day because I exercise it. The stronger it gets, the more money I can make.” He believed that automatically saying “I can’t afford it” was a sign of mental laziness.
Although both dads worked hard, I noticed that one dad had a habit of putting his brain to sleep when it came to finances, and the other had a habit of exercising his brain. The long-term result was that one dad grew stronger financially, and the other grew weaker. It is not much different from a person who goes to the gym to exercise on a regular basis versus someone who sits on the couch watching television. Proper physical exercise increases your chances for health, and proper mental exercise increases your chances for wealth.
My two dads had opposing attitudes and that affected the way they thought. One dad thought that the rich should pay more in taxes to take care of those less fortunate. The other said, “Taxes punish those who produce and reward those who don’t produce.”
One dad recommended, “Study hard so you can find a good company to work for.” The other recommended, “Study hard so you can find a good company to buy.”
One dad said, “The reason I’m not rich is because I have you kids.” The other said, “The reason I must be rich is because I have you kids.”
One encouraged talking about money and business at the dinner table, while the other forbade the subject of money to be discussed over a meal.
One said, “When it comes to money, play it safe. Don’t take risks.” The other said, “Learn to manage risk.”
One believed, “Our home is our largest investment and our greatest asset.” The other believed, “My house is a liability, and if your house is your largest investment, you’re in trouble.”
Both dads paid their bills on time, yet one paid his bills first while the other paid his bills last.
20 YEARS AGO TODAY...
YOUR HOUSE IS NOT AN ASSET
The 2008 housing market crash was a clear message that your personal residence is not an asset. Not only does it not put money in your pocket, but we cannot count on the fact that it will go up in value.
Many houses in 2017 are still worth less than they were in 2007.
One dad believed in a company or the government taking care of you and your needs. He was always concerned about pay raises, retirement plans, medical benefits, sick leave, vacation days, and other perks. He was impressed with two of his uncles who joined the military and earned a retirement-and-entitlement package for life after 20 years of active service. He loved the idea of medical benefits and PX privileges the military provided its retirees. He also loved the tenure system available through the university. The idea of job protection for life and job benefits seemed more important, at times, than the job. He would often say, “I’ve worked hard for the government, and I’m entitled to these benefits.”
The other believed in total financial self-reliance. He spoke out against the entitlement mentality and how it created weak and financially needy people. He was emphatic about being financially competent.
One dad struggled to save a few dollars. The other created investments. One dad taught me how to write an impressive résumé so I could find a good job. The other taught me how to write strong business and financial plans so I could create jobs.
Being a product of two strong dads allowed me the luxury of observing the effects different thoughts have on one’s life. I noticed that people really do shape their lives through their thoughts.
For example, my poor dad always said, “I’ll never be rich.” And that prophecy became reality. My rich dad, on the other hand, always referred to himself as rich. He would say things like, “I’m a rich man, and rich people don’t do this.” Even when he was flat broke after a major financial setback, he continued to refer to himself as a rich man. He would cover himself by saying, “There is a difference between being poor and being broke. Broke is temporary. Poor is eternal.”
My poor dad would say, “I’m not interested in money,” or “Money doesn’t matter.” My rich dad always said, “Money is power.”
The power of our thoughts may never be measured or appreciated, but it became obvious to me as a young boy that it was important to be aware of my thoughts and how I expressed myself. I noticed that my poor dad was poor, not because of the amount of money he earned, which was significant, but because of his thoughts and actions. As a young boy having two fathers, I became acutely aware of being careful about which thoughts I chose to adopt as my own. Should I listen to my rich dad or to my poor dad?
There is a difference between being poor and being broke. Broke is temporary. Poor is eternal.
Although both men had tremendous respect for education and learning, they disagreed about what they thought was important to learn. One wanted me to study hard, earn a degree, and get a good job to earn money. He wanted me to study to become a professional, an attorney or an accountant, and to go to business school for my MBA. The other encouraged me to study to be rich, to understand how money works, and to learn how to have it work for me. “I don’t work for money!” were words he would repeat over and over. “Money works for me!”
At the age of nine, I decided to listen to and learn from my rich dad about money. In doing so, I chose not to listen to my poor dad, even though he was the one with all the college degrees.
A Lesson from Robert Frost
Robert Frost is my favorite poet. Although I love many of his poems, my favorite is “The Road Not Taken.” I use its lesson almost daily.
The Road Not Taken
Two roads diverged in a yellow wood,
And sorry I could not travel both
And be one traveler, long I stood
And looked down one as far as I could
To where it bent in the undergrowth;
Then took the other, as just as fair,
And having perhaps the better claim,
Because it was grassy and wanted wear
Though as for that the passing there
Had worn them really about the same,
And both that morning equally lay
In leaves no step had trodden black.
Oh, I kept the first for another day!
Yet knowing how way leads onto way,
I doubted if I should ever come back.
I shall be telling this with a sigh
Somewhere ages and ages hence;
Two roads diverged in a wood, and I—
I took the one less traveled by,
And that has made all the difference.
And that has made all the difference.
Over the years, I have often reflected upon Robert Frost’s poem. Choosing not to listen to my highly educated dad’s advice and attitude about money was a painful decision, but it was a decision that shaped the rest of my life.
Once I made up my mind about whom to listen to, my education about money began. My rich dad taught me over a period of 30 years until I was 39 years old. He stopped once he realized that I knew and fully understood what he had been trying to drum into my often-thick skull.
Money is one form of power. But what is more powerful is financial education. Money comes and goes, but if you have the education about how money works, you gain power over it and can begin building wealth. The reason positive thinking alone does not work is because most people went to school and never learned how money works, so they spend their lives working for money.
Because I was only nine years old when I started, the lessons my rich dad taught me were simple. And