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THE BIGGEST MISTAKE YOUNG PEOPLE MAKE - ROBERT KIYOSAKI - YouTube
Channel: The Rich Dad Channel
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(gentle music)
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- Okay, once again, it's Robert Kiyosaki.
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We're here talking to Miss Alex,
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and we're also talking about
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financial education for
millennials and money.
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And I'm glad she's asking
me when she's very young,
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because one of the biggest mistakes,
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I still hear it today, from young people,
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oh, I don't have to
worry 'cause I'm still?
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- Young.
- Yeah.
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And that is death to most people.
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Because eventually you get old
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and then you're not young again.
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So it's a way of saying,
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when I talk about assets and liabilities,
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one of the most important things
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you have in your life is time.
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It's one of your greatest
assets or it's your liability.
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And being, you know I just turned 70,
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and I have friends who have nothing.
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I mean they have zero.
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Now they've made a lot of money,
but they have nothing here.
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They have nice houses, nice cars,
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16 wives, 19 kids, I
don't know what they have,
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but do you know what I mean?
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And being young is great,
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except it can be a liability to you.
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'Cause when you're young
you're just havin' a lot of fun
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and life's exciting, you know, it's new.
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So, at the time, but the thing
is, this is the lesson today,
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is so many people spend
their time focusing here.
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They wanna make a lot of money.
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And I can hear it in their words.
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They say, oh, I want a career.
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This is career.
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'Kay, or, I'm gonna start my own business
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and this is the chart
here, which we've seen.
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This is the cash flow
quadrant, book number two.
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E is employee.
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S is small business,
self-employed, or a specialist
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like a doctor or lawyer or web designer.
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B is big business, 500 employees or more.
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And I is professional investor.
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So, when I was your age, I
knew I wanted to get here.
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This takes time.
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This is the hardest, you know?
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This is where the mega bucks
are, and Kim and I are here.
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And the money is massive.
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But it takes time to get there.
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The big mistake I see young
people make is they focus here.
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And the words are, I wanna do what I love.
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That's the track.
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You see, in the real life,
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sometimes you have to do what you hate.
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Like, people think I like to write books.
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I hate writing books.
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But it fills my purpose in life.
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It's not my passion, my purpose in life.
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Because my purpose was to get here.
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A lot of these guys get trapped
here doing what they love,
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and as we've talked about
on earlier episodes of this,
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you guys pay the highest taxes.
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40% here, 60% in taxes here,
20% here, and then 0% here.
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So when I was in my, before my 20s,
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I knew I wanted to go there.
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And it wasn't doing what I love.
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I had to learn what I
didn't want to learn.
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I sometimes had to do what I hated.
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I had to learn about taxes.
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I had to learn about debt.
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I had to take classes, I had
to learn about insurance.
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So I was doing a lot of things
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I hated doing so I could come over here.
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These guys never do this,
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'cause they want to live their passion.
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I want my passion.
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The difference is passion is greedy,
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purpose is for the people.
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So my purpose was to come over here
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so I could serve more people.
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'Kay?
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So I have employees here and all this.
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I don't buy stocks, bonds, mutual funds,
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because as a professional investor
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I can create my own assets.
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'Kay?
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Any comments on anything so far?
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- Yeah, if you ask anyone, they all say
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they want to do what they love.
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- And they're talkin' about here.
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And this is where you get taxed.
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- [Alexandra] Yeah.
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- And coming here I was
doing fine over here
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'cause I didn't have much money.
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(laughs) 'Cause the government
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takes all your money anyway, right?
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40% in taxes, nobody's gonna sue you.
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But you come over here, they sue you.
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'Kay, so I had to learn about lawsuits.
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I hated it, but I learned it.
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So the big mistake for young people
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who say I'm gonna do what I love,
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which is fine over here, but
what do you love the most?
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Well, I loved my freedom.
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And I know it sounds greedy,
but I love making money.
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I'd rather have a lot
of money than no money.
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I've been both.
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I've been broke, I've
been down, and everything.
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But I'd rather have a lot of money.
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So it was worth my
purpose to get over here.
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The big mistakes I see
young people making is here.
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You know, they think
about what they wanna do,
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what they love, and what I'm saying
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to the millennials right
now, invest in what you love.
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There's a very big difference.
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In other words, think
about this side first.
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Most young people, or should
I say short-sighted people,
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they think this is it or this is it.
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But this is the one here.
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So when I was your age, I knew
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that the assets I wanted to acquire,
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the richest people own businesses.
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Over here, these guys are small
businesses, self-employed.
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You're self-employed if
you can't stop working.
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I stopped working years ago
because I have businesses.
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Very big difference.
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It was painful, but I got there.
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So number one is a business.
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So when I was in my 20s,
I knew I was gonna do
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whatever it took, school, study,
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learn about taxes, debt,
insurance, accounting,
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lawsuits, and all this, through business.
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Next is real estate.
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I love real estate.
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But most people can't do what I do
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'cause they don't have a business.
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It's catch 22.
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They don't have enough
money to get over here.
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Your mom just made that switch
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'cause she uses other people's money.
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- [Alexandra] Yeah. (laughs)
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- So, the reason I make
more money is because,
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it's not that I'm doing what I love,
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I do, sometimes, what I hate,
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so I can have the assets that I love.
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I love having a business.
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You know, if I didn't have a
business, you wouldn't be here.
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Darren wouldn't be here.
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I wouldn't have a CEO and President.
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I wouldn't have accountants.
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I wouldn't have attorneys.
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So the business affords
me the lifestyle I want.
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And then I invest in real estate.
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I've never gone past a piece of land
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or a building I did not love.
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And then, what most people
invest in from there is paper.
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And that's fine, that's stocks, bonds,
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mutual funds, savings, ETFs.
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Not my game.
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I don't love it.
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I actually hate it.
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But these guys, it's perfect
for them to have paper,
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stocks, bonds, mutual
funds, ETF, and all that.
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Because they're focused over here.
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They wanna do what they love.
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They wanna climb the ladder,
they want their career,
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they want this, I'm gonna
become president, you know?
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That's not what I wanted.
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I wanted to be a football star.
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But this is for the middle class here.
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That's fine, you can get rich here too.
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I just don't like it.
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It's not exciting to me.
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And then the last one are commodities.
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And the four basic, there's a
lotta commodities, like food.
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Farmers get rich, they
provide food, which is good.
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I invest in food.
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I invest in avocado
farms that provide food.
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Oil, gold, silver.
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I love those things.
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I love avocados.
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(laughs) You know?
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- [Alexandra] I love avocados. (laughs)
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- Yeah, I know.
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So I'm doing what I love.
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I love trees, I love plants,
you know, things like this.
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So, I'm doing what I love
here, here, and here.
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I don't like stocks, bonds,
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mutual funds, ETF, 401(k)s, IRAs.
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It doesn't excite me.
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You know?
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This excites me.
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So I invest in what I love
rather than do what I love.
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And these guys do what they love
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but most of them never get over here.
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And this is like Steve Jobs, Zuckerberg,
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Bezos of Amazon, and they have
all the money in the world.
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That was my plan.
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Any comments, any questions on that?
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- So as you mentioned, a
lot of people are talking
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about how they wanna do
what they love, right?
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And I think you have a very valid point
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on investing in what you love.
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Because a lot of people, just to say
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that they're entrepreneurs or investing,
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they're investing in the
whole Bitcoin outrage
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and the cryptocurrencies.
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And I felt like I wasn't
actually pursuing what I loved,
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or I was falling off the wagon,
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because I wasn't really
interested in Bitcoin.
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But, I realized that
that's just not my thing.
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I'm not investing in what I love
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if I'm doing that in Bitcoin.
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What I wanna do is invest in real estate.
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So I love looking at properties.
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I love looking at houses, fixer-uppers,
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and looking at the numbers.
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That's my passion.
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Maybe I got it from my mom, who knows?
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But Bitcoin isn't my thing.
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So I have no reason to feel
like I'm not doing what I love
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just because I'm not investing in Bitcoin.
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- And that's kind of the attitude.
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In my world, like I said, I see people,
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they chase shiny objects.
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And what a shiny object
means is, you know,
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when you're fishing you throw a lure out,
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this little shiny object goes.
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And the fish comes and
(imitates splashing)
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where they jump it.
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That's what most people do.
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Bitcoin today, it's a shiny object.
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I'm not saying you can't
make a lot of money in it.
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But most people are chasing shiny objects.
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They wanna make money.
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They're not building an asset here.
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The reason I don't do it here,
this is the highest risk.
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Now, this is what I know.
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The higher the risk, the
more education it takes.
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For example, if I flew.
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You know, if I wanted to
just fly my little Cessna 172
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around the place, not much risk in that.
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But when I had to go to Vietnam
to fly, the risk went up.
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I had to study harder, become
better, work harder at it.
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The reason most people stay in paper,
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401(k)s, IRAs, and chasing
shiny objects like Bitcoin,
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is because they don't want
to take the risk here.
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They're huge.
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You've gotta study.
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That's why we have our
Rich Dad's Education,
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Rich Dad's Coaching.
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All of you guys are
allowed to take courses
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on all of this if you come here.
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It takes no intelligence to be here.
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It takes no intelligence to buy Bitcoin.
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I mean, I have four Bitcoin.
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No, five Bitcoin.
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It doesn't take, you know,
I don't have to do anything.
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Over here, I have to know a lot.
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Over here, I have to know a lot.
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I have to study.
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So, if you wanna chase shiny objects
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like the stock market and all
that, you can get rich there.
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It's really easy to get in here.
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It's really hard here.
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Any comments, any questions?
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Does that make sense?
- Yeah.
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- They're chasing shiny objects.
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- So, I do agree with you
when you talk about Bitcoin
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being a shiny object that
everybody is chasing, right?
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And one of my favorite
stories that you've told
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is about your mentor Frank,
when he sent you to Peru
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so you could learn a valuable
lesson about maybe something
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that wasn't such a shiny
object and turned into be,
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because shiny objects change every day.
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- I wanted to learn,
you know they have ICOs?
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- Mm-hmm.
- Initial coin offerings?
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I wanted to learn about IPOs,
initial public offering.
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And it's how you take a
business and turn it into paper.
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You turn it into stock.
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So, I went to see my friend
Frank who was hardcore here.
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I don't know how many companies
he started taking public.
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And I said, Frank, and he
didn't know me from Adam,
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and I said I wanna learn to do an IPO.
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And he goes, yeah, you and everybody else.
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He said, most guys don't have it.
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They don't have the guts.
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They don't have the determination.
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And they're wimps.
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And I said, I wanna learn.
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He says, how bad?
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This is up here in Scottsdale, Arizona.
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I said, badly.
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He says, okay, this is Wednesday.
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Be in Lima, Peru on Saturday.
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I went, on Saturday?
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And we were shooting our video
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for the CASHFLOW game, you know?
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He says, how bad do you want it?
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I said, badly.
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He says, you know, you
meet my president in Lima.
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Frank never traveled.
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You meet my president in Lima
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and I'll find out how bad you want it.
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So that was Wednesday.
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Wednesday night, I was
on a plane to Lima, Peru.
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I had to pay full boat.
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I paid my own way.
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Most employees can't stand that,
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'cause they don't have any money.
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I flew into Lima, Peru.
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I went to look at three gold
mines, with Frank's president.
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It was an experience, an education,
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I would've never had if I hadn't shown up.
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It cost me probably 15 to $20,000
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just for airfare on that thing.
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I get back on Tuesday to talk to Frank
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and I said, Frank, there's nothing there.
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He says, I coulda told you that.
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So why'd you send me?
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I wanted to find out how
badly you wanna learn.
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He says, most people don't have it.
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They want a job, they want job security,
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they want a paycheck, they want a 401(k).
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And that's why they
don't get to come here.
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That's why they don't
get to come over here.
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Nothing right or wrong, you know?
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I don't ever want to be here.
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I knew when I was your
age I wanted to come here,
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but the higher the risk,
the higher the returns,
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but also the higher dedication, education,
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and study you have to go through.
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And I'm making millions and millions.
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I make more in a day than many
people make in a lifetime.
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But it was worth it.
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Did I lose?
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Sometimes, yes.
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But it was worth it.
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You go to school here, you take no risk.
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That's why my poor dad was poor.
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He didn't like to make mistakes.
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'Kay?
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- I love that story, Robert.
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Thank you for sharing it.
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- I'll leave you one last word
that's very very important
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for people to understand at a young age.
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And the word is called
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liquidity.
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The reason this is better
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for most people is because it's liquid.
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You can buy a stock, you
make a mistake, you get out.
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You buy an ETF, you make
a mistake, you get out.
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It's good, it's important.
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The moment you go into real
estate, you're not liquid.
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That's why you gotta be smarter going in.
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'Cause if you make a
mistake, you can't get out.
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You buy a bad piece of
property, you ride it down.
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And the same is businesses.
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You're in there.
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You're solid, you can't get out.
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Rich Dad's gotten in trouble, you know,
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with money and all businesses are.
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I can't quit.
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Employees just quit and they leave
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and they run like little rats, you know?
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But if you're in here or
here, you can't get out.
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So that's why liquidity is crucial.
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It's very important, which means,
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that's why I have Rich Dad's Coaching,
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Rich Dad's Education, we have
all our programs and all this.
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But most people are not
willing to do the study
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'cause they wanna do what they love,
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rather invest and acquire what they love.
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That make sense to you?
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- Yeah, totally.
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- So stocks, bonds, mutual
funds, ETFs, savings,
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they're good 'cause they're liquid.
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You can make a mistake and get out.
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These things, hard to get out of.
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Including gold, gold's hard
to get out of sometimes.
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Gold's more liquid than this.
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Oil is tough to get out of.
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You make a mistake there,
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you're gonna ride that
baby down, you know?
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Silver's pretty easy.
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But the word is liquidity.
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The less liquid, the higher your financial
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IQ.
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You've got to be so much smarter.
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And most people, they have it.
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They have that ability to be that smart.
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But they'd rather do what they love
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rather than invest in what they love.
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Got it?
[983]
- Yeah, of course.
[984]
Thank you, Robert.
[985]
And I also wanna give you thanks
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for sharing this topic on
investing in what you love,
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because I hope that this can be a guidance
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for every millennial out there
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as opposed to what we're
traditionally taught
[996]
in doing what you love.
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