For years, one person has been studying the global economy and has boldly (and oftentimes successfully) predicted booms, opportunities, and crashes. His name is Robert Toru Kiyosaki.
If you have read any of the 26 books he has written (the most popular of course is Rich Dad Poor Dad which stayed on the New York Times bestseller list for 8 incredible years), Robert Kiyosaki needs no introduction.
However, aside from being a bestselling author, the former Marine is also a very successful entrepreneur, investor, and sought-after educator and speaker. He is also considered a financial knowledge activist.
If you’re a Robert Kiyosaki fan, today’s your lucky day as we have him on the podcast. Aside from sharing his thoughts on the upcoming crash and how you can protect yourself from losing everything, he also candidly shared many powerful insights that will surely change the way you look at things.
You better have a pen and paper handy as you have plenty of awesome gold nuggets to take note of!
The Upcoming Crash And How To Protect Yourself From Losing It All With Robert Kiyosaki
We have the man, the myth, the legend who has changed so many lives, Robert Kiyosaki. I’m super excited to be here. This guy has been someone that’s changed my life in real estate. He has molded me and shaped me into who I’m becoming in real estate. Without fail, his book is mentioned by more of our guests than any other book. Whenever we end our episode saying, “What was the book that changed your life or that’s been a game-changer?” Without fail, most of our audience says, “Rich Dad Poor Dad.”
We have Mr. Rich Dad Poor Dad, Robert Kiyosaki, here with us. I’m super excited. Get your pen, get your paper, and get ready to write down a ton of gold nuggets and value that’s going to change your life. Let’s get going right into it. Robert, what an honor to be here. I want to thank you for allowing me to come to your place here in Scottsdale. It’s a beautiful place. I’m excited about this interview.
Me, too. Thank you very much.
Let’s get right into it. Talking about real estate, in general, do you still believe real estate is still the best way to grow your wealth?
No, it’s what I love to do. If you don’t love real estate, don’t do it. It’s quite simple. There are a lot of people who like stocks, bonds, ETFs, and all that. If you love it, do that. If you don’t love something, don’t do it. People say, “Do what you love.” You should also invest in what you love. I’m an entrepreneur. I love businesses. I start businesses because a business is your best asset.
The purpose of a business is to buy real estate. That’s the McDonald’s formula. If you read Rich Dad Poor Dad, they asked Ray Kroc, “What business are you in?” Everybody said, “Hamburgers.” Ray Kroc says, ” McDonald’s is a real estate company.” The purpose of a business is to buy real estate. If I own this business, I also own the building, but they’re two separate companies.”
If you understand that, you’ll understand why the rich get richer. The main reason I love real estate is two answers, debt and taxes. Most people are afraid of debt, and they should be afraid of debt. It’s those guys like Dave Ramsey who live debt-free. The average guy should live debt-free because they don’t know about money. They went to school, got a job, and invested in the stock market. They should live debt-free because they know nothing about money. Money is debt. Money became debt in 1971 when Nixon took the dollar off the gold standard.
The people that are losing are the people who are saving money. They’re the biggest losers because why would you save money when the federal government’s printing money? It makes no sense. If you look at interest rates, since the 2008 crash, interest rates went sub-zero in many parts of the world, and idiots are still saving money. Look at the Japanese. I’m Japanese. They’re idiots. They save money. The Japanese have the highest saving per capita of any country in the world, and their governments are ripping them off by printing money.
I’m fourth-generation Japanese. I don’t think like them. Why would you save money when the government’s printing and interest rates are down? They keep lowering interest rates, and they still save money. When they lower interest rates, they’re saying, “Please borrow money.” After 1971, the only way money was created is if you borrowed money.
The people that know how to handle debt are getting richer and richer. The savers are losers. Unlike real estate, the more debt I use, the less tax I pay. Your two largest expenses are debt and taxes. You better learn how to use it. That’s why I like real estate. Don’t invest in real estate because you want not to pay your debt and taxes. You get your butt handed to you.
If you don’t love real estate, don’t do it.
Some of the things I learned from you that are interesting, and I’m still trying to master this skill, by the way, is that you pay very little or no taxes. You know how to do the zero taxes. This is the key thing. It’s not little to none. It’s no taxes legally. Talk a little bit about that. What are some of the tips on that to help people realize they can do that?
I am a student of money. If you want a tip, talk to your financial planner and get screwed. A financial planner is a salesperson. They’re not a rich person. The average person has taken financial advice from poor people who need money, like the school teacher and their parents. They may be good people. You don’t come to me for dental work because I don’t know anything about it. That’s what people are doing. They’re talking to poor people about money.
The only thing they can tell them is, “Give your money to me.” The most stupid question I hear day in, day out is, “I have $10,000. What should I do with it?” The first step is to shut your mouth. If you say you have $10,000 and you don’t know what you want to do with it, there are 12 quadrillion people that will tell you what to do with it. Give it to them. That’s how stupid people are. The word is stupid. If you have money, don’t tell anybody. That’s step one.
Figure out what you want to do with your money. If you love business, learn entrepreneurship. If you like real estate, learn real estate. If you like stocks and bonds, most guys who like stock stocks and bonds are corporate employee types. I’m not corporate. I’m not an employee. I don’t like stocks and bonds. I’ve taken three companies public. The most corrupt thing you can do is take a company public. Nothing’s real in there. Stocks, bonds, mutual funds, and ETFs are all manipulated. I don’t touch them. I’m not a corporate guy. I’m an entrepreneur. I like real estate because I don’t have to play the stock market. If you don’t know real estate, play the stock market.
Growing up, you had an incredible mentor. You have what you call your rich dad who was able to give you an insight and teach you these different things that may be your poor dad wasn’t able to do. What is your value still now looking at mentors? Is this something you still look for guidance from mentors? Do you still seek people out that are maybe in a higher destination? What does that look like for you when it comes to mentors in general?
I covered it in my latest book called FAKE. The first is fake money. In 1971, the US dollar became fake. Why were you save it? Why would you work for it? It makes no sense. The more you work for, the higher tax you pay. That is stupid. That’s why Rich Dad Poor Dad‘s lesson number one is don’t work for money. Everybody goes the school to work for money. I wouldn’t work for money because you pay tax.
The second one is fake teachers. What do teachers know about money? Nothing. I was in an Accounting class. I knew more about accounting than my teacher did in the MBA program. That’s when I dropped out. I said, “Why am I here? I’m listening to an idiot.” Fake assets. Wall Street pumps out fake assets. They wouldn’t do that. There was a thing called derivatives. MBS is credit default swaps. This crap they’re handing out is toxic.
I like Wall Street, but I don’t buy their assets. The average person buys stocks, bonds, mutual funds, ETFs, credit default swaps, MBS, and all that. They rip people off. I don’t touch it. It’s the same as when I go into a bank. I don’t keep my money in a bank because they’re printing it. I go to my bank. I love my banker because I borrowed money from my bank. I go to Wall Street to borrow money from Wall Street. I love debt. If you can’t handle debt, don’t borrow it. That’s why it’s fake money, fake teachers, and fake assets.
You got another between all of them. Why would you listen to a person who’s poor? I don’t know why people do that. My poor dad is a great guy, PHD, Poor, Helpless, and Desperate. I didn’t listen to him about money. He taught me to be honest and a few other things but not money. He didn’t know about money. I would say 98% of all school teachers, 50% are good people, and 100% don’t know about money. Why would I listen to them? That’s what I’m saying.
Do you do groups where you meet with individuals?
The more debt you use, the less tax you pay.
No. Why would I talk to them? I created this Cashflow board game. How did my rich dad teach me about money? It was Monopoly, with four greenhouses, and one red hotel. I have 6,000 houses, hotels, businesses, and oil wells. I play Monopoly every single day of my life. It’s how I went. I only play to win. If you want to lose, save money, and buy ETFs. I don’t like losing. What makes this different than Monopoly? This is why most people leave school. They have no idea what it is. This separates Monopoly from rich dad and Cashflow. This is a financial statement.
When you go to your banker, your banker asks for one thing, “Show me your financial statement.” 99% of all high school kids leaving high school have no idea what a financial statement is. They wonder why they’re going broke. This is an income statement. This is a balance sheet. This is called a statement of cashflow. I played it once. You’re an idiot. You don’t play the game of golf once and go to the masters. That’s how stupid people are. They go to school. They think they play. They get the answers and do it at once. I can’t believe it.
I got tired of talking to people. I created this game with my wife, Kim. You can teach each other. People can teach people. You play it, and you do it in real life. Don’t talk to me until you get stuff. This call up here is called an asset. Assets cashflow money into your pocket. Liabilities cashflow money out of your pocket. 99% of the people have liabilities of a house, a car, and a college loan. Those are liabilities. They call assets. That is how bad our education is. That’s why I created the Cashflow game.
I play that once. I’ve had people telling me, “I have a Degree in Economics.” This is not Economics. This is called accounting. They don’t know there’s accounting in Economics. That’s how stupid people are. They said, “I can balance a checkbook.” A checkbook is balanced inside here. It’s under your savings. They don’t have the big picture. My wife and I created Cashflow so you could teach each other, and you play it over and over again. Why do you want to play it over and over again? You can make mistakes. It’s like the game of golf, the person who makes the most mistakes wins. Look at baseball. Babe Ruth, the biggest home run hitter, was also the biggest strikeout king, two-point average.
In our school systems, if you’re not hitting a home run every single time, you’re an idiot. It’s the school system that the idiot. The parents punish kids. There’s new evidence saying that when a kid is forced to study hard, the brain is damaged. They would never learn this in school. This was started in 1996, and I wrote Rich Dad Poor Dad, which was all over the world in 1997. That’s the difference. If you want to be an employee, a high-paying job, you work here, but you’ll look here, first-line on an expense tax. I don’t pay tax because my income comes from here. Trump doesn’t pay tax either. That’s why they’re after his tax records.
New York Times interviewed Jared Kushner. The Kushners are Jewish. They’re richer than the Trumps. The Kushners don’t pay taxes either. This New York Times reporter went nuts because the reporter was an A student that went to school in Journalism, but they didn’t know. All they know is a high-paying job and to pay taxes. That’s why they’re broke. Why would you listen to them?
I’m not saying one is right or wrong. What is most interesting to you? You want a high-paying job, pay more taxes, buy a big house, more student loans, a nice car, and all that. That’s why most professional athletes are bankrupt in five years because they got a high pay job. They pay taxes. The first one was to take care of their friends and family, their mother, and buy big houses. When their contracts are up, they go broke.
One of my greatest paradigm shifts from you was because of Rich Dad Poor Dad. When you said your home is not an asset, the whole role flipped upside down. They’re like, “What are you telling me? My home is not an asset. It’s an asset.” You’re like, “It’s not.” Tell our audience a little bit about this who are thinking their home is an asset. Why isn’t your home an asset? What is the real definition of an asset?
These are the two most important words in business, cashflow. Financial intelligent people can control their cashflow. Idiots cannot. They would have financial diarrhea. The money flows out, loose as a goose, as they say. This is called a statement of cashflow here. This is what happens to the average person. They get a job because they go to school. It cashflows this way out into taxes. That’s why I don’t work for money, and I don’t want a job.
The first expense goes to the government in taxes. They buy a house. That money goes straight to the banks, the mortgage companies, the shadow stats banks, and stuff like this. They have a 401(k) in ETFs, and the money flows straight to Wall Street. Let’s say you graduate from college at age 20 or 25. You retire at 65. For 40 years, your cashflow goes way straight to Wall Street. If they lose the money, which they do, you don’t get it back. That’s stupid.
If you want to make money, study it. If you just want a tip, talk to your financial planner and get screwed.
That was my poor dad. Go to school, get a job, pay your taxes, live below your means, buy a house because it’s your biggest asset, and invest for the long term in a well-diversified stock portfolio, stocks, bonds, mutual funds, and ETFs. The month the cash is flowing out is called loose as a goose. A goose takes a dump and goes out fast. That’s called a goose that didn’t lay the golden egg.
I sat there and got tired of listening to these idiots. My wife and I, in 1986, created the Cashflow game so people could teach people. You can make up your mind, “Which assets do I want? Do I want real estate? Do I want business? Do I want oil, gas, gold, silver, or all different assets?” Most guys say, “I don’t have the time. I don’t have the money.” You’ll be as loose as a goose.
Robert, one thing you’ve been pretty spot on in multiple of your books is you’ve been able to see almost the future and what’s going to happen with the economy. You’ve called out pretty dead on each crash that has taken place. What do you see the future economy doing? How should people start preparing?
The question is, “How long can the government keep printing money?” In 2019, the national debt passed $22 trillion. The off-balance-sheet debt in the United States is $265 trillion. We cannot pay it off. When it goes past 60% debt to the GDP, it’s a warning. That’s like making $1,000 a month, and the $600 is going into debt. When it hits 90%, you can’t turn back. The US Government’s debt to GDP is 115%. It cannot turn back.
The question is, “Are we going to have depression or a collapse?” A collapse happens every 1,500 years. The last collapse was the Roman Empire 1,500 years ago. I hope it doesn’t happen. If you study well, history does repeat at times. That’s why in FAKE, I write about keeping rail money which is gold and silver. Do not touch fake gold and silver, which are gold and silver ETFs, because they’re still fake.
I keep gold and silver in a safe outside the banking system. If the banking system shuts down, businesses will collapse. We will have a collapse. I don’t think it will happen, but I’m prepared in case it does. What I always suggest to people is to have enough money outside the banking system, so they can survive for a year. That’s why I save gold and silver. What happened with gold and silver in 1971? The business school started saying to people that gold and silver were barbaric relics. It is, but it’s real. Gold and silver have been here since the earth was formed. Gold and silver will be here when we’re gone.
Since 1972, I’ve been saving gold and silver. I have millions in gold and silver. I never intend to spend it. What happened to gold and silver? It went to $800 and dropped. I bought more. In the year 2000, gold was $260 an ounce. Now, it’s $1,400 an ounce. The guys who saved money took a hammering. It’s not an ROI. I didn’t lose money. That’s why savers are losers. Guys who held gold and silver were the winners. Still, our business schools will tell you not to touch gold and silver. Why? They can’t print it.
You see, the whole system is to print money, which is why savers are losers. That’s why I like real estate. I use debt to buy real estate and pay no taxes. All the money flows into my income statement, but the average person doesn’t have a financial statement. They don’t know what’s going on because they went to school and never learned this stuff.
This is something I’m interested in. When you’re talking gold and silver, what is the even beginning steps? Where are the trusted sites? How do you even buy gold and silver? How do you even begin to look into what is the gold you should be buying versus the gold you shouldn’t be buying?
Like everything, you should study anything on here. I study gold and silver. That’s all. The trouble with most people that don’t know anything about gold and silver, they go in and don’t make any money on gold and silver. They make money on selling idiots’ numismatic, collectible coins. You’ll walk in there, and you want a silver dollar, let’s say, or a gold Krugerrand or a gold Eagle. They’ll say yes, but if you buy 1912, it’s worth five times more. You buy the collectible called numismatic, and that’s where the margins are. That’s how they make money.Financially intelligent people can control their cash flow. Idiots cannot.
Financially intelligent people can control their cash flow. Idiots cannot.
They want you to buy the collectibles because it’s no different than buying a stock and hoping it’s going up. It’s no different than buying a piece of real estate and hoping it’s going to go up. The average person’s a sucker. We all know that. The reason I started the Rich Dad company is supposed to educate those who don’t want to be suckered anymore. Go to school, get a job, buy a house, get out of debt, pay your taxes, and invest in the stock market. That’s for suckers and losers. Nothing wrong with being a sucker or loser, but I don’t like being one.
Knowing what you know now, you’ve had this life to study and absorb so much. You’ve probably had wins and losses, maybe. What would you tell yourself? If you’re looking at twenty-year-old Robert Kiyosaki, what would you tell him what you know now?
I wouldn’t change a thing. The second biggest mistake people make is they always want to know what was your biggest mistake. Do you know why? The question is, “Why are you afraid to make mistakes?” it’s because you went to school, your mother said, “Don’t make mistakes,” or you went to church and if you make a mistake, you’re going to go to hell. The only way we learn is by making mistakes. When people are afraid of making mistakes, they don’t make them and stay stupid.
If they make a mistake, they lie about it. Look at President Clinton. He had sex in the White House. There’s nothing illegal about having sex in the White House, but lying about it is a felony. Because he lied, Clinton became a felon, and a couple of other things, too. Most people are afraid of admitting they made a mistake. They waste an opportunity to learn something. I’m constantly making mistakes. Am I going to make more? Absolutely. Why would I not make mistakes?
A lot of people have this Christian idea. I’m not against religion either. If I get rich, I’ll become evil. Rich is evil. If you don’t get rid of all that thought, you’ll never be rich. I remember my school teacher when I was in fourth grade. I raised my hand and said, “What am I going to learn about money?” She was a church lady. She goes, “The love of money is the root of all evil.” I said, “Who told you that?” “Church.” I said, “Change churches.” That’s why you’re a Mormon. The Mormon religion is the most up-to-date there is because you tithe 10%. That’s smart.
When you tithe, God becomes your partner. I give 10% to what inspires me. I give 10% to things that I can’t work on. My wife donates to animals. I donate to educational events, public television, and stuff like this. I learned this in the Mormon church. People who don’t pay their partner, who is God, God doesn’t take care of them. If you don’t pay God, it’s like not paying your partner. People who don’t tithe get crap to happen all the time. Not that I’m a Mormon, but I subscribed to tithing. The reason for tithing is you got to pay your partner. You pay God first. That’s it. I’m not religious. I pay God first. That’s the difference, so good stuff happens.
I’m absorbing all this in listening to where you’re at, someone who I look up to, and still say, “Am I going to make mistakes?” Even egg it on like, “Come on. Bring on the mistakes.” It’s those mistakes that ultimately make us better and sharper individuals who we’re supposed to become. I love this because this is what our audience needs to learn. “It’s okay. Fail your way forward. Make mistakes.”
It’s more than that. You have to learn from them, and that takes humility. How do you make mistakes? Being egotistical. God knows I’m egotistical. You’ll see this yellow Ferrari there. That’s my sixth Ferrari. I have an ego so big. When I make a mistake, that ego has got to be deflated a little bit so I can learn a little bit. That’s how I get rich. People who make mistakes and don’t learn from them make a bigger mistake. Humility is how we learn. I’m arrogant and egotistical. I have Rolls-Royces, Ferraris, and Bentleys. I love money, but I tithe. I make a mistake. I say, “God, what do I need to know?”
Great words of advice right there. Robert, I appreciate that. In closing, we always ask two questions that we always love asking. What’s a good book you’re reading that’s game-changing and you like? What would you say if you had to name all the books, including your incredible wall here of amazing books?
This book is an asset. Every month money comes in all over the world. I’m not the best writing author because I flunked out of school. I can’t write. I’m a best-selling author. The reason my best friends are Mormons. Why? You guys can sell. When a Mormon goes on a mission, my esteem for them goes up. I went to military school. We have a mission also. We go to faraway places, meet nice people, and we shoot them. You guys have to save them. I would rather shoot them than save them. My friends are Mormons. I go, “How in the world did you do it? You got to be nice to these people, try, and save their soul.”
People who make mistakes and don’t learn from them just make bigger mistakes.
Being a Marine is a lot easier. The reason Marines are tight is we have a mission. It’s a code of honor. We’re a spiritual organization. Marines do not desert fellow Marines in combat. We stay behind and bring them back no matter what. When I went to military school, the first word I learned was “mission.” I go to this interview because they need pilots. They had the Army Air Force, Navy, Coast Guard, and Marine. I’m standing out and looking, “Which one am I going to join?”
The Marine stands up first. He says, “Gentlemen, be clear on the mission of the United States Marine Corps. They kill people. Every Marine carries a gun. If you want to save people, join the Coast Guard. If you want to play golf, join the Air Force. If you want to drive boats, join the Navy. If you want to drive trucks, join the Army. We kill people.” Nobody went to talk to him, but he was crystal clear. Out of 600 men in those days were pilots. Twelve stood in front of them. I was one of them. I was clear on the mission. If I’m going to go to war, I want to be clear about what I’m doing.
I don’t want to be in combat with somebody who was thinking about joining the Coast Guard. If you want to save people, become a Mormon or join the Coast Guard. Be clear on your mission. That’s why the mission is spiritual. That’s why I had tremendous respect. That’s why some are not good Mormons, but they’re good missions. My friends are Jack Mormons. They went and became missionaries.
I have tremendous respect for their internal discipline. That’s the difference. They can sell. I made so many guys who can’t sell. They’re afraid of rejection. Business is much like a religion. You better be clear on your mission, what you’re here to do, who you’re trying to save, and do your job. Too many people are only in business for money. That’s why they’re not successful because money is fake. There are fake money, fake teachers, and fake assets.
It’s the book FAKE.
You’ve got to have this as much as a banker wants to see. A banker doesn’t care if you had good grades. A banker doesn’t care what college you went to. Look at the richest guys on earth. They dropped out of school. Steve Jobs, Gates, Zuckerberg, Branson, Henry Ford, and Walt Disney dropped out of school. It didn’t hurt them at all.
Robert, thank you so much. This has been an awesome interview. It’s been an honor for me to have this opportunity. I remember reading your book, and it changed my life as a young kid. Here I am sitting in front of you. What an honor to be here. Thank you for allowing this to happen.
Keep teaching. The world needs real teachers, not fake teachers.
Thank you so much. I appreciate it.
What an awesome episode. You got to learn from the man that has been out there doing good and teaching us how to grow with the real estate business. There are so many gold nuggets here.
What do you love?
That’s key. Do what you love.
I love real estate. I love not paying taxes.
Come on. Who wouldn’t love not paying taxes?
Let me explain one thing. Taxes are incentives. If you donate to the church, you get a tax break. If you donate to charity, you get a tax break. If you invest in real estate, you get a tax break. If you invest in food, you get a tax break. If you invest in stocks, you get no tax break. That should tell you something. I invest in oil and gas as an entrepreneur. I invest $1 million in oil and gas. I got $400,000 cashflow that day. If I invest in Exxon or Standard Oil with $1 million, I get zero the next day. Why would I touch stocks? It makes no sense to me.
Guys, thanks for joining in. I’m so grateful that Robert was able to take some time. Reread this and keep jotting down his gold nuggets. You’ll be well on your way to where you can be financially free and hopefully catch up to this guy who is incredible at what he does with all of his investments. Thank you, guys.
- Rich Dad Poor Dad
- Dave Ramsey
- FAKE: Fake Money, Fake Teachers, Fake Assets: How Lies Are Making the Poor and Middle Class Poorer
- Rich Dad company
- Be Sure To Join The Wholesaling Inc Facebook Group
About Cody Hofhine
Cody Hofhine, a multiple Inc 5000 Business Owner. Co Founder of Wholesaling Inc. the #1 Real Estate coaching program across the nation. Co Founder of Joe Homebuyer the leading Real Estate Franchise. A successful Real Estate investor/mentor and sought after Speaker.
Cody has coached over 3 thousand students on how to successfully Build their Real Estate Business through his real estate training as well as help individuals perform at their highest levels with his one-on-one mentoring.
Cody used his background in sales to quickly build multiple 7 and 8 figure Real Estate Businesses that all start on the foundation of clarity or Vision and Purpose.
Cody loves being with his family and doing crazy tricks behind a boat.