Rich Dad Poor Dad is a starting point for anyone looking to gain control of their financial future

LESSON 5:
 THE RICH 
INVENT MONEY
Often in the real world, it’s not the smart
who get ahead, but the bold. 
Last night, I took a break from writing and watched a TV 
program on the history of a young man named Alexander Graham 
Bell. Bell had just patented his telephone and was having growing 
pains because the demand for his new invention was so strong. 
Needing a bigger company, he then went to the giant at that time, 
Western Union, and asked them if they would buy his patent and 
his tiny company. He wanted $100,000 for the whole package. The 
president of Western Union scoffed at him and turned him down, 
saying the price was ridiculous. The rest is history. A multi-billion-
dollar industry emerged, and AT&T was born.
The evening news came on right after the story of Alexander 
Graham Bell. On the news was a story of another downsizing at a 
local company. The workers were angry and complained that the 
company ownership was unfair. A terminated manager of about 
45 years of age had his wife and two babies at the plant and was 
begging the guards to let him talk to the owners to ask if they would 
reconsider his termination. He had just bought a house and was 
afraid of losing it. The camera focused in on his pleading for all the 
world to see. Needless to say, it held my attention.

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Chapter Five: Lesson 5
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I have been teaching professionally since 1984. It has been a great
experience and a rewarding one. It is also a disturbing profession, for
I have taught thousands of individuals and I see one thing in common 
in all of us, myself included. We all have tremendous potential, and 
we all are blessed with gifts. Yet the one thing that holds all of us back 
is some degree of self-doubt. It is not so much the lack of technical 
information that holds us back, but more the lack of self-confidence. 
Some are more affected than others.
Once we leave school, most of us know that it is not so much a 
matter of college degrees or good grades that count. In the real world 
outside of academics, something more than just grades is required.
I have heard it called many things; guts, chutzpah, balls, audacity,
bravado, cunning, daring, tenacity, and brilliance. This factor,
whatever it is labeled, ultimately decides one’s future much more
than school grades do.
Inside each of us is one of these brave, brilliant, and daring
characters. There is also the flip side of that character: people who 
could get down on their knees and beg if necessary. After a year in 
Vietnam as a Marine Corps pilot, I got to know both of those
characters inside of me intimately. One is not better than the other.
Yet as a teacher, I recognized that it was excessive fear and
self-doubt that were the greatest detractors of personal genius. It 
broke my heart to see students know the answers, yet lack the courage 
to act on the answer. Often in the real world, it’s not the smart who 
get ahead, but the bold.
In my personal experience, your financial genius requires both 
technical knowledge as well as courage. If fear is too strong, the 
genius is suppressed. In my classes, I strongly urge students to learn 
to take risks, to be bold, and to let their genius convert that fear into 
power and brilliance. It works for some and just terrifies others. I have 
come to realize that for most people, when it comes to the subject of 
money, they would rather play it safe. I have had to field questions 
such as: “Why take risks?” “Why should I bother developing my 
financial IQ?” “Why should I become financially literate?” And I 
answer, “Just to have more options.”

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Rich Dad Poor Dad
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There are huge changes up ahead. In the coming years, there will 
be more people just like the young inventor Alexander Graham Bell. 
There will be a hundred people like Bill Gates and hugely successful 
companies like Microsoft created every year, all over the world. And 
there also will be many more bankruptcies, layoffs, and downsizings.
So why bother developing your financial IQ? No one can answer 
that but you. Yet I can tell you why I myself do it. I do it because it 
is the most exciting time to be alive. I’d rather be welcoming change 
than dreading change. I’d rather be excited about making millions than 
worrying about not getting a raise. This period we are in now is a most 
exciting time, unprecedented in our world’s history. Generations from 
now, people will look back at this period of time and remark at what an 
exciting era it must have been. It was the death of the old and birth of 
the new. It was full of turmoil, and it was exciting.
So why bother developing your financial IQ? Because if you do, 
you will prosper greatly. And if you don’t, this period of time will be 
a frightening one. It will be a time of watching some people move 
boldly forward while others cling to worn-out life preservers.
Land was wealth 300 years ago. So the person who owned the 
land owned the wealth. Later, wealth was in factories and production, 
and America rose to dominance. The industrialist owned the wealth. 
Today, wealth is in information. And the person who has the most 
timely information owns the wealth. The problem is that information 
flies around the world at the speed of light. The new wealth cannot be 
contained by boundaries and borders as land and factories were. The 
changes will be faster and more dramatic. There will be a dramatic
increase in the number of new multimillionaires. There also will be 
those who are left behind.
I find so many people struggling today, often working harder, 
simply because they cling to old ideas. They want things to be the way 
they were, and they resist change. I know people who are losing their 
jobs or their houses, and they blame technology or the economy or 
their boss. Sadly, they fail to realize that they might be the problem. 
Old ideas are their biggest liability. It is a liability simply because they 

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Chapter Five: Lesson 5
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fail to realize that while that idea or way of doing something was an 
asset yesterday, yesterday is gone. 
One afternoon I was teaching how to invest using a board game
I had invented, CASHFLOW
®
, as a teaching tool. A friend had brought
someone along to attend the class. This friend of a friend was recently 
divorced, had been badly burned in the divorce settlement, and was now 
searching for some answers. Her friend thought the class might help.
The game was designed to help people learn how money works.
In playing the game, they learn about the interaction of the income
statement with the balance sheet. 
They learn how cash flows between 
the two and how the road to wealth 
is through striving to increase your 
monthly cash flow from the asset 
column to the point that it exceeds 
your monthly expenses. Once you accomplish this, you are able to get 
out of the Rat Race and out onto the Fast Track. 
As I have said, some people hate the game, some love it, and 
others miss the point. This woman missed a valuable opportunity to 
learn something. In the opening round, she drew a “doodad” card 
with the boat on it. At first she was happy. “Oh, I’ve got a boat.” 
Then, as her friend tried to explain how the numbers worked on her 
income statement and balance sheet, she got frustrated because she 
had never liked math. The rest of her table waited while her friend 
continued explaining the relationship between the income statement, 
balance sheet, and monthly cash flow. Suddenly, when she realized 
how the numbers worked, it dawned on her that her boat was eating 
her alive. Later on in the game, she was also downsized and had a 
child. It was a horrible game for her.
After the class, her friend came by and told me that she was upset. 
She had come to the class to learn about investing and did not like 
the idea that it took so long to play a silly game.
Her friend attempted to tell her to look within herself to see if 
the game reflected her in any way. With that suggestion, the woman