Tag Archives: Robert Kiyosaki author

Three Entrepreneurship Lessons from the Founder of Airbnb

20 Ene

Put these lessons to work for you in the New Year and build your business

Since the New Year is a time when people commit themselves to betterment and goals, I thought it would be helpful to share the inspiring story of Airbnb co-founder, Nate Blecharczyk. If one of your goals is to become an entrepreneur in 2018, Blecharczyk’s story has some valuable lessons to keep in mind.

In an interview with Boston’s WBUR radio station, Blecharczyk shares that “he always knew he was an entrepreneur.” In fact, at the age of 12 he learned how to code through some books and started sharing his work online. When he was 14, someone contacted him and offered $1,000 for Blecharczyk to code something for him.

According to Blecharczyk, his dad’s response was, “Son, nobody from the Internet is going to pay a thousand bucks.” Nonetheless, Blecharczyk took the gig. This eventually led to a coding business he started in high school that made him almost a million dollars before he’d ever graduated college.

There are some important lessons to learn from this early story of Blecharczyk’s life.



Lesson1: Age is not important

I’ve written a few times in the past that age should not be a determining factor when it comes to starting your own business. Whether you’re a baby boomer or a millennial, or something else entirely, you have the capacity to start your own thriving business.

That Blecharczyk started a coding business at age 12 does not make him special. It simply makes him smart and opportunistic. Sometimes opportunity will come knocking at your door, like it did for him in the form of an email request. Your job is to strike when opportunity comes.

This is not to say that Blecharczyk wasn’t a part of his success, after all he taught himself valuable skills and shared them with the world, which led to an initial request for service.

But the point is that anyone at any age can do this—including you.

Lesson 2: You will run into naysayers

The response of Blecharczyk’s dad is a good reminder that if you choose the path of entrepreneurship, most people will think you’re crazy. This is because they are trained with the mindset of an employee.

I learned this at an early age. My poor dad, my natural father, constantly pressured me to follow the traditional path of most people: to go to a good school and get a good high-paying job.

I ended up going to a good school, the Merchant Marine Academy, and I also had opportunities for high-paying jobs, both in the shipping industry and as a pilot after my tour of duty in Vietnam.

In honesty, it was tempting to take those offers. I could have make the equivalent of a six-figure salary at a very young age. But I knew that if I did that, I would sacrifice a part of who I was and my freedom.

In talking with my rich dad, my best friend’s father and a successful entrepreneur, he taught me the single most important skill to master if I wanted to own a business was sales. So, I took a low-paying job at Xerox to learn how to sell. I was horrible at first, but by the time I left, I was the top salesman in the company. That is when I learned the value of working to learn rather than to earn.

My poor dad hated that decision and couldn’t understand why I would give up a high-paying job. Later, when I was making a lot of money at Xerox, I decided to leave and start my first company. Again, my poor dad said I was crazy. After my first business failed and I started a second business, he said I was crazy again.

If I had listened to my poor dad’s naysaying, I would never have achieved my dreams. Similarly, if Blecharczyk had listened to his dad’s opinion that nobody would ever pay him off the internet, he wouldn’t have made his first million in high school and then gone on to found one of the most successful businesses in the internet age, Airbnb.

How Airbnb got its name

Another interesting story from Blecharczyk’s interview is how Airbnb got its name. According to Blecharczyk, it started as way to make some extra cash since he was living in San Francisco and could barely afford his rent after it went up 25%. He and his roommates decided to rent out an extra room to people who were in town for a conference. They made $1,000 doing it.

As Blecharczyk relates to WBUR, “The bedroom had no furniture, but they set up an air bed and instead of calling it a bed and breakfast they called it an air bed and breakfast. So, Airbnb is short for air bed and breakfast.”

Based off this one experience, Blecharczyk and his roommates decided that if they could make money one time, they could do it multiple times. The seeds for the multi-billion dollar Airbnb were born.

Lesson 3: Always be looking to solve pattern problems

This part of Blecharczyk’s story brings up perhaps one of the most important thing any aspiring entrepreneur can remember: your job is to solve problems, so you should always be looking for problem patterns to solve.

Most people would be content with making an extra $1,000 by renting out a room. Only a few would have the mindset to realize that a larger problem could be solved by short-term room and house shares. The fundamental difference between Blecharczyk and his co-founders, and most other people is that they didn’t solve a singular problem—the need for a few people at a specific point in time to rent a room—but instead solved a problem pattern, the need for millions of people to rent a room short term.

By thinking about the pattern problem, they were able to create a solution that could be deployed at scale—and make a fortune doing it.

What problems do you see around you? And what are the underlying patterns you can solve to build a business around?


How to Cure Your Bad Money Habits

29 Oct

…Without Cutting Up Your Credit Cards

When I was a young boy, I was rushed to the hospital for emergency surgery stemming from complications regarding an ear infection and chicken pox. At the same time, my mother was at home struggling with a weak heart. Not too long after, my younger brother was rushed to the hospital after hitting his head and my younger sister needed a knee operation. To top it all off, my youngest sister, Beth, had a baffling skin disorder that required multiple trips to the doctor.

The only person in our family who didn’t get sick during this time was my dad, but he may have contracted the worst disease of us all—heavy medical debt.

My siblings and I recovered from our hardships. My dad did not. From that point on, he struggled financially, carrying the burden of debt, including a mortgage. He had dreams to be a professor, but instead he compromised to take an administrative job for the State of Hawaii school system.

Later in life, in futile attempts to recapture what he’d lost after many years of sacrifice, my dad chased after a lot of get rich scams. Each time, he lost the little money he had saved up. He kept making bets, and they kept failing.

At the end of his life, my father lamented to me and my siblings about how little he had left to give us. Holding his hand, I cried with my father. He had dug a financial hole early in life, and he never dug out. I loved my dad, and it was one of the saddest things I’d ever seen.

I learned a lot from my dad about money. Unfortunately, it was more about what not to do rather than what to do, but those lessons were important. And fortunately, my best friend’s dad became a mentor to me, eventually becoming who I would call my rich dad.

Rich dad taught me many lessons about money that were in contrast both to what my natural father, my poor dad, said and did. Perhaps most important, rich dad taught me what it takes to dig out of a financial hole.

One lesson, in particular, was crucial: pay yourself first. And it’s that lesson I want to share with you today.

Decision Day

Now it’s time to make one of the most critical decisions in your life—will you take control of your finances or will you not.

If you take control of your finances, it will empower you to shape a new life for yourself. Getting financially healthy can seem like a huge undertaking, but the choice is really a series of smaller decisions. The decision to change your financial future is a mere preliminary. The decision to follow up, renewed each day you open your eyes, is the more critical choice.

How Deep Are You?

The problem with money problems is that things tend to pile on fast. You might make one financial mistake—or run into a spell of bad luck—but if it’s not quickly remedied, you soon start digging an even deeper hole.

To get a sense of how deeply dug in you are, look at the list below. If you can answer yes to any of the questions, put a check in the box:

  • Do you pay your bills late?
  • Have you hidden a bill from your spouse?
  • Have you neglected repairing the car because of insufficient funds?
  • Is there family tension because of overspending?
  • Have you bought something recently that you didn’t need and couldn’t afford?
  • Do you regularly spend more than your paycheck?
  • Have you been turned down for credit?
  • Do you buy lottery tickets in the hopes of getting out from under?
  • Have you put off saving money for a rainy day?
  • Does your total debt exceed your rainy day reserve?

Add up the checks in the boxes. Is your score 0? Good for you! You are in control.

If you score in the 1-5 range, however, you may need to reduce your debt. If you score in the 6 to 10 range, watch out! You may be headed towards a financial disaster The higher the score, the more urgent it is that you increase your financial literacy.

You can manage your money without living below your means

There are financial gurus out there who say the only way out of debt is by cutting up your credit cards, forgoing your daily coffee (or avacado toast), or even putting your credit card in a freezer. Essentially they are saying, “Live below your means.”

There are many reasons that I do not subscribe to the live-below-your-means methodology. But essentially, I don’t think that advice solves the problem for anyone who wants to be wealthy. If a person wants to become wealthy, they need to learn how to respect the power of debt, know how to get into the right kind of debt, and learn how to harness the power of debt.

This all takes self-control—the ability to delay gratification. This is the beginning to changing how you think about money. Instead of saying, “I can’t afford it,” start saying, “How can I afford it?

Debt isn’t your problem

I wrote a blog about why debt trumps savings, but there’s a big difference between the good debt and the bad debt that is drowning most of America’s middle and lower class.

Good debt makes money for you. It’s the debt you use to invest in assets that pay for themselves. Bad debt takes money out of your pocket and is spent on things like clothes, electronics, a mortgage, or car. The problem isn’t the debt; it’s the financial literacy to know the difference between good debt and bad debt.

At Rich Dad, we say you shouldn’t live below your means. Rather we say you should expand your means by purchasing assets so that eventually the income from your assets pays for things like clothes, electronics, a mortgage, or a car. Sometimes you’re dug so deep financially that expanding your means to match your debt level isn’t possible. For people in that unfortunate situation, a debt-reduction program is necessary, which means until they are debt free, they must live within their means.

But if you’re debt is under control, you should pay yourself first.

Pay Yourself First

So many people get the wrong idea when they hear me say you should pay yourself first to get ahead financially. They usually think it means “treat yourself,” which is absolutely far from what I mean.

To get ahead financially, you have to invest in assets. But most people can’t go out right now and buy a cash-flowing asset. Which is where the pay yourself first rules come into the picture.

With every single dollar that comes into your household, take 30% off the top. Whether the money comes from your paycheck, tax refund, or gift, follow this rule.

Then, take one-third and divide it up between three accounts: savings, investment, and charity. Your savings account becomes your rainy day fund. Your investment account will buy your assets, and your charity account will be your opportunity to give back (which is so important to Kim and me.)

How Kim and I did this

Perhaps you’re thinking, “Sure, that sounds easy when you make as much as you do. But what about me? I’m living paycheck to paycheck!”

Fair enough, but you should know that Kim and I have been there and done that. When we were first married, we were very poor. I was $1 million in debt, and at times we lived in our car or on the couch of a kind friend. During that time, we were hustling day and night to build our business, and we hired a bookkeeper named Betty.

Betty was great because she organized our finances and kept us honest about our financial situation. But the one thing Betty and us disagreed on was the idea to pay yourself first. Each month we instructed her to take the 30% off the top and apply to our savings, investments, and charity—and each month she moaned about what a bad idea it was (mostly because the money wasn’t there for it).

Yet, each month, we made it happen and Betty dutifully fulfilled our directive. As entrepreneurs, we worked together to figure out new ways to make up the shortfall. We’d find side jobs, or create a new product. We’d hustle our way forward. And in the end, we paid ourselves and paid our creditors. Betty almost had a heart attack, but it all worked out!

You can do this

The good news is you can do the same! Make this a habit. Once you embrace paying-yourself first, you will be surprised at how fast the money will grow. Once you start investing in assets, that’s when the fun starts and you are able to use that income to purchase things like cars and vacations. But only once you’ve replaced your salary with investment income.

It would be great if everyone had a rich dad and grew up learning financial literacy. Most of you didn’t have such an advantage. Don’t let that discourage you. Regardless of what did or didn’t happen in the past, when you’re ready to make big changes, amazing things can happen in a short time. Many great fortunes have been built by determined people who started out later in life, even people who were in considerable debt.

In my years of teaching, I’ve had the good fortune to meet and hear from tens of thousands of students who have taken the steps to get a financial education have turned their lives around. No matter what stage of life a person is in, if the desire to change is there, change is possible.

Why You Should Encourage Kids to be Rule Breakers

12 Ago

Developing and nurturing the entrepreneurial spirit

As a young man, I knew that school was not for me. It’s not that I didn’t like to learn. It was that I didn’t like to learn the way they taught at school. Rather, I like to do things. Book knowledge to me was boring.

Because of this, I did not do well in school. I was also labeled as a troublemaker, much to my father’s dismay. He was after all the superintendent of the Hawaii school system.

In fact, by some people’s measure, I was a rule breaker.

This was true in my natural father’s estimation. To him, playing by the rules meant following the old rules of money. To him, the path to success was to get good grades, go to a good college, get a good job with a high salary, save money, buy a house, and invest in a portfolio of stocks, bonds, and mutual funds for retirement.

Unfortunately, none of these “good” things did him any good. He always struggled financially, and during his last days, he lamented that he didn’t have much to leave us kids. I call my natural father my poor dad not because he was a bad father. In fact, he was the most loving and kind man I could ask for. Rather, I call him my poor dad because he did not know how money worked and regretted his financial position his whole life. He played by the rules, and they did not serve him well.

The rich dad difference

My best friend’s dad was my rich dad. He did not have the same rules my poor dad did. Rather, he saw the world in a much different way.

Where my poor dad would say, “We can’t afford that,” my rich dad would ask, “How can I afford that?”

Where my poor dad would say, “You must save for retirement,” my rich dad would say, “Savers are losers.”

Where my poor dad would say, “Get a secure and high paying job,” my rich dad would say, “Being an employee is the riskiest thing you can do.”

You name any conventional rule of money and life, and my poor dad probably had a contrarian view. He was at his core a rule breaker. And he was immensely successful.

My best friend Mike and I followed in my rich dad’s footsteps. Whether it was using return copies of comic books to make money through a lending library, or giving up lucrative job offers to take a low paying job that taught sales skills, our lives were and are defined by breaking the conventional rules.

Tired Boy Sleeping on the School Desk on the white background

The success of rule breakers

Turns out it is this bent towards rule breaking that contributes to our success. I recent study by professors from UC Berkeley and London School of Economics confirms, rule breakers are more likely to grow up to be entrepreneurs.

Here’s the tragedy, a big percentage of our kids are these rule breakers, and many of them have entrepreneurial dreams. Here are some statistics from my book Why “A” Students Work for “C” Students.

  • 44% of young people want to be entrepreneurs
  • 46% aim to set up their business within the next two years
  • 43% of students grades 5 through 12 want to be entrepreneurs

In other words, young Americans want to be entrepreneurs. They want to start companies that provide a high quality of life while also providing innovation and employment. The only problem is that our school system specializes in training our kids to be employees.

This is why schoolteachers and many parents continue to say, “Go to school to get a good, high-paying job.” Few parents or teachers are saying, “Go to school to learn to create good, high-paying jobs.”

So, there are two problems. Our kids want to create jobs, which is a vital need for our country, and instead of teaching our kids how to create jobs, our schools teach them how to get jobs.

In the process, they build into them an employee mindset, which is one that is inclined to follow the rules instead of break them. This breaks their spirit, and it squashes their entrepreneurial dreams.

These dreams will die

There is a tremendous difference between the skill sets of an entrepreneur and of an employee. Unfortunately, because the skill sets required to be an entrepreneur are not taught in our schools, many of our kids will never realize their dream to start their own business.

Many people dream of becoming entrepreneurs, but few will take the leap of faith. Why? The lack of financial education in our schools. Without financial education, most employees are terrified of losing their job, not having a steady paycheck, or simply failing—and most kids have no idea where to start except by getting a good job, and then they’re trapped.

Without financial education, our kid’s dreams will die.

Every kid has a genius

Every child has a genius. Unfortunately, their genius may not be recognized by the educational system. It may even be crushed.

Thomas Edison, one of the great geniuses of modern times, was labeled “addled”—mixed up or confused—by his first teacher. He never finished school and instead went on to found General Electric.

Albert Einstein also failed to impress his teachers. They called him lazy, sloppy, and insubordinate. He proved them wrong.

The point is that the environment of our school system is not always a good one for the type of genius many kids have. In fact, it can be constricting.

All parents have met the genius in their child. Most parent’s know that a child’s true genius comes through most clearly in the things that child dreams about—the ideas and things that delight, fascinate, and challenge them—and yes, in the rules that they break.

Nurture the rule-breaking, entrepreneurial spirit

Traditionally, we’ve left it to the school system to develop and nurture our children’s genius. Today, that won’t work.

Because our kid’s dream of being entrepreneurs, they’ll face a system in school that is bent on breaking that dream, teaching them to follow conventional rules for success, replacing their dreams with the old American dream of getting a good job.

Because of this, it’s up to parents to nurture and cultivate their children’s dreams—and to direct the rule-breaking tendency from negative actions to positive challenges to the status quo. It’s up to parents to provided a solid financial education.

Robert Kiyosaki