over freedom pay more in taxes. That is why people who have safe, secure jobs pay more in taxes than people who own the businesses that provide the jobs.”
I spent a few days thinking about that comment, letting the magnitude of the idea sink in. The next time I saw rich dad, I asked him, “Do I have to choose between security or freedom? In other words, does that mean I can have one, but not the other?”
Rich dad laughed after he realized how much thought I had given to his remark. “No,” he replied, still chuckling. “You don’t have to have one or the other. You can have both.”
“You mean I can have both security and freedom?” I asked.
“Sure,” he said. “I have both.”
“So why did you say that, for most people, the price of security is personal freedom?” I asked. “How can you have both when you say most people can have only one? What’s the difference?”
“The price,” said rich dad. “I’ve always said to you that everything has a price. Most people are willing to pay the price for security, but they are not willing to pay the price for freedom. That is why most people have only one of the two. They only have one or the other.”
“And why do you have both security and freedom?” Mike asked. He had just entered the room and had heard only part of the conversation.
“Because I paid twice the price,” said rich dad. “I was willing to pay the price for both security and freedom. It’s no different than having two cars. Let’s say I need a truck, but I also want a sports car. If I want both, I pay twice the price. Most people go through life paying for one or the other, but not both.”
“So there is a price for security, and there is a price for freedom,” I said. “And you paid the price for both.” I repeated what rich dad had just said so that I could let the idea sink into my head.
Rich dad nodded. “Yes, but let me add one more point to clarify what it means to be willing to pay the price to have both. You see, we all pay a price anyway. We pay a price even if we don’t pay the price.”
“What?” I replied, frowning and shaking my head. Rich dad now seemed to be speaking in circles.
“Let me explain,” said rich dad, gesturing with his hands that we should calm down. “Do you remember when I helped the two of you with your science homework a few weeks ago when you were studying Newton’s laws?”
Mike and I nodded.
“Do you remember the third law: For every action, there is an equal and opposite reaction?”
Again we nodded.
“That is kind of how a jet flies through the air,” said Mike. “The engine propels hot air backward, and the jet moves forward.”
“That’s right,” said rich dad. “Since Newton’s laws are universal laws, they apply to everything, not only jet engines.” Rich dad looked at the two of us to see if we were following what he had just said. “Everything,” he repeated, just to make sure we understood.
“Okay, everything,” said Mike, a little frustrated at the repetition.
Suspecting that we were not really getting his point about everything, rich dad continued, “When I say ‘everything,’ I mean it quite literally.” He went on, “Do you recall my lessons about financial statements? Do you remember my explanation that, if there is an expense, then there must be income somewhere else?”
Now I was beginning to understand what he meant by “everything.” Newton’s universal laws also applied to financial statements.
“So for every asset, there has to be a liability,” I said. Just to let him know that I was beginning to follow his thinking, I added, “A universal law applies to everything.”
“And for something to be up, something else must be down. And for something to be old, something else has to be new,” added Mike.
“Correct,” rich dad said with a smile.
“So how does this apply to security and freedom and your willingness to pay twice the price?” asked Mike.
“Good question,” said rich dad. “It’s important because, if you don’t pay twice the price, you’ll never get what you want anyway. In other words, if you don’t pay twice the price, you do not get what you paid for in the first place.”
“What?” I replied. “If you don’t pay twice, you don’t get what you paid for?”
Rich dad nodded his head and began to explain. “People who pay the price only for security may never really feel secure—like in job security,” he stated boldly. “A person may have a false sense of security, but they never really feel secure.”
“So even though my dad has what he thinks is a safe, secure job, deep down he never really feels secure?” I asked.
“That’s correct,” said rich dad. “Because he is paying only for the action, but not for his internal reaction. The harder he works for security or pays the price for security, the more his insecurity grows inside him.”
“Does insecurity have to be the reaction?” Mike asked.
“Good question,” rich dad said. “No, there can be other kinds of reactions. A person could have so much security that the reaction is boredom and then restlessness. They want to move on, but they don’t because then they would give up their security. So that is why I say that each of us has different challenges, and each of us is unique. We’re unique because we don’t react to things in the same ways that others do.”
“Like some people see a snake and panic, and others see a snake and get happy,” I added.
“That’s correct. We are all different because we are all wired differently,” rich dad said.
“So what is the point of all these mental gymnastics?” I asked.
“The gymnastics are to make you think,” said rich dad. “I always want you to remember that everything has a price—and that the price is often twice as much as it seems. If you pay for only one side of Newton’s law, you may think you have paid the price, but you may not get what you want.”
“Can you give us some examples?” I asked.
“I can give you general ones because, as I said, each of us is unique,” said rich dad. “But, as a general rule, always remember that there are two sides to each situation.
“For instance, the best employer has usually started his or her career as an employee. He or she uses that prior experience as an employee to develop a management style that empowers the employees he or she manages.”
“So good employers will be honest and treat their employees like they would like to be treated?” I asked.
“Exactly,” rich dad replied. “Now let’s look at an extreme example. What do you think it takes to be a good detective?”
“To be a good detective?” Mike and I repeated in tandem, thinking that rich dad was now driving down the wrong side of the road.
“Yes, a good detective,” rich dad continued. “To be a good detective, a detective must first be honest, moral, and of the highest integrity. Is that correct?”
“I would hope so,” said Mike.
“But to be good, a detective must also think exactly like a crook or someone who is immoral, unlawful, and unethical,” said rich dad. “Always remember Newton’s law. You cannot be a good detective without also being able to think like a good crook.”
Mike and I were now nodding. We were finally beginning to understand where rich dad was going with this whole lesson.
“So that is why a person who tries to become rich by being cheap still winds up, in many ways, as poor as someone who has no money?”