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Rich Dad, Poor Dad author Robert Kiyosaki dropped into the Sydney Writers’ Centre and we chatted to him about his new book Midas Touch: Why Some Entrepreneurs Get Rich – And Why Most Don’t, which he co-authored with Donald Trump. Robert has built an entire empire on his “Rich Dad, Poor Dad” series of books so it was great to be able to chat to him about his writing and book marketing strategies.
Rich Dad Poor Dad ranks as the longest running bestseller on all four of the lists that report to Publishers Weekly – The New York Times, Business Week, The Wall Street Journal, and USA Today – and has held a top spot on the famed New York Times list for over six years and counting. Translated into 51 languages and available in 109 countries, the Rich Dad series has sold over 27 million copies worldwide and has dominated bestseller lists across the US, Asia, Australia, South America, Mexico, and Europe. In 2005, Robert was inducted into the Amazon.com Hall of Fame as one of that booksellers top 25 authors.
Click play to listen. Running time: 20.42
* Please note these transcripts have been edited for readability
Valerie
Hi, this is Valerie Khoo from the Sydney Writers’ Centre. Today, I’m here with Robert Kyosaki, the man behind the world wide phenomenon Rich Dad, Poor Dad series. His latest book is Midas Touch: Why Some Entrepreneurs Get Rich and Why Most Don’t.
Robert, thanks for joining us today.
Robert
Thank you, I’m honored to be in your presence.
Valerie
That’s very kind of you. Tell us, why don’t most entrepreneurs get rich?
Robert
Well, the problem is they go to school and our schools don’t teach us to be entrepreneurs, schools teach us to be employees. They also teach you not to make mistakes in school, I’m how silly that is. The only way I learned to walk, or ride a bicycle, or as a pilot, you fall down a couple of times. Most people who go to school come out really risk-aversed, and rather than becoming entrepreneurs, they become bureaucrats. A bureaucrat is somebody who has managerial power, but they have no fiscal risk. They’ll never lose, if they make a bad decision, they don’t pay for it, you know? So, that’s what most bureaucrats are — like Obama, and Bernanke in the US, they’re bureaucrats. They screw up, this guy Bush, they screw up big time, we pay for it. So, that’s the difference of people who go to school and entrepreneurs; they’re very different people.
Valerie
So, the concept of Midas Touch is great, great imagery, because in the book, you actually talk about your thumb and you five fingers, tell us a little bit about that?
Robert
Well, Midas Touch is really simple to remember, Donald and I have been friends since about 2004, and we’re very concerned because unemployment is rampant across the US. Now one is six US residents is now in poverty. I think that’s 47 million in poverty in America, and the reason is they went to school again. They learned nothing about money. So, the only way we’re going to solve this problem is by creating more entrepreneurs, and like I said, our schools can’t do that, corporations aren’t going to do it.
So, the Midas Touch is five things you must remember. Number one is the thumb, which is strength of character, you fail, stand up, don’t lie, don’t cheat, just stand up on it, keep going on, strength. This is focus, you know, the index finger, this is where I’m going. And, I talk about how I went to flight school, and was preparing to fly in Vietnam. You know, people are shooting at you, you’ve still got to stay focused on your target, even if you get killed in the process. This one everyone knows, this is what you stand for, so Donald stands for that absolute wealth, and what I stand for is very simple, financial education. Keep it simple, teach people to manage their money. I stand for that, and I don’t ever get off that track. The ring finger’s for relationships, if somebody is struggling financially, be it a company, a country or marriage, it’s because you have a bad relationship. A thing that Donald and I always say is that you can’t do a good deal with a bad partner. And God knows, I’ve had some bad partners. And they’re just incompetent, but they want to pretend they’re smart. And, the little one is the little finger, every entrepreneur must do something that nobody else does. For example, in the United States, Wal-Mart, their whole system of business is designed to give you the lowest price possible, everything, whereas little mom and pop stores they’ll say, “Well, we put things on sale.” That’s not the same thing. FedEx says ‘overnight’, that was their whole thing, they built a whole company around that little promise. Domino’s pizza in America was pizza in less than 30 minutes, the entire business was built around one simple, little promise. Those are the things that make entrepreneurs extremely rich or extremely poor, if they don’t have those five.
Valerie
Now, it’s interesting that you talk about the little things, you’re a consummate marketer of books, and you’ve built and empire on them. Tell me, when it comes to a book, what are the little things that an author needs to do?
Robert
Well, I’m honored to meet you, because, I mean you’re a great writer, and I flunked out of school because I can’t write. So, I don’t know what I do most of the time. I just know, as we were talking about, you have a degree in accounting and economics and all this, plus you work for PR firms. So, what really makes a person successful, is not that you’re mono-culture, mono-disciplined, you have to be a synergy of different skill sets. So, I am a best-selling author, I am not the best writing author, so what I do is when I’m writing I’m selling constantly, I am a salesman, I am not a writer. And, so that’s why I make a lot of ‘A’ students crazy because this guy can’t write. I say, “Yeah, but I can sell.” And so I had to learn how to sell, and if you’re going to be a capitalist like I am, selling is your number one skill, if you can’t sell, you can never be an entrepreneur, period.
Valerie
Apart from selling, as you just touched on then, you say that you need a synergy of different skills, and a fairly broad range of skills to be an entrepreneur, and in the book you say don’t specialize. Now that kind of flies in the face of some advice that business mentors give about you’ve got a niche, and you’ve got to narrow down your target, and your audience, and what you do. So, what’s your comment on that?
Robert
Well, that’s good for small business people. If you want to stay small, be the smartest guy on the block. That’s why most accountants, most attorneys, most doctors never get rich. It’s because they’re too narrow, they are experts in toenail removal or something, you know what I mean? Or my attorney, poor guy is an ‘A’ student, but he knows jack outside of that.
I flunked out of high school twice because I can’t write, it’s irony that I’m a writer today, but the reason I’m pretty good is because in the military, we’re taught to be generalists, not specialists. So, when I sit down with my team, I have accountants, I have attorneys, I have media guys, I have IT guys, I have graphic designers and all this. So, I operate as a team, since I don’t know anything. So, in actuality, being a great entrepreneur means I could be the laziest guy, and I can know the least, but I have to have a very smart team with just a ring finger around me.
So, because I was never smart I had respect for people who are smart. And, a lot of times I meet ‘A’ students, and they think they’re the smartest guys on planet earth. And that lack of respect is what keeps them small. That’s what most corporate guys want to do, stay small, you know, you’ve got to climb that corporate ladder, you’ve got to beat the other guy for the job, and it’s all that stuff. That’s not the way that an entrepreneur really works; it’s corporate, it’s school system, you know, you’ve got to beat up for the grades, you’ve got to get the best grades. I don’t have to be the best, but I have to hang out with the best.
Valerie
In the book you opened with this great story of how you got onto Oprah in 2000, and it was kind of a big break for you.
Robert
Yeah.
Valerie
Is your advice to other entrepreneurs to be searching for a big break? And if so, what’s your advice for how for them to position themselves in the best way to increase their chances to get a big break.
Robert
Well, like I say in Midas Touch, you’ve got to have five things going for you. And, when you’re prepared, it happens, but if you’re not prepared, it doesn’t happen. For example, I was out here in Aussie when Oprah called. I didn’t start preparing when she called, you know? I was prepared when she called. And my wife calls up and says, “Hey, Oprah called.” I do, “So, what?” she says, “Well, she wants you on the program.” And I said, “So, what?” Because, you know, real men don’t watch Oprah. I don’t watch Oprah, I didn’t know who she was.
So, my wife says, “Get your butt home now.” So, I fly all the way from the bush, way inland from Brisbane, through Brisbane, to Phoenix, to Chicago, and I’m sitting on Oprah. It’s too late to practice. You know, but I had done so many PR stunts, you know stuff like this here, I’ve practiced, practiced, practiced, practiced. And so when the lights went on, I went, “Oh my God, this is it.” It’s too late to practice.
I learned that in the military, as a pilot in Vietnam, you know, I don’t say, “Yeah, I should have studied a little harder before I got to Vietnam.” You’ve got to practice, practice, practice, practice, because when that little Vietcong was shooting at me, there’s only one guy going home that day, him or me. And at that, it’s too late to practice.
What happens for most entrepreneurs, is they don’t have the skills, they don’t practice enough. There’s a very good book called Outliers: The Story of Success, I think that’s the best book for entrepreneurs, because it talks about how the Beetles became the Beetles. You know, they played more than any other band in history. They played almost for free in Frankfort, Hamburg, wherever they were. And the average person doesn’t practice enough, period.
Valerie
OK, great advice. One of the things that you’re saying is that you get the skills, practice. So, you eluded to or gave a bit of a teaser in the book about the Global Entrepreneurs Organization, can you tell us a little bit about what you’re planning there?
Robert
Yeah, it’s called GEO, Global Entrepreneurs Organization, and it’s my company, because we develop entrepreneurs. We’re developing a world wide web game that’s going to teach entrepreneurship via games, because games are the best way to learn. But, also we’re starting an on the ground type of thing where we’re going to start training people how to think like an entrepreneur.
There’s a difference between a small entrepreneur and a big entrepreneur. See a big entrepreneur — the problem with small entrepreneurs is they’re the product. Like if I’m a dentist, I’m it. It’s hard to expand, if I’m a shoe-shine guy, I can’t expand. But, to be a big entrepreneur, you’ve got to be able to, I’ve got to be able to leverage, in other words, I cannot be my business.
The second this must be — I forget the other one. Anyway, it must be predicable, it must expand, and once it’s that it must be financeable. See, there’s difference between small and big. The good thing about me, a small entrepreneur says, “I can’t find money.” The reason is because you’re small. You think too small. Like, when I’m thinking about my world wide web game right now, people are throwing money at me. They all want to be part of my business. Why? Because it’s expandable, it’s big, it’s a big thought. It’s not dependent on me.
Most small entrepreneurs business is them. If it was Robert Kyosaki Ice Cream shop, nobody would invest in me. So, you’ve got to think big. That’s Midas Touch is about, that’s what GEO’s about, to train people to think bigger, and you can’t do it by yourself. I can’t do it, and that’s a good thing I loved about being a ‘C’ and an ‘F’ student, is that I was not smart, so I don’t depend upon me, I depend upon other things to get my job done. I’m sitting here, I’m still making money, if my business shut down, I’d still make money, you know, because I think differently.
Valerie
About thinking big, I come across, obviously at the Sydney Writers’ Centre, many authors who may not yet be best-sellers like you, but a lot of them don’t necessarily think of themselves as a business.
Robert
That’s correct.
Valerie
They think of themselves as authors. What’s your advice to them, if they actually want to make it big, get on the best-seller lists, do they need to be thinking of themselves as a business, and their book as a product?
Robert
Yeah, I said it earlier, I’m not a best writing author, I’m a best-selling author. And, I was talking to you about you with your accounting background as well as your PR background, there’s a synergy of different skill sets. The trouble with most writers is they’re actually craftsman, they’re trades people, they can write a book by themselves. Same as me, I can write a book by myself, but I have a business that markets my books, and my books are marketed in I think 112 countries. So, every month I get checks home, they’re coming in and all this. But, I think like a businessman, I don’t think like a writer. I will say it again, I flunked out of high school twice because I cannot write, and I still don’t know how to write, that’s why I was saying to you I should come here to the Sydney Writers’ Centre and learn how to write because I never learned how to write.
Valerie
So, when you are thinking of your next idea for a book tell me about the process, do you actually map out the whole marketing strategy beforehand, or do you sit down and write?
Robert
I sit there and I write. The good thing about the Apple computer is I can just delete, delete, delete. The next morning I come and I start again. Pretty soon, the thoughts start to crystallize, the thoughts start to take shape. When I wrote Midas Touch and thought that’s a good title, now what do I do? I said, “Oh, let me use the fingers.” So, it was just kind of a combination of the title, and how do I get my message through?
The trouble with most writers is they want to sound intelligent. Donald and I have been friends for years, we don’t need to be intelligent, we just want to be rich. And so, we want to keep it simple, super simple, communicate with people. Most writers, I read their economic books, I read their finance books, and they are all trying to sound intelligent, and the trouble is the more intelligent you sound, the smaller market you have. So, the good thing about — Donald was a perfect ‘A’ student, I wasn’t. So, I just keep it simple.
Valerie
Now, you are very humble when you say you’re not the greatest writer, but I believe, because I’ve read many of your books, that you are a master storyteller. And, you have many stories in this book from — you have a story about getting on Oprah, to your Pensacola Wings of Gold, and getting to be a combat pilot. How important is storytelling when it comes to business?
Robert
Well, if you look at the richest guys on earth, I mean the most powerful, they were storytellers. Like Jesus Christ, I’m not really Christian, but he was a great story teller. The bible is nothing, the bible comes from the word bibliotheca, it’s a book of stories. That’s all it is, Matthew’s a story, they’re stories. And, stories are the ways humans learn, it’s been passed down from centuries. You know, cave men sitting around the fire, they told their history via stories. And what happens is when people go to school to become technical writers and not story tellers. And, if you’re technical writing, your market niche is very, very narrow. I write for the general public, you know, Donald and I write for the general public, because we’re not really good writers.
Valerie
Just tell us, because a lot of our community would be interested, in your actual writing process, as on a daily. When you sit down and you’re ready to write, do you have a ritual, do you have to start off the day with a long black, or do you actually have to go through a certain process in order for you to get into the zone, or do you write on airplanes?
Robert
I write all the time now. It’s really strange to have been a kid who hated writing, to now I love writing. I just hated school, that was the thing for me. My ritual is pretty close to that, I just get up in the morning, I just start cranking away. I know what I want to say — I know what I want to say, I just don’t know how to say it. And so, I’ll say it delete, say it delete, and pretty soon it simplifies down, like, “Oh, that’s what I’m trying to say.”
Valerie
You’re an author, and a businessman, and a rugby fanatic — what gets you out of bed in the morning these days after you’ve been doing what you’ve been doing for so long? What excites you? What’s your passion?
Robert
Well, it’s really not passion, I’m very concerned. I travel the world and I see poverty on the increase. I just came back from Rio, and they have things called favelas. Favelas are slums and they’re increasing. Long Beach California is a big slum right now. And, I see poverty increasing.
So, Donald Trump and I get together because we’re educators, we need more entrepreneurs. Obama, and Bernanke, and the corporate guys, they can’t create jobs –they kill jobs. Obama’s a labor union guy, they kill more jobs than anybody else on planet earth, and Obama goes to them for advice on how to save the economy. How can a labor union save the economy? They kill jobs. And, I know Australia’s a big labor state and all this, but what gets me up is poverty is spreading at high rates of speed.
China is about to crash, and people don’t know, they think China’s rich. No, they’re not, China is about to crash, and what’s going to happen is all these middle class guys they’re going to lose their jobs. In Australia, the middle class is going to be wiped out. The first book I wrote with Donald was Why We Want You Rich, and it was about the demise of the middle class. So, what gets me up is our school system is not doing their job. We need to get rid of most of those school teachers and bring entrepreneurs in and teach people what it really takes to be an entrepreneur.
The trouble is the school system is the biggest labor union in America. So, I’m not anti-labor, not anti-unions, I’m anti ignorance. And, we’ve really got to have more entrepreneurs, otherwise this poverty is just going to explode. America today — one in six Americans is in poverty. That’s an increase, a huge increase. And, they’re still saying, “Go back to school.” You’ve got to be kidding, to look for what? A job?
And you know, everybody says, “Well, this Great Depression…” we’re in a new depression. What saved America during the last depression was we had factories. You know, Japan was bombed out, Germany was bombed, France, England were all bombed. We had factories, so that’s what saved us during the last depression. This new depression, the factories are now in Taiwan, Korea, the Philippines, Indonesia and all that. Where’s the jobs? So, this idea of going to school to get a high paying job is really an obsolete idea. That’s what gets me up.
I still don’t like school, I don’t like most school teachers. They’re good people, but I think they are doing a disservice by telling people to go to school to get a job, there’s no jobs.
Valerie
One of the things you say in the book is that to get experience before you start your own company, and that may also fly in the face of some people saying to the Gen-Y’s and Gen-Z’s, or whatever they are, “Start your own start up, do your own startup, you can do it from 18…” What are your thoughts on that?
Robert
Well, it’s actually really easy to do a start up today because of the web. You know, if you can create an app, then you’re technically an entrepreneur. To be a successful entrepreneur is a whole different story. What I say to guys my age, the old guys, they say, “What would you do if you lost your job?” I say, “I’d go back and work for McDonald’s.” They go, “Are you kidding me?” I say, “Yeah, if I didn’t have a job, I had no skill set, I would go and work for McDonald’s.” I would learn their systems because McDonald’s has the best systems — business systems in the world. And after I learned to master one little McDonald’s outlet in Jerome, or wherever the heck it is, then I’d go to the owner and say, “I want two, and then I want three, and then I want four.” And, if I can manage like ten McDonald’s franchises, I’m rich again. But, it’s not anything but a mindset, and most people look down upon McDonald’s, but McDonald’s, does something extremely well, they have fantastic business systems.
Valerie
And, of course, the all important question to finish with, who do you want to win the World cup?
Robert
I’ve always been with the Tri-Nations, I love the Springboks, I love the Wallabees, and I love the All Blacks. So, as long as the sun and hemisphere nation wins, I’m happy.
Valerie
Well, thank you very much for your time today, Robert.
Robert
Thank you.
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