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

Why Were We Not Wiped Out?
FAQ 
Millions of investors lost everything starting in 2007. How did you 
gain and not lose?
Short Answer 
Financial education gave us the ability to not follow conventional 
financial wisdom.
FAQ 
What did you know that others did not know? Why did you win even 
as the economy was crashing?
Very Short Answer 
We kept playing Monopoly.
Explanation 
There are three priceless lessons in Monopoly. They are:
1. Four green houses, one red hotel
The lesson is: Start small. Dream big. We both took classes and 
did small deals on weekends. We had a rule: We had to look at 
100 properties before we bought one. With every deal we looked 
at, especially the bad ones, we got smarter. As you may know, 
most investments are bad investments, so you need to invest time 
looking for those rare great deals.
It doesn’t have to be real estate investing. It could be stocks, or a 
business. The lesson is that most people, especially men, jump into 
a market, create a big splash, and try to make a killing. Usually, 
they are the ones who are killed.
Give yourself at least five to ten years to learn and gain from 
experience. If you like real estate, start with real estate. If you like 
stocks, start with stocks. If you are interested in business, start 
in business. Know that you will make mistakes, so make small 
mistakes, learn, and keep dreaming big. 
What Is Unfair?
Since the stock-market crash of 1987, the world’s economy has 
gone through two major boom-and-bust cycles. Each boom and each 
bust made Kim and me stronger financially. In 1990 the economy 
was similar to 2010. Bad economies are great times to become rich. 
In 1990, during a very bad recession, Kim and I began our process of 
going from poor to rich. 
The process has not changed. The only thing that changed is the 
number of zeros. Kim purchased her first investment property in 
Portland, Oregon, for $45,000. Again, I remind you, we had zero 
credit and most banks turned us down since we were self-employed 
and did not have steady jobs. To make matters worse, I had nearly 
a million dollars in debt dragging behind me. Interest rates were 9 
percent to 14 percent for investors. On top of this, we had zero extra 
cash since all our extra cash was going into growing our international 
education company. I taught Kim what I knew about creative 
financing, and magically she came up with $5,000 to purchase the 
house (by having the seller help us find the credit for the mortgage). 
After acquiring the property, she earned $25 a month after all 
expenses, including the mortgage payment. In 1989, she was on her 
way. She was not rich, but her financial education had begun. It was 
no longer intellectual theory. It was real life.
Twenty years later, she and I purchased the $46 million resort 
with five golf courses, but Kim did most of the work. Again, the 
process is the same. She did not have the money, but she knew how 
to raise the money. The only change in the process is the number of 
zeros: $45,000 versus $46,000,000. What increased was her financial 
education. Her real-life financial education was a long-term process 
of classes, seminars, study, reading, successes, failures, good times, 
bad times, crooks, con men, liars, cheats, mentors, bad partners, and 
great partners. As her knowledge increased, her confidence increased, 
risk went down, and the size of her investments increased. This is her 
unfair advantage today, and why she is qualified to write her book, 
Rich Woman, to encourage other women to take control of their 
financial future by gaining real-life financial education.

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Chapter One
Unfair Advantage
43
42
To make things very simple, the diagrams below illustrate the 
differences between cash flow and capital gains.
When Kim and I buy a property, we invest primarily for cash flow, 
diagram #1. We want to see the financial statement. Whether it is 
a 2-bedroom rental house for $45,000 or a 400-room luxury resort 
with five golf courses for $46,000,000, investing for cash flow 
means we must have cash flowing in. When the economy crashed 
with over 3,000 rental units and commercial properties, cash flow 
kept pouring in, even as the economy dried up.
Cash kept flowing in because we make sure there are solid jobs 
in the area before buying anything. Always remember that real 
estate is only as valuable as the jobs. We did not invest in high-end 
residential properties. With our partner Ken McElroy, we invested 
primarily in “workforce housing” properties in areas that need a 
strong, steady work force.