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Lewis HowesLewis Howes

DO THIS To Make MILLIONS In A Market Crash (Become A Millionaire)| Robert Kiyosaki & Lewis Howes

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Robert KiyosakiguestLewis Howeshost
Apr 20, 20201h 1mWatch on YouTube

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Transcript

  1. 0:00 – 2:06

    Crash Predictions and How Tragedy Shapes a Path

    1. RK

      We- we're probably going into a depression, you know? We're not gonna get out of this.

    2. LH

      Really?

    3. RK

      Oh, yeah. And so the thing is, is this good for you or bad for you? I'm looking forward to it. You know, the last, the last crash was 2008, and I made more money in 2008 than in my whole life. [upbeat music]

    4. LH

      Welcome, everyone, to The School of Greatness Podcast. We've got the legend, Robert Kiyosaki, in the house. Thank you so much for being here. Super excited about this.

    5. RK

      Well, thank you. People say I'm the, I'm a legend in my own mind, you know?

    6. LH

      [laughs]

    7. RK

      And, and my reply is, "You may as well be a legend in your own mind because you're not a legend in anybody else's mind."

    8. LH

      [laughs]

    9. RK

      [laughs]

    10. LH

      Hey, you gotta believe in yourself if you wanna create great things in the world, at least you've gotta believe. Uh, it's almost 25 years now, Rich Dad Poor Dad, right? Are you sick and tired of talking about Rich Dad Poor Dad, or is this still something you enjoy talking about?

    11. RK

      No, that's kind of what we were talking about. This is what I'm supposed to have done anyway, you know?

    12. LH

      Mm.

    13. RK

      It was, um... So I got on my path.

    14. LH

      Yes.

    15. RK

      And what I was saying, what, what you and I were talking about before we started is I meet a lot of guys who something tragic happens in their life, but it was the best thing that ever happened to them. Like, I, I had a friend who was a, a Olympic, uh, snowboarder, and he did one of those [laughs] goofy things those guys do, and he shattered his body.

    16. LH

      Oh.

    17. RK

      And nobody could heal him, so he became an acupuncturist. And the guy is the greatest. He found his real gift. It's not snowboarding or whatever he was doing. It's he's a healer.

    18. LH

      Mm-hmm.

    19. RK

      And he uses acupuncture, you know, and he heals people. He's unbelievably good, but if he hadn't crashed, he wouldn't be where he is today.

    20. LH

      Yeah. What was the big tragedy in your life?

    21. RK

      Oh, there's every other, every other day there's-

    22. LH

      Or-

    23. RK

      ... every other day.

    24. LH

      What was the big tragedies? What was, like, the big aha moments where something bad had to happen for you to say, "Oh, let me wake up and take down this path"?

  2. 2:06 – 7:35

    The Nylon Wallet and Shoe Pocket Business Failure

    1. RK

      Oh, there's a lot of them. I, man, I really was, uh, as an entrepreneur, uh, my biggest failure was that I was, I was successful in my first venture.

    2. LH

      Mm.

    3. RK

      And my, I was... Uh, this is, I don't know, I was about 25 years old, and I started a nylon envelope or surfer wallet business. And everybody said, "Well, why are you, why are you doing that?" I said, "Well, I don't know what else to do, [laughs] you know?"

    4. LH

      Right.

    5. RK

      And I used to make nylon wal- I went to school in New York at a military school, and a sailing school, so I used to sell these nylon wallets out of sails. So when we're looking for an idea for a product, and the product sucks, the product doesn't really count.

    6. LH

      [laughs]

    7. RK

      I just needed to start a business. So I was working at Xerox at the time in Honolulu, and I, I gave my... I showed this little wallet to my two partners, two criminals, but anyway. So we, [laughs] we came up with these nylon wallets, and we had them manufactured in Korea, and nobody would buy them. [laughs] So I have 100,000 wallets in a warehouse out in New York. I'm in Hawaii, and my friend and I are going door to door trying to sell these stupid-

    8. LH

      No way

    9. RK

      ... and everybody kept saying, "Are you shitting me? What are you guys doing?" You know?

    10. LH

      [laughs]

    11. RK

      [laughs] You know?

    12. LH

      Yeah.

    13. RK

      And what happened was, because we failed at the wallet business, I was sitting in our offices in Honolulu, and then somebody says, "Hey, these..." You know, jogging had just started. Baby boomers are get- first getting into health, and they started jogging. They had the Nike Waffle and all these other good shoes.

    14. LH

      Yeah.

    15. RK

      And so this guy in Golden Gate Park goes for a jog, and he didn't know what to do with his key, so he put his key on top of his car tire. And he went for a run, and guess what? He came back and his car was gone. [laughs]

    16. LH

      Wow.

    17. RK

      And so the headline says, uh, S- San Francisco Times, and it says, "What does a jogger do with their key?" And I went, "Oh my God." So since I have kind of a quasi engineering background and w- I design with a hook and tear method, I built the shoe pocket that went on a runner's shoe. So I had this nylon wallet, now I had a runner's shoe. I mean, a shoe pocket. So I go around the world again. So I, I'm going, we're going broke so fast. You know, we had no money. We kept borrowing money, raising capital. But it was all good, 'cause I was learning how to raise capital.

    18. LH

      Yeah.

    19. RK

      So finally, we're desperate and we buy a full... Those, those days, it took four months for an ad to come out, so we have to shoot this stupid w- shoe pocket on a, on, on a New Balance 320 shoe. And we get it into Runner's World Magazine.

    20. LH

      Uh-huh.

    21. RK

      I think it was only 16,000 bucks, and it was like-

    22. LH

      Oh my gosh

    23. RK

      ... watch, oh.

    24. LH

      That's a lot of money.

    25. RK

      And then we waited for the phone to ring, so we had to wait till, like, January, February, March, and then the phone didn't ring. So we wanna quit. We're out of money, you know, can't pay the rent. The repo of my Harley.

    26. LH

      [laughs]

    27. RK

      And it wa- it was getting so bad. So my, "S- let's give it one more shot, just one more shot." So we, we, we go to New York City at the sporting goods store at the Coliseum, and I'm setting up my booth in the basement, 'cause that's all I could afford, and this guy goes walking past, and he goes... My company was called Rippers, so I'm putting my big sign up, Rippers, you know? And he goes, "Rippers, Rippers, where have you been?" And I turn around, I said, "I'm here." "No, no, no. N- no, no." He says, "Where have you been?" I'm like, "What do you mean?" He says, "I saw your ad." I said, "Good." "My store is filled with people coming in looking for the shoe pocket."

    28. LH

      Wow.

    29. RK

      I said-

    30. LH

      Call me. [laughs]

  3. 7:35 – 9:26

    Lessons on Dishonest People and Why Experience Can't Be Taught

    1. LH

      What was the greatest lesson you learned from that big success/failure?

    2. RK

      Well, just because they're smart doesn't mean they're not dishonest or a crook, and I've, I've run into more crooks... You know, I think I hire them on to- intentionally.

    3. LH

      [laughs] Until you learn your lesson, right?

    4. RK

      No, no. Every, every per- every entrepreneur I've talked to have had somebody steal from them.

    5. LH

      Mm-hmm.

    6. RK

      You know, I, I, I go to my doctor and this little cutie, little cutie working for him, this beautiful young woman, you know, as sweet as... Everybody loved her, da, da, da, da, da. And so one day I went and said, "Well, where is she?" And he goes, you know, "Where is she?" Well, what she did, because she's tech-savvy, she rigged the invoicing on their computer so, you know, 20 per- ni- you know, like, 90% went to the doctor and 10% went to her.

    7. LH

      Wow.

    8. RK

      And so she heisted. Sh- I said, "That little sweetheart?" He goes-

    9. LH

      Smart. [laughs]

    10. RK

      And then so he, he called the police, and th- this was the interesting part. Her father was already a rich guy.

    11. LH

      Hmm.

    12. RK

      And he comes in and says, "I'll pay you anything, just don't send her to jail."

    13. LH

      Wow.

    14. RK

      So then that was the next thing you learn. Is it better to send her to jail or take, take the money?

    15. LH

      Take the money.

    16. RK

      You know?

    17. LH

      Wow.

    18. RK

      So, so she's in jail. No, no, she's not. [laughs]

    19. LH

      [laughs] What?

    20. RK

      But what I'm saying is you can't teach that stuff.

    21. LH

      Yeah, you gotta experience it. You gotta go through it.

    22. RK

      Yeah. It's, it's right in front of you all the time.

    23. LH

      Man, what was the, what's the lesson you've learned in the last two to three years that you thought you'd already learned that you, you, you keep learning that comes the hard way? Is there anything that you still learn, or have you seen it all?

  4. 9:26 – 12:44

    Rich Dad vs. Poor Dad and the Problem with Schooling

    1. RK

      No, it's, it's that, as, as you know, like, like, Rich Dad Poor Dad is the story of my rich dad who had no education.

    2. LH

      Mm-hmm.

    3. RK

      But he, he grew up in business for real. You know, he, he, he, he took over the family business at 13, so he kinda grew up in the real world of money. Where my rich dad was a PhD.

    4. LH

      Mm-hmm.

    5. RK

      Poor and helpless and desperate. Went to Stanford and Northwestern in the-

    6. LH

      [laughs]

    7. RK

      ... Northwestern, you know, very smart guy, good guy and all this, but as you know, teachers don't know shit.

    8. LH

      Eh. [laughs]

    9. RK

      In fact, they teach stuff, they teach stuff they don't know nothing about.

    10. LH

      Right. Well, th- some of them are forced, I mean, they're forced to teach that, right? Some of them try to-

    11. RK

      Yeah

    12. LH

      ... educate in other ways and inspire.

    13. RK

      Don't, don't defend them. Don't defend them. I don't like them. [laughs] Anyway, eh, you know what happens? You... When do I get in the most trouble? Is when I criticize going to school.

    14. LH

      Hmm.

    15. RK

      Because to many people it's their only hope and salvation.

    16. LH

      Yeah.

    17. RK

      So if I say, "Well, I, I don't think school teaches you much," I may as well piss on the Pope. You know, they say-

    18. LH

      I know

    19. RK

      ... "Religion. If, if you don't go to school." And then they tell them, well, you know, Steve Jobs dropped out. He did pretty good.

    20. LH

      Yep.

    21. RK

      Gates dropped out. Dell dropped out.

    22. LH

      Zuckerberg.

    23. RK

      Zuckerberg dropped out. Henry Ford, Walt Disney, they didn't, they, you know, they didn't hurt.

    24. LH

      Mm-hmm.

    25. RK

      No. So anyway, religion is... I mean, education is religion to most people.

    26. LH

      Yeah.

    27. RK

      So that's why I step on toes and I get gumpped.

    28. LH

      Well, what did, what did Mark Twain's quote say? Like, "Don't let schooling get in the way of your education" or something like that?

    29. RK

      Yeah, education. Ed-

    30. LH

      And the, one of the reasons why I started the School of Greatness, I was telling you before we started recording, is that I, I was in the special needs classes literally every day for as long as I can remember. Since kindergarten until seventh year in college, I had a tutor. I was in the special needs classes with the few kids who had learning disabilities, and it was the most challenging thing for me because I wish they would've taught me the things that I'm learning now. And the reason I created the School of Greatness, 'cause I was like, what are the things I wish they would've taught me in school to help me get ahead in my finances, to help me get ahead in my health, my mindset, my, you know, how to deal with, uh, a breakup in a relationship, uh, a tragic time, like, the, the emotional side of things, the, the education that I wish they would've taught us. I was like, I'm gonna go create it and I'm gonna find people like Robert and teach us the ways. So, you know, you're doing that through your, your work, and I'm trying to do that, but I think there's people trying to do good by educating outside of the traditional school system where they're, I think they're more limited.

  5. 12:44 – 15:08

    Challenge vs. Security and Howes's Wake-Up Call

    1. LH

      Yeah, and you talk about, you know, uh, you know, rich favors the bold, those that are willing to take risks and willing to put themselves out there. Do you think you can get rich without taking risks and being bold, and taking, you know, these big chances? Or can you keep s- this security mindset and really gain true wealth?

    2. RK

      Well, many people have. You look at Cuomo and all those guys, they were, they were born rich kids from their father.

    3. LH

      Right.

    4. RK

      You know, Trump could have taken that path, too. He was, he was born a rich kid. So it's not... It's po- I think it's e- either an entrepreneur or you're not.

    5. LH

      Right.

    6. RK

      I think that's the difference.

    7. LH

      You know what's interesting? I never thought I was an entrepreneur until I had a, a big wake-up call, a tragic experience, and it was kind of like a perfect storm. I didn't know how to make a dollar. I was not, like, selling baseball cards. I didn't do the lemonade stand. I didn't try to hustle all this stuff as a kid. I literally maybe made a little bit of money in the summers just because my dad put me to work. And I w- had this dream of playing professional football, and then I made 250 bucks a week. My dad got in a tragic car accident. He was in a coma for three months. Um, I didn't have a college degree. It was 2008. The, the economy went down. Uh, I was living on my sister's couch. She was feeding me. I was making no money. I was living off three credit cards with student loans, and I didn't have my dad as that kind of financial safety net anymore because he wasn't able to help me and bail me out. So it was more like, "What do I do?" No one was hiring people with degrees at that time, even master's degrees. I didn't even get a bachelor's degree yet, and I was just like, "How do I survive?" So it was, I don't think if the worst thing in my life would have happened, I wouldn't be here learning how to be hungry, how to, like, say, "I need to go survive right now and take chances."

    8. RK

      Good for you.

    9. LH

      So I, I think, I think that perfect storm mentality made me into this survivor creative mindset, willing to risk it all. Whereas if I had my father to kind of protect me financially or say... Because he was like, "You're gonna take over the business. You're gonna come work for me." And that was my mindset. When he kind of left emotionally and mentally, he's still alive today, but not the same from the brain trauma, it made me step up as a human being-

    10. RK

      Sure

    11. LH

      ... as a 24-year-old and say, "I gotta learn some stuff."

  6. 15:08 – 17:36

    The Pandemic as Opportunity for a Tech-Savvy Generation

    1. RK

      And that's what, that's what I say to young people today. Look at this pandemic, this coronavirus pandemic, you know? It's really tragic because it attacks the old guys.

    2. LH

      Mm-hmm.

    3. RK

      But this, but even worse is the baby boomers had it the easiest of all generations. But now their pension-

    4. LH

      Exactly

    5. RK

      ... their pensions are gone, their 401 (k) s are gone.

    6. LH

      Yep.

    7. RK

      Social Security's broke. Medicare is broke. So I say to younger people, uh, this pandemic, this crisis, is the best thing that ever happened to you. You know, you, you think about that iPhone. You have more power in that iPhone than I had with my Sperry Univac mainframe computer. And then so when I meet people that say, "Oh, the economy's bad," I said, "There's, the only economy is between this ear and that ear."

    8. LH

      Mm.

    9. RK

      You know, there's an economy out here. But this is the best time for your generation, because you're tech-savvy. I'm not tech-savvy.

    10. LH

      Mm-hmm.

    11. RK

      You know, you got... This was made for you guys. The old guys like me are being cleaned out by the pandemic. [laughs]

    12. LH

      Unless you have a lot of assets that are bringing you in cash.

    13. RK

      The way is clear for you now. The old guys are gone. They're dead.

    14. LH

      Right.

    15. RK

      What are you gonna do about it? You know? So it's really a great time, but exactly as you were talking about, the bad times are the, leading to the best times.

    16. LH

      That's it, yeah.

    17. RK

      If you can see it. But some, unfortunately, as you know, there's a lot of your generation and younger, they'll never recover.

    18. LH

      Yeah.

    19. RK

      They're gonna see this as the worst of times.

    20. LH

      I know, and they're gonna, they're gonna reflect back to this in 5 years, in 10 years and say, "That's the thing that screwed me up or hurt me," and, and be a victim to it, as opposed to saying, "Okay, this is happening, and how can I make the most of it? And what's it gonna take for me to learn a new skill or get more creative or be hungrier in this time?" And that's-

    21. RK

      Or, or, or, or more important, who's your teachers?

    22. LH

      Mm. Who are we listening to?

    23. RK

      Well, you know, that's why I keep saying to the young, the millennials, you know, they're a pack of wimps. You know? I meet millennials who are just horrifyingly weak.

    24. LH

      [laughs]

    25. RK

      Snowflakes, I call them, you know?

    26. LH

      Yep.

    27. RK

      They go to college and they-

    28. LH

      Doormats

    29. RK

      ... they're taught trigger events or whatever, you know, the, the... I don't know what they say today, but they've got to have special rooms where there's no whatever. I'm going, "Holy mackerel."

    30. LH

      [laughs]

  7. 17:36 – 21:23

    Fragile, Robust, Antifragile and the Depression Outlook

    1. LH

      Yeah. For the, uh... W- what do you think is the, the num- the next step, the first step or the number one step for the average person with, you know, the kind of the normal job that they might be losing, they have s- some debt, they got some credit card. What's the next step for them to not only survive, but thrive in this market, in this time?

    2. RK

      Well, I always say quit your job, but that's not, you know... I don't have a job. I never have, I've only had one job, and I never wanted a job after that because I had to be hungry.

    3. LH

      Mm.

    4. RK

      Not gonna say, you know? But, uh, we're all different. We're humans. We're different beings. If I show you this diagram here, you know, this, it's why I created my CASHFLOW board game.

    5. LH

      Mm-hmm.

    6. RK

      Because we have four different intelligences. We have mental intelligence. We have, I don't know what that one is. Physical intelligence. He'd probably have very good physical to make-

    7. LH

      Mm-hmm

    8. RK

      ... you know, football and all that.

    9. LH

      Yeah.

    10. RK

      Emotional intelligence, but spiritual intelligence. So I went to military-

    11. LH

      Mm

    12. RK

      ... school in New York. The first thing is spiritual. You know, I become a Marine, that's spiritual.

    13. LH

      Yeah.

    14. RK

      You know what I mean? Because y- you're putting your life on the fricking line.

    15. LH

      Yeah.

    16. RK

      You know, so Nassim Taleb, you know, wrote the book The Black Swan. He also wrote, uh, Antifragile. He says there's three kinds of people in the world. There's fragile, and that's what our school systems are putting out.

    17. LH

      Mm-hmm.

    18. RK

      Fragile, wimpy snowflakes, and that's your choice. You wanna be that way? Have a good life.

    19. LH

      Mm-hmm.

    20. RK

      The second type is then, so a s- a fragile is like a champagne flute.

    21. LH

      Yep.

    22. RK

      You hit it, it shatters. Then the second one is called robust, and a robust person is like the rock. You know, you can pound on 'em, dump on 'em.

    23. LH

      Yeah.

    24. RK

      They take it, but that's all they do. They take it.

    25. LH

      Mm.

    26. RK

      And then antifragile is somebody like you, where they pound the crap out of you, and you get smarter and better because of it.

    27. LH

      Mm-hmm.

    28. RK

      So I love Nassim Taleb. You know, a lot of people call him Dr. Doom, but the way I look at this whole thing, this economy's... We're, we're probably going into a depression. You know, we're not gonna get out of this one.

    29. LH

      Really?

    30. RK

      Oh, yeah. And so the thing is, is this good for you or bad for you? I'm looking forward to it. You know, the last, the last crash was 2008, [coughs] and I made more money in 2008 than in my whole life. S- so this one here, 2000... You know, what is it, 2020? I'm gonna get even richer.

  8. 21:23 – 22:51

    Borrowing $300 Million in 2008, Debt and Taxes

    1. RK

      Well, now the lesson is here you gotta choose your teachers wisely. When the market crashed in 2008, guess how much money I borrowed?

    2. LH

      A lot.

    3. RK

      300 million.

    4. LH

      No way. From private investors?

    5. RK

      Mortgage-

    6. LH

      The bank, or how does that, how does that work?

    7. RK

      Because interest rates were dropping and real estate prices were going to the toilet. And when I walk into my banker... This is what Rich Dad Poor Dad are about. Rich Dad Poor Dad is about a financial statement.

    8. LH

      Mm-hmm.

    9. RK

      Income statement, balance sheet, statement of cash flow. It's a book on accounting. People don't even know it's a book on accounting. So I walked into my bank with my partner. I had all this property that was floating to the surface, and I say, "I'll take them off your hands. I just... Give, give me the money to buy the property."

    10. LH

      Wow.

    11. RK

      That's cojones.

    12. LH

      300 million?

    13. RK

      Give me the money and I'll buy your properties for you.

    14. LH

      [laughs] That's crazy.

    15. RK

      So it depends, and this is my whole thing. I am now 700 million, almost a billion in debt.

    16. LH

      Really?

    17. RK

      You know why? Because I don't pay any taxes. The more debt I have, the less tax I pay. And the average guy goes, "How do you do that?" Because you had bad teachers. And so it's this whole thing that you gotta choose your teachers wisely.

    18. LH

      Mm.

    19. RK

      That's why I wrote the book Fake. Fake money, fake teachers, fake assets. I don't touch that garbage that Wall Street puts out. I don't have a 401 [k] . I don't have stocks, bonds, mutual funds, ETFs. Doesn't mean you shouldn't, but I don't need them. Okay?

    20. LH

      Right. Right.

  9. 22:51 – 26:48

    Wartime vs. Peacetime Leaders and Vietnam

    1. RK

      And the other part is, look, for you young guys, the best teachers are not in colleges. The best teacher are on YouTube.

    2. LH

      Mm.

    3. RK

      The best teachers are on YouTube. Wake up. You know, this guy George Gammon, he's fantastic. Patrick Bet-David.

    4. LH

      Mm-hmm.

    5. RK

      Fantastic, you know?

    6. LH

      He's great.

    7. RK

      Getting records. The fake teachers are in colleges, and they're telling you to get a job.

    8. LH

      Right.

    9. RK

      Climb the corporate ladder. You know, Patrick Bet-David said it the best, and I love that guy. He says there's two kinds of leaders, wartime and peacetime, and a peacetime leader is a guy like my poor dad. You know, goes through all the right schools. He has all the pedigrees, the credentials. He does all the right things. He climbs the corporate or the government ladder and all that. Well, a wartime leader goes to, goes to war. So Jobs, Steve Jobs was a wartime leader. I'm a wartime leader. Difference is I went to war. I went to war twice on the front lines.

    10. LH

      Yeah.

    11. RK

      And I ch- You know what happened? So I joined the Marine Corps. I got a flight school in Pensacola. I learned to fly. I go to Camp Pendleton. I strap on my weapons. I go to advanced weapons in Camp Pendleton. I go to Okinawa, and then they send me into Vietnam. And I, I came out of Vietnam about four months later, back to, to, back to restage in Okinawa, and I thought everybody had changed. I looked at the, uh, fellow Marines and I thought they were [censored] . And it wasn't that they were [censored] . I had been to war.

    12. LH

      Mm. [laughs] You got tougher. You got stronger.

    13. RK

      No, no, I'm just... It's different when, when somebody's trying to kill you. Every single mission, I went down three times.

    14. LH

      No way.

    15. RK

      Yeah, and I came back stronger and tougher. So I come back to Okinawa, I g- I got, like, a week off- And they're gonna ship me back into Vietnam again. I said, "What happened to these guys?" And it wasn't that they changed. I changed. So what happens to entrepreneurs who go out and they get their ass handed to them and they survive, if you survive, you see the world differently.

    16. LH

      Mm-hmm.

    17. RK

      So that's what happened to you when you got injured and all this.

    18. LH

      Yeah.

    19. RK

      You see a different world. Whereas some peacetime who's climbing the corporate ladder right now, they just lost their job, they're sucking their thumb. You know, this is the worst time for them. Yet for a wartime leader, this right-

    20. LH

      They're excited. They're excited about it. Yeah.

    21. RK

      It's the best of times.

    22. LH

      Yeah.

    23. RK

      If, if you're an entrepreneur right now, the world's open to you. If you're an employee, the world's dead to you.

    24. LH

      What adv- yeah.

    25. RK

      An entrepreneur can create their own success.

    26. LH

      Yeah. What advice- w- oh, sorry, go ahead.

    27. RK

      You know, if you need a job-

    28. LH

      Mm

    29. RK

      ... they're a peacetime warrior. Remember, see, watch Patrick Bet-David, you know?

    30. LH

      He's great.

  10. 26:48 – 28:21

    Rejecting the Conventional Money Advice and Making Your Own Assets

    1. LH

      I hear, I hear you. What's, what's the best investment people can make then to, to opport- uh, capitalize on this opportunity? Is the investment in education?

    2. RK

      Left ear... Look, if you're poor right now, it was called look in the mirror.

    3. LH

      Mm-hmm.

    4. RK

      That's what my dad always said to me. He says, "If you're looking in the mirror right now and you see a loser, that's what you are."

    5. LH

      Mm.

    6. RK

      You can't make money in this economy, you better change your thinking. Because you know, the, you know, hindsight is 2020, as they say.

    7. LH

      Yes, yes.

    8. RK

      So I was... If you're looking in the... You know, you don't have any money, you don't have a job, your boyfriend or girlfriend has left you, and, uh, sitting there, go, "So, well, how did I get here? How did I get here?" There was a, there was a great book called, uh, you know, Gulag Archip- Archipelago by Solzhenitsyn. So he gets thrown in this, in a, um, concentration camp or a gulag in Siberia, and he says, "How did I get here?" You know how you got there? 'Cause he was a peacetime leader.

    9. LH

      Mm.

    10. RK

      Didn't fight back. So people are being sold the bill, go to school, get a job, pay taxes-

    11. LH

      Mm-hmm

    12. RK

      ... save money, get out of debt, buy a house, 'cause a house is an asset, and invest for the long term in a well-defined portfolio of stocks, bonds, mutual funds, and ETFs. And I do none of that.

    13. LH

      And why do you recommend the opposite?

  11. 28:21 – 39:29

    Pensions, the Fed and Bailouts

    1. RK

      'Cause I don't have to do that crap. That's, that's Kool-Aid. Go to school. Go to school. What do they teach you about money? Nothing. Get a job. You pay the highest taxes. Pay your taxes. I don't pay taxes. Get out of debt. Well, debt, money is debt after 1971, if you know your history of money. Your house is not an asset. Your house is a liability. And why would I invest for the long term in the stock market when I can make my own assets? I don't need the stock market. I'm not saying you shouldn't.

    2. LH

      Mm-hmm.

    3. RK

      But I create my own assets. I create my own cash flow.

    4. LH

      You mean-

    5. RK

      Every day I can live-

    6. LH

      You mean through your, you mean through your business, through your, your... Right, your creativity.

    7. RK

      My... I'm an entrepreneur.

    8. LH

      Yeah.

    9. RK

      Most people are employees. They're looking for jobs. I'm just looking for... So, like, right now-

    10. LH

      Should entrepreneurs invest in, in the stock market? Do you think if you're entrepreneurial, you should be investing?

    11. RK

      Look, let's... Hey, look, find a stupid teacher who's gonna tell you what to do.

    12. LH

      [laughs] I'm asking your opinion. I'm curious as a teacher.

    13. RK

      I don't, I don't give advice.

    14. LH

      Mm-hmm.

    15. RK

      You know, I wouldn't follow Warren Buffett either.

    16. LH

      Mm.

    17. RK

      You know why? 'Cause he invests the money. Why do I let him invest my money? I want the fun.

    18. LH

      So what's the, what's the investment you make the most in?

    19. RK

      Look, please hear what I'm saying.

    20. LH

      Yes.

    21. RK

      I made a fortune in 2008.

    22. LH

      Mm-hmm.

    23. RK

      2020, I'm making more money and paying less taxes. It doesn't mean I don't have problems, but I'm prepared for this.

    24. LH

      Mm-hmm.

    25. RK

      My biggest problem right now is because everybody's taking a vacation, I can't get enough product.

    26. LH

      Mm.

    27. RK

      I'm selling out. You know, my Cashflow Game is sold out. It's selling out constantly all over the world. All over the world, I get royalties from my book sales. My book sales are going through the roof right now, so I'm making more money.

    28. LH

      It's all this information, yeah.

    29. RK

      There's two kinds of discipline. There's internal or self-discipline, and then there's external discipline. So right now, if the world's kicking your butt, that's external discipline.

    30. LH

      Mm.

  12. 39:29 – 45:30

    Defined Benefit vs. Defined Contribution and How He Pays No Taxes

    1. LH

      you say there's two different types of pensions. What's the difference between a normal pension that someone would get and a defined benefit plan-

    2. RK

      Yeah

    3. LH

      ... pension? What's, and why should people be aware of these things?

    4. RK

      Well, defined benefit is industrial age. That was my poor debts, you know? So what happened is I, I got a job with Ford Motor Company and I get a defined benefit, which meant... Defined benefit means they got a paycheck for y- for life.

    5. LH

      Mm-hmm.

    6. RK

      If they promise you $1,000 a month, you get that for the rest of your life guaranteed. Well, the problem was, as you know, right around the, the '70s, that's when China and Japan and all of main- Japan and Germany came on. So they had to get rid of pensions, because pensions are a drag on the, on the business.

    7. LH

      Mm.

    8. RK

      So they came up with a thing called ERISA, which today is known as a 401 [k] . So a 401 [k] -type is a defined contribution. See, a defined benefit, which is industrial age, defined corporation is the 401 [k] co- contribution. So defined contribution means you only get what you put in. If there's not enough there, aloha. [laughs]

    9. LH

      [laughs]

    10. RK

      You know, it's not our problem today. So I meet all these millennials, they go, "I have a 401 [k] ." And I said, "Do you like bending over and picking up the soap?" You know what I mean? [laughs]

    11. LH

      [laughs]

    12. RK

      [laughs] They don't know the difference.

    13. LH

      Yeah.

    14. RK

      Because you know what a 401 [k] means? Fees, fees, fees, fees. Mutual funds, fees, fees, fees, fees. Your money is stolen right out of your pension.

    15. LH

      Mm.

    16. RK

      Defined benefit, defined contribution. So defined contribution 401 [k] is information age pension.

    17. LH

      Mm.

    18. RK

      It came about in 1974, just as ou- just as the baby boomers entered the workforce. So today, the average baby boomer's 401 [k] has $65,000 in it. The guy with a for- with a defined benefit, their, their annual... You know, they have something like a million in it.

    19. LH

      Wow.

    20. RK

      The trouble is, they're empty.

    21. LH

      Mm.

    22. RK

      That's what Who Stole My Pension? is about. My co-author's name, Ted Siedle. He was an SEC attorney and he became a whistleblower because he saw how much Wall Street was sucking the cash-

    23. LH

      Wow

    24. RK

      ... from pensions. So that's Who Must Stole My Pension. So he then-

    25. LH

      But if-

    26. RK

      He, he made I think 39 million last year blowing the whistle on all these for- on these, um, Wall Street firms. Goldman Sachs and those guys.

    27. LH

      What can people be doing when they have this 401 [k] or this pension already that's gonna do nothing for them? What should they be doing?

    28. RK

      Well, what they should be doing is choosing their teachers wisely.

    29. LH

      Yeah.

    30. RK

      Because I can tell... You know, I don't need money. Like, I write a book, right? And I get royalties from 50 different book companies throughout the world.

  13. 45:30 – 48:34

    Saving, Real Estate Outlook and Office Buildings

    1. LH

      Find the teachers. Find the right teachers. You, you say don't be a saver, be an investor. Should people be investing even during these times if they're not comfortable doing that or... This is the greatest time to invest, is what I'm hearing you say, because the opportunity-

    2. RK

      Well, the question, why would you save?

    3. LH

      Fear.

    4. RK

      No, but, you know, that was, that worked before 1971. You know, they printed 4.5 trillion after 2008. They estimate they're gonna print another 6 to 8 trillion, maybe 10 trillion-

    5. LH

      Wow

    6. RK

      ... after 2020. At the same time, they're gonna pay zero, zero interest rate policy. So you're saving money while the Fed's printing money, and they're gonna pay you no interest on it. Why would you save it?

    7. LH

      Hmm.

    8. RK

      So that's, that's all I say, and so that's why when Suzy talks about saving and Dave talks about saving-

    9. LH

      [laughs]

    10. RK

      ... I wouldn't do that. But for the average person, they should do that. So that's why choose your teachers wisely.

    11. LH

      Right.

    12. RK

      You just have to know money, that's all.

    13. LH

      Yeah. And, and what's your prediction with real estate over the next few years? Do you think it's gonna keep going down now, or do you think it's... Like, in LA, I feel like it hasn't gone down at all. It's like the place is, continues to grow, but eventually it's got to, right?

    14. RK

      I wouldn't invest in LA for one reason: taxes.

    15. LH

      Mm-hmm.

    16. RK

      You know, I, I just wouldn't. I s- that's your choice, you know? People say it's a nice place to live, and it is, but I don't like paying taxes.

    17. LH

      Mm-hmm.

    18. RK

      I don't move there. Plus, you have, you have what's called, um... They, they try to pull it, uh, I forget the name of it, but you can't raise the rent on people, so I don't like it-

    19. LH

      Rent, rent control. Yeah

    20. RK

      ... taxes, no. Great place to live, great lifestyle. But it's gonna, we're gonna have the biggest crash. We're going into a depression right now. We're going right past recession into a depression.

    21. LH

      Really?

    22. RK

      Yeah.

    23. LH

      Wow.

    24. RK

      You can't have every business closing. And the stock market's going up, but like I said, the real problem's in the repo, the shadow banking market. That's what they're trying to save, 'cause it's broke. They're going bankrupt in there. So the dollar's gonna be strong, because everybody, 80% of the debt is measured in US dollars. So everybody needs dollars to pay off their debt. Okay? But in the meantime, the guys for a week, their houses are gonna come up for sale, their Lamborghini, their, you know, their real estate. I wouldn't touch, I wouldn't touch commercial real estate. I mean, uh, office buildings.

    25. LH

      Hmm.

    26. RK

      Office buildings, you know, they're fucked.

    27. LH

      No one c- 'cause no one can go work anymore. The people are working from home for a while or yeah, whatever.

    28. RK

      Okay. Now, now, you know, I, I go to South Africa a lot. In South Africa, the office buildings became low-income housing.

    29. LH

      Whoa.

    30. RK

      It's the future. Do you know all those homeless people? Century City, here they come. [laughs]

  14. 48:34 – 56:05

    Three Truths, Recommended Teachers and Family Offices

    1. LH

      Yeah. I got a few ki- final questions for you. I really appreciate you sharing and giving us this tough love, which, which I think a lot of people need right now.

    2. RK

      That's true. I'm not politically correct.

    3. LH

      [laughs] Hey, it's all good. We all, we, we all need different teachers, and I appreciate your perspective. Um, this is a question I ask everyone towards the end of their conversations. I call it the three truths. It's a hypothetical question. Uh, but I'd like for you to imagine for a moment that many years from now, it's your last day. ... on this earth, and you've accomplished everything. You've accomplished all the things you want in your personal life, your dreams, it's all happened. Uh, but for whatever reason, hypothetically, you gotta take all of your, your work with you. Your books, your content, your board games, all the teachings you've ever given to the world, it goes with you. And you got to leave only three lessons behind for the rest of us to learn from. What would you say would be your three lessons, or what I like to call three truths?

    4. RK

      Well, I think the most important lessons probably, I think I said this way, my, my rich dad said all the time. My rich dad always said, you know, "Knowledge is finite. Stupidity is infinite."

    5. LH

      [laughs]

    6. RK

      So stay stupid. [laughs]

    7. LH

      [laughs] That's a great truth.

    8. RK

      Because that's how you get knowledge.

    9. LH

      Mm.

    10. RK

      And, well, he, he used to always say that to me, 'cause my dad always hid behind his diploma, PhD. He didn't know anything. Most k- school teachers don't know much. You know, when, when people ask me about the Fed, what is the Fed? I said, "Have you ever watched, uh, The Wizard of Oz?"

    11. LH

      Mm-hmm.

    12. RK

      And they go, "Yeah." Well, you know how Dorothy and the Tin Man and the Lion and the Straw Man, they went down the yellow brick road. They were hoping to find the wizard, and the wizard was gonna give the Lion a heart or, or, you know, Dorothy, whatever she wanted and all this stuff. And when they get to the wizard, or the Fed, it was a midget behind of it. There was nothing behind of it. That's the Fed. That's the PhD. They're hiding behind this thing called diploma.

    13. LH

      Mm.

    14. RK

      It's obsolete. And so that's the second lesson, you know, be careful who your teachers are. Make sure your teacher actually practices what they teach. So my tax guy is Tom Wheelwright. His book is Tax-Free Wealth. You really wanna stop paying taxes, get that book. It's 20 bucks. You'll probably save a couple of million dollars over your lifetime. But if you don't change, you know, the, this left ear and right ear, that gap between there, you're screwed.

    15. LH

      Yeah.

    16. RK

      And then you have my other friend, another advisor, Andy Tanner, he wrote the book St- uh, uh, Stock Market Cash Flow. Instead of investing for the long term, he makes money at markets going up or down. I'd rather do that than buy, pray, and hold, and listen to Suze Orman and Dave Ramsey. But it's your choice.

    17. LH

      Yeah.

    18. RK

      Other guys, uh, um, s- Kenny McElroy, he writes all my real estate books. He's my real estate partner. We've made fortunes together. You know, this... I- it's just fortunes, tax-free. Why would you go to school? Just buy some books, study them, get their YouTube, you know-

    19. LH

      Make some m- make some mistakes on your own, right? [laughs]

    20. RK

      Oh, you don't have to... Just get stupid.

    21. LH

      Yeah.

    22. RK

      But, you know, blessed are the meek, for they shall inherit. Meek means ego-less. I'm gonna learn, so I know what goes on in the stock market. That's why I stay out of it. But if you don't know, might be the best place for you. So if you wanna stay in the stock market, that's Andy Tanner, Stock Market Cash Flow and 401 Chaos.

    23. LH

      Mm.

    24. RK

      They tell you what's really going on because they're real. They're in the market every day. You know Jim Rogers wrote The Investment Biker and all that. He lives in Singapore. He basically says the problem with the Fed is they don't know what they're talking about. They're idiots, and we listen to them. They're the Wizard of Oz.

    25. LH

      Mm.

    26. RK

      Everybody thinks they know something 'cause they got this piece of paper, like my poor dad, call it PhD. Rich Dad Poor Dad had a financial statement. You cannot lie in your financial statement 'cause that's fraud. PhDs, diploma. Rich people, financial statements.

    27. LH

      Mm.

    28. RK

      The other thing is this, I don't have a financial planner. I have a family office. The rich have family offices. So we have money to lend constantly, we make so much money.

    29. LH

      Mm.

    30. RK

      So there's a difference in the mindset, the intelligence of what you learn. So I think the most important thing that you're teaching people, you know, in the School of Greatness-

  15. 56:05 – 1:01:32

    Closing: Who Stole My Pension?, Greatness and Final Thoughts

    1. LH

      You have, uh, you've, you've impacted millions of peoples' lives around the world. I remember actually playing the game with my mom 20, 22 years ago. I don't know, I was a kid.

    2. RK

      Yeah.

    3. LH

      A teenager. And I remember, you know, learning these principles. And even though I didn't fully understand it-

    4. RK

      Yeah

    5. LH

      ... and even though it seemed like too much for me to understand as a teenager, and overwhelming, it planted a seed, and so did the book, Rich Dad Poor Dad, which I learned about at, at an early age. So I wanna acknowledge you for-

    6. RK

      Yeah. Thank you

    7. LH

      ... giving, being a teacher in a world of teachers.

    8. RK

      Yes. Yes.

    9. LH

      Educate people on a specific way, not the only way, but a way that has worked for you and worked for millions of people around the world, for cr- constantly creating value, board games, being creative with your content to educate us in this way. And, uh, I'm, I'm really just grateful that you continue to show up and serve and, and be yourself. Because you are a unique human being, and I appreciate you, Robert, for your own, uh, style and approach. And-

    10. RK

      Well, th- thank you. But you know why you and I are great teachers?

    11. LH

      Why is that?

    12. RK

      We didn't, we didn't do well in school.

    13. LH

      Yeah. 'Cause we have to be curious and learn.

    14. RK

      Well, we just like that style of edu- it, it worked-

    15. LH

      Yeah

    16. RK

      ... for my poor dad, didn't work for my rich dad.

    17. LH

      Yeah.

    18. RK

      And you see, that's what I mean, choose your teachers wisely.

    19. LH

      Yeah.

    20. RK

      And there's millions of ways you can become rich, but you gotta find your way, your teacher, your path.

    21. LH

      Mm-hmm. Mm-hmm.

    22. RK

      Yeah.

    23. LH

      And you've got this book out now, Who Stole My Pension? Uh, make sure to check this out to really educate yourself on what's happening with pensions, 401 (k) s, and what you can do with your money moving forward. This is great. It's gonna help a lot of people who are gonna be trapped, uh, if they're not educated on this. G-

    24. RK

      Well, the, well the, the biggest reason is if you're young as your age-

    25. LH

      Uh-huh

    26. RK

      ... you know, most you guys will have your parents and siblings moving in with you.

    27. LH

      And we'll have to pay for them.

    28. RK

      Yeah.

    29. LH

      My mom is 68, 69, I'm already having to figure out, okay, how do I support her? And-

    30. RK

      And if, and if she loses her 401 [k] , IRAs, you're toast.

Episode duration: 1:01:32

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