RPF0306-Robert_Kiyosaki_Interview
00:00:00.000 | [Spanish]
00:00:17.240 | [Birds chirping]
00:00:21.740 | [Spanish]
00:00:25.840 | [Spanish]
00:00:30.160 | I enjoy reading books and I find them to be, frankly, one of my better investments.
00:00:35.200 | I don't know how you get more bang for the buck than to plunk down 10 or 15 or 20 bucks for a good finance book
00:00:40.880 | that gives you potentially hundreds of dollars or thousands or even millions of dollars worth of ideas.
00:00:45.920 | And I do this thing where I like to ask people about what their favorite finance books are.
00:00:50.560 | And you do this long enough and you start to get a sense of the ones that really matter.
00:00:54.000 | I can list 10 off the top of my head.
00:00:56.400 | But there's one book that seems to come up more than ever, more than all the rest.
00:01:03.520 | Seems to have sparked more people's financial journey than anything else.
00:01:08.560 | That book is a book 20 years old called "Rich Dad, Poor Dad."
00:01:13.120 | And today we've got the author of "Rich Dad, Poor Dad," as well as all the dozens of follow-on books,
00:01:18.880 | Mr. Robert Kiyosaki here on Radical Personal Finance.
00:01:22.000 | [MUSIC]
00:01:38.240 | Welcome to the Radical Personal Finance podcast.
00:01:40.160 | My name is Joshua Sheets and I'm your host.
00:01:41.680 | Thank you for being with me today.
00:01:42.800 | Man, I'm excited about today's interview.
00:01:45.280 | I think you're going to really enjoy it.
00:01:47.040 | It's interesting to talk to a man who has shaped the personal finance industry
00:01:51.680 | and since this is the show where we work hard to figure out how to live a rich life now
00:01:56.480 | and how to build a plan for financial freedom in 10 years or less,
00:02:00.720 | why not learn those things from the guy who shaped the industry?
00:02:04.800 | [MUSIC]
00:02:10.480 | I really do mean it.
00:02:11.360 | If you start to profile people and ask them what book started you off,
00:02:14.640 | I don't know how he did it.
00:02:15.760 | But "Rich Dad, Poor Dad" was probably one of the most motivational books that I've ever heard of.
00:02:21.520 | In the personal finance industry, it seems like its effects can be felt everywhere.
00:02:27.840 | And so many people say, "Man, I read 'Rich Dad, Poor Dad' and it changed everything."
00:02:30.960 | And Robert Kiyosaki, he's been just pumping out best-selling books since then and building
00:02:36.720 | a massive empire of a business.
00:02:38.880 | He's also not a stranger to controversy because what's interesting is "Rich Dad, Poor Dad" is
00:02:44.480 | one of the more controversial books on personal finance.
00:02:49.520 | Now, in today's show, I think you're going to enjoy it because we're just going to talk with
00:02:52.000 | Robert as a man, as an author, as a man, and get his insights on personal finance, the industry,
00:02:58.240 | and on what and how his advice has changed over the years and what's currently true and what's
00:03:03.280 | not been true.
00:03:03.840 | I think you're really going to enjoy this.
00:03:05.440 | It was a pleasure to sit down with him virtually over Skype.
00:03:09.120 | It was a pleasure to talk to him and to hear what he's been able to accomplish.
00:03:14.560 | And in line with the value of the show, living rich today and building a plan for financial
00:03:19.920 | freedom in 10 years or less, it's hard to get better than Robert Kiyosaki.
00:03:24.000 | Before I play the interview for you, two sponsors for today's show.
00:03:26.400 | Number one is Paladin Registry.
00:03:28.160 | Paladin Registry was my response to coming up with an answer for a question that many of you
00:03:33.440 | have asked me, which is, "Joshua, how do I find a great financial advisor?"
00:03:36.640 | And I said, "Well, I'm not sure.
00:03:39.760 | It's a tough question to answer."
00:03:41.920 | And so I connected with Paladin Registry and Jack Wehmeyer, the founder.
00:03:45.360 | Basically, Jack's-- here's the deal.
00:03:46.560 | He's a former financial advisor, and he got sick and tired of not having a good answer
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00:03:50.640 | So he created a careful vetting process to sort through the good financial advisors and
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00:03:58.640 | So if you are looking for a financial advisor-- and personally, I believe that we all need
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00:04:06.160 | Go to RadicalPersonalFinance.com/Paladin, P-A-L-A-D-I-N, or just click the banner on
00:04:12.000 | the website.
00:04:12.720 | RadicalPersonalFinance.com/Paladin.
00:04:14.960 | Put in your information.
00:04:15.840 | They'll connect you with a couple of advisors.
00:04:17.440 | It's up to you to take it from there.
00:04:18.880 | But at least start with having advisors whose credentials have been checked, whose disciplinary
00:04:23.920 | record has been checked.
00:04:25.040 | RadicalPersonalFinance.com/Paladin.
00:04:27.680 | Sponsor number two today is Trade King.
00:04:29.680 | Trade King is the official brokerage company of Radical Personal Finance.
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00:05:22.560 | So hey, if all your stock trades don't work out, at least you get an extra $100.
00:05:26.000 | Robert Kiyosaki, welcome to Radical Personal Finance.
00:05:31.680 | Thank you, Joshua.
00:05:32.560 | Thank you.
00:05:33.280 | Been looking forward to talking to you.
00:05:34.800 | It's hard for me to think of anybody who has had more of an impact on the personal
00:05:40.160 | finance industry than you and your Rich Dad Empire.
00:05:44.160 | To the best of my knowledge, is Rich Dad Poor Dad still the best-selling personal
00:05:49.520 | finance book of all time?
00:05:50.560 | That was from Publishers Weekly.
00:05:53.600 | But it was just recently.
00:05:55.680 | Publishers Weekly had it up there again.
00:05:58.000 | That's awesome.
00:05:58.640 | Well, congratulations on that.
00:05:59.840 | 20 years.
00:06:01.120 | Do you know that?
00:06:02.000 | 20 years.
00:06:02.720 | I'm probably, in some ways, almost the perfect consumer of your content because 20
00:06:10.320 | years ago, that's when I was just starting to pay attention to personal finance.
00:06:15.360 | When I was a young teenager, I'd spend my time hanging out in the bookstore reading
00:06:19.680 | personal finance books, and there were always a number of purple book covers quite
00:06:25.360 | prominently displayed.
00:06:26.480 | That's how I was working on books.
00:06:30.240 | I'd like to ask you a couple of questions.
00:06:31.280 | I like the title of your show, "Radical Personal Finance," because that's kind of
00:06:36.320 | my category, is I'm radical.
00:06:37.920 | I really don't like what most financial planners tell people.
00:06:43.280 | Well, this ought to be a fun interview.
00:06:45.920 | As a former professional financial planner, I've seen both sides of the industry.
00:06:50.320 | I was widely schooled in the personal finance side and also then moved over to the
00:06:56.880 | professional side.
00:06:57.520 | So I've seen both sides and live to tell about it.
00:06:59.360 | So I'd like to begin with a question primarily about your message.
00:07:02.400 | You're most well-known for "Rich Dad, Poor Dad."
00:07:05.600 | And as you mentioned, we're talking 20 years of publishing history.
00:07:09.120 | If you were to distill the essence of your message, the lessons that you want to teach
00:07:15.920 | to your listeners, your readers, your audience, what would you say is the distillation of
00:07:22.640 | your primary message as it relates to personal finance?
00:07:25.200 | That's a great question.
00:07:28.160 | It goes to chapter one, lesson one, and most people miss it.
00:07:31.360 | You know, they say, "Read 'Rich Dad, Poor Dad,'" but they don't know what lesson one,
00:07:34.320 | chapter one is.
00:07:35.040 | And lesson one, chapter one is, "The rich don't work for money."
00:07:38.720 | And that goes right over their head because from birth, you know, we're programmed to
00:07:43.760 | work for that paycheck and to save money and to invest money.
00:07:48.560 | And that one statement, "The rich don't work for money," is not between their left
00:07:54.960 | ear and their right ear.
00:07:56.000 | So it doesn't comprehend.
00:07:57.440 | I may as well speak in Japanese or Swahili, you know what I mean?
00:08:00.240 | They don't understand what I'm talking about.
00:08:01.680 | And because they don't understand that statement, "The rich don't work for money," most
00:08:06.640 | people then become enslaved to money, working for money, saving money, and investing their
00:08:12.320 | money.
00:08:13.120 | It's that one statement, "The rich don't work for money," is a radical statement.
00:08:17.680 | Do you think of that as a place to start, as a cause?
00:08:23.360 | Meaning that if you start with that statement, "Okay, the rich don't work for money," and
00:08:26.800 | if obviously I have a goal of being rich, most people who are studying personal finance
00:08:32.240 | share that goal, is that a good place to start as a financial plan or is that the outcome
00:08:39.120 | that you're ultimately working toward?
00:08:40.560 | Well, Joshua, I mean, that's why I'm laughing at your radical personal finance because
00:08:47.600 | we're in the same category.
00:08:48.960 | In other words, there's, you know, lesson number one, really, for all of us is choose
00:08:54.400 | your teachers wisely.
00:08:56.320 | So a rich dad, poor dad is about two different teachers.
00:08:59.200 | My poor dad, who was the head of education for Hawaii, PhD, you know, and then my rich
00:09:05.200 | dad, who was an entrepreneur, and they both say different things.
00:09:09.360 | Now, in our world of personal finance today, the leaders are, of course, Suze Orman.
00:09:14.080 | You know, she's number one.
00:09:15.200 | And then that's, then next is Dave Ramsey, and then there's you and I on the outside.
00:09:22.240 | But we're radical.
00:09:24.560 | And the reason Suze Orman is number one is she talks to poor people.
00:09:28.160 | And I'm not saying they're poor because they don't earn money.
00:09:31.920 | I'm saying they're poor because they have poor spending habits.
00:09:34.880 | As a financial planner, you'll see that most people make money, they just mismanage
00:09:39.760 | their money.
00:09:40.400 | That's why they're poor.
00:09:41.680 | So that's why she'll say, you know, I want you puppy, I want you boat.
00:09:44.480 | She goes, denied.
00:09:45.280 | You know, and we all need a Suze Orman in our lives to say denied.
00:09:49.680 | And Dave Ramsey, his byline is live debt free.
00:09:54.880 | Now, that's a great idea if you're middle class, but you're going to get crushed that
00:09:59.440 | way.
00:09:59.680 | And then there's guys like me who are basically saying I use debt and I don't pay
00:10:05.120 | taxes.
00:10:05.600 | And they go nuts.
00:10:07.520 | You go, what are you talking about?
00:10:08.880 | Because like I said, it doesn't fit between their left ear and their right ear, but it
00:10:13.920 | all goes back to lesson one, the rich don't work for money.
00:10:17.360 | And the reason the rich don't work for money is after 1971, when Nixon took us off
00:10:21.920 | the gold standard, the US dollar became a currency.
00:10:24.960 | It's no longer money.
00:10:26.080 | And they can print as much as they like.
00:10:28.800 | And as you know, today, the whole world is printing money.
00:10:32.240 | So why would you work for it?
00:10:34.000 | It doesn't make sense to me.
00:10:35.200 | So that's why it is radical.
00:10:37.280 | The Suze Orman for the poor, Dave Ramsey for the middle class and me for the rich.
00:10:42.720 | That's the difference.
00:10:43.440 | That's why the rich teach our kids about money.
00:10:45.280 | The poor and middle class do not.
00:10:47.120 | I don't work for money.
00:10:48.240 | I acquire assets.
00:10:49.440 | I build assets.
00:10:50.400 | I have businesses.
00:10:51.840 | I have real estate.
00:10:52.640 | I have oil wealth.
00:10:53.440 | But I don't want a job.
00:10:55.200 | When you're beginning, if you were given, and I agree with you about the segmentation
00:11:03.280 | of financial advice.
00:11:04.320 | Yeah, it's a broad category.
00:11:07.040 | And as a professional financial advisor, that's one of the things that I would argue most
00:11:14.320 | strongly for is that good financial advice is always specific.
00:11:17.120 | We who are, you and I in a media space, we always face the difficulty of giving generalized
00:11:24.320 | advice and then trying to teach someone that you've got to figure out how to apply this
00:11:30.080 | within the context of your own specific situation.
00:11:33.600 | And that's where--
00:11:34.880 | Amen.
00:11:36.740 | That really is amen right there.
00:11:40.000 | You can't do what we do if you need Suze Orman.
00:11:45.600 | If you can't control your spending habits, let's say you make $100,000 a year, but you're
00:11:50.080 | spending $200,000 a year.
00:11:51.600 | You need Suze Orman.
00:11:52.480 | You don't need us.
00:11:53.120 | Right, right, exactly.
00:11:55.040 | And so we've got to find the person whose advice is suitable to us at a point in time.
00:12:01.520 | I'm going to use myself as a case study and just ask you to lay out what today in 2016
00:12:09.600 | is going to look like.
00:12:10.160 | If I, as a young man, just for your knowledge, I've got a young family.
00:12:14.160 | I'm in an excellent financial position.
00:12:17.120 | I live a rich life.
00:12:18.320 | I'm not yet a millionaire.
00:12:19.840 | But I've got cash.
00:12:20.720 | I've got capital.
00:12:21.760 | I have assets.
00:12:22.640 | I've built a number of assets that are working well in my life.
00:12:26.800 | If I were looking at the investment opportunity landscape and also just considering the marketplace
00:12:33.040 | here in 2016, what are the types of opportunities that you would counsel someone like me to
00:12:38.240 | look for to build wealth?
00:12:40.640 | Well, let's say it's spring Q1 of 2016.
00:12:47.600 | To me, the best opportunity is in gold and silver.
00:12:50.800 | And that's going to pass too, because if gold is under $1,500 an ounce, it's a good time.
00:12:59.280 | It passes $1,500, or let's say silver passes $20, it's no longer a good investment.
00:13:06.800 | So as long as gold is under $15 and silver is under, let's say, $20, it's probably the
00:13:14.480 | safest thing, better than the stock market today, which is on a downward trend.
00:13:19.120 | And the governments are going broke.
00:13:21.600 | So they're probably going to print.
00:13:24.080 | And the only two political guys actually speaking about it are Donald Trump and who's the African
00:13:33.680 | American neurosurgeon?
00:13:35.040 | Ben Carson.
00:13:36.160 | Ben Carson.
00:13:36.720 | They're the only guys talking about it.
00:13:38.160 | And I think it goes over most people's heads.
00:13:41.440 | Like, Ben Carson says, "Hey, look, our national debt's not $20 trillion.
00:13:46.320 | It's $250 trillion."
00:13:47.760 | And Trump says the same thing.
00:13:50.000 | But the average American doesn't even know what that means, because it doesn't fit between
00:13:53.920 | their left ear and their right ear.
00:13:55.200 | So I didn't--
00:13:57.200 | And they don't know what's going to come down the road.
00:13:59.680 | You can't keep running out that much debt.
00:14:02.160 | Right.
00:14:04.400 | I didn't expect that as an answer.
00:14:06.960 | I had intended to ask you about some of your perspectives on central banking a little bit
00:14:12.240 | later.
00:14:12.480 | But let's jump to it now.
00:14:13.440 | Why would you feel so confident in saying that gold and silver are an opportunity?
00:14:20.880 | What's the research or what's the thought process behind that recommendation?
00:14:24.960 | Well, it goes back to everybody-- in an election, everybody's talking about Reagan.
00:14:29.680 | But Reagan had two criminals inside of his operation.
00:14:35.360 | You know, one was this guy, Caspar Weinberger, who was Secretary of Defense.
00:14:39.920 | Another one was Alan Greenspan, you know, the Fed chairman.
00:14:45.520 | And those guys-- I mean, those guys ripped us off.
00:14:47.840 | They ripped us off big time.
00:14:50.320 | And then we have these incompetent guys like Bernanke and now Janet Yellen, who are economists.
00:14:58.000 | They're academics.
00:15:00.160 | And most academics are like poor debt.
00:15:02.560 | And they're risk-averse.
00:15:04.160 | They're not very-- they're very smart in one area, but they're not smart in all areas.
00:15:09.360 | So what Janet Yellen-- I mean, she doesn't-- she has not a clue how the central bank called
00:15:16.320 | the US Fed rips us off or the ECB, the European Central Bank, or the Bank of Japan, or the Bank
00:15:22.480 | of China.
00:15:23.040 | And the reason we have this huge gap between the rich and everybody else is because we
00:15:27.680 | have a currency crisis.
00:15:29.600 | We don't have a stock market crisis or a real estate crisis.
00:15:32.560 | We have a currency crisis.
00:15:34.160 | And as long as you can print money-- that's why Ben Carson, $250 trillion, is kind of
00:15:40.480 | my number also.
00:15:41.520 | It's called the unaccounted financial-- it's called-- my brain's not--
00:15:46.480 | Unfunded liabilities.
00:15:48.160 | Unfunded liabilities.
00:15:49.440 | We're broke.
00:15:50.880 | And the question is, how are we going to handle our brokenness?
00:15:54.640 | Are we going to print money, or are we going to cut it off?
00:15:57.520 | I think we're going to print.
00:15:59.120 | So that's why I bet on gold.
00:16:00.720 | And I could be wrong, but I'd rather have gold right now than dollars or yen or pesos.
00:16:05.840 | Today.
00:16:09.200 | Today.
00:16:09.680 | Right, right, right.
00:16:10.240 | Tomorrow, if gold's at $2,000, I'm not buying anymore.
00:16:14.080 | Right.
00:16:14.580 | But if that were the case, wouldn't you rather have a productive asset as compared to a non-productive
00:16:20.960 | asset?
00:16:21.200 | Or at least-- let's talk about my situation.
00:16:23.120 | So you're in a very different financial situation.
00:16:25.120 | You've made your fortune.
00:16:26.880 | Or at least you've made plenty of fortune.
00:16:28.720 | And so now you've got to think intensely about protecting that, which is a different scenario.
00:16:34.800 | You're at a different phase of life.
00:16:37.280 | For somebody like me, wouldn't you think that gold or silver are generally less productive
00:16:44.240 | than some of the other business pursuits that I could participate in?
00:16:47.120 | They're definitely less productive.
00:16:49.600 | But right now, I'm waiting for the crash.
00:16:51.440 | I wrote a book.
00:16:52.160 | It came out-- it started in 1996, and it came out in 2002.
00:16:56.240 | It said the biggest financial crash in history was coming in 2016.
00:16:59.520 | So looking at the long view, I think we're going to collapse in 2016 or 2017.
00:17:06.800 | And when that happens, you want to have gold or cash, because people will be in a short
00:17:14.320 | squeeze.
00:17:14.800 | And a short squeeze is when somebody has to sell anything that's somewhat liquid, like
00:17:20.640 | their Mercedes or their house or whatever.
00:17:23.040 | They don't have to start getting out.
00:17:25.360 | And so I'm waiting for the crash.
00:17:27.920 | We're at an all-time high in the stock market.
00:17:30.880 | Are you kidding me?
00:17:31.760 | Why would you buy anything?
00:17:33.120 | So when that baby comes down, that's when you get rich.
00:17:38.080 | You get more rich when things crash.
00:17:40.400 | And that's what most people don't realize, is when afterwards crashes, the better time
00:17:46.320 | to start businesses and acquire and do those things.
00:17:49.280 | I'm waiting for the crash.
00:17:50.320 | That's why I'm kind of biding my time.
00:17:53.680 | How would you define the word "crash"?
00:17:55.200 | Well, the same thing that happened in 2007.
00:17:58.160 | You know, if you go to my website, richdad.com, you have pull-up pictures, I mean, video of
00:18:06.480 | me with Wolf Blitzer on CNN, and I'm calling the crash of Lehman Brothers an old thing.
00:18:11.920 | And I'm so far ahead of my time.
00:18:14.320 | So 2016, the same thing is going to happen.
00:18:17.600 | There's all the lakes going to come out.
00:18:19.040 | But this time, it's not going to be just a U.S. crash.
00:18:22.000 | It's going to be global, because China is in serious, serious trouble.
00:18:25.920 | So that's why you're going to see a crash of epic proportions in 2016 to 2017, outside
00:18:34.320 | 2018.
00:18:35.040 | And that's when you'll get rich.
00:18:37.600 | So in some ways, in many ways, I agree with you.
00:18:41.040 | I'm a little bit uncomfortable with the word "crash."
00:18:43.120 | It goes a little-- it's a little more sensational than I'm--
00:18:45.840 | It's called "collapse."
00:18:46.720 | It's called "collapse."
00:18:47.920 | That doesn't help.
00:18:49.920 | I'm uncomfortable with the word "crash" and the word "collapse."
00:18:52.480 | But I've also said many times on the show, my best guess is severe recession or depression.
00:18:58.960 | No, no, no.
00:19:00.400 | Collapse.
00:19:00.880 | OK.
00:19:02.080 | We'll agree to disagree.
00:19:03.280 | Let me tell you why.
00:19:04.400 | Go ahead.
00:19:04.900 | If it scares the hell out of you, you may prepare for it.
00:19:09.200 | If you sugarcoat it, like what's called political correctness, you might say, "Oh, yeah, yeah,
00:19:14.000 | yeah.
00:19:14.160 | It won't be a problem."
00:19:16.160 | But by scaring the you-know-what out of yourself, you may start taking action.
00:19:19.760 | And that's why I use severe words.
00:19:21.680 | I use severe language.
00:19:23.600 | Because hopefully, most people will be like deer in the headlights.
00:19:27.040 | They won't do anything.
00:19:27.920 | And other people like you will say, "Well, maybe he's right and he will do something."
00:19:32.560 | But if you sugarcoat it a little bit, mild recession and all this stuff, it may as well
00:19:37.520 | be Janet Yellen.
00:19:38.400 | But here's my rebuttal to that.
00:19:41.360 | If you are too strong with your language and you are—and I understand, you wrote a book.
00:19:46.720 | You wrote the book Prophecy.
00:19:48.000 | I read it, I think, a couple years or so after it came out.
00:19:52.000 | And so, I don't necessarily expect you to agree with me.
00:19:55.040 | But here is my counterpoint.
00:19:56.640 | If you're too strong with your language, what happens is people have a tendency to grab
00:20:01.360 | onto the emotion of what you're saying rather than the more careful, logical perspective.
00:20:06.640 | And my fear is that in the same way that those who are concerned about something like Y2K,
00:20:13.520 | and they ran out in a frenzy and they said, "We've got to stock up because Y2K happens."
00:20:18.000 | And they buy a pallet of freeze-dried food and a generator.
00:20:23.920 | And then on January 2nd, they say, "Well, that was a waste."
00:20:26.960 | And then they get rid of all the food in the generator.
00:20:28.800 | I think a more realistic approach is to say, "Be prepared for disruptions in society."
00:20:34.880 | And Y2K is one possible scenario, so be ready, but don't go crazy about it.
00:20:39.680 | And so, in the same way I would apply it to finance, I would say, "Be prepared for
00:20:43.760 | significant recessions, be prepared for stock market crashes, be prepared for long-term
00:20:49.200 | depressions, but don't bet the farm on it and make sure that you're prepared to take
00:20:53.280 | advantage of the business opportunities that come out of it."
00:20:55.840 | That way, if you and I are wrong about our timing or wrong about the Fed so far has certainly
00:21:04.400 | seemed to be able to fulfill their mission, and who knows, will they continue to be able
00:21:08.480 | to or not?
00:21:09.440 | I don't know.
00:21:09.920 | But that way, at least you leave people thinking and more prepared for the normal fluctuations
00:21:16.080 | with severe occurrences in between.
00:21:18.240 | What say you?
00:21:18.800 | That sounds politically correct to me, but I think you're both bunch of...
00:21:24.080 | Look, all I'm saying is this, and as a financial planner, you know 90% of the people are not
00:21:28.480 | prepared.
00:21:29.360 | Agreed.
00:21:30.480 | Okay, so they're already either complacent or they're terrified.
00:21:34.880 | I talk to my family all the time.
00:21:38.960 | They think I have my head up my butt, you know, because they have jobs.
00:21:42.960 | And you tell me people are losing their jobs today?
00:21:46.480 | You know, the big thing of the presidential debate was that Carrier just wiped out 2100
00:21:52.640 | jobs in Indiana or something, and people are crying, gnashing their teeth.
00:21:56.720 | What do you want to say to them?
00:21:59.360 | You know, I mean, if I'm telling you a crash is coming, it's coming.
00:22:02.640 | I promise you that, because in 2007, I made so much money.
00:22:07.200 | I borrowed $500 million in 2009.
00:22:13.280 | Half a billion dollars.
00:22:15.520 | That's how you get rich.
00:22:16.560 | I was ready for it.
00:22:18.800 | What'd you do with the money?
00:22:20.880 | I bought real estate.
00:22:22.800 | You know, at 3%...
00:22:25.440 | I was floating at 5.5% interest.
00:22:27.680 | They did reduce it down to less than 3%.
00:22:29.600 | You know how much money I made on all that debt?
00:22:32.880 | I made...
00:22:33.360 | They're giving money away.
00:22:34.800 | So when all those real estate prices crashed, because they were at all-time highs, I went
00:22:40.720 | in and bought all the real estate I could buy.
00:22:42.640 | How on earth do you buy $500 million of real estate?
00:22:48.560 | That's what I do.
00:22:51.280 | Well, what I mean, though, is the scale.
00:22:52.480 | I mean, it's one thing to go out and find a couple of single-family homes, but when
00:22:55.520 | you get into, I mean, those numbers, I mean, that's thousands of properties.
00:23:00.000 | Were you deploying it in large commercial property or individual transactions?
00:23:03.520 | 10,000.
00:23:04.080 | 10,000 apartment houses.
00:23:05.840 | Okay.
00:23:06.340 | We operated at a mini rate.
00:23:08.640 | Our thing is just, look, Rich Dad Poor Dad, I started when I was 9 or 10 years old.
00:23:15.280 | You know, I bought my first property when I was 20-something.
00:23:19.360 | And what increases is your knowledge and experience as you go along.
00:23:23.280 | So I didn't start off with 10,000.
00:23:25.360 | I started with one.
00:23:26.560 | Excuse me.
00:23:28.820 | And my knowledge increases, and I make my mistakes, and I screw up, and I correct.
00:23:35.920 | And then one day I had 100, and then the next time it was at 1,000.
00:23:41.680 | And then from 1,000 to 1,500 didn't take so long.
00:23:47.040 | And then when I knew the market was crashing, that's when we moved in, right after the crash.
00:23:51.920 | So you should read my book.
00:23:54.480 | It's called Second Chance.
00:23:56.000 | You know, it just came out a year ago.
00:23:57.840 | And in there you'll see the charts and graphs.
00:24:00.320 | I just read the charts and graphs.
00:24:01.840 | It's clear as day when the markets are going to crash.
00:24:05.600 | I have in Second Chance a chart of the Dow for 120 years.
00:24:10.560 | You will see that we've had three major crashes since 2000.
00:24:14.720 | We've had two real estate-- no, two stock market crashes.
00:24:18.560 | And we've had one real estate crash in the first from 2000 to 2010.
00:24:24.160 | And I call 2016.
00:24:26.880 | There's going to be a currency collapse.
00:24:28.400 | That's a very severe word.
00:24:30.480 | Now, if it doesn't happen, fine.
00:24:32.960 | I'm still going to do the same thing.
00:24:34.480 | I'm still going to use debt to buy real estate.
00:24:36.640 | Nothing changes.
00:24:39.440 | You know, I mean, I just-- I'm aware of the ups and downs of markets.
00:24:45.200 | And that's what Second Chance-- you just get the book, read it.
00:24:47.760 | I use debt.
00:24:49.200 | I don't save money.
00:24:50.240 | I don't have stocks.
00:24:51.200 | And I don't pay tax.
00:24:53.360 | That's my personal finance, legally.
00:24:57.600 | So I'm not saying you should do it.
00:25:00.960 | I'm just telling you.
00:25:01.680 | That's why I like the title, Radical Personal Finance.
00:25:04.160 | It's precisely radical.
00:25:05.520 | - Trust me, if you listen to the show, we--
00:25:07.680 | it's funny, some of the audience is longtime listeners.
00:25:10.640 | They're chuckling at you saying that I'm politically correct.
00:25:13.920 | I consider this politically incorrect financial talk.
00:25:16.640 | - No, no.
00:25:17.040 | - You're polite.
00:25:20.000 | But I was a Marine in Vietnam.
00:25:23.680 | The time to be polite, time not to be polite.
00:25:25.760 | You know, if I really suspect that we're going to collapse, I'd better say it.
00:25:32.560 | And that's why I love Trump, you know, because he just-- he called-- he said,
00:25:36.880 | George Bush, you know, he was the skipper of the Titanic for 9/11.
00:25:44.480 | For the economic collapse and for the invasion of Iraq.
00:25:47.520 | He said, the guy is incompetent.
00:25:49.040 | And all the Republicans say, how can you say that?
00:25:52.880 | How can you say that?
00:25:53.760 | Well, that's what happened.
00:25:54.880 | That's what happened.
00:25:56.720 | And no, no, no, that didn't happen.
00:25:59.680 | That didn't happen.
00:26:00.480 | George didn't do that, you know.
00:26:02.160 | Give me a break.
00:26:02.960 | - Over the years, you mentioned Donald Trump.
00:26:06.720 | He is probably the premier figurehead currently of controversy
00:26:12.640 | and turning controversy to his advantage.
00:26:14.800 | And over the years, you've certainly been embroiled in various controversies.
00:26:19.920 | How have you learned to deal with-- personally,
00:26:24.400 | with deal with the emotion and the business impact of controversy?
00:26:29.200 | - Oh, I mean, when people call your names and all that stuff?
00:26:33.360 | - I just-- it goes more than that.
00:26:35.680 | But I mean, you-- first of all, I mean, your-- all of your writing was built upon
00:26:39.680 | a controversial title, your initial book about-- "Don't Go to School."
00:26:43.680 | I forget the exact title.
00:26:44.720 | Forgive me.
00:26:45.120 | So that's obviously a controversial perspective.
00:26:47.760 | But then over the years, your books have been incredibly successful.
00:26:50.880 | And that's brought a lot of public scrutiny.
00:26:52.160 | And there's even a Slate article this week challenging a lawsuit that you're engaged in.
00:26:58.400 | And I don't care about the particulars of that.
00:27:00.960 | That's a-- you know, people-- that's a place for another format.
00:27:03.840 | I'm interested in the personal experience of that,
00:27:06.960 | of how have you learned personally to deal with that and maintain,
00:27:10.960 | I guess, a sense of happiness while going through controversial situations?
00:27:14.880 | - That's a great-- that's a very good question.
00:27:16.960 | I do a lot of meditation.
00:27:19.040 | And I also-- you know, if I am, let's say, wrong, I admit it.
00:27:25.680 | And I just pay the dues.
00:27:29.440 | But other than that, if I'm worried about what pencil heads think of me,
00:27:35.040 | then I'm a pencil head, too, you know?
00:27:36.720 | I-- look, I just-- you can ask my accountant.
00:27:40.960 | I have the money.
00:27:41.680 | I have all that stuff.
00:27:42.720 | Most lawsuits are frivolous, you know?
00:27:46.320 | I just got charged, again, some of this is a sexual harassment.
00:27:51.040 | I said, "You gotta be kidding me."
00:27:52.320 | You know what I mean?
00:27:52.960 | People are so f'ed up today.
00:27:54.480 | It's incredible.
00:27:55.280 | But if I run my life upon that, being afraid of pencil heads,
00:28:01.920 | not worth living, you know what I mean?
00:28:04.640 | - Over the course of 20 years as a teacher and author and lecturer and guru,
00:28:11.280 | and I mean that in a complimentary sense, not a derogatory sense,
00:28:14.480 | what would be some of the biggest mistakes,
00:28:17.520 | or what advice have you given over the years that you've come to regret?
00:28:20.400 | - I haven't.
00:28:22.080 | I've told people, "Your house is not an asset.
00:28:25.120 | Savers are losers, and I don't invest in the stock market."
00:28:28.320 | And I use debt, and I don't pay taxes.
00:28:32.880 | I mean, I don't just give advice, I live my advice.
00:28:38.240 | And the thing that's happened, that's why "Rich Dad, Poor Dad" came out in April of 1997,
00:28:43.840 | so it's 19 years, 20 years next year,
00:28:45.840 | is almost everything I've said has come true.
00:28:48.800 | I've said, "Savers will be losers."
00:28:50.960 | And now we have quantitative easing.
00:28:52.960 | You don't have ZURP, you know, ZURP is zero-interest rate policy.
00:28:57.360 | You now have NERP, negative-interest rate policy.
00:29:00.320 | It means you have to pay to save money.
00:29:03.200 | So savers are the biggest losers, and people are still saving money.
00:29:06.400 | And I said, "The biggest stock market crash is coming in 2016."
00:29:10.720 | And on schedule, we've already lost one-third of the wealth of this country.
00:29:15.520 | And those guys with 401(k)s just got wiped out in 2016.
00:29:19.040 | So, I mean, I just call it as I see it.
00:29:23.040 | If I'm wrong, I'm wrong.
00:29:24.080 | But so far, I'm fairly accurate.
00:29:26.800 | I also called 2007.
00:29:29.200 | So all I'm just saying is we're going to collapse in 2016 or 2017
00:29:34.400 | simply because we're going to go the same way Japan did and Greece does
00:29:41.600 | and Puerto Rico and Brazil.
00:29:43.920 | We can't keep printing money.
00:29:45.840 | So that's why lesson one, chapter one is the rich don't work for money.
00:29:50.480 | And that's why I said right now, I think gold looks pretty good
00:29:53.440 | because if money comes down in value of the dollar,
00:29:56.880 | then gold should go past $2,000.
00:29:59.280 | I wouldn't buy past $2,000.
00:30:01.760 | But I'd rather have gold than the dollar right now.
00:30:05.360 | 50 years from now, gold will still be around.
00:30:07.600 | The dollar won't be.
00:30:08.480 | That's what's happening.
00:30:10.080 | And so if I'm wrong, I'm wrong.
00:30:13.360 | But so far, I'm right.
00:30:14.800 | A consistent theme of your message is to acquire and invest in financial education.
00:30:23.040 | So I assume you put your money where your mouth is
00:30:25.600 | and that you have developed mentors and advisors,
00:30:29.840 | obviously, beyond the rich dad figure that you talk about.
00:30:33.920 | Who do you look for financial advice, economic advice?
00:30:39.440 | Who are your current mentors, advisors, and sources of financial education?
00:30:43.200 | Well, one is Donald Trump.
00:30:45.280 | You know, we wrote two books together.
00:30:46.560 | And we're both real estate guys.
00:30:48.800 | Also, there's a guy named Bert Dillman,
00:30:51.840 | "The Grace of Wellington" report.
00:30:53.440 | Everybody should subscribe to that.
00:30:55.520 | And a couple other guys.
00:30:57.280 | One, the big one that really understands it is a guy named Richard Duncan.
00:31:01.520 | He wrote "The Dollar Crisis."
00:31:02.800 | He's hard to read.
00:31:03.600 | That's the only problem.
00:31:04.480 | But when he wrote "The Dollar Crisis,"
00:31:07.200 | it was easier than to predict the downfall of China.
00:31:11.840 | And so what I'm saying to people right now, and Kyle Bass just said it,
00:31:16.080 | this is the Chinese banking crisis will be bigger than the U.S. banking crisis.
00:31:23.280 | So you can sit there and hope and pray and buy your mutual funds
00:31:27.920 | and hope that guys like Kyle Bass, myself, and Duncan and Dillman are wrong.
00:31:34.320 | Or you can take evasive action right now and do something while gold is under
00:31:39.120 | about $1,200 an ounce or silver is at $1,500 an ounce.
00:31:42.080 | Because the problem is not stock markets or real estate.
00:31:45.760 | It's currency.
00:31:46.640 | That's why the rich don't work for money.
00:31:49.200 | In 1971, Nixon took us off the gold standard.
00:31:53.040 | And today it's called quantitative easing.
00:31:55.680 | We have printed more money than any time in the history of the world.
00:31:59.600 | And when we have $200 trillion in unfunded liabilities, the odds are
00:32:05.760 | they're going to print some more to cover it.
00:32:08.800 | Now, if they don't cover it, we collapse anyway.
00:32:10.880 | You grew up in Hawaii.
00:32:16.240 | And as I understand it, Hawaii would lean towards more of a liberal political philosophy.
00:32:23.680 | What did you say?
00:32:26.340 | Very common.
00:32:29.520 | If they believe the government should solve our problems, I don't like the government.
00:32:36.160 | Understood.
00:32:38.080 | Hawaii is one of three states I haven't yet been to.
00:32:40.080 | So I was being careful with my description.
00:32:43.600 | I'm trying to.
00:32:44.160 | It's just that I don't keep my money there.
00:32:46.000 | And no one would keep my money in California or New York.
00:32:48.880 | Right.
00:32:49.380 | You know what I mean?
00:32:50.480 | I'm not that stupid.
00:32:51.920 | I didn't do well in school, but I don't keep my money in Hawaii, California, or New York.
00:32:56.960 | Texas is better.
00:32:57.840 | Florida is better.
00:32:58.720 | Nevada is good.
00:33:00.240 | So you grew up in a liberal environment, and your biological father was in the government
00:33:07.200 | school system.
00:33:08.160 | But today, you seem to have moved in a very libertarian political direction and a very
00:33:15.920 | free market Austrian economics position.
00:33:19.120 | How did you come to that change of thinking?
00:33:25.120 | Well, that's the story of Rich Dad Poor Dad.
00:33:28.000 | My rich dad was theoretically an uneducated man, but he was very smart financially.
00:33:36.720 | And he really thought that he's kind of like Trump.
00:33:39.920 | He didn't really not like government.
00:33:41.520 | He says you got to have them.
00:33:42.800 | But he said he just don't want to think like him.
00:33:44.560 | You know, and so my poor dad always believed the government should take care of people.
00:33:49.440 | So my poor dad was more like Bernie Sanders and Hillary.
00:33:52.400 | And my rich dad was more like Trump.
00:33:54.960 | That's the difference.
00:33:56.800 | And we all have those choices.
00:33:59.280 | So I don't I don't I don't trust my government at all.
00:34:03.520 | I mean, I'm a Vietnam veteran.
00:34:04.960 | I went there twice.
00:34:06.560 | And we're lied to the same thing we're being lied to in the Middle East right now.
00:34:11.520 | You know, those ISIS is made up of a lot of Saddam Hussein's ex fighters.
00:34:17.920 | We finance our enemies.
00:34:20.800 | So I don't really want to participate.
00:34:23.760 | You've for about 20 years, you've skirted the issue of talking about the identity of
00:34:32.720 | the rich dad figure.
00:34:34.960 | Do you ever intend to disclose a name or put that controversy to rest?
00:34:38.320 | I think it was already disclosed.
00:34:40.880 | I did a radio show with his son.
00:34:43.760 | It's called Rich Dad Radio.
00:34:45.840 | You can go to his archive.
00:34:46.880 | And we talked about what he taught us.
00:34:49.120 | Who was the who was the rich dad?
00:34:52.480 | What was his name?
00:34:53.120 | I don't I don't give that.
00:34:54.800 | See, there you go.
00:34:56.800 | You're going right around.
00:34:58.000 | What was the name of the son?
00:34:59.200 | What difference would it make?
00:35:02.160 | If you just go to Rich Dad Radio, you want to listen to the program, go listen to the program.
00:35:06.960 | All right.
00:35:08.000 | So it's I will.
00:35:10.720 | It won't make you any richer, I promise.
00:35:12.480 | I'll let you go on that one.
00:35:15.680 | How we doing on time?
00:35:17.200 | I got a couple of questions more.
00:35:18.880 | Do you have a few more minutes or do we need to cut it off here?
00:35:20.640 | No, no, go ahead.
00:35:22.240 | Okay, because I know we only we're only booked for 30 minutes.
00:35:24.080 | I want to be respectful of your time.
00:35:27.360 | Personally, in your teachings, you talk about escaping the rat race.
00:35:31.840 | And I'm interested to know at what point in time, historically, in your life, did you first
00:35:39.280 | come to the realization that you had actually escaped the rat race?
00:35:43.440 | What was the what was the how did you know that you were out of the rat race at that point?
00:35:48.640 | That's two good questions.
00:35:53.440 | I would say about 1994.
00:35:57.360 | So my wife and I met in 84 and we were free by 94.
00:36:02.800 | We weren't rich.
00:36:03.520 | We're making about $150,000 a year without working because we had real estate.
00:36:08.880 | And we weren't paying taxes on $150,000.
00:36:12.160 | So that was our goal.
00:36:13.200 | But you're not rich at $150,000.
00:36:14.960 | And then I would say last year, I went past what I need.
00:36:19.760 | You know, I have too much money now.
00:36:22.160 | So it was kind of a it was kind of a tragic year because I was going, no, my game is finished
00:36:27.600 | because I have I have more than enough money.
00:36:29.360 | So then that's wealthy, as rich as wealthier than what's next.
00:36:34.560 | So that's kind of my evolution.
00:36:36.160 | But why did you know?
00:36:38.720 | And the reason I let me give you more backstory and more context for the question.
00:36:42.400 | In the personal finance industry, we gurus talk a lot about escaping the rat race and
00:36:50.400 | having enough money to be rich or to be financially free, financially independent, etc.
00:36:55.360 | But the thing I've noticed is and this was one of the conclusions I came to as a financial
00:36:59.440 | advisor was that nobody retires.
00:37:01.840 | And the reason nobody retires is that those who are rich and wealthy don't want to retire.
00:37:08.800 | And those who are desperate to retire because they don't want they don't want to do what
00:37:13.440 | they're doing anymore for work, never actually build the money to retire.
00:37:17.760 | And so on its face, almost nobody retires.
00:37:21.520 | Obviously, I used to work with retired clients.
00:37:23.680 | That's a it's a it's a provocative statement.
00:37:26.160 | But when you look at it, Conrad, Donald Trump is not retired.
00:37:29.200 | You're not retired.
00:37:30.320 | Dave Ramsey is not retired.
00:37:31.680 | Insert whoever, whatever popular rich figure that you want to talk about.
00:37:35.840 | Nobody retires.
00:37:36.800 | And so we always struggle a little bit with this definition, because once you reach the
00:37:42.080 | escape point from the rat race, once you reach that point of financial freedom or financial
00:37:45.520 | independence, my observation is that most people don't actually retire.
00:37:48.960 | So if you're not going to retire, if you're not going to quit, then how do you know when
00:37:53.040 | you hit your goal?
00:37:53.760 | Well, it's not financial freedom, not retirement.
00:37:57.840 | Those are two retirement is for people who hate what they do.
00:38:02.480 | I love what I do.
00:38:04.880 | I just want to be free.
00:38:06.560 | They're very, very different words.
00:38:08.560 | So it's a very good question.
00:38:11.360 | But anybody who dreams of retirement really hates their job.
00:38:15.600 | That's the problem.
00:38:17.200 | So at that point, I was financially free at 47.
00:38:23.520 | My wife was 37.
00:38:25.040 | That was in 1994.
00:38:27.040 | And we just keep doing what we love to do.
00:38:31.440 | We buy more and more real estate.
00:38:33.280 | We start more businesses.
00:38:35.200 | Don't pay any taxes.
00:38:39.120 | And harass people.
00:38:42.080 | That's why if you read my book, Second Chance, you look at some of the charts there of the
00:38:49.200 | Dow for 120 years.
00:38:50.800 | If that doesn't scare the you know what out of you.
00:38:52.880 | You know, I would, I would, you know, when you look at 120 years of the Dow, what cracks
00:38:58.800 | me up is every time I listen to CNBC, they talk about the giant crash of 1929.
00:39:04.720 | Well, you can look at the chart of the Dow from 1895 to 2015, you'll see the giant crash
00:39:10.640 | of 1929 doesn't even register.
00:39:13.360 | As compared to the crash of 2000, 2000 and 2007 and the one that's coming.
00:39:20.960 | This crash is so big.
00:39:23.840 | I mean, if you look at that chart in my book, Second Chance, you won't need coffee for a
00:39:29.840 | week.
00:39:31.760 | And especially if you have a 401k or you're counting on, you know, like CalPERS, the state
00:39:38.080 | pension plans, they're all bankrupt.
00:39:39.920 | They're all bust.
00:39:40.640 | You know, three years ago, Obama had to, you know, bail out, I think the Frito or the Twinkies
00:39:47.200 | drivers, you know, because their defined contribution plan got wiped out.
00:39:51.840 | So he bailed out the Twinkie guys.
00:39:54.080 | It's coming.
00:39:56.560 | I mean, you know, you can say, well, it's not coming.
00:39:58.640 | Maybe it won't.
00:39:59.280 | Just look at the charts, look at the graphs and second chance.
00:40:01.920 | And you can make up your own mind.
00:40:04.960 | You know, maybe I'm wrong.
00:40:06.000 | Maybe I'm missing something, but I don't think so.
00:40:08.800 | Just look at the charts, look at the graphs.
00:40:10.480 | The pictures are worth a thousand words.
00:40:12.240 | A 10 year old kid can understand it.
00:40:14.080 | You look at the amount of money printing going on.
00:40:16.800 | You look at when Social Security goes bust.
00:40:18.960 | All those charts are in there.
00:40:20.160 | I'll give you my rebuttal.
00:40:23.120 | So I'm generally pessimistic about the long term future of the United States government
00:40:30.960 | as it currently stands.
00:40:32.480 | However, I, this is my personal opinion.
00:40:34.800 | I don't expect, I don't expect there to be such a dramatic, you know, end of the world
00:40:41.600 | as we know it event.
00:40:42.720 | We're in global war, et cetera.
00:40:44.720 | I can't quite get to that position.
00:40:47.280 | Now, I have not read second chance.
00:40:49.280 | So I'm under equipped for the conversation.
00:40:52.720 | However, having studied a lot of doom and gloom economic prognostication, the major
00:40:59.920 | factors that I find to be compelling against the doom and gloom scenario is number one,
00:41:06.320 | companies are not countries.
00:41:08.160 | Countries go bankrupt all the time.
00:41:09.840 | And so I expect over time, the US government to go bankrupt.
00:41:12.800 | I expect the US government to default on its debt.
00:41:14.960 | That doesn't necessarily impact or influence what the companies that I own shares of might
00:41:21.120 | do.
00:41:21.680 | And number two, simply because something is a historical event that doesn't lend indication
00:41:27.360 | to the future that something is going to happen again.
00:41:30.000 | Now, obviously cycles exist, but there's always got to be a causation factor.
00:41:35.280 | And when I look at the world that exists fundamentally, the simple fact that I see is that our currency
00:41:43.440 | is humming along perfectly fine.
00:41:45.920 | The US dollar is the most valued reserve dollar in the world, excuse me, reserve currency
00:41:50.640 | in the world.
00:41:51.280 | Certainly it has its chinks in the armor.
00:41:53.920 | But the basic logical flaw that I see in a lot of economic doom and gloom prognostication
00:42:01.600 | is that people say, well, the world has been controlled up to this point by the central
00:42:05.440 | banking system.
00:42:06.560 | And then something's going to happen that's out of their control and then it's all going
00:42:11.280 | to fall apart.
00:42:12.080 | And I don't see how that argument holds water.
00:42:14.480 | Where am I wrong?
00:42:15.760 | It might be right.
00:42:19.360 | I mean, I'm not here to-- everybody's-- that's why I said there are three financial planners
00:42:24.160 | in the world, Suze Orman, Dave Ramsey, and me.
00:42:28.000 | I use debt.
00:42:29.600 | I don't pay taxes.
00:42:30.640 | That's my game.
00:42:32.800 | You know, if I owned stocks, I'd pay taxes.
00:42:37.280 | So I don't want to pay taxes.
00:42:40.160 | Can you expand a little bit more of what you mean as far as by the statement, I don't pay
00:42:48.000 | taxes?
00:42:48.400 | Are you specifically referring to that because of using real estate, you have significant
00:42:52.400 | enough depreciation allowances that that reduces your profits?
00:42:55.200 | Or can you give that answer a little more texture, please?
00:42:58.320 | Yeah.
00:42:59.940 | I don't have a job, OK?
00:43:01.760 | So I don't have a work for money.
00:43:03.520 | So when money comes in, I buy-- like last year, I bought 2,000 units.
00:43:12.720 | Now, the reason I buy 2,000 units of apartments is because I get-- and I use debt.
00:43:18.640 | I use depreciation.
00:43:20.400 | I just depreciate them.
00:43:21.440 | And so my income is offset by depreciation.
00:43:24.320 | So I have to buy more real estate so I can keep losing money.
00:43:30.480 | [LAUGHTER]
00:43:34.480 | I'll refer the listener to your books on the subject of tax-free wealth.
00:43:38.400 | I'm not saying do it.
00:43:40.240 | I'm just saying that's my game.
00:43:41.840 | [LAUGHTER]
00:43:43.120 | And if Dave Ramsey lived debt-free and I just borrowed $500 million, a half a billion,
00:43:49.680 | obviously he's not going to agree with me either.
00:43:53.040 | Right.
00:43:53.360 | Right.
00:43:54.000 | And this is--
00:43:55.040 | And I don't expect anybody to agree with me.
00:43:57.040 | I just started back in 1973 with a little one-bedroom, one-bath house in the island of
00:44:03.120 | Maui.
00:44:03.620 | I paid for it with a credit card, and it was 100% debt.
00:44:07.360 | I made $25.
00:44:10.560 | And I got to depreciate it.
00:44:11.760 | Capitalism is a lovely form of making money.
00:44:16.640 | Right.
00:44:17.360 | And it's very doable.
00:44:18.240 | If I got a job, I'd have to pay tax.
00:44:20.640 | Agreed.
00:44:22.160 | Agreed.
00:44:23.040 | And it's very doable.
00:44:23.680 | And just for the listener's sake, the simple concept here is just recognize that borrowed
00:44:29.280 | money you don't pay taxes on.
00:44:31.040 | Because it's not income.
00:44:32.160 | It's borrowed money.
00:44:33.120 | So if you can arrange--
00:44:34.400 | But the problem is you pay money on stocks.
00:44:36.640 | I don't pay money on real estate.
00:44:38.240 | There's a very big difference there.
00:44:39.360 | In fact, I got accelerated depreciation and all those other things that reduced my taxes.
00:44:45.360 | So it's just a different game.
00:44:47.680 | And financial education is a very, very big subject.
00:44:50.720 | So I'm not saying-- that's why I started this whole thing.
00:44:53.840 | Three people-- Susie, Dave, and myself.
00:44:56.400 | And somewhere in there, people find their happy camp in there somewhere.
00:45:02.640 | (laughs)
00:45:03.440 | What do you do in your free time that you value the most?
00:45:08.000 | I probably study a lot.
00:45:09.200 | There's a book I think everybody should read, but nobody is.
00:45:12.640 | It's called-- I forget the name-- but it's written by David Stockman.
00:45:17.520 | It's about 750 pages long.
00:45:19.360 | If you want to find out why we're in financial trouble, it's that book.
00:45:24.080 | It's by David Stockman.
00:45:25.440 | It's "The Great Unraveling of the Great"-- something like that.
00:45:27.680 | But he's not a doom and gloom guy.
00:45:29.760 | He just explains stupidity.
00:45:31.520 | You know, how Greenspan and how Bernanke and all these guys--
00:45:37.120 | and Paulson-- just ripped us off, which is my belief anyway.
00:45:40.800 | You're referring to "The Great Deformation" book?
00:45:43.840 | "The Great Deformation" is what it is, yeah.
00:45:46.480 | It's a fantastic book.
00:45:47.440 | But it's 750 pages.
00:45:50.480 | And then there's Richard Duncan's book called "The Dollar Crisis,"
00:45:56.720 | which explains why China is in trouble.
00:45:59.680 | But China is no different than Mexico or Indonesia and those guys,
00:46:05.280 | and then Japan and why now the United States is next.
00:46:08.720 | It's all factual.
00:46:11.040 | Just look at it.
00:46:12.000 | You can see it coming.
00:46:12.880 | You can't keep printing money to pay your bills.
00:46:17.280 | At this point in time, you are still
00:46:22.560 | overseer and the head of a very large business.
00:46:27.200 | And I'm interested to know, what does your normal work day look like from the beginning?
00:46:32.800 | I don't have a job.
00:46:34.480 | I mean, I don't go to work anymore.
00:46:35.840 | I'm a CEO and a president.
00:46:38.640 | When I said that statement to you that rich don't work for money, I'm living proof of it.
00:46:45.200 | I don't have an office.
00:46:47.920 | I sit around and I read.
00:46:49.760 | And I do stuff like that.
00:46:52.800 | How did you make the transition?
00:46:55.840 | And explain what I'm asking.
00:46:57.840 | So I run a small business here with Radical Personal Finance.
00:47:02.000 | This is currently squarely in the self-employment quadrant.
00:47:06.240 | It is not a capital B business.
00:47:10.240 | It is squarely in the self-employment quadrant.
00:47:12.480 | However, we're moving in a different direction.
00:47:15.040 | I'm capitalizing on the resources and assets that I have and the skills
00:47:19.520 | and moving in a different direction.
00:47:20.480 | But one of the most challenging things is making those transitions,
00:47:23.680 | figuring out how to transition a business from the owner-operator doing all of the work
00:47:29.680 | to overseeing an organization.
00:47:32.400 | Where were the inflection points for you?
00:47:35.280 | Where you transitioned little by little?
00:47:37.200 | And how did you educate yourself through that process?
00:47:39.600 | Well, Josh, I'm not going to give you an answer.
00:47:42.720 | I'll flip it, but it's true.
00:47:44.480 | I mean, what I always say, the key to success is incompetence.
00:47:47.600 | So since I'm incompetent, I have to find good people.
00:47:55.840 | [laughter]
00:48:00.640 | Like, you don't find me fixing my car or fixing my teeth or doing any of that stuff.
00:48:04.400 | It's that I just remain incompetent.
00:48:06.160 | You know, that's a story of how the Huckleberry Finn or Mark Twain,
00:48:13.280 | they got somebody else to paint the fence for them.
00:48:15.280 | That's me.
00:48:17.780 | I get everybody else to paint the fence.
00:48:22.160 | So you may be incompetent at everything other than finding good people, then,
00:48:26.400 | because that is certainly probably one of the most financially valuable skills.
00:48:30.720 | How did you become competent at finding and attracting the right people to your organization?
00:48:34.560 | Well, it's like the same thing.
00:48:36.320 | If you kiss a lot of frogs, you'll find a prince.
00:48:38.320 | I went through a lot of bad people.
00:48:40.800 | Bad people.
00:48:42.000 | You know, that, what do they call it, bankruptcy owner,
00:48:45.920 | that thing they're going after is a bad person.
00:48:47.760 | I've never been personally bad.
00:48:50.480 | I'm like Trump.
00:48:50.960 | I've never been personally bankrupt, but I've had a couple of companies go bankrupt.
00:48:54.480 | And it was always due to bad people, either incompetent or criminal.
00:49:00.640 | So that's the price you pay.
00:49:05.120 | And that's why most people stay small is they don't trust other people.
00:49:08.000 | After the bankruptcy proceedings and the lawsuits and those things were settled,
00:49:15.200 | what changes did you make in your business practices?
00:49:19.040 | Or you just said, okay, finding bad people.
00:49:21.280 | Did you make any changes after that based upon what you learned?
00:49:23.840 | That's right.
00:49:24.960 | Of course I did.
00:49:25.600 | Yeah.
00:49:26.000 | I had to, you know, I can't blame the other guy, if you know what I mean.
00:49:29.040 | And that one lawsuit, you know, it's because I was an asshole.
00:49:33.520 | You know, I mean, I caught the guy cheating and all this and I pounded on him.
00:49:37.760 | And he sued.
00:49:40.720 | Yeah, just because I was, I didn't do anything wrong per se.
00:49:45.120 | I just told him he was screwed up.
00:49:48.400 | And I warned him the crash was coming in 2006.
00:49:51.440 | And he wouldn't listen and all this.
00:49:54.240 | And he went down with it.
00:49:55.280 | And he and I got into a fight.
00:49:56.960 | I should never have screamed and yelled at him.
00:49:58.800 | That's what I did.
00:49:59.520 | So he sued and won.
00:50:03.680 | Right.
00:50:04.180 | Anyway, that's what happens in life, you know.
00:50:07.040 | You don't, you don't, you know, you don't go to court to, for settlement.
00:50:13.920 | You know, you don't go to court for justice or truth.
00:50:17.280 | You go to court because you want to get rid of somebody in your life.
00:50:19.680 | And people just lie, lie, lie.
00:50:22.800 | And that's how you learn.
00:50:26.240 | You know, so I learned.
00:50:27.040 | So I don't, I don't get into those arguments.
00:50:29.680 | I'm, that's why I have my rich dad advisors.
00:50:32.480 | I might have about eight other guys I do business with.
00:50:35.360 | And I don't go outside of that group.
00:50:36.960 | Does that make sense to you?
00:50:39.520 | And if I don't trust them, I don't do business anymore.
00:50:46.480 | I have two final questions.
00:50:47.840 | I'm interested to know about your writing process and how that's changed since the beginning.
00:50:54.240 | This is primarily just a personal question.
00:50:56.160 | Me using the opportunity to ask somebody who's more experienced than I am.
00:50:59.280 | It seems to me like you, your primary skills in watching you are in verbal communication.
00:51:05.680 | And that's for me, verbal communication is the, is the key skill.
00:51:09.440 | I struggle at writing.
00:51:10.720 | And over the years you have attracted to yourself co-authors
00:51:16.080 | who've made contributions and rich dad advisors, things like that.
00:51:19.440 | And then you've effectively used those to build, to build a brand.
00:51:23.920 | When you sat down in the beginning to write a book,
00:51:27.280 | did you write the first one just yourself?
00:51:29.200 | And how did you learn to transition from sitting there and arguing with a typewriter to,
00:51:33.760 | I guess, being the face of the brand and using the skills of other people to build it?
00:51:40.720 | How did you learn that?
00:51:41.680 | Well, first of all, I flunked out of high school twice because I can't write.
00:51:46.080 | So for me to write is a blessing from God someplace.
00:51:49.360 | But it is, I sit there and struggle every morning and that's what I'm doing.
00:51:56.000 | I just sit there and struggle with me.
00:51:57.600 | There's a book called The War of Art and everybody should get it who wants to be a writer.
00:52:02.880 | It's how you just sit there with a blank screen or a page or a paper.
00:52:08.640 | And then that's where the battle starts and everybody goes through it.
00:52:15.120 | So it's called The War of Art.
00:52:16.640 | I forgot the, I should know his name.
00:52:18.480 | Steven Pressfield.
00:52:19.520 | Yeah.
00:52:20.900 | And it's a fantastic book.
00:52:23.680 | But it's the, it's, anybody who is successful goes through that struggle,
00:52:28.720 | whether it's in golf or acting or in medicine or something like this.
00:52:33.200 | And the unsuccessful people don't go through that process regardless what the process is.
00:52:41.520 | So The War of Art is a great, great book to read and understand.
00:52:45.120 | Why do you write?
00:52:47.520 | Why do you put yourself through that struggle?
00:52:48.960 | Well, because that's what my passion is.
00:52:52.960 | You know, I could, you know, I tell you this, this market's going to come down.
00:52:57.200 | I've been right every single time.
00:52:59.440 | We're going to go down and I can see it coming.
00:53:03.200 | I've been, you can go to my website.
00:53:06.320 | I did a video called The Man I Could See the Future.
00:53:10.320 | 60 minutes long.
00:53:11.440 | You can look at it, watch it.
00:53:12.960 | But I'm calling the crashes and I'm calling this one coming up now.
00:53:17.680 | I'm on time, on schedule.
00:53:19.360 | And the people, you know, who go to school and get a job and save money and work hard,
00:53:23.920 | they're getting wiped out.
00:53:25.040 | They're getting wiped out all over the world.
00:53:28.480 | It breaks my heart.
00:53:29.360 | So I just keep writing.
00:53:30.400 | I do what I can to, you know, and look, a person does what they have to do.
00:53:36.400 | You know, you are very accurate.
00:53:39.680 | A person can only do what they're capable of doing.
00:53:42.960 | So when I talk about how I use debt, I don't pay tax, and I buy this and that,
00:53:50.080 | I didn't start that way, but that's what I've learned to become.
00:53:53.040 | And the average person will not go through that process.
00:53:56.800 | As you know, as a financial planner, all my friends who are financial planners
00:53:59.920 | tell me that most people choose to be poor because they're lazy.
00:54:03.920 | They work hard, but they're lazy.
00:54:06.640 | And that's the problem.
00:54:10.280 | - I guess the reason I'm probing on the writing question is you mentioned that writing
00:54:15.120 | is difficult, but you say it's your passion.
00:54:16.800 | What is your passion, the writing or the communication of ideas that you think are important?
00:54:22.160 | - It's the communication.
00:54:23.680 | I'm still trying to save my poor dad.
00:54:26.400 | My poor dad went to Stanford, you know, Chicago, Northwestern, he's a PhD.
00:54:31.200 | At 50, he lost his job.
00:54:34.800 | He couldn't recover.
00:54:35.760 | He didn't have the skill sets.
00:54:37.440 | And who do we listen to in the world today?
00:54:39.280 | We listen to guys like Bernanke and Greenspan and Yellen, and these are just like my poor dads,
00:54:44.080 | they're academics who don't know the reality and theory.
00:54:48.560 | You know, they should be sent to jail, both Greenspan and Bernanke and Yellen,
00:54:56.000 | they should go to jail.
00:54:56.960 | You know, as Trump said to Jim Bush, he says, "Your brother should be impeached."
00:55:03.760 | But we don't impeach him, we make him heroes.
00:55:06.320 | I mean, you know, I'm a former Marine.
00:55:12.000 | George Bush destabilized Saddam Hussein and now we have ISIS.
00:55:17.680 | We should never have gone to war.
00:55:19.200 | And we lose thousands of people and now they'll come get us.
00:55:24.240 | So when Trump says he should be impeached, I agree with him.
00:55:28.880 | Other people go, "You know, it wasn't his fault, you know,
00:55:32.880 | but he's the guy that gave the orders."
00:55:35.440 | So all I'm saying is protect yourself and I don't care who gets elected after that.
00:55:39.760 | You can elect Sanders or you can elect Trump.
00:55:43.440 | It won't make any difference to me, that's what I'm saying.
00:55:45.680 | Because I'm not dependent upon their actions for my security.
00:55:50.560 | When you look at your involvement in the personal finance industry, I mean, you have,
00:55:58.160 | your Rich Dad brand and 20 years of involvement have seen a lot of people
00:56:02.960 | who have been in the business for 20 years,
00:56:06.000 | who have been in the business for 20 years of involvement,
00:56:08.400 | have seen major changes in the last 20 years.
00:56:13.360 | What's the same and what's different as far as the personal finance advice?
00:56:19.120 | As I said, everything I said 20 years ago is coming true.
00:56:22.960 | I don't invest in the stock market.
00:56:24.640 | The 401(k)s are a ripoff and savers are losers and don't look for job security.
00:56:28.880 | I mean, nothing's really changed.
00:56:31.360 | They're highly educated people.
00:56:32.880 | Many, many people have lost their 401(k)s and their savings the last crash.
00:56:38.400 | Many people have lost their houses.
00:56:40.080 | Nothing I have said has changed.
00:56:43.520 | It's just that people can't hear you.
00:56:46.080 | Your house is not an asset.
00:56:47.120 | What do you mean my house is not an asset?
00:56:49.120 | What do you mean don't save money?
00:56:50.400 | What do you mean a 401(k) is a ripoff?
00:56:52.160 | You know, what do you mean don't go to school if you don't get a job?
00:56:55.920 | Because you're probably going to lose your job anyway.
00:56:58.560 | That's what's happening.
00:57:03.440 | And you know who pays the most taxes?
00:57:04.960 | The people that work for money.
00:57:06.080 | This is true.
00:57:06.800 | That's the lesson one.
00:57:08.240 | The rich don't work for money.
00:57:09.600 | It goes back.
00:57:11.360 | Nothing's really changed, Josh.
00:57:13.280 | Everything I said has happened.
00:57:17.280 | Everything I'm saying has come true.
00:57:18.880 | Look at 2016.
00:57:20.320 | It's crashing.
00:57:21.040 | Well, it's not real.
00:57:23.840 | We're already in a recession.
00:57:26.800 | China is about to implode.
00:57:28.480 | And I say, as long as gold's under $1,500, you may want to buy some.
00:57:33.920 | That's all I said.
00:57:34.800 | Because I think they're going to print more money.
00:57:38.560 | Now, if I'm wrong, it's going to collapse anyway.
00:57:40.480 | You can't pay off $250 trillion with money you don't have.
00:57:47.440 | It's just not mathematical possible.
00:57:52.720 | Yeah, I agree.
00:57:56.160 | There is no mathematical way for the United States government to ever
00:57:59.360 | satisfy its debt obligation.
00:58:00.720 | So I fully agree with you.
00:58:02.480 | Last question.
00:58:03.120 | Last question I'd like to ask.
00:58:04.960 | I thought I'd close this, but it makes it the last question.
00:58:06.480 | Yeah, this is it.
00:58:06.960 | I appreciate the questions, and I appreciate the in-depthness of them.
00:58:09.760 | Thank you, Josh.
00:58:10.480 | Absolutely.
00:58:11.040 | Ask the question.
00:58:12.240 | What do you wish your legacy to be?
00:58:15.280 | I don't even think about that.
00:58:19.520 | I just do what I think I have to do.
00:58:25.520 | You know, I mean, I don't--
00:58:26.480 | I'm really concerned about my fellow human beings.
00:58:29.920 | You know, we don't learn anything about money at school.
00:58:34.800 | Nothing.
00:58:35.280 | Nothing.
00:58:36.320 | If they do learn something, tell them to save money, get a job, work hard,
00:58:42.720 | invest in a 401(k).
00:58:44.400 | And those are the biggest ripoffs going.
00:58:46.160 | Now, that's why I started this whole thing.
00:58:49.200 | Three kinds of advisors.
00:58:50.560 | Susie, Orman, Dave Ramsey, and myself.
00:58:54.400 | And that's why I like the title of your show, "Radical Personal Finance."
00:58:57.600 | I think we should all get a little bit more radical and think outside the box,
00:59:01.840 | because if you're thinking inside the box, you're probably getting wiped out.
00:59:04.880 | You know what I'm saying?
00:59:07.040 | Absolutely.
00:59:07.840 | And I don't think--
00:59:08.640 | You know, Trump's my friend, but he can't save us.
00:59:10.720 | And Bernie Sanders can't save us.
00:59:12.960 | And neither can Hillary.
00:59:13.920 | So you better do something.
00:59:15.040 | The very best thing that could happen for Donald Trump would be for him to go far in the--
00:59:18.960 | to go far in the primary--
00:59:21.360 | or in the primary process, or perhaps even the election process,
00:59:24.000 | and then lose.
00:59:24.640 | Because whoever is elected as the next president of the United States
00:59:28.080 | will face a major problem.
00:59:29.680 | And I pity the man or woman who becomes president.
00:59:33.200 | The next president's going to be the skipper of a Titanic.
00:59:35.520 | That's why I agree with it.
00:59:36.720 | Right.
00:59:37.440 | Well, richdad.com is your website.
00:59:39.120 | You do Rich Dad Radio.
00:59:40.400 | The book-- you said your latest book is "Second Chance."
00:59:43.600 | Anything else that you're excited about that you'd like for the listeners to check out?
00:59:46.880 | I would check out some of the videos, especially on CNN in 2008,
00:59:51.520 | when I was calling for the fall of Lehman and Goldman and all those guys.
00:59:54.960 | It's-- I recorded all that stuff since then.
00:59:57.200 | And so I said, "2016's the next crash, and on schedule, 2016 is crashing."
01:00:02.160 | Robert Kisiaki, thank you for coming on.
01:00:04.480 | Thank you very much, Josh.
01:00:06.000 | Fascinating to hear the inside story from someone who's been around for so long.
01:00:11.760 | Hope you enjoyed that interview.
01:00:12.960 | I hope you can take some of the information that Robert shared.
01:00:14.960 | Hey, you got to do what you got to do for your own situation.
01:00:19.120 | Learn from everybody.
01:00:21.520 | But you got to apply it in your own situation.
01:00:23.600 | So be careful.
01:00:24.640 | Make your decisions carefully.
01:00:26.160 | Be thoughtful.
01:00:27.200 | Do your homework.
01:00:27.920 | Do your own research.
01:00:29.120 | So, Robert, thank you for coming on the show.
01:00:30.880 | Welcome any of you who have found the show because of Robert Kisiaki.
01:00:34.720 | He's a big name, so I'm sure there's many new listeners to the show.
01:00:38.320 | If you've not heard of Radical Personal Finance, make sure you subscribe to the show.
01:00:41.120 | We do the show-- try to hit about five days a week.
01:00:43.600 | Usually it's probably about four.
01:00:45.120 | We do the show here Monday through Friday, about four or five episodes a week.
01:00:48.720 | And we talk about living a rich life now and building financial freedom in 10 years or less.
01:00:54.240 | Work through technical questions.
01:00:56.560 | Work through big picture questions.
01:00:57.840 | We talk about entrepreneurship.
01:00:59.280 | We talk about tax planning.
01:01:00.320 | We talk about living rich.
01:01:01.760 | We talk about living poor.
01:01:02.960 | We talk about what you can learn from dumpster divers and hobos.
01:01:05.680 | I need to do another one of those shows again.
01:01:07.680 | And also we need to talk about what you can learn from billionaires.
01:01:09.760 | And I need to do more of those shows because I have-- that's probably the little tag that
01:01:13.520 | I've not done the best job on.
01:01:14.960 | So if this is your first time here, please make sure you subscribe to the show.
01:01:18.160 | You can find it in iTunes.
01:01:19.600 | Or the easiest thing is just search the App Store on your phone for Radical Personal Finance.
01:01:23.600 | There is a free mobile app available to each and every one of you in your app store of choice.
01:01:28.320 | I am device company agnostic.
01:01:31.040 | I don't care if it's Windows or Blackberry or Android or Google or-- what's the other one?
01:01:35.920 | Fire.
01:01:36.800 | My wife has a Fire phone.
01:01:37.920 | I don't care which of those-- Amazon Fire.
01:01:39.600 | I don't care which of those it is.
01:01:40.720 | Just check-- search the App Store for Radical Personal Finance and you will find a free
01:01:44.560 | mobile app with all of the past shows.
01:01:47.040 | Thank you all for listening.
01:01:48.080 | If you'd like to support the content here, please consider becoming a patron of the show.
01:01:51.280 | Go to RadicalPersonalFinance.com/patron.
01:01:52.720 | RadicalPersonalFinance.com/patron.
01:01:55.840 | A couple of extra bonuses there for those of you who sign up to support the show through
01:01:59.280 | that format.
01:02:00.080 | And I think each and every one of you, without your listener support, this show would not
01:02:04.080 | be possible.
01:02:14.880 | [Music]
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