Why Do You Recommend Starting Your Own Business?

Looks like this is the second last chapter in the book which means it is coming to an end soon. For Robert’s view, he mainly expresses how being a business owner provides him with the ability to control his own future and how being an entrepreneur allows him to experience new things everyday. To learn to become an entrepreneur, he recommends finding a network marketing company with a great training program to join as it is one of the least expensive ways to learn the ropes of running your own business and to commit to it for at least 5 years. For people who have more money and are prepared to take a bigger plunge, he suggests looking into purchasing a franchise as you will be trained on how to run a business. He does mention that this is a very expensive route though such as how a McDonald’s franchise requires you to have at least one million dollars.

When one starts a business, being persistent is the key to success and to help keep you on track Robert Kiyosaki emphasizes the benefits on having a personal coach or mentor. Of course, he then plugs in his company and how it offers these types of services. He brings up a past point on how people that want more security receive less freedom which works the other way around as well. Overall, he recommends starting a business as it provides you with the freedom to control your own life.

Donald Trump begins by immediately mentioning how not everyone is fit to be an entrepreneur and there are many times that he has told this to people who he felt didn’t have what it takes to be one as he would feel personally responsible if he encouraged someone to do so and then learned that they ended up failing. In general, his main point in recommending one to become a business owner is that while it requires a lot of work, with it comes with vast rewards. Not just from a financial view, but he talks about how it is a great feeling knowing that you built something and watching it grow as it represents yourself as well.

For me, I guess the best thing about being an entrepreneur is like they say you have control over your future. Now when you say this to people they think control only in the sense that basically people like it because you set your own hours and so fourth. Instead, it’s the accountability as well where I personally hate it when people whine or make excuses such as their job is boring, they don’t make enough money, etc. Being an entrepreneur means that if you ever complain about something, just look in the mirror as you have no one to blame but yourself. Of course, it is definitely not for everyone.

Why Do You Recommend Network Marketing?

Robert starts out with his take on the Network Marketing industry. He mentions how when he first learned about the industry, he was against it. After learning about the industry and its business model more thoroughly, he began to see the good points of it. Kiyosaki tries to address people’s concerns first on how everyone associates network marketing as a pyramid scheme. He uses an example that I have seen used many times on how a corporation is actually a typical example of a business that utilizes a pyramid structure. For example, on the top you would have the CEO of a company and on the bottom you would have all of the other employees and how the people at the top make most of the money. In a true network marketing company, he explains how it is the other way around as the business relies in trying to bring people to the top or else it will fail.

He then talks about how starting a network marketing business can allow you to do tax write offs as it would be a business operation for yourself and the key reason that he seems to recommend it is that companies usually have a great training program and are devoted in helping to train you to become successful whereas in a typical corporation you would probably be fired if you didn’t produce results in a timely fashion. As an added bonus, you will frequently get to meet like-minded people and is one of the more affordable ways to start a business compared to traditional methods.

Donald Trump seems to be a little more cautious in his recommendation as while he sees it as a great way for someone to start their own business he stresses the importance of finding a company that has a great product that you can personally vouch for first. He also mentions that the business is inherently a social one and so shy people or individuals who are afraid to meet new people should think twice before diving into a company.

I referenced my past post about network marketing a little earlier and I think my opinion about the industry is fairly similar. That example used by Robert about corporations being a pyramid scheme due to its structure is something that I have seen used many times and it often creates large debates between a lot of people from what I have seen. Although for most people I think that example isn’t used so much as a method to try and degrade the way corporations operate, but rather to help open up people’s mind about network marketing in general.

Why Do You Invest In Real Estate?

Looks like I am reaching towards the end of the book and this last section is suppose to be about getting started by using different industries and professions as an example. As the title implies, the first one is about real estate. Robert starts off by reminding us his view on how there is no such thing as a risky investment, but rather there are bad investors. His main reason on why he likes to invest in real estate is because it gives him control over his investment as opposed to say mutual funds, which he thinks is bad. Some other reasons on why he likes real estate is because investing in it can provide a lot of tax advantages and while the industry has its ups and downs constantly, it is very unlikely that it will ever go away as people need homes to live in.

He then says that his main secret on why he likes real estate is because the industry is slow in the sense that it doesn’t change rapidly like say being involved with an Internet business. Now the interesting thing was that he mentioned how he isn’t exactly a technology savvy person and yet he still has a web site which makes him millions of dollars. The big kicker was that he said he doesn’t even use an e-mail address. At this day in age with so many devices which obtain e-mail capabilities and how some sites only distribute information online or require a user to have valid e-mail address, I think that is a little over the top.

Afterwards, he goes into depth in trying to describe about Warren Buffet’s term of investing into something that has intrinsic value which he says is the other reason he loves real estate so much. Trying to summarize it here, basically most people approach an investment with a buy low and sell high mentality such as buying something for $50 and then selling it for $100. Instead, one should look at an investment from an intrinsic value point of view.

For example, let’s say I just bought a web site and its operations for one-hundred thousand dollars and I am just hoping that the value of the site will go high enough for me to sell to make money. Instead, before investing I should of looked at the complete picture and invest in it based on all of the benefits that I could get in purchasing that site. Just off the top of my head, if I just bought a news site, some examples would be that I now don’t have to pay money to get the same news elsewhere which saves me money, it is currently staffed with industry veterans that can help make the site even bigger, the site could expand its revenue by introducing new forms of advertising mediums and I can get tax breaks in more ways now. Basically, it is more like treating your investment like a business rather than a typical stock.

In the end, Robert once again talks about his dislike for mutual funds and writes down on how when one invests in a mutual fund, 80% of the return goes to the company and you receive 20% of it. At the same time, you are taking 100% of the risk and capital while the mutual fund company gets a free ride and lives by collecting the fees associated with the investment.

Donald Trump mostly just talks about his passion for real estate in general and how he even loved to build tall objects with building blocks as a child. He pretty much agrees with Robert’s point of view in regards to the real estate industry and how it will never become obsolete as the value of Earth has constantly gone up. He mentioned a point which was very interesting on how the original price of Manhattan was only $24. He also says that it is a very energetic industry which also makes him very passionate about it.

I would say this is the first chapter thus far that made me think a lot and taught me things that I didn’t really think too much before about the real estate industry as it isn’t exactly my forte. I am the complete opposite though when it comes to technology and the Internet as I feel at home with it. I still can’t get over the fact that Robert says he doesn’t even have an e-mail address. I can see for like older folks who live a simple life as there are many who still don’t even have a computer, but this is a guy that runs a business, uses a computer and even has web site……. How is that even possible nowadays? I guess I’ll just have to meet someone like that in real life before I can really believe that.

Why Do Some People Who Want To Be Rich…Fail To Be Rich?

Aside from the more common answers such as one not having enough determination to become financially free, the main topic that Robert and Donald dive into this chapter is how one needs to be in the right environment to become successful. Some of Robert’s examples was how associating with the right people provides him with a wealth of support in becoming rich. He used his old job with the Xerox Corporation as an example and how his supervisors would mention that it was against company policy to work on his own business and therefore the environment that he was in was not ideal if he wished to become rich.

Donald also expresses his opinions on the matter with a similar tone where the key is to be in the right environment. In this chapter, he also throws in a comment how there is absolutely no advantage to being poor and how poverty hurts everyone in the long run. As in the previous chapters, he mentions on how one should not focus on the negative points of a bad situation but rather one should focus on the solution.

I think associating with the right people for any situation will help you in becoming successful. There are so many times where I have met people who simply have a negative outlook in life and at the same time they try to encourage you to see things with their eyes. I often like the apple analogy that I hear used in business a lot where they say one rotten apple can spoil the whole bunch which is so true.

What If I Am Already Rich? What Advice Do You Have For Me?

It seems like the main message here was that if you are rich, value it and don’t be careless in the way you handle it as there are a lot of people out there who would be happy to take it from you. Robert mostly talks about the three ways of investing again by using his CASHFLOW game as a reference. The funny thing I thought was how in regards to taking care of your money, he mentioned about how Anna Nicole Smith married a billionaire who was way older than her (Which he sarcastically states that the marriage was only because of love) and how Paul McCartney’s divorce may prove to be costly as there was no prenuptial agreement in place. He basically summarizes his advice for the rich to have the following four factors in-place:

1. A Will
2. An Estate Plan
3. A plan if incapacitated
4. A prenuptial agreement if you get remarried.

Donald re-emphasizes on how you should treasure your wealth and once again to be careful with it. His twist is that you should also have a lot of fun because of it. He uses himself as a personal example on how he owns a golf course and is in the midst of setting up a production company called Trump Productions. In the end, he throws in a comment about how philanthropic efforts can be one of the most rewarding things to do in life.

Robert’s 4th point of having a prenuptial agreement if you get remarried was a little odd I thought. If the point was to try and protect yourself, wouldn’t you do that right from the beginning instead of waiting for something bad to happen first? It’s almost like saying, if someone didn’t fulfill a service for you as intended, then the next time get it down in writing instead of doing it the first time. Kind of odd I must say or maybe I am misinterpreting the point.