financialsuccess, which are academic, professional, and financial education, there arethree different types of intelligences required for financial success in the realworld.Thethreetypesofintelligencesare:

1. MentalIntelligence:Generally,whereIQismeasuredinschool.2. EmotionalIntelligence: It has been said that emotional intelligence is

25 times more powerful than mental intelligence. Examples of emotionalintelligenceare:keepingonescoolratherthanarguingback;notgettingmarriedto someone you know in the long run will not be a good life’s partner; anddelayedgratification,whichistheoppositeofinstantgratification,thecauseofmanyoftoday’sfinancialproblems.

3. FinancialIntelligence:Myrichdadsaid,“Yourfinancialintelligenceismeasured on your personal financial statement. Your financial intelligence ismeasuredbyhowmuchmoneyyoumake,howmuchmoneyyoukeep,howhardthat money works for you, and how many generations you can pass on themoney.”

WhySmartPeopleFailToBecomeRich

One of the reasonsmany smart people, likemy poor dad, fail to becomerich, even though theyhaveahigh IQanddidwell in school, isbecause they

lack the emotional intelligence required for financial success and wealthaccumulation.ThefourcommonsignsoflowfinancialIQare:

1. They get rich too slowly because they play the money game toocautiously.Theyoften,becausetheyareinajobintheEquadrant,payahigherpercentageofincomeintaxes,theyfailtoinvestwisely,keepingtheirmoneyinthebank,earningverylittleininterest,andthelittletheydoearnininterest,istaxedatthehighesttaxablerate.

2. Trying to get rich too quickly. This person lacks the emotionalintelligence known as patience.This person often goes from job to job or hotnewideatohotnewidea.Theystartsomething,getboredandquit.

3. Spends on impulse. This persons favorite form of exercise is goingshopping. They shop until they drop. If they havemoney, they spend it on awhim.Thesepeoplesay,“Moneyseemstorunthroughmyfingers.”

4. Cannot stand owning anything of value. In otherwords, this persononlyownsthingsorworksat thingsthatmakethempoor.Forexample,Ihavemet several people who have invested in investment real estate. Themomenttheyownit, theysell, taketheearningsandpayoffcreditcardbillsorstudentloansortheybuyanewboatortakeavacation.Inotherwords,theyhangontothingsthathaveverylittlevalueandsellanythingthathasrealvalue.

Manyofthesesamepeople,ratherthanbuildabusiness,feelbetterworkingfor someone else and working hard at something they will never own. Theemotionof fear is sohigh that theywould ratherwork for security rather thanworkforfreedom.

EmotionalIntelligenceIsEssentialToFinancialIntelligence

Thischapterstartedwithmyradiointerview.ThereasonIstartedwiththisinterview is that this young man was out of control emotionally. He wasobviously very bright mentally, but his emotions were causing him to thinkirrationally.Ifyouareoutofcontrolemotionally,yourchancesofsolvingyourfinancialchallengesarereduced.

Simplysaid,intherealworld,emotionalintelligenceismoreimportantthanmental intelligence ifyouwant tobecomerich.HavingahighemotionalIQ isessentialtohavingahighfinancialIQ.WarrenBuffet,America’srichestinvestorsays,“Apersonthatcannotmanagetheiremotionscannotmanagetheirmoney.”

WhenIwasyounger,Iwasanemotionalretard…everythingwas“Livefortoday.”That is one reason I did not achieve financial freedomuntil Iwas 47,eventhoughIknewwhattodo.WheneverIacteduporgotoutofhand,wantingtoeithergetrichquicklyorquitbecauseIwasfrustrated,richdadwouldoften

say,“Comebackwhenyou’vegrownup.ThenI’llgetbacktoteachingyoutoberich.”

DoYouWantToImproveYourEmotionalIQ?

IthasbeenmypersonalexperiencethatthemoremyemotionalIQgoesup,thebettermy life became.Being a formerMarine, not only am I impulsive, Ialso have developed a very violent and quick temper. When I returned fromVietnam,myrichdadsaid,“Yourhottemperandquickreactionmayhavekeptyou alive in Vietnam, but those same emotions will kill you in the world ofbusiness.”RichdadstronglysuggestedIworkonimprovingmyemotionalIQifI wanted to improve my financial IQ. As my control over my emotionsimproved,mymarriage improved,mybusiness skills improvedand sodidmyinvestmentskills.Myhealthevenimproved,justbykeepingmytemperatbay…althoughat times it still takescontroloverme.Thefirst step in increasingmyemotionalintelligenceistoadmitIneedtoimproveit.

If you are likeme, a person who can always use a little more emotionalmaturity,anetworkmarketingbusinessmaybethebesttraininggroundforyou.Tome one of the best values of a networkmarketing business is that it doesdevelop your emotional IQ.You raise your emotional IQ every time you dealwith people who quit, people who lie, overcoming your own fears, yourdisappointments,yourfrustrations,andyourownimpatiencetobecomeabetterperson. Inotherwords,anetworkmarketingbusiness isagreatplace toget toknowyourselfbetterandworkonimprovingyourself.

Askyourselfthisquestion.“Howaremyemotionsinterferingwithmylife?Aremyemotionscausingmetobe?

1. Tooshy2. Afraidofrejection3. Needingsecurity4. Tooimpatient5. Toohottempered6. Addictedtosomething7. Tooimpulsive8. Tooangry9. Tooslowtochange10. Lazy11. ____________(yourchoice)Again,oneofthegreatvaluesofanetworkmarketingbusinessisthatitwill

testyouremotionalintelligenceandinmanycasesgreatlyimproveit.Onceyou

beginimprovingyouremotionalIQ,youwillprobablyfindotherareasofyourlife improving. You will find it easier to talk to people, communicate moreclearly,handletheiremotionsmoreeffectively,andwhenyoucandothatbetter,yourbusinesswillgrowfaster.Beingmorepatient,youhaveabetterchanceatbeing a better investor. By developing your emotional intelligence, yourmarriagemayimprove,ifyouaremarriedorwanttobecomemarried,andweallknowhowemotionalasubjectmarriagecanbe.Youmayalsobecomeabetterparent and hence raise better kids. Therefore, I would say that investing anumberofyearsbuildinganetworkmarketingbusinessmightpayoff inmanyotherareasofyourlife.Why?Becauselifeisaveryemotionalsubject.

ABetterMarriage

For Kim and me, our plan to become financially free was great for ourmarriage. Starting with nothing, we had a project we could both work ontogether.Iwouldsayhandlingtheupsanddownsofbuildingabusinessofferedmanychallengestoourmarriage,yetintheend,itmadeourmarriagestronger.We took risks together, took our losses together, and celebrated our winstogether.

As statedearlier,ourplanwas simple. In1985,Kimand Ibeganbuildingour business, startingwith nothing. In 1991,we invested in our first piece ofinvestment real estateonlyafter thebusinesswasveryprofitable. In1994,wesoldourbusiness,boughtmorerealestate,andretiredfinanciallyfreefortherestofourlives.Itwasasimpleplananditmadeourlivessimplerandhappier.Asmostofusknow,moneyisoneofthemainsubjectsforargumentinamarriage.Today we have a better marriage, not so much because of the money, butbecausewebuiltabusiness together. Insteadofgrowingapart,wegrewclosertogetheraswebecamemoreemotionallymature.Ihearmanypeoplesay,“Oh,Icould never work withmy husband. I could not stand being around him thatmuch.”Icanhonestlysay,IwouldnotbeassuccessfultodaywithoutKimandwewouldnot have as great amarriage ifwehadworked at different jobs fordifferent companies. If we had worked apart, we would have grown apart.Buildingbusinessestogetherandinvestingtogethermadeourmarriagestrongerbecausewehad the time toworkoutourdifferences,wegrewcloser together,got to know each other better, began to respect each other more, maturedemotionallytogether,andintheend,webecamemuchhappierwitheachother…andtomethatispriceless.Whilewestillhaveourdifferences,todayweknowour love for each other is greater than those differences. A happy marriagebetween two people is definitely due to emotional intelligencemore than two

peoplewithgoodgradesandgoodjobsearningalotofmoney.

WhySomeSuccessfulNetworkMarketersFail

Over theyears Ihavemet several successfulnetworkmarketerswhohavebuiltvastfortuneswiththeirbusiness.Ihavealsometseveralnetworkmarketerswhobuilt a big business and then lost everything.Why?Again, the answer isfoundinemotionalintelligence.

AnexampleofasuccessfulnetworkmarketerwhofailedisapersonnamedRay.RaylivesinSouthernCalifornia.Heworkedforahealthfoodstorechainright after college andhewas soonappointed to storemanager.Ray,havingabiochemistrydegree,wasveryinterestedinhealth.Onedayacustomerwalkedin and showed Ray this new product line of health products. Ray tried theproductsandtheyweregreat.Rayimmediatelywenttohisbossandaskedhimifthestorecouldcarrythem.Thebosssaid,“No.”Beingimpatientandimpulsive,Rayquithisjobandjumpedintothisnetworkmarketingbusinessopportunity.

For three years, Ray studied and learned the business. He struggledfinanciallyforafewyearsandthensuddenlythelightswenton;Rayhadmadeitfrom theEquadrant to themind-setof theBquadrant.Hisbusiness explodedandsoonhewasmakingmoremoneyinaweekthanhewasmakinginayearathisjobatthehealthfoodstore.

SoonRaywas on the stage talking to all the new people coming into thebusiness.Hewasthenewstar.Thetroublewasthatthestageandstardomwenttohishead.Hebecamearrogantandcocky,asignoflowemotionalintelligence.He began to argue with those that taught him the business, thinking he wassmarter than theywerebecausehehadnicer cars, nicerhomes, andmore freeflowingcash.Themoneyhadtrulygonetohishead.

A new network marketing business was starting up. They too had anexcellenthealthproduct lineandtheywerelookingforstarslikeRaytodefectandjointheirbusiness.ItdidnottakelongforthenewbusinessownerstowooRay away from the oldermore established company he had startedwith.Raymadethejumpbecausehewantedtogetinonthegroundfloor,getinearly,andbuildabiggerbusinessquicker.Rayalsotookmanyofhisteamwithhim.

Three years laterRaywas broke.Why?There are two reasons I can find.One is that the owners of the new company were just like Ray. They wereimpatient and impulsive. They too wanted to get richer quicker. The secondreason is that just like Ray, the new company owners were poor moneymanagers that lived high on the hog, looking good, flashing cash, and talkingtrash. Rather than reinvest in their business, and reinvest in real estate, they

boughtthesymbolsofwealth,ratherthanacquirerealwealth.Doyourememberearlier in this chapter, I mentioned that poor people often feel uncomfortablewiththingsofrealvalue?Rayandthefoundersofthenewbusinesswereinthatcategory,Ibelieve.ThatiswhyRayandtheownerofthenewcompanyfailedtobuy real wealth. Instead, they bought fast cars, fast women, and went out ofbusiness and into bankruptcy court at high speed. Birds of a feather do flocktogether.

Today Ray is still hopping from one new network marketing business toanother. Every time I see him, he has a new business opportunity and a newproductlinetopromote.Raylearnedtobuildanetworkmarketingbusinessbuthefailed tobecomesuccessful in thebusiness.Hefailedbecausehisemotionsdidhisthinking.

Don’tBeAFrog

Now I am not saying that it is wrong to change network marketingcompanies.Iknowitdoeshappen.Iamsayingthatmanypeopleare likeRay,peoplewhogofromcompanytocompanylookingfortheperfectbusiness,theperfectproductline,andeasymoney.Manypeopledothatbecausetheyfailtodevelop their emotional intelligence,which is, inmyopinion,oneof themainreasonstogointothebusiness.Inotherwords,itisOKtoleaveabusiness,butdoitfortherightreasons,ratherthanemotionalreasons.Hoppingfromlilypadtolilypadmaybegoodforfrogs,but it isnotgoodforbusinessowners.Asafriendofminesaid,“Thetroublewithbeingafrogisthatnotonlydoyouspendyourdaychasingbugs,youalsohavetoeatthebugsyoucatch.”Themessageis,once you find a network marketing business that is right for you, give thebusinessandyourselftimetogrowuptogether.Don’tbeafrogchasingbugs.

WhySuccessfulNetworkMarketersBecomeMoreSuccessful

It was also a pleasure to meet some very successful network marketingbusinessowners…manyfarmoresuccessfulthanmyselfandevenmyrichdad.Forme, the pleasure was to find that the formula for success in the networkmarketingbusinessisthesameformulamyrichdadtaughtme.Theformulaisasfollows.

1. Buildabusiness.Gettingabusinessoffthegroundusuallytakesabout5years.Iknowitcantakelesstimeanditcantakelonger.However,abusinessislikeachild,ittakestimetogrow.

2. Reinvestinthebusiness.Thereasonthisisimportantisthatthisstepis

theone thatRayandmanyothersdonot like todo.Rather thanreinvest, theyspend theirmoney as fast as theyget it.They are soonbuyingon credit, nicecars,nicehomes,niceclothesandnicevacations.Insteadofhelpingtheirchildgrow,theystealthekid’slunchmoneyandthekidbeginstostarve.

Unfortunately,storiesaboutpeoplelikeRayarecommonineverybusiness.Oneof themain reasonswhy so fewpeople inAmericaare rich, even if theymakea lotofmoney, is simplybecause theyspend theirkids lunchmoneyontoysandthingsthatmaketheiregofeelgood.

HowBusinessesReinvest

As a traditional business, richdad.com has been reinvesting by spendingmillions of dollars on improving ourwebsite, building our on liveweb gameCASHFLOW 101 andCASHFLOW forKids, the game and school curriculumthat is given to schools for free. These are examples of a traditional businessreinvesting into the business.Another examplemay be building awarehouse,addingtruckstothefleet,orspendingmoneyonnationaladvertising.

In a network marketing business, reinvesting may mean expanding yourbusinessfrom10peopleto20people.Itcanalsomeaninvestingsometimeinhelping your downline get deeper. The beauty of most network marketingbusinesses is that it does not require that much money to reinvest into yourbusiness.

One last point is that a true business owner never stops investing andreinvestingtobuildthebusiness.Thereasonsomanypeoplefailtoachievegreatwealth in any business is simply that they fail to reinvest continually in thebusiness.

3. Investinrealestate.Whyrealestate?Tworeasons.Oneisbecausethetaxlaws(loopholes)arewritteninfavorofbusinessownerswhoinvest inrealestate. In an Appendix, my tax strategist, Diane Kennedy discusses how realestate and a networkmarketing business aremade for each other. The secondreasonisyourbanker loves to lendyoumoneyforrealestate.Tryaskingyourbankerfora30-yearloanat6.5%tobuymutualfundsorstocks.They’lllaughyououtoftheirbank.

Awordofcaution.ThereasonIsuggestbuildingabusinessfirstisinvestinginrealestatetakestime,education,experienceandmoney.Ifyoudonothavetheextra steady income and the tax advantages that come with a B quadrantbusiness,realestateiseithertooriskyortooslow.Thereasonit istooriskyisthat mistakes in real estate, especially in property management, can be veryexpensive.Thereasonmanypeoplefailtobecomerichinrealestateorgetrich

tooslowlyissimplythattheydonothavetheexcesscashbusinessownersoftenhave.Inreality,thebestrealestatedealsareusuallyexpensive.Ifyoudon’thavemoney,theonlyrealestatedealsareoftendealspeoplewithmoneyhavepassedon. Today I meet many people looking for “nothing down,” real estateinvestments.Whiletheydoexist,themainreasontheylookforthemisthattheyhave“nothing toputdown.” Ifyou lack real estateeducation, experience, andmoney, puttingnothingdowncouldbe themost expensive investmentof yourlife.Sobuildabusinessfirst,reinvestinthebusinesssecond,andthirdbuyrealestate.

“So build a business first, reinvest in the businesssecond,andthirdbuyrealestate.”

4. Buyluxuries.Formostofourmarriage,KimandIdidnotliveinabighouseordrivenicecars.Foryears,welivedinasmallhousethatcostusabout$400 amonth inmortgage payments.Whilewe lived in that small house anddroveaveragecars,wewerebuildingourbusinessand investing inrealestate.Todayweliveinamuchlargerhome,wehavesixcarsbetweenus…butwealsohave far more money coming in from our assets such as businesses and realestate.Myrichdad’ssimpleruleofthumbwas,buildabusiness,reinvestinyourbusinesssoitgrows,investinrealestate,andthenhaveyourbusinessandrealestatebuyyourluxuries.Inotherwords,worktobuildorbuyyourassets,andthenhaveyourassetsbuyyourluxuries.

Today,eventhoughKimandIhaveourbighouseandoursixcars,wecanstillaffordtostopworkingfortherestofourlivesbecausewedonothavejobs,wehaveassets.Todayweworkbecausewelovewhatwedo.Ontopofthat,weget richer and richer simply because we follow my rich dad’s simple 4-stepformulaforrealwealthandever-increasingwealth.Webuildbusinesses,reinvestinbusiness,andinvestinrealestate,andthenourassetsbuyluxuries.

WhyDon’tMostPeopleBecomeRich?

Whydon’tmost people follow this plan, even though it is a simple plan?Theanswerinmostcasesisagainfoundinemotionalintelligence.Mostpeoplelack the patience, the discipline, and the willingness to delay gratification tofollowsuchaplan.Mostpeopleearnmoneyandthenspendmoney.Therefore,itisnotamatterofmental IQor financial IQ. It isamatterofemotional IQ. Infact, the easiest of all three IQ is financial IQ, which explains why so many

peoplewho did not dowell in school are rich. Therefore, inmy opinion, thebridge to financial IQ is emotional IQ and a networkmarketing business canhelpanyoneindevelopingthatintelligence.

WhenDoYouBuyPaperAssets?

Manypeopleaskme,“Whendoyoubuypaperassetssuchasstocks,bondsandmutualfunds?”Myanswerismyrichdad’sanswer.Yearsago,richdadsaidtome,“Thebestassetisabusiness.ThereasonIputabusinessasnumberoneissimplythatitisthebestassettoown…ifyouaresmartenoughtoownone.Thesecondisrealestateandthirdarepaperassets.Thereasonpaperassetsarelastissimplybecausetheyaretheeasiest tobuybut theriskiest toown.Ifyoudon’tbelievemeabouttheriskinpaperassets,justgoaskyourbankertogiveyouathirtyyearmortgagetobuythem.”

Therefore,myanswertopeopletodayismyrichdad’sanswer.Thereasonpaperassetsarelastisbecausetheyaretheeasiesttobuybuttheriskiesttoown.OnemorereasonisthatIcanbuyinsuranceforcatastrophiclossonabusinessorrealestate.VeryfewpeopleknowhowtobuyinsuranceforstocksandIdonotknowofanyinsuranceformutualfunds…buttheremightbe.

WhyPeopleAreNotHappyAtWork

Afriendwhoisatrainedandexperiencedmentalhealthworkersaidtome,“Oneofthecausesofhappinessisthewordcontrol.Themorecontrolyouhave,the happier you become. On the flip side, if you are out of control or losecontrol,youoftenbecomeunhappy.”Theexamplehegavewasapersonrushingto the airport and suddenly he finds himself stuck in amile long traffic jam.Creepingalong in trafficwithnoway toget off the freeway,he realizeshe isgoingtomisshisplaneandhischeerfulmooddisappears.Thereasonthepersonbecomesunhappyisthathehasnocontroloverthetrafficjam.Thesummaryofhislessonwas,“Controlandhappinessarecloselyrelated.”

Goingbacktothecallerontheradioatthestartofthischapter,Iwouldsayhewasnothappy.Oneof the reasons Ibelievehewasunhappy isbecausehehadlostcontroloverhislife.Althoughhehadwhathebelievesisasecurejob,hehasnocontroloverhisfinances.Hehasalsolostcontroloverhisinvestmentsinstocksandmutualfunds.Intheworldtoday,especiallyafterthestockmarketcrash,theeconomyweakening,andSeptember11terroristattack,manypeoplefeeltheyhavelostcontrolandthatleadstounhappiness.Oneofthegreatvaluesinbuildinganetworkmarketingbusinessandtheninvestinginrealestate,those

two actions can give you back control over your life…and if you havemorecontrol,youhavemorehappiness…andhappinessisaveryvaluableemotiontohaveinyourlife.

InSummary

Sothequestionis,“Areyouworkingformoneyorworkingforwealth?”Ifitis time to start working for wealth, I have two suggestions. Looking at theCASHFLOWQuadrantbelow,Isuggestthefollowing:

Inyoursparetime,ifyouwilldobothforthenext3to5years,Ibelieveyourfinancialfuturewillbefarbrighterratherthanifyoudidwhatmostpeopledo,which is tocling to jobsecurityand invest theirmoney inmutual funds.Howcananyonebehappywhenheorshehasgivencontrolofhisorherfinanciallifeawaytosomeoneelse?Inaddition,inafewyears,ifyouaresuccessfulinboththeBandtheIquadrants,youwillbeworkingforwealthinsteadofworkingformoney.

TheNextValue

Inthenextchapter, thisbookwillgointothevalueofhavingyourdreams

cometrue.ForthosewhohaveplayedCASHFLOW101,youmayrecallthatthefirststepbeforeplayingthegameistochooseyourdream.Richdadalwayssaid,“Start with your dreams and work backwards.” I have left the best for lastbecausenowthatyouknowyoucanacquiregreatwealthinyourlifetime,youmaywanttodreambiggerdreams.

CHAPTER10

Value#8:LivingYourDreams

“Manypeopledon’thavedreams,”myrichdadsaid.“Why?”Iasked.“Becausedreamscostmoney,”hesaid.

RekindlingTheDream

MywifeKimandIwenttoagatheringwhereatopproducerinanetworkmarketing companywas showingoff his 17,000 square footmansion,with aneight-cargarage,aswellastheeightcarstofillit,hislimousine,andallhisothertoys.Thehouseandtoyswereimpressive,butthethingthatreallyimpressedmewasthatthecityhadnamedthestreethishousewasonafterhim.WhenIaskedhimhowhegot thecity todothat,hesaid,“Easy,Idonatedmoneytobuildanew elementary school and a library.When I did that, the city allowedme tonamethestreetaftermyfamily.”Atthatpoint,Irealizedthathisdreamwasfarbiggerthanmydream.Ihaveneverdreamedofhavingastreetnamedaftermeordonatingenoughmoneytobuildaschoolandalibrary.Leavinghishomethatnight,Irealizedthatitwastimeformetoincreasethesizeofmydreams.

OneofthemoreimportantvaluesIhavefoundingoodnetworkmarketingcompaniesisthattheystresstheimportanceofgoingforandlivingyourdreams.The top producer we were visiting was not showing off his material goodsmerely to show off. He and his wife were speaking to the group about thelifestyletheyhadachievedinordertoinspirethegrouptolivetheirdreams.Itwasnotaboutthebighouse,thetoysortheircost.Itwasaboutinspiringotherstogofortheirdreams.

KillingTheDream

InRichDad PoorDad, I wrote about my poor dad constantly saying, “Ican’taffordit.”Ialsowrotethatmyrichdadforbadehissonandmefromsayingthosewords.Instead,herequiredustosay,“HowcanIaffordit?”Assimpleasthosestatementsare,thedifferencebetweenthemwasveryimportanttomyrichdad.He said, “Askingyourself ‘Howcan I afford things?’ allowsyou tohavebiggerandbiggerdreams.”

Richdadalsosaid,“Beawareofpeoplewhowanttokillyourdreams.Thereisnothingworsethanafriendorlovedonekillingyourdreams.Therearepeoplewhomayinnocentlyornotsoinnocently,saythingssuchas:

1. “Youcan’tdothat.”2. “Thatistoorisky.Doyouknowhowmanypeoplefail?”3. “Don’tbesilly.Wheredoyoucomeupwithsuchideas?”4. “Ifitissuchagoodidea,whyhasn’tsomeoneelsedoneitbefore?”5. “OhItriedthatyearsago.Letmetellyouwhyitwon’twork.”I have noticed that peoplewhokill other people’s dreams are peoplewho

havegivenupontheirowndreams.

WhyDreamsAreImportant

Myrichdadexplainedtheimportanceofdreamsinthisway,“Beingrichandbeingabletoaffordabighousearenotimportant.Whatisimportantisstriving,learning,doingyourbesttodevelopyourpersonalpowertoaffordthebighouse.It is who you become in the process of affording the big house, which isimportant. People who dream small dreams continue to live lives as smallpeople.”

“Peoplewhodreamsmalldreamscontinuetolivelivesassmallpeople.”

Asmyrichdadsaid, thehomewasnotwhatwasimportant.MywifeKimandIhaveownedtwoverylargehomes…andIagreethatitwasnotthesizeofthehouseorbecomingrich,thatwasimportant.Thesizeofthedreamwaswhatwasimportant.WhenmywifeandIwerebroke,wesetagoalthatwhenwehadmade over a million dollars, we would buy a big house.When our businessgrossed over amillion dollars,we bought our first big house and then sold itsoonafter.Wesold itbecausewehadmovedon toachievinganewdream.Inother words, the house and earning amillion dollars was not the dream. Thehouseandmoneywerethesymbolsofbecomingpeoplewhocouldachieveour

dreams.Todayweagainownabighomeandagainthehomeisjustthesymbolofthedreamweachieved.Ourbighouseisnotthedream,itiswhowebecameintheprocessthatisthedream.

Rich dad said it thisway, “Big people have big dreams and small peoplehavesmalldreams.Ifyouwanttochangewhoyouare,beginbychangingthesizeofyourdream.”WhenIwasbrokeandlostmostofmymoney,myrichdadsaid,“Neverletthistemporaryfinancialsetbackdiminishthesizeofyourdream.It is the vision of your dream thatwill pull you through this rough period oflife.” He also said, “Broke is temporary and poor is eternal. Even if you arebroke,itdoesnotcostyouanythingtodreamofbeingrich.Manypoorpeoplearepoorbecausetheyhavegivenupondreaming.”

DifferentTypesOfDreamers

WhenIwasinhighschool,myrichdadexplainedthattherewerefivekindsofdreamers.Theyare:

1. Dreamerswhodreaminthepast.Richdadsaidtherearemanypeoplewhosegreatestachievementsinlifearebehindthem.AlBundyofTV’ssitcomMarried With Children is a classic example of someone whose dreams arebehindhim.For thosewhomaynotbe familiarwith the show,AlBundy is agrownmanwhostillre-liveshisdaysinhighschoolwhenhewasafootballstarwhoscoredfourtouchdownsinonegame.Thatisanexampleofsomeonewhocontinuestodreaminthepast.

Richdadwouldsay,“Apersonwhodreamsinthepastisapersonwhoselifeisover.Thatpersonneedstocreateadreaminthefutureinordertocomebacktolife.”

Itisnotjustex-footballstarsthatliveinthepast,itisalsopeoplewhostillrevel in getting good grades, being prom king or queen, graduating from aprestigiousuniversity,orbeinginthemilitary.Inotherwords,theirbestdaysarebehindthem.

2. Dreamerswhodreamonlysmalldreams.Richdadsaid,“Thesetypesofdreamerswilldreamonlysmalldreamsbecause theywant to feelconfidenttheycanachievethem.Theproblemis,eventhoughtheyknowtheycanachievethem,theyneverdoachievethem.”

ThistypeofdreamerdidnotmakemuchsensetomeuntilonedayIaskedthisman,“Ifyouhadallthemoneyintheworld,wherewouldyoutravel?”

Hisreplywas,“IwouldflytoCaliforniatovisitmysister.Ihaven’tseenherin14years,andIwouldlovetoseeher.Especially,beforeherchildrengetanyolder.Thatwouldbemydreamvacation.”

I then said, “But thatwouldonly cost you about $500dollars.Whydon’tyoudothattoday?”

“OhIwill,butnottoday.I’mjusttoobusyrightnow.”Aftermeeting this individual, I realized that this type of dreamer ismore

commonthanIthought.Thesepeoplelivetheirliveshavingdreamstheyknowtheycanachieve,buttheyneverseemtogetaroundtolivingtheirdreams.Laterinlife,youcanhearthemsay,“Youknow,Ishouldhavedonethatyearsago,butIjustnevergotaroundtodoingit.”

My richdad said, “These typesofdreamersareoften themostdangerous.Theyliveliketurtles,tuckedawayintheirownquietpaddedroom.Ifyouknockontheshellandpeakinoneoftheopenings,theyoftenlungeoutandbiteyou.”Thelessonisletdreamingturtlesdream.Mostaren’tgoinganywhereandthatisperfectlyfinewiththem.

3. Dreamerswhohaveachieved theirdreamsandhavenot set anewdream. A friend of mine once said to me, “Twenty years ago, I dreamed ofbecomingadoctor.IbecameadoctorandnowIamjustboredwithlife.Ienjoybeingadoctorbutsomethingismissing.”

Thisisanexampleofsomeonewhohassuccessfullyachievedhisdreamandcontinuestoliveinthedream.Boredomusuallyisasignthatitistimeforanewdream.Myrichdadwouldsay,“Manypeopleareinprofessionstheydreamedofinhighschool.Theproblemistheyhavebeenoutofhighschoolforyears.Itistimeforanewdreamandanewadventure.”

4. Dreamerswhodreambigdreamsbutdonothaveaplanonhowtoachieve them…so they wind up achieving nothing. I think we all knowsomeone in this category. These people say, “I’ve just had a major breakthrough. Let me tell you about my new plan.” Or, “This time things will bedifferent.”Or,“I’mturningoveranewleaf.”Or,“I’mgoingtoworkharder,payoffmybills,and invest.”Or,“I justheardofanewcompanycomingto town,andtheyarelookingforsomeonewithmyqualifications.Thiscouldbemybigbreak.”

My rich dad said, “Very few people achieve their dreams on their own.People like this often try to achieve a lot, but they try to do it on their own.Peoplelikethisshouldkeepdreamingbig,findaplan,andfindateamthatwillhelpthemmaketheirdreamscometrue.”

5. Dreamerswhodreambigdreams,achievethosedreamsandgoontodreambigger dreams. I think that most of us would like to be this kind ofperson.IknowIwould.

Oneof themost refreshing things that happened tomewhile looking intosome of the networkmarketing businesses was that I foundmyself dreaming

evenbiggerdreams.Thebusinessencouragespeople todreambigdreamsandachieve their big dreams. Many traditional businesses don’t want people todreampersonaldreams.

Toomanytimes,Imeetpeoplewhohavefriendsorworkforbusinessesthatactivelykillaperson’sdreams.Isupportthenetworkmarketingindustrybecauseitisanindustrymadeupofpeoplewhotrulywantpeopletodreambigdreamsand then it supports those people in creating a business plan, providing thetraining,thediscipline,andthesupporttohavetheirdreamscometrue.

InSummary

If you are a personwith big dreams and are a personwhowould love tosupport others in achieving their big dreams, then the network marketingbusinessisdefinitelyabusinessforyou.Youcanstartyourbusinesspart-timeatfirst,andthenasyourbusinessgrows,youcanhelpotherpeoplestarttheirpart-timebusiness.This is a valueworth having—abusiness andpeoplewhohelpothersmaketheirdreamscometrue.

WhatAreYourBigDreams?

Atthistime,itisimportantthatyoutakeamomenttothink,dream,andthenwritedownyourdreams.Thefollowingspaceistheplaceforyoutolookdeepintoyourselfandputyourdreamsdownonpaper.

Afteryouhavewrittenyourdreamsdown,youmaywanttodiscussyourdreamswith someonewhowill support you having everything youwant.That personmaybethepersonthatgaveyouthisbook.

ALittleAddedValue

This concludes my personal chapters on what I feel are the eight hiddenvalues found in a network marketing business. In the Appendices are threeadditional“hiddenvalues.”Threeveryimportantwomeninmylifeoffer theseadditional“hiddenvalues”;valuestheyfeelareimportantinbuildingabusiness.

ThefirstpersonismywifeKim.Kimwritesaboutthevalueofmarriageandbusiness.

The second person ismy business partner and co-author of theRichDadbooks,SharonL.Lechter.Sharonwritesabout the impactofbuildinga family

business.HersonPhillipworksinthebusinessofrichdad.comandhehasbeenatremendous asset to the business. Not only is he an asset, Sharon who is abrilliantbusinesswoman,hastheadvantageofhavingmoretimetohelpeducateandguidehersonintheworldofbusiness.

Thethirdpersonismytaxstrategist,DianeKennedy.Dianewillgointothehiddenvalueoflegaltaxloopholesthatapart-timenetworkmarketingbusinesscanoffer.Asweallknow,taxesareoursinglelargestlifetimeexpense,andifwecan save somemoney in taxes, thatmeansmoremoney for our business, ourinvestments,ourlives,andourselves.

Value#9:MarriageAndBusinessByKimKiyosaki

Robert& Ihadour first date inFebruary1984 inHonolulu,Hawaii.Thateveningheaskedme,“Whatdoyouwanttodoinlife?”Isaid,“Iwanttohavemyownbusiness.”Atthetime,IwasmanagingamagazineinHonolulu.Robertsaid,“Ifyouwant,I’llteachyouwhatIknowandwhatmyrichdadtaughtme.”Withinthemonthwehadstartedanew(myfirst)businesstogether.

We designed a unique logo, embroidered it on shirts and jackets, andtraveled throughout the U.S. selling our products. The real purpose of thisbusinesswas to fundour education for oneyear (attendingbusiness seminars,meetings and conferences across the country) while we prepared for the nextbusinesswewereabouttobuild.Wecompletedour1-yeargoalandclosedourshirt&jacketbusiness.

In December 1984, we sold everything we had in Hawaii and moved toSouthernCalifornia,andsetouttobuildournextbusiness.Within2months,wehad gone through any savings that we had. We were broke. We knocked onfriend’sdoorsandasked tostay thenight.Weslepton thebeach.Somenightswesleptinanoldborrowedbeat-upToyota.Myfamilythoughtwewerecrazy.Our friends thoughtwewerecrazy.Moreover, sometimesweeven thoughtwewerecrazy.

Tobecandid,Idon’tknowifwewouldhavemadeitifwedidn’thaveeachother.Therewerenightswhenwewouldjustholdeachother—providingalittleshelterfromthestorm.WasIscared?Yes.WasIuncertain?Yes.DidIthinkattimesthatwewouldn’tmakeit?Absolutely!Nevertheless,weweredeterminedtokeepgoing.Moreover,wedid.

The thing that kept us goingwas our determination to build our business,andmoreimportantly,tonotgobacktoapaycheck.Gettingajobatthatpointwould have been the easy thing to do. However, to us that would be goingbackwards.Weknewwhatwewantedwejustweren’tsurehowtoget there…yet.(Thisseemstobeacommonthemethroughoutourlives.)

Thebottomlineiswedidn’tgoback.Westayedtruetoourdream.Webuilt

ourbusiness—aninternationaleducationbusinessoperatinginsevencountries.We sold that business in 1994 and today our time is primarily spent betweeninvestingandourRichDadbusiness.

WhatIReallyWanted

Therewasonething,however,Ididn’ttellRobertthenightofourfirstdate.WhatelseIwantedalongwithmyownbusinesswasapartner/spousewhowasalsomybusinesspartner.Buildingabusinessisallconsuming.Iwantedtogrowtogether with my partner, not grow apart because we never saw each other,because we had different focuses, or because we were moving in differentdirections.IdidnotwanttobelikesomanyothermarriedcouplesIhadseenatrestaurantswhojustsitthereinsilencebecausetheyhavingnothingtodiscuss.RobertandIhaveconversationsthatareexhilarating,thatarefrustrating,thatareloving, that are confronting…but we always have plenty to talk about…andwhat’s most rewarding for me is that the personal growth I experience fromgrowingmybusinesseverydayIgettoshareandexperiencewithRobert.

PersonalGrowth

WhenI lookbackon that firstyearofourbusinessIwouldsay itwas theworstyearofourlives.Thestresswasextreme,myself-esteemtookabeating,and our relationship was not always peaceful. However, in retrospect it wasprobablythebestthingthatcouldhavehappenedtous.Bygettingthroughthosehard times, it helped to make us who we are today. As a result, Robert & Iindividually aremuch stronger,more confident anddefinitely smarter fromallourlearnings.Inaddition, thelove, therespectandthejoyofourmarriagearebeyondmywildestdreams.

WorkingTogether

In the network marketing industry, I see many couples building theirbusinessestogether.Tomethisisaperfectbusinessforcouplesthatwanttogointobusinesstogetherforseveralreasons:

1. It’sabusinessyoucanbothbeginpart-time2. Youdictatethehourstofityourschedules3. Theindustrysupportsfamiliesinbusinesstogether4. Manyofthemostsuccessfulpeopleintheindustryarecouples

5. The education many network marketing companies offer allowscouplestolearnandgrowtogether

These are some strong pluses for couples. Now I’ll be honest, being inbusinesswithyourspouseisnotnecessarilytheeasiestthingintheworldbyanymeans.Yes,Robert& I have hadourmoments, but Iwill say it has been themostrewardingforus.Wehavebuiltseveralbusinessestogether.Yearsagowediscussedandwethoughtitmightbebetterthatweeachhaveourownprimarybusiness in different arenas. However, when we weighed our options is wascrystalclearthatwewantedtobuildourbusinessestogether,notapart.

FormewhatisimportantisthatRobert&Isharecommonvalues,goalsandultimatelyacommonmission.Becausewearealwayslearningtogether,wearegrowingtogether.Weevenhaveapolicythatifoneofusattendsaneducationalseminarorconferencethenwebothattendit.What’sfunforusisthatwealwaystalkaboutourbusinesses—figuringoutwaystomakethembetter,meetingnewpeopleandexploringnewideas.

Working with your spouse may not be for everyone. I recognize that.However,forme,Iwouldn’thaveitanyotherway.

Bestwishes,KimKiyosaki

Value#10:TheFamilyBusinessBySharonL.Lechter,C.P.A.

InTheBusinessSchoolForPeopleWhoLikeHelpingPeopleRobertandIoutlineseveraloftheprimarybenefitsofstartinganetworkmarketingbusiness.

1. Thereisalowentrycosttogetstartedinanetworkmarketingbusiness.2. No formal education or degree is required to qualify for most of the

companies.3. Theindustryisopentoeveryone,regardlessofyourgender,ageorrace.4. Companies provide established systems, already proven successful,

availableforyoutousetobuildyourbusiness.5. Manycompaniesprovidegoodeducationand trainingprograms tohelp

youbecomesuccessful.6. Therearementors,successfulinthebusiness,readytoassistyouinyour

journey.7. Youcanstartanetworkmarketingbusinesspart-timeandbuild itwhile

youkeepyourjob.8. Therearemanytaxadvantagesavailabletoabusinessowner,whichare

notavailabletoyouasanemployee.

There is another important benefit, or value, of a network marketingbusiness.Thatisthevalueasuccessfulnetworkmarketingbusinessbringstothefamily.Robert askedme to sharemypersonal thoughts about thevalue to thefamilyinlightofmypersonalexperience.

MyFamily

Family is themost important thing tome.My husband,Michael and ourchildren,Phillip,ShellyandRickarethecenterofmylife.However,earlyinourmarriage asMichael and I grewmore successful professionally,we foundwewere spending less and less timewithour childrendue to thedemandsofour

businesses. We were both workaholics and we knew that something had tochange.

WhileMichaelcontinuedworkinglongerandlongerhours,Ifoundwaystowork fromhome tomake sure that Iwasaroundmore forour children. IwasveryfortunatethatIcouldchoosetocombinemyprofessionalpursuitswiththeconcerns I had as amother.For instance,whenmychildrenwere small IwasconcernedabouttheirlackofinterestinreadingsoIwenttoworkwithafriendwhoinventedtalkingbooksforchildren.

Whenouroldestson,PhillipwentofftocollegeandgotintocreditcarddebtbeforeDecemberofhisfreshmanyear,Iwasdevastated.AsaC.P.A.,IfeltIhadtaughtmychildrenaboutmoney,butmysonsexperienceshowedthatIhadnotdoneagoodenoughjob.Iturnedmyfocustogettingfinancialeducationintotheschoolsystem.

EventhoughIwasaroundmore,mychildrenstillmissedspendingtimewiththeirdad…andhemissedmuchoftheiryouth.Weseldomtooktimeforfamilyvacations. We were very successful and had become rich by conventionalstandardsbutat theexpenseof timewiththefamily.Many, ifnotmost,ofourfriends found themselves in the same situation, themore professional successtheyenjoyed,thelessfamilytimetheyhadtogether.Weallthoughtthistypeoffamilylifewasnormal.

Threeyearslater,MichaelintroducedmetoRobert,andeverythingchanged.

RichDadAndTheLechters

InworkingwithRobertindevelopingtheRichDadbooks,gamesandothermaterialsMichaelandIhavehadtheopportunitytoinvolveourchildrenalongthewayandhaveseentheirliveschangeddramaticallythroughtheprocess.NotonlyhavetheylearnedtheRichDadlessonstohelpthemintheirownlives,butalsoourrelationshipwithourchildrenhasstrengthenedbecauseofworkingandlearningtogether.WearehonoredandveryproudtohavePhillipasanimportantpartoftheRichDadteam.ItissorewardingtoworkwithPhilandseehimgrowwithinourcompany.ByfollowingtheRichDadlessonsofworkingtolearn,notto earn, Phillip has developed the experience and knowledge to help lead thecompanytoitsnextlevel.However,themorepersonalrewardisthatourfamilybondtrulygrowsstrongeraswelearnandworktogethertowardacommongoal.

The experience of sharing the Rich Dad message with our children andseeingtheminternalizeithasbeenincredible.Ithasbecomeourfamilybusiness.

CreateYourOwnFamilyBusiness

Howdoesthisrelatetonetworkmarketing?Overdielastfewyears,Ihavehadtheopportunity toget toknowmanywonderfulandsuccessfulpeopleandfamilies in thenetworkmarketing industryandI foundmanyqualities theyallshared:

1. Allareveryfamilyfocused.2. All value the extra time their success allows them to spend with their

family.3. Thechildren learn thebenefits of thenetworkmarketingbusiness from

experiencingitwiththeirparents.4. Theytakemanymorefamilyvacationsandfamilybusinesstripsthanwe

everdid.5. Thechildrenlearnthebenefitofpassiveincomeandfinancialeducation

atearlyages.6. Thechildrenoftenchoosetoparticipateinthebusinessontheirown.7. Manysetfamilygoalsandworktogetherforacommongoal.8. Often,oneparentwillcontinueworkingtheirfulltimejobwhiletheother

parentbeginsbuildingthenetworkmarketingbusinessontheside.9. Theverynatureoftheindustrypromotesfamilytogethernessandunity.

TrueWealthIsMeasuredInTimeNotMoney

I didn’t have enough timewithmykidswhile theywere growingup, andnowthattheyaregrown,Icantrulyappreciatethevalueofthefamilycenteredfocusofsuccessfulpeoplewithinthenetworkmarketingindustry.WhatagifttobeabletobuildyourbusinessWITHyourfamilyinsteadofFORyourfamily.

Rich Dad defines wealth in time not money. The more successful youbecome, themore time youwill have and themore freedomyouwill have tospendwithyourfamily.

Congratulations on selecting a family focused business.May your familysharethegiftsofloveandtogethernessfromyoursuccess!

Allthebest,SharonLechter

Value#11:HowYouCanUseTheSameTaxLoopholesTheRichUse

ByDianeKennedy,C.P.A.

Doesitseemthattherichgetanunfairadvantagewhenitcomestotaxlaws?That’sprobablybecausetheydo!Thetaxlawsarewrittentopromotetwomainactivities—businessownershipandrealestateinvestment.Thebestwaytotakeadvantageofthesetaxlawsistodowhatthegovernmentwantsyoutodo—ownabusinessandinvestinrealestate.That’swhattherichdo.

StartAPart-TimeBusiness

Noteveryonecanquithisjobtostartabusinessfull-time.Manypeoplehavefoundthat thekeytobuildingincomethatyoucankeepis throughapart-timebusiness such as networkmarketing.Once you have established (according togovernmentguidelines)thatyouhaveabusiness,youcanthenstartusingyourhidden business deductions as you convert current personal expenses intobusinessdeductions.

First,youneedtoprovethatyouhavearealbusiness.TheIRSwantstoseethatyouhavealegitimatebusinessandarenotsimplylookingforawaytowriteoffpersonalexpenses.Inotherwords,theywanttoknowwhatyourintentwiththebusinessis.

Toprovethatyouhaveabusiness,theIRSwantstoseethatyou:

1. Operateinabusinesslikemanner.2. Commityourtime,effortandintentiontomakethisprofitable.3. Have,orwillhave,arelianceontheincome.4. Experiencelosseswhichareeithernormalorbeyondyourcontrol(ifyou

experiencelosses).5. Makechangesinattempttoachieveprofit.6. Possess(oryouradvisorspossess)knowledgeinthisarea.

7. Have experience making profit in this type of business or you havereasonableexpectationofprofitfromfutureappreciationofassets.

Youcanhavealossforanumberofyearsasyourbusinessgrows,aslongasyou can demonstrate that you have a commitment to making the businesssucceed.That tax loss fromyour start-up business can be used to offset otherincomethatyouhaveonyourtaxreturn.

HowToDiscoverYourHiddenBusinessDeductions

The real tax benefit from having a part-time business comes when youdiscoveryourhiddenbusinessdeductions.One rule isnever tobuy somethingjustforthededuction.Ifyoubuysomethingtogetadeductionof40%,anditssomethingthatyouwouldn’tnormallyhavebought,thenyou’vewasted60%ofyourmoney.That’snotgoodtaxsense!

Instead, look for items that you already have as expenses that could beconsideredbusinessexpenses.TheIRStellsusatInternalRevenueCodeSection162(a),injust27words,whatyoucandeductforyourbusiness:

“Thereshallbeallowedasadeduction,all theordinaryandnecessaryexpenses paid or incurred during the taxable year in carrying on anytradeorbusiness.”

Researchofthewholebodyoftaxlawprovidesthefollowingdefinitions:

Ordinary Expenses: Expenses that are normal, common, and acceptedunderthecircumstancesbythebusinesscommunity.

NecessaryExpenses:Expensesthatareappropriateandhelpful.

Thekey to findingyour hiddenbusiness deductions is to find all of thoseexpensesthatcanfitthesedefinitions.Somecommonexamplesare:

HomeOffice—Aslongasyouhavearoomwithexclusivebusinesspurposeandsomeformofregularbusinessactivity,youhaveadeduction.Calculatetheamount of deduction as a percentage (business use compared to total squarefootage)ofallhome-relatedcosts.

Computer&Software—Thecostofyourcomputerandsoftwarethatyouuseinyourbusinessisadeduction.Ifyou“contributed”yourpersonalcomputertothebusinesswhenyoubegan,rememberthatyoubusinessneedstoreimburse

you.Travel—Thecostoftravelrelatedtoyourbusinessisadeduction.Thiscan

includemeetingstomeetwithyourmentors,prospectivecustomers,advisorsortoattendtrainingcoursesandevents.

Children—Putyourkidstowork!Insteadofpayingthemanallowance,youcanpayyourchildrenasalaryforworktheylegitimatelyperform.Perhapsbestofall,yourkidscanstartapensionplansuchasaRothIRA,whichallowstheirinvestmentstogrowtax-free.Tomakesurethedeductionislegitimate:

1. Haveawrittenjobdescription,2. Trackthehourstheywork,and3. Payareasonablewageforworktheyperform.

Now,BuyRealEstate

After a business begins to produce excess cash flow, begin investing theproceeds in real estate.Now the full advantages of the loopholes are evident!With realestate investments,youcancreatepassivecash flow.Thiscash flowgoes into your pocket eachmonth but it is offset by depreciation, a non-cash“phantomexpense.”Thismeansyoupaylittleornotaxonthecashyoureceive.Bestofall,yourwealthgrowsthroughrealestateandyourbusiness.

It all begins with your business. These tax advantages are simply notavailable for employees. Change the way you make money, if you want tochangetheamountoftaxesyoupay.

GoForIt!DianeKennedy

SelectedQuotesFromTheBusinessSchool

“Ifyouwanttoberich,youneedtobeabusinessownerandaninvestor.”

“Since you did not become rich from building a networkmarketing business,whydoyourecommendthatothersgetintothebusiness?ItisbecauseIdidnotgainmyfortunefrombuildinganetworkmarketingbusinessthatIcanbeabitmore objective about the industry. This book describeswhat I see as the realvalue of a network marketing business…a value that goes beyond just thepotentialofmakingalotofmoney.Ifinallyfoundabusinesswithaheartandadeepcaringforpeople.”

“IfIhadtodoitalloveragain,ratherthanbuildanoldstyletypeofbusiness,Iwouldhavestartedbuildinganetworkmarketingbusiness.”

“A network marketing business is a new and revolutionary way to achievewealth.”

“Therichestpeopleintheworldbuildnetworks.Everyoneelseistrainedtolookforwork.”

“Network marketing gives millions of people throughout the world theopportunitytotakecontroloftheirlivesandtheirfinancialfuture.”

“Anetworkmarketingbusinessisabusinesswithpeoplewhoaretheretohelpyoubecomericher.”

“Network marketing systems are fairer than previous systems for acquiringwealth.”

“Anetworkmarketingsystem,asystemIoftencallapersonal franchiseoraninvisiblebigbusinessnetwork,isaverydemocraticwayofwealthcreation.Thesystemisopentoanyonewhohasdrive,determinationandperseverance.”

“Many companies in the network marketing industry are offering millions ofpeople thesamebusinesseducationmyrichdad taughtme, theopportunityofbuilding your own network rather than spending your life working for anetwork.”

“The network marketing industry continues to grow faster than franchises ortraditionalbigbusinesses.”

“AnetworkmarketingbusinessisforpeoplewhowanttoentertheworldoftheBquadrant,eitherpart-timeorfull-time.”

“Simplyput,anetworkmarketingbusiness,withitslowcostofentryandgreattrainingprograms,isanideawhosetimehascome.”

“Thereisfarmoretoanetworkmarketingbusinessthanjustthechancetomakesomeextramoney.”

“A network marketing business is the perfect business for people who likehelpingotherpeople.”

“I recommend a network marketing business for its life-changing system ofeducation.”

“Manycompaniesinthenetworkmarketingindustryarereallybusinessschoolsforthepeople,ratherthanbusinessschoolsthattakesmartkidsandtrainthemtobeemployeesoftherich.”

“Many network marketing companies are really business schools that teachvaluesnotfoundintraditionalbusinessschools…valuessuchasthebestwaytobecome rich is to teachyourself andotherpeople tobecomebusinessowners,ratherthanteachthemtobealoyalemployeeworkingfortherich.”

“Network marketing businesses are business schools for people who want tolearn the real world skills of an entrepreneur, rather than the skills of anemployee who wants to become a highly paid mid-level manager in thecorporateworld.”

“A network marketing business is based upon the leaders pulling people up,while a traditional corporate or government business is based upon onlypromoting a few and keeping themasses of employees content with a steady

paycheck.”

“Ifoundinnetworkmarketingcompaniesaneducationsystemdesignedtodrawouttherichpersoninyou.”

“In the world of network marketing, you are encouraged to learn by makingmistakes,correcting,andgettingsmartermentallyaswellasemotionally.”

“Ifyou love to leadby teaching, influencingothers to find theirownworldoffinancial abundance without having to beat the competition, then a networkmarketingbusinessmayberightforyou.”

“Ifyouare apersonwho is terrifiedofmakingmistakes andafraidof failing,thenIbelieveanetworkmarketingbusinesswithagreateducationalprogramisespeciallygoodforyou.”

“Oneofthebeautiesofnetworkmarketingisthatitgivesyoutheopportunitytofaceyourfears,dealwithyourfears,overcomeyourfears,andletthewinnerinyouwin.”

“Thenetworkmarketingbusiness encouragespeople todreambigdreamsandachievetheirbigdreams.”

“Anetworkmarketing business provides a large support groupof like-mindedpeople,peoplewiththesamecorevalues,thevaluesoftheBquadrant,toassistyouwhileyoumakeyourtransitiontotheBquadrant.”

“Afteryouhavebuiltyourbusiness,andyouhavestrongcashflow,thenyoucanbegininvestinginotherassets.”

ABOUTTHEAUTHORS

ROBERTT.KIYOSAKI

Born and raised in Hawaii, Robert T. Kiyosaki is a fourth-generationJapanese-American.Aftergraduatingfromcollege inNewYork,Robert joinedtheMarineCorps and served inVietnam as an officer and helicopter gunshippilot.Followingthewar,Robertworkedfor theXeroxCorporationinsales.In1977,hestartedacompanythatbroughtthefirstnylonVelcro‘surferwallets’tomarket.Inaddition,in1985hefoundedaninternationaleducationcompanythattaught business and investing to tens of thousands of students throughout theworld.

In1994,Robertsoldhisbusinessandretiredattheageof47.Duringhisshort-livedretirement,Robert,incollaborationwithhisco-author

andbusinessspartner,SharonL.Lechter,C.P.A.,wrotethebookRichDadPoorDad.SoonafterhewroteRichDad’sCASHFLOWQuadrant,RichDad’sGuideto Investing, RichDad’s Rich Kid Smart Kid, RichDad’s Retire Young RetireRichandRichDad’sProphecy—allofwhichearnedspotsonthebestsellerlistsofTheWallStreetJournal,BusinessWeek,TheNewYorkTimes,USAToday,E-Trade.com,amazon.comandothers.

Priortobecomingabest-sellingauthor,Robertcreatedaneducationalboardgame—CASHFLOW®101—toteachindividualsthefinancialstrategiesthathisRichDadspentyearsteachinghim.ThosefinancialstrategiesallowedRoberttoretireattheageof47.

In2001, thefirstof theseriesofRichDad’sAdvisorsbookswasreleased.ThisteamofprofessionalssupportsRobert’sbeliefthat“businessandinvestingareteamsports.”InRobert’swords,“Wegotoschooltolearntoworkhardformoney.Iwritebooksandcreateproductsthatteachpeoplehowtohavemoneyworkhardforthem.Thentheycanenjoytheluxuriesofthisgreatworldwelivein.”

RichDad’sOrganizationisthecollaborativeeffortofRobertandKimKiyosakiandSharonLechter,who,in1996,embarkedonajourneythatwouldaffordthemtheopportunitytoimpactthefinancialliteracyofpeopleeverywhereandcarrytheRichDadmissiontoeverycorneroftheworld.

KIMKIYOSAKI

KimKiyosakienteredthebusinessworldinapositionwithatopHonoluluadvertisingagencyandbyage25,shewasoperatingaHonolulumagazinethatserved the city’s business community. It didn’t take long for Kim’sentrepreneurial spirit to surfaceand twoyears later, sheventured intoher firstbusiness:aclothingcompanywithnationaldistribution.

Notlongafterlaunchingthatcompany,KimjoinedRobertT.Kiyosakiasapartnerinacompanythattaughtentrepreneurialbusinessthroughouttheworld.Thatbusinessgrewtosupport11officesinsevencountries,presentingbusinessseminarstotensofthousandsofattendees.

In1989,Kimbeganher realestate investingcareerwith thepurchaseofasmall 2-bedroom, 1-bath rental house in Portland, Oregon. Today, Kim’s realestateinvestmentcompanybuys,sellsandmanagesmillionsofdollarsworthofproperty.Kimstronglyadvocatesandencourageswomentogetintotheworldofinvesting.AccordingtoKim,“Investingcanultimatelyleadwomentofreedom—freedomofneverhavingtobedependentonanyonefor theirfinancialwell-being.”

KimandRobert,whomarriedin1984,soldtheireducationseminarbusinessin1994and‘retired.’In1997,KimandRobert—withpartnerandRichDadco-authorSharonL.Lechter—foundedthecompanythatwouldtaketheRichDad®message and mission of financial literacy—through books, games and othereducationaltools—tointernationalrecognitionandacclaim.

BLAIRSINGER

Themessageisclear.Inordertoberichandtosucceedinbusinessyouhavetobeable to sell and teachothershow to sell.Secondly, tobuild a successfulbusinessyouhavetoknowhowtobuildachampionshipteamthatcanwinnomatter what. Blair Singer has helped increase the revenues of companies andindividualsallover theworldthroughgivingthemthesecrets to implementingthosecriticalcomponents.

If the owner or leader of an organization can sell and instill that spirit ofownership, accountability and team into the culture of the business, incomessoar. If they cannot, it fails. Blair’s work with thousands of individuals andorganizations has allowed them to experience unparalleled growth, return oninvestmentandfinancialfreedom.

He is a facilitator of personal and organizational change, a trainer and adynamic public speaker. Blair’s approach is one of high energy, intense andprecise personal development and inspiration. His unique ability to get entireorganizationstochangebehaviorsquicklyandachievepeakperformancelevelsinaveryshortperiodisduetohishighimpactapproach.

Blair is the author of the books: SalesDogs: You Do Not Have To Be AnAttackDog ToBe Successful In Sales andABC’s ofHow to Build a BusinessTeamthatWins,whicharepartof theRichDad’sAdvisorsseries.Hefoundedand currently operates an international training firm that offers life-changingsuccess strategies that have helped thousands increase their income throughbuildingchampionshipsalesteams.

Since 1987, Blair has worked with tens of thousands of individuals and

organizations ranging from Fortune 500 companies to groups of independentsalesagents,directsellersandsmall-businessownerstoassisttheminachievingextraordinarylevelsofsales,performance,productivityandcashflow.HeistheRich Dad Advisor who imparts the two most important skills required forsuccessinbusiness:salesandthesecretsforbuildingchampionshipteams.

BlairwasformerlythetopsalespersonforUNISYSandlateratopperformerinsoftwaresales,automatedaccountingsalesandairfreightandlogisticssales,bothinthecorporateworldandasanentrepreneur/businessowner.Forthepast15 years, he has conducted thousands of public and private seminars withaudiences ranging in size from 3 to 300 to over 10,000. His clients typicallyexperiencesalesandincomegrowthof34percentto260percentinamatterofafewshortmonthsdependingontheindustry.Hisworkspansover20countriesandacrossfivecontinents.Overseas,heworksextensively inSingapore,HongKong,SoutheastAsia,AustraliaandaroundthePacificRim.