Friday, February 02, 2007


I'm currently reading a book, Rich Dad Poor Dad by Robert T. Kiyosaki with Sharon L. Lechter, C.P.A. In it, Sharon talks about her little boy.
He asks her the classic question that all kids ask parents, "Why do we need to go to school?"
So she answers with the classical response saying that good grades ensure a successful future, to which he replies by saying that good grades don't ensure a good future as getting a job just means working really hard to earn money while those who have a lot of money didn't even get a good education to start with, like Bill Gates who dropped out of university and Micheal Jordan who pursued a career in basketball.
While it's true that most people aren't as lucky to get high incomes with no educational background, let's face it, to us education equals security. Living on the edge is quite risky. However, truth be told, a sound education does not guarantee big money. It guarantees being fed and clothed, but does not guarantee success.

So what is it that makes one successful?

Well, according to the authors of the book, a mixture of investing plus financing skills is the solution. Apparently, Sharon met Robert at a workshop he was teaching where he was trying to teach people these skills through a game. The game had basic balance sheets and income statements which many couldn't understand. There was a business owner and a banker who were struggling with these basic financial statements. What does that tell you about financial knowledge?

The book's title, Rich Dad Poor Dad, came from Robert's childhood, as he was raised by two fathers who he loved very much. One was rich the other poor.
Here are a few excerpts from the book:
one dad would say, "The love of money is the root of all evil." The other, "The lack of money is the root of all evil."


One of the reasons the rich get richer, the poor get poorer, and the middle class struggles in debt is because the subject of money is taught at home, not in school. Most of us learn about money from our parents. So what can a poor parent tell their child about money? They simply say, "Stay in school and study hard." The child may graduate with excellent grades but with a poor person's financial programming and mind-set. It was learned while the child was young.


One dad had a habit of saying, "I can't afford it." The other dad forbade those words to be used. He insisted I say, "How can I afford it?" One is a statement, and the other is a question. One lets you off the hook, and the other forces you to think. My soon-to-be rich dad would explain that by automatically saying the words "I can't afford it," your brain stops working. By asking the question, "How can I afford it?" your brain is put to work. He did not mean buy everything you want. He was fanatical about exercising your mind, the most powerful computer in the world. "My brain gets stronger everyday because I exercise it. The stronger it gets, the more money I can make." He believed that automatically saying "I can't afford it" was a sign of mental laziness.


My two dads had opposing attitudes in thought. One dad thought that the rich should pay more in taxes to take care of those less fortunate. The other said, "Taxes punish those who produce and reward those who don't produce."

One dad recommended, "Study hard so you can find a good company to work for." The other recommended, "Study hard so you can find a good company to buy."

One dad said, "The reason I'm not rich is because I have you kids." The other said, "The reason I must be rich is because I have you kids."

One encouraged talking about money and business at the dinner table. The other forbade the subject of money to be discussed over a meal.

One said, "When it comes to money, play it safe, don't take risks." The other said, "Learn to manage risk."

One believed, "Our home is our largest investment and our greatest asset." The other believed, "My house is a liability, and if your house is your largest investment, you're in trouble."

Both dads paid their bills on time, yet one paid his bills first while the other paid his bills last.

One dad believed in a company or the government taking care of you and your needs [...] The other believed in total financial self-reliance. He spoke out against the "entitlement" mentality and how it was creating weak and financially needy people. He was emphatic about being financially competent.

One dad struggled to save a few dollars. The other simply created investments.

One dad taught me how to write an impressive resume so I could find a good job. The other taught me how to write strong business and financial plans so I could create jobs.

My poor dad would also say, "I'm not interested in money" or "Money doesn't matter." My rich dad said, "Money is power."

[my rich dad] encouraged me to study to be rich, to understand how money works and to learn how to have it work for me. "I don't work for money!" were words he would repeat over and over, "Money works for me!"

It's interesting how schools now teach us things that we don't really use in real life. Actual life skills depend on one's luck.

Another good book, How to Sell Anything to Anybody, by Joe Girard, was an enjoyable read. He's a salesman, the guy who stands in the store waiting for customers to come in.
Except that he doesn't wait. He has unique techniques. One of them is keeping track of the customers he sells to using a system. He sells cars, so what he basically does is he calls you up maybe three years after he sells it to you, asking you if you're interested in buying a new one. He also sends personalized birthday cards like the ones from Hallmark instead of the stuffy corporate ones. He simply signs it, "Joe Girard, Chevrolet Motors." It might cost that much more, but let's be honest here, wouldn't you remember the guy who sent you the sweet card? I know I would.
He keeps balloons, candy and cigars in his desk drawer so that if a potential customer walks in with his kids, he knows what to give them to entertain them. He's a delight to talk to and makes excellent small talk. One of the things he does is he fills in the order form as the customer is speaking so that they don't have to do that after the customer says he wants the car, he can simply sign the form and take the car home with him.
Another technique is selling right there, right then. Customers hate waiting, so if someone says they want a navy blue car he won't say it'll arrive next month, as that's too long and the customer would've looked at another dealer by then. So he tells the customer that he has the car in stock, maybe it's a powder blue one. He takes him down to where they keep their inventory, pretending to curse his incompetent staff for this mistake. He then starts to compliment the car and tries to flatter the customer. Chances are, he'll leave with it.

Yesterday, I was out shopping with a friend. We saw this beautiful Mexican poncho that I knew would look great on her. She seemed hesitant as she never bought a poncho before and wasn't very open to buying something that was completely new to her.
As we started to walk away, I remembered reading Joe Girard saying that one of the techniques he used was to put the customer inside the car. Making a customer try something makes them feel obligated to it. So whatever it is you're selling, clothes or cosmetics or electronics, make sure you make the customer try it. There's a higher chance they'll buy it.
I turned back and told her, "Will you look at that?! It's screaming, 'Please try me on!' Go ahead just try it on you don't have to buy it. Let's see how it looks like on you."

She bought it.

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