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The other day a friend of mine approached me excitedly, saying, "I found the house of my dreams. It's in foreclosure and the bank will sell it to me for a great price."

"How good is the price?" I asked.

"Just before the real estate market crashed, the seller was asking $780,000 for the property. Today, I can buy it from the bank for $215,000. What do you think?" she asked.

"How would I know?" I replied. "All you've given me is the price."

"Yes!" she squealed. "Now my husband and I can afford it."

"Only cheap people buy on price," I replied. "Just because something is cheap doesn't mean it's worth the cost."

I then explained to her one of my most basic money principles: I buy value. I will pay more for value. If I don't like the price, I simply pass. If the seller wants to sell, he will come back with a better price. I let him tell me what he will accept. I know some people love to haggle; personally, I don't. If a person wants to sell, they will sell. If I feel what I am buying is of value, I'll pay the price. Value rather than price has made me rich.

Against my advice, my friend sought financing for her "dream" home.

Fortunately, the bank turned her down. The house was on a busy street in a deteriorating neighborhood. The high school four blocks away was one of the most dangerous schools in the city. Her son and daughter would either have to go to private school or take karate lessons. She is now looking for a cheaper house to buy and has asked her father, who is retired, for help with the down payment. If her past is a crystal ball to her future, she will likely always be cheap and poor, even though she is a good, kind, educated, hard-working person.

My Point of View

What follows are some thoughts on why my friend will probably never get ahead financially -- especially in this market.

1. She and her husband have college degrees but zero financial education. Even worse, neither plans to attend any investment classes. Choosing to remain financially uneducated has caused them to miss out on the greatest bull and bear markets in history. As my rich dad often said, "What you don't know keeps you poor."

2. She is too emotional. In the world of money and investing, you must learn to control your emotions. When you think about it, three of our biggest financial decisions in life are made at times of peak emotional excitement: deciding to get married, buying a home, and having kids.

My dad often said, "High emotions, low intelligence." To be rich, you need to see the good and the bad, the short- and long-term consequences of your decisions. Obviously, this is easier said than done, but it's key to building wealth.

3. She doesn't know the difference between advice from rich people and advice from sales people. Most people get their financial advice from the latter -- people who profit even if you lose. One reason why financial education is so important is because it helps you know the difference between good and bad advice.

As the current crisis demonstrates, our schools teach very little about money management. Millions of people are living in fear because they followed conventional wisdom: Go to school, get a job, work hard, save money, buy a house, get out of debt, and invest for the long term in a well-diversified portfolio of mutual funds. Many people who followed this financial prescription are not sleeping at night. They need a new plan. Had they sought out a little financial education, they might not be entangled in this mess.

A Thank You to Jon Stewart

Speaking of finance experts, I personally want to thank Jon Stewart of 'The Daily Show' for taking on Jim Cramer and CNBC. Jon Stewart did an incredible job of representing the millions of people all over the world who have lost their savings in the market. He was right in saying he thought it "disingenuous" to advise people to invest for the long term through their retirement plans while knowing full well that traders could steal Americans' retirement money by trading in and out of the market. Most traders like Cramer realize that investing in mutual funds for the long term is financial suicide. Cramer should have spoken up, but we all know why CNBC won't let him tell the truth. If he did, the station's advertisers would leave.

While I applaud Cramer for going on 'The Daily Show' and facing the music, I'm afraid he was marginalized by Stewart -- certainly outgunned -- and he has lost his credibility. He may pay an even bigger price if the SEC decides to dig deeper.

Jim Cramer is a very smart man. I watch his show. I just do not follow his advice.

In closing, I will say what I have said for years: We need financial education in our schools. Without it, we cannot tell the good advice from the bad.



Leave A Comment jump to leave a comment
5/3/2011 4:13:02 AM
if the real estate make pasdive income and located in good position, i think it is good debit
Sunday, July 01, 2012
Well, let me congratulate you on a job Sonderposten well done! The hair may be gray and the beard white but the website is awesome. I really loved what you did with the site, and truly enjoyed reading your piece and those of Restposten your visitors who truly left some nice comments.
6/3/2011 5:22:52 PM
I have a great respect for Suze Orman, but wonder why she goes on so much about investing in 401k and other advised investments. Why would that be in this time and age?
Sunday, June 05, 2011
You know Michele, I used to love Suze but when I learned what I learned from Robert my whole perspective changed forever. Not that I disrespect Suze, I just moved on from her old way of thinking. Suze has become a multi-millionaire from her advice but I doubt she has helped many people become Millionaires like Robert has. She goes on about 401K plans because I believe those institutions pay her to give this advice to continue their success. In my opinion a great investment would be in precious metals, real estate (Cash Flow)and believe it or not, join a good MLM company. It doesn't cost that much to be in an MLM company and if you have the right company with the right team you can make very great returns on your investment. I highly recommend these 3 assets and start with MLM (Multi-Level Marketing).
ben franklin
Tuesday, August 16, 2011
What is fair about Orman is she tries to work on the person inside. I try to sum this up in my own words: "How are you going to win, if you aint right within?" In many cases being right from within is also a theme by Kiyosaki, a financial intelligence theme makes one right inside.
Monday, October 10, 2011
What MLM companies would you suggest joining? I would be interested to know which ones have worked for you personally. Thanks. Guy
Saturday, July 14, 2012
To be honest with you i joined Qnet and my life change. Now i want you to make personal research for yourself today The company have the most amazing Team called the V. Also the compensation plan, i think is the best in the world and above all the Products are unbelivable. Check them yourself. So, if really you want to change your lifesytle, your financial status join qnet today. for further information contanct
Wednesday, March 07, 2012
Suze does not give any advice on making,investing or earning more money she advice people who does not take action to earn more insist on working on the same thing whatever they are doing, So she just tell them to manage their money wisely.Robert is different you need to be motivated and wanting a change in your life then Robert is the one.
Wednesday, June 29, 2011
She talks about 401ks because she works for CNBC as well. Watch some of the adds like Fidelity..Huge Mutual fund companies pay for CNBC. Follow the money and you will find out the truth most of the time
6/5/2011 12:33:57 PM
Suze Orman make money telling the world to invest in 401K
6/15/2011 1:36:27 AM
Hey guys..I am Nel one of the million people that inspire by Mr. Robert Kiyosaki, Talking about (Multi-Level Marketing). I was once a negative person when it comes to MLM but when I read the Rich Dad Poor Dad book by Master Robert, suddenly every things change. I'm now in network marketing and I'm with this superb company. This company named Myvideotalk was founded on San Ramon California, on 2004, it's the first company that uses IT products, a state of the art products that is very in demand this days. So for those who wants to have an extra income let's say 2k dollars in a week or up to 35k/week, just send me an email: here are some links for additional info i know all of us wants to go out the RAT RACE and this will be our vehicle going to the FAST TRACK to the Right side of the quadrant.
Thursday, June 23, 2011
what types of businesses are your main clients? I am in a MLM also and have clients such as pharmacies, doctors, etc.
Thursday, June 23, 2011
my e-mail is
Tuesday, August 23, 2011
If you're also a strong believer in network marketing and have the burning desire to make a difference in the world. There's a way you can improve your friends health and wealth and change their lives forever, as well as your own. If you had a chance to be in Herbalife or Amway at the beginning and become one of the top income earners of the world, would you do it? There's a window of opportunity to be among the first 5% who make all the money but the window is slowly closing. Why not get some more information? 913 396 3091 Don't be afraid to call Miro
Thursday, June 27, 2013
hit my inbox
6/15/2011 9:54:38 PM
love what robert preaches, followed his books for years. i am now in a great position to invest in rentals and flips, great credit score, plenty of real working capital. twice i have contacted rich dad coaching and i can never get a direct answer on what they do. how can they claim to be with you one on one when i live in florida and they are in utah? i have a business plan but do i really need to pay someone to tell me to do it when i know what needs to be done? does anyone share my questions or what has coaching actually done for you?
Thursday, June 16, 2011
Keith, I live in Utah and know a lot of people who have worked as these coaches. Less than half are actual RE investors. The other half talk a good game and have been taught what to say. You and I both realize, there is really only one way to learn, and that is to go out and do it. If you need a mentor in RE investment then find someone who lives in your area and has had success. 9 times in 10 they will be willing to advise you for free. I have a lot of respect for Robert and the RichDad company. I love the game and the books have been instrumental in helping me get started in buidling my own RE portfolio and getting my own business started on the side. Hope this helps you realize you should probably save your money and use it to invest in RE rather than coaching.
Thursday, June 16, 2011
thanks justin, nice to hear what i was thinking
Friday, June 17, 2011
Justin, My experience also. Rich Dad taught me a lot and also taught me what I need to teach my kids. That is incredibly valuable - something you can't put a value on. Once my eyes were open I found a local resource who indeed provided his help for free. Am now in the RE market but I'm still on the Rich Dad message board because it's a good place to learn. Guys like Robert deliver a lot of common sense and I'd love to attend one of his seminars to find out more but not currently in my budget. Thanks to him though I'm in the RE market, playing the game and I've given up on mutual funds. Knock it if you want but it got me off the couch. Jeff.
Wednesday, July 06, 2011
Coaching is not a side-by-side process. It is a step by step process, itegrating every learning curve with the assumption that you have a previous education already. I will advice you not to do this coaching first if you are just doing the technical stuff. You gotta have that perspective that coaching is not theoretical, it is learning through assumption. Do your homework first, then seek coaching later on.
Wednesday, July 04, 2012
nice answer!
7/1/2011 1:44:07 PM
Allows you are taking with minds, big change in my financial live I had after god support and reading your excellent books and articles. Thanks Robert
7/7/2011 9:57:29 AM
I think financial literacy shld b given more priority b4 stepin in any transaction. U alwayz make me inspired Robert.
David Miguel
7/10/2011 11:42:43 AM
pues tengo una idea para salvar el sistema financiero de EUA, trata sobre la gula financiera, propongo una idea que regule la capacidad de los privados para acaparar dinero, ya que cuando el dinero esta estancado en manos de un privado genera recesion y asfixian a la economia, pues propongo que solo se pueda ahorrar determinado porcentage del ingreso de los pivados, que el excedente de efectivo que tienen sea puesto en circulacion y esten obligados invertir o gastarlo para activar la economia, el exedente tiene que ser gastado o invertido en un determinado plazo. Robert si tu mision es elevar el nivel financiero de la humanidad tienes que leer esto y conocer toda mi idea.
Sunday, July 17, 2011
Entiendo tu idea, Creo que muchas personas estubiera de acuerdo, pero siento que le estarias arebatando la misma libertad que hemos recibido de Dios. De la misma forma podriamos quitarnos nuestra libertad de gastar, esta es la razon que estamos donde estamos, gastamos mas de lo que ganamos y no sabemos invertir. Pregunto? Si tu fueras rico te gustaria que te manipulen tu dinero? Porque lo que suguires es manipulacion. Pero hasta que punto controlarias el dinero de otros, hasta que tu estes rico, hasta que ellos sean pobres? Yo creo en lo que se dice, "Estas donde tu mente te ha puesto." Pobre o rico llegastes alli por tu propia experiencia, o conocimiento del financiero. Si nuestros padres nos hubieran ensenado a ahorrar (no gastar dinero en lo material, cosas que no se ocupan), o invertir (en bienes y raices o cosas que nos den dinero sin trabajar) nuestra vido fuera mejor. "No sabemos lo que no sabemos!" Es lo que Robert Kiyosaki quiere hacer, el quiere darnos la experiencia para lograr las cosas por nosotros, sin tener que depender del govierno. Bueno te deseo lo mejor y suerte!
quoc huy
7/15/2011 8:32:27 PM
hello thanks
11/27/2011 11:04:34 AM
I've invested in both real estate and stocks and so far real estate is whats making me money every month.Unlike the stock market that's manipulated by traders (and computer trades), the news media, and many other factors, I have total control of how my real estate performs.
8/7/2012 2:45:39 AM
hello ,
8/10/2012 9:41:14 PM
8/10/2012 9:41:26 PM
8/13/2012 8:24:35 AM
Thanks for sharing Robert it's make me open my eyes,that in school Financial Education is did not taught.
8/15/2012 12:15:08 AM
Your points are very true. many times a normal buyer buys something because 1. It is cheap. 2. Because his heart likes it. 3. he can afford it or it is in his budget. But all these are mistakes for long term.
8/16/2012 1:54:48 AM
if you get 3% rental reward in your house but you have to pay 7% of the interset,is it a good deal ?
8/5/2011 8:56:22 PM
I agree. When making a purchasing decision it is important to focus on value not price. In addition, one should have control over his/her emotions when making important decisions.
8/13/2011 12:41:29 AM
It's the answer
Sunday, August 14, 2011
when there’s no way out there’s still a way through … ;) And when really there is no exit? There is no even a hope? There is nobody to prompt what to do? Only in Russia there is such problem, as salary nonpayment. The situation - doesn't happen worse. Took on credit money in several banks, money has stolen. Has passed to more highly paid work, and there in two months have ceased to pay the salary... For old work not to return any more. Banks call some times in day, I in the answer can cry and say only that the salary have given only for February that I still should feed and dress a seventeen-year daughter, she still studies. Whom excites that at me a diabetes, and I have nothing to buy medicines, after all the cheapest - 375 roubles. My problems that I was such inattentive, and at me have stolen money... But My God, I work, why for us such state that it doesn't have affairs on salary nonpayment!. Every day I plunge into this bog more and more that for me waits further, I do not know... Poverty, prison for debts? For apartment already too a huge debt, probably, will soon move. What exit, where it? What to me to do? I don't have health, at me a diabetes, I drink grasses that itself I collect, but it is not enough of it... To Whom my daughter when I will die will be necessary, it hasn't risen yet on feet, and will go to work, it it is necessary to pay my debts. How, how to me to get out of this situation? I don't see an exit, prompt to me, please, for the sake of the Christ!
Saturday, July 14, 2012
Hello no doubt you are doing great I jst want to share a business project with you if you like it we can then enter into next stage of discusion.To be honest with you i joined Qnet and my life change. Now i want you to make personal research for yourself today The company have the most amazing Team called the V. Also the compensation plan, i think is the best in the world and above all the Products are unbelivable. Your diabetes will go quickly with the help of drinking water. Check them yourself. So, if really you want to change your lifesytle, your financial status join qnet today. for further information contanct me. Thanks.
7/1/2012 7:28:27 AM
Well, let me congratulate you on a job Sonderposten well done! The hair may be gray and the beard white but the website is awesome. I really loved what you did with the site, and truly enjoyed reading your piece and those of Restposten your visitors who truly left some nice comments.
7/8/2012 12:23:20 PM
I am on a path to financial freedom thanks to Robert
9/30/2013 8:38:00 AM
If Robert ever look at this he said i need a coach why was his coach free? How come i can't have a free coach myself?
9/30/2013 8:40:05 AM
If Robert ever look at this he said i need a coach why was his coach free? How come i can't have a free coach myself?
5/19/2011 9:31:37 AM
Excellent. Very practical and pragmatic.
Friday, May 27, 2011
How true. Your books have been key in realizing that I need to create my own passive sources of income, and also opened me up to network marketing as a business model. I'm excited to be learning, and sharing that learning at about leveraging the web to build residual, passive income.
Val Roberts
Wednesday, July 13, 2011
Your post was intriguing, so I followed the link you provided. On a first reading, Attraction Marketing sounds like new wine poured into an old wineskin. I've read a lot of claims from affiliate marketing programs about making hundreds of thousands of dollars from a few hours worth of work. Does anyone really become financially free by doing this type of work? I would appreciate some honest feedback. How successful have you been so far? Would you say the work you put in is worth the value you get in return?
Friday, July 29, 2011
Yes, affiliate marketing is a real and legitimate business. I own several content based websites that generate revenue via affiliate sales and advertisement. The problem with this business are people selling bad information and misleading beginners. It is not a "get rich quick" scheme. It will take time, effort, and planning to build a profitable long-term affiliate business, just like any other business. My husband and I enjoy being home business owners who do business all over the world via affiliate marketing.
5/19/2011 11:57:26 PM
You have been saying for years that we need financial education in our school system and I couldn't agree with you more! I HOPE that we will see that day come to fruition;however seeing how people and the like are playing with our kids future the way that they do, I believe what you and CashFlow Technologies are doing is the BEST and -so far-The Only way (other than teaching our kids what you teach) that we can give an "Unfair Advantage" to them! I love you guys for what you are doing and am extremely grateful that I have the opportunity to learn from such GREAT PEOPLE!Thank You from the bottom of my HEART!!
Ralph Dominick
12/29/2012 7:17:34 PM
@Mr. Robert Kiyosaki My mother game this RDPD book for me to read. Honestly im a person who have no interest in reading books . I usually listen to the teacher. One day , when im bored. I found this book at my table. Since it was brown-out. I have no choice but to read it . This book is like an eye-opener to me to start to think of investments and business. I can't stop reading it until i finished it in just two days. Today i am 18 years old and i am looking forward to start a business. My father told me that he would invest a house for me and my soon wife. I refused it and rather made a demand to buy a lot for me .. I hope my choice is right
1/19/2013 5:53:23 AM
Being Calm and Agressive at the right time is the key. ty Robert.
4/29/2013 2:29:18 AM
Has anyone done the coaching with Rich dad and benefited immensely from that programme?
10/10/2011 3:22:43 AM
I got to find the value in us. Otherwise, people would look at us like cheap
Sunday, November 27, 2011
Your missing the point. The article talks about finding the value in what you buy ,not in yourself.
1/1/2012 9:48:50 PM
Happy New Year! Get paid daily, weekly. Build your success story today. Please visit:
10/13/2012 8:32:49 AM
good articles "What you don't know keeps you poor."
7/2/2013 2:24:14 PM
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8/5/2014 9:09:16 AM
everything i've learned about financial education, i've learned it from you Mr. Kiyosaki.. you rule! :)
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6/24/2014 12:24:38 PM
robert kiyosaki you are a man of your dreams. god bless you for adding to our lives financially
12/10/2014 8:51:35 PM
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12/23/2014 6:18:18 AM
mir eine Chance gegeben Sie auf der Arbeit gut gemacht Sonderposten zu begrüssen! Das Haar kann Schwarz hell und die Schnurrhaare weiß sein, aber die Seite wunderbar ist. Ich gehegt wirklich, was Sie mit der Website haben, und wirklich erfreute sich an Durchsicht Ihr Stück und derjenigen reserviert Ihre Gäste, die wirklich einige anständigen Bemerkungen zu verlassen. (Kamagra)