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

Learn to Invest in Debt
In 1973, my rich dad said there were three things I needed to learn 
if I wanted to follow in his footsteps. They were:
1. Learn to sell.
The ability to sell is the most important skill of an entrepreneur. 
The most important job of an entrepreneur is to raise money.
2. Learn to invest via market trends.
Today, this is called technical analysis, predicting the future of 
markets by tracking the past.

---

Chapter Three
Unfair Advantage
103
102
unit was $18,000. The terms: 10 percent down, or $1800, with the seller 
financing the balance. 
This meant I did not to have to qualify for a bank loan. It was 
everything all the other real estate brokers said did not exist, and it was on 
the island of Maui, near one of the most desirable resorts on the island.
Once I knew the property would generate cash flow, even with 100 
percent financing, I pulled out my credit card, putting the $1,800 down 
payment on the card. I had none of my own money in the investment, 
and I still made money. Eventually, I bought a total of three of these 
properties. I would have bought more, but my credit card was at its limit.
Things went well for about six months. Then all hell broke loose. The 
septic system in the project broke, raw sewage rolled into my best unit, 
and I learned about negative cash flow and the dangers of being in too 
much debt. The moment the septic system broke and my tenant moved 
out, my asset turned into a liability. Rather than making $20 a month, 
I was losing $300 a month. I was facing the nightmare that keeps most 
investors out of real estate: property management and negative cash flow. 
My real-life education had begun. Thank God my two other units 
were still operating. I was learning how to use debt to become rich and 
how debt can make you poor. It was the start of a priceless education in 
the power of debt. 
Today, real estate brokers continue to say to Kim and me, “You 
can’t do that.” They say that, even though they see us buying 300- to 
500-unit apartment complexes with debt and making millions tax-free. 
Most real estate agents can’t do what we do because they were educated 
in the S quadrant, rather than the I quadrant.
Since debt can be lethal, we recommend you start small. Buy a 
number of small deals, as Kim did when she bought her first 20 units. 
Learn how to manage debt and manage real estate.
As most people know, getting into debt is easy. Managing debt
is hard.
seminar, I heard exactly what I wanted to hear and paid $385 for a three-
day course to be held in a few weeks. At the time, $385 was a fortune for 
a Marine Corps pilot whose flight pay was less than $900 gross a month. 
Like most people, I had a mortgage, car payment, and other expenses. 
My mind went crazy as I wondered if I was being smart or foolish. I 
wondered if I was being taken and if I would walk away with nothing. 
That $385 turned out to be one of the best investments I have ever 
made. That course has made me multimillions of dollars, over and over 
again, much of it tax-free. More important than the money is the impact 
that course has had on our lives. Investing in our education, through that 
course, is one of the reasons Kim and I were able to become financially 
free, Kim at 37 and me at 47. 
In 1973, I did exactly what the instructor of the real estate course 
taught us to do. I spent weeks looking at different investments. At every 
real estate office, the real estate agents told me the same thing, “You 
cannot find those deals in Hawaii. Hawaii is too expensive.”
I was prepared for this closed-minded chatter from real estate agents 
because the course instructor had warned us, saying, “That is why they 
are real estate agents and not real estate investors. If they were investors, 
they would not need to be sales people.”
After weeks of searching and hearing over and over, “You can’t do 
that here. What you want does not exist,” I finally found a tiny real 
estate office on a back street of Waikiki and found the answers I had 
been searching for. When I said to the broker, “I’m looking for an 
investment property in a great area, low priced, very little to zero down, 
and something that has positive cash flow,” he smiled and said, “I have 
what you’re looking for. In fact, I have nearly 35 of them.”
Three days later, I flew to the island of Maui, rented a car and drove 
45 minutes to the property. Once there, I could not believe my eyes. The 
project was spectacular. It was across the street from a beautiful, isolated 
sandy beach, just like in the post cards of old Hawaii. The reason the 
prices were so good is because the entire property was in foreclosure. 
Everything was for sale. Like a kid in a candy store, I went from unit to 
unit, looking for the one I wanted. Finally, I chose one. The price for any 

---

Chapter Three
Unfair Advantage
105
104