What Schools Will Never Teach You About Money By Robert T. Kiyosaki

Explanation
Rather than work for money, the rich follow the Laws of Compensation.
The Laws of Compensation
The following section explains three different variations on the 
Laws of Compensation. To be better compensated, you must follow 
these laws.
Law of Compensation #1 
Reciprocity: Give, and you shall receive.
I learned this law long ago in Sunday school. As obvious as it is, 
when it comes to money, many people seem to forget this law. 
They want to receive, but not give, or give only after they receive. 
Many people want to be paid more and do less. My poor dad was 
one of those people. As head of the teachers’ union of Hawaii, he 
worked hard to secure more pay and less work for his teachers. I 
remember a fight he took on, demanding that teachers teach fewer 
students for more pay, with more days off and better benefits. To 
my poor dad, this made sense.
To my rich dad, my poor dad’s philosophy violated one of the laws 
of compensation. Rich dad believed in giving more if you want to 
receive more.
It always seemed strange to me that many people thought my rich 
dad was greedy and my poor dad was right in fighting for higher 
pay and less work for his teachers.
Today when we want a new liability, maybe a new car or vacation 
house, all we have to do is acquire or develop an asset first, and that 
asset will pay for the liability.
A year ago, in the midst of the financial chaos, I wanted a new 
Ferrari. When I told Kim what I was going to buy, she did not 
say, “You can’t have a new Ferrari. We can’t afford it.” Nor did she 
say, “Why do you need a Ferrari? You already have a Lamborghini, 
Porsche, Bentley and a Ford truck.” And she didn’t say, “Which car are 
you going to sell?”
She does not say those words because she knows a new liability will 
make us richer. Rather than remind me of how many cars I already 
have, she simply said, “What are you going to invest in?” In other 
words, what asset are you going to buy that will pay for the liability?
I had already found a new oil well project and invested in the well. 
When the oil well produced, the income from the well’s production 
paid for the Ferrari. The well is estimated to produce oil for about 20 
years. The Ferrari will be paid for long before that oil runs dry. 
Kim is happy because she has a new asset, and I am happy because 
I have a new Ferrari.
Our rule is simple: Assets buy our liabilities. Rather than live below 
our means, we expand our means by focusing on the asset column. 
Over the years, I have written books, bought a mini-warehouse, and 
subdivided land to buy liabilities. Some of the liabilities, such as the 
cars, are long gone, but the assets still provide cash flow. Our liabilities 
inspire us to become richer.
We also forbid ourselves from saying, “I can’t afford it,” or “You 
can’t have this or that.” We know we can afford anything we want if we 
acquire assets first. Knowing how to create or acquire assets is why the 
rich do not work for money.

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Chapter Five
Unfair Advantage
177
176
The law of reciprocity also works in reverse. If you cheat people, 
people will give back to you what you gave them. This is what 
happened to Bernie Madoff. He took people’s money and wound 
up in jail. He got what he deserved. 
Unfortunately, many of the biggest crooks do not get caught. 
Some of them are still running the economy.