LESSON 1: THE RICH DON'T WORK FOR MONEY

The poor and the middle class work for money.

The rich have money work for them.

“Dad, can you tell me how to get rich?”

My dad put down the evening paper. “Why do you want to get

rich, Son?”

“Because today Jimmy’s mom drove up in their new Cadillac, and

they were going to their beach house for the weekend. He took three

of his friends, but Mike and I weren’t invited. They told us we weren’t

invited because we were poor kids.”

“They did?” my dad asked incredulously.

“Yeah, they did,” I replied in a hurt tone.

My dad silently shook his head, pushed his glasses up the bridge of his

nose, and went back to reading the paper. I stood waiting for an answer.

The year was 1956. I was nine years old. By some twist of fate,

I attended the same public school where the rich people sent their

kids. We were primarily a sugar-plantation town. The managers of

the plantation and the other affluent people, such as doctors, business

owners, and bankers, sent their children to this elementary school.

After grade six, their children were generally sent off to private

schools. Because my family lived on one side of the street, I went

to this school. Had I lived on the other side of the street, I would

have gone to a different school with kids from families more like

mine. After grade six, these kids and I would go on to the public

intermediate and high school. There was no private school for them

or for me.

My dad finally put down the paper. I could tell he was thinking.

“Well, Son…,” he began slowly. “If you want to be rich, you have

to learn to make money.”

“How do I make money?” I asked.

“Well, use your head, Son,” he said, smiling. Even then I knew

that really meant, “That’s all I’m going to tell you,” or “I don’t know

the answer, so don’t embarrass me.”

A Partnership Is Formed

The next morning, I told my best friend, Mike, what my dad had

said. As best as I could tell, Mike and I were the only poor kids in this

school. Mike was also in this school by a twist of fate. Someone had

drawn a jog in the line for the school district, and we wound up in

school with the rich kids. We weren’t really poor, but we felt as if we

were because all the other boys had new baseball gloves, new bicycles,

new everything.

Mom and Dad provided us with the basics, like food, shelter,

and clothes. But that was about it. My dad used to say, “If you want

something, work for it.” We wanted things, but there was not much

work available for nine-year-old boys.

“So what do we do to make money?” Mike asked.

“I don’t know,” I said. “But do you want to be my partner?”

He agreed, and so on that Saturday morning, Mike became my

first business partner. We spent all morning coming up with ideas

on how to make money. Occasionally we talked about all the “cool

guys” at Jimmy’s beach house having fun. It hurt a little, but that hurt

was good, because it inspired us to keep thinking of a way to make

money. Finally, that afternoon, a bolt of lightning struck. It was an

idea Mike got from a science book he had read. Excitedly, we shook

hands, and the partnership now had a business.

For the next several weeks, Mike and I ran around our neighborhood,

knocking on doors and asking our neighbors if they would save their

toothpaste tubes for us. With puzzled looks, most adults consented with a

smile. Some asked us what we were doing, to which we replied, “We can’t

tell you. It’s a business secret.”

My mom grew distressed as the weeks wore on. We had selected a

site next to her washing machine as the place we would stockpile our

raw materials. In a brown cardboard box that at one time held catsup

bottles, our little pile of used toothpaste tubes began to grow.

Finally my mom put her foot down. The sight of her neighbors’

messy, crumpled, used toothpaste tubes had gotten to her. “What are you

boys doing?” she asked. “And I don’t want to hear again that it’s a business

secret. Do something with this mess, or I’m going to throw it out.”

Mike and I pleaded and begged, explaining that we would soon

have enough and then we would begin production. We informed her

that we were waiting on a couple of neighbors to finish their toothpaste

so we could have their tubes. Mom granted us a one-week extension.

The date to begin production was moved up, and the pressure was

on. My first partnership was already being threatened with an eviction

notice by my own mom! It became Mike’s job to tell the neighbors to

quickly use up their toothpaste, saying their dentist wanted them to

brush more often anyway. I began to put together the production line.

One day my dad drove up with a friend to see two nine-year-old

boys in the driveway with a production line operating at full speed.

There was fine white powder everywhere. On a long table were small

milk cartons from school, and our family’s hibachi grill was glowing

with red-hot coals at maximum heat.

Dad walked up cautiously, having to park the car at the base of

the driveway since the production line blocked the carport. As he and

his friend got closer, they saw a steel pot sitting on top of the coals in

which the toothpaste tubes were being melted down. In those days,

toothpaste did not come in plastic tubes. The tubes were made of

lead. So once the paint was burned off, the tubes were dropped in the

small steel pot. They melted until they became liquid, and with my

mom’s pot holders, we poured the lead through a small hole in the

top of the milk cartons.

The milk cartons were filled with plaster of paris. White powder

was everywhere. In my haste, I had knocked the bag over, and the

entire area looked like it had been hit by a snowstorm. The milk

cartons were the outer containers for plaster of paris molds.

My dad and his friend watched as we carefully poured the molten

lead through a small hole in the top of the plaster of paris cube.

“Careful,” my dad said.

I nodded without looking up.

Finally, once the pouring was through, I put the steel pot down

and smiled at my dad.

“What are you boys doing?” he asked with a cautious smile.

“We’re doing what you told me to do. We’re going to be rich,”

I said.

“Yup,” said Mike, grinning and nodding his head. “We’re partners.”

“And what is in those plaster molds?” my dad asked.

“Watch,” I said. “This should be a good batch.”

With a small hammer, I tapped at the seal that divided the cube

in half. Cautiously, I pulled up the top half of the plaster mold and a

lead nickel fell out.

“Oh, no!” my dad exclaimed. “You’re casting nickels out of lead!”

“That’s right,” Mike said. “We’re doing as you told us to do. We’re

making money.”

My dad’s friend turned and burst into laughter. My dad smiled

and shook his head. Along with a fire and a box of spent toothpaste

tubes, in front of him were two little boys covered with white dust

smiling from ear to ear.

He asked us to put everything down and sit with him on the front

step of our house. With a smile, he gently explained what the word

“counterfeiting” meant.

Our dreams were dashed. “You mean this is illegal?” asked Mike

in a quivering voice.

“Let them go,” my dad’s friend said. “They might be developing a

natural talent.”

My dad glared at him.

“Yes, it is illegal,” my dad said gently. “But you boys have shown

great creativity and original thought. Keep going. I’m really proud

of you!”

Disappointed, Mike and I sat in silence for about twenty minutes

before we began cleaning up our mess. The business was over on

opening day. Sweeping the powder up, I looked at Mike and said,

“I guess Jimmy and his friends are right. We are poor.”

My father was just leaving as I said that. “Boys,” he said. “You’re

only poor if you give up. The most important thing is that you did

something. Most people only talk and dream of getting rich. You’ve

done something. I’m very proud of the two of you. I will say it again:

Keep going. Don’t quit.”

Mike and I stood there in silence. They were nice words, but we

still did not know what to do.

“So how come you’re not rich, Dad?” I asked.

“Because I chose to be a schoolteacher. Schoolteachers really don’t

think about being rich. We just like to teach. I wish I could help you,

but I really don’t know how to make money.”

Mike and I turned and continued our cleanup.

“I know,” said my dad. “If you boys want to learn how to be

rich, don’t ask me. Talk to your dad, Mike.”

“My dad?” asked Mike with a scrunched-up face.

“Yeah, your dad,” repeated my dad with a smile. “Your dad

and I have the same banker, and he raves about your father. He’s

told me several times that your father is brilliant when it comes to

making money.”

“My dad?” Mike asked again in disbelief. “Then how come we

don’t have a nice car and a nice house like the rich kids at school?”

“A nice car and a nice house don’t necessarily mean you’re rich or

you know how to make money,” my dad replied. “Jimmy’s dad works for

the sugar plantation. He’s not much different from me. He works for a

company, and I work for the government. The company buys the car for

him. The sugar company is in financial trouble, and Jimmy’s dad may

soon have nothing. Your dad is different, Mike. He seems to be building

an empire, and I suspect in a few years he will be a very rich man.”

With that, Mike and I got excited again. With new vigor, we began

cleaning up the mess caused by our now-defunct first business. As we

were cleaning, we made plans for how and when to talk to Mike’s dad.

The problem was that Mike’s dad worked long hours and often did not

come home until late. His father owned warehouses, a construction

company, a chain of stores, and three restaurants. It was the restaurants

that kept him out late.

Mike caught the bus home after we had finished cleaning up. He

was going to talk to his dad when he got home that night and ask him

if he would teach us how to become rich. Mike promised to call as soon

as he had talked to his dad, even if it was late.

The phone rang at 8:30 p.m.

“Okay,” I said. “Next Saturday.” I put the phone down. Mike’s dad

had agreed to meet with us.

On Saturday I caught the 7:30 a.m. bus to the poor side of town.

The Lessons Begin

Mike and I met with his dad that morning at eight o’clock. He

was already busy, having been at work for more than an hour. His

construction supervisor was just leaving in his pickup truck as I walked

up to his simple, small, and tidy home. Mike met me at the door.

“Dad’s on the phone, and he said to wait on the back porch,”

Mike said as he opened the door.

The old wooden floor creaked as I stepped across the threshold of

the aging house. There was a cheap mat just inside the door. The mat

was there to hide the years of wear from countless footsteps that the

floor had supported. Although clean, it needed to be replaced.

I felt claustrophobic as I entered the narrow living room that

was filled with old musty overstuffed furniture that today would be

collectors’ items. Sitting on the couch were two women, both a little

older than my mom. Across from the women sat a man in workman’s

clothes. He wore khaki slacks and a khaki shirt, neatly pressed but

without starch, and polished work boots. He was about 10 years older

than my dad. They smiled as Mike and I walked past them toward the

back porch. I smiled back shyly.

“Who are those people?” I asked.

“Oh, they work for my dad. The older man runs his warehouses,

and the women are the managers of the restaurants. And as you

arrived, you saw the construction supervisor who is working on a

road project about 50 miles from here. His other supervisor, who is

building a track of houses, left before you got here.”

“Does this go on all the time?” I asked.

“Not always, but quite often,” said Mike, smiling as he pulled up

a chair to sit down next to me.

“I asked my dad if he would teach us to make money,” Mike said.

“Oh, and what did he say to that?” I asked with cautious curiosity.

“Well, he had a funny look on his face at first, and then he said he

would make us an offer.”

“Oh,” I said, rocking my chair back against the wall. I sat there

perched on two rear legs of the chair.

Mike did the same thing.

“Do you know what the offer is?” I asked.

“No, but we’ll soon find out.”

Suddenly, Mike’s dad burst through the rickety screen door and

onto the porch. Mike and I jumped to our feet, not out of respect,

but because we were startled.

“Ready, boys?” he asked as he pulled up a chair to sit down with us.

We nodded our heads as we pulled our chairs away from the wall

to sit in front of him.

He was a big man, about six feet tall and 200 pounds. My dad was

taller, about the same weight, and five years older than Mike’s dad. They

sort of looked alike, though not of the same ethnic makeup. Maybe their

energy was similar.

“Mike says you want to learn to make money? Is that correct, Robert?”

I nodded my head quickly, but with a little trepidation. He had

a lot of power behind his words and smile.

“Okay, here’s my offer. I’ll teach you, but I won’t do it classroomstyle.

You work for me, I’ll teach you. You don’t work for me, I won’t

teach you. I can teach you faster if you work, and I’m wasting my time if

you just want to sit and listen like you do in school. That’s my offer. Take

it or leave it.”

“Ah, may I ask a question first?” I asked.

“No. Take it or leave it. I’ve got too much work to do to waste

my time. If you can’t make up your mind decisively, then you’ll never

learn to make money anyway. Opportunities come and go. Being able

to know when to make quick decisions is an important skill. You have

the opportunity that you asked for. School is beginning, or it’s over in

10 seconds,” Mike’s dad said with a teasing smile.

“Take it,” I said.

“Take it,” said Mike.

“Good,” said Mike’s dad. “Mrs. Martin will be by in 10 minutes.

After I’m through with her, you’ll ride with her to my superette and

you can begin working. I’ll pay you 10 cents an hour, and you’ll work

three hours every Saturday.”

“But I have a softball game today,” I said.

Mike’s dad lowered his voice to a stern tone. “Take it, or leave it,”

he said.

“I’ll take it,” I replied, choosing to work and learn instead of playing.

Thirty Cents Later

By 9:00 a.m. that day, Mike and I were working for Mrs. Martin.

She was a kind and patient woman. She always said that Mike and I

reminded her of her two grown sons. Although kind, she believed in hard

work and kept us moving. We spent three hours taking canned goods off

the shelves, brushing each can with a feather duster to get the dust off,

and then re-stacking them neatly. It was excruciatingly boring work.

Mike’s dad, whom I call my rich dad, owned nine of these little

superettes, each with a large parking lot. They were the early version

of the 7-Eleven convenience stores, little neighborhood grocery stores

where people bought items such as milk, bread, butter, and cigarettes.

The problem was that this was Hawaii before air-conditioning was

widely used, and the stores could not close their doors because of the

heat. On two sides of the store, the doors had to be wide open to the

road and parking lot. Every time a car drove by or pulled into the

parking lot, dust would swirl and settle in the store. We knew we had

a job as long as there was no air-conditioning.

For three weeks, Mike and I reported to Mrs. Martin and worked

our three hours. By noon, our work was over, and she dropped three little

dimes in each of our hands. Now, even at the age of nine in the mid-

1950s, 30 cents was not too exciting. Comic books cost 10 cents back

then, so I usually spent my money on comic books and went home.

By Wednesday of the fourth week, I was ready to quit. I had

agreed to work only because I wanted to learn to make money from

Mike’s dad, and now I was a slave for 10 cents an hour. On top of

that, I had not seen Mike’s dad since that first Saturday.

“I’m quitting,” I told Mike at lunchtime. School was boring, and

now I did not even have my Saturdays to look forward to. But it was

the 30 cents that really got to me.

This time Mike smiled.

“What are you laughing at?” I asked with anger and frustration.

“Dad said this would happen. He said to meet with him when

you were ready to quit.”

“What?” I said indignantly. “He’s been waiting for me to get

fed up?”

“Sort of,” Mike said. “Dad’s kind of different. He doesn’t teach like

your dad. Your mom and dad lecture a lot. My dad is quiet and a man

of few words. You just wait till this Saturday. I’ll tell him you’re ready.”

“You mean I’ve been set up?”

“No, not really, but maybe. Dad will explain on Saturday.”

Waiting in Line on Saturday

I was ready to face Mike’s dad. Even my real dad was angry with

him. My real dad, the one I call the poor one, thought that my rich dad

was violating child labor laws and should be investigated.

My educated, poor dad told me to demand what I deserve—at least

25 cents an hour. My poor dad told me that if I did not get a raise, I

was to quit immediately.

“You don’t need that damned job anyway,” said my poor dad

with indignation.

At eight o’clock Saturday morning, I walked through the door of

Mike’s house when Mike’s dad opened it.

“Take a seat and wait in line,” he said as I entered. He turned and

disappeared into his little office next to a bedroom.

I looked around the room and didn’t see Mike anywhere. Feeling

awkward, I cautiously sat down next to the same two women who were

there four weeks earlier. They smiled and slid down the couch to make

room for me.

Forty-five minutes went by, and I was steaming. The two women

had met with him and left 30 minutes earlier. An older gentleman was

in there for 20 minutes and was also gone.

The house was empty, and here I sat in a musty, dark living room

on a beautiful sunny Hawaiian day, waiting to talk to a cheapskate who

exploited children. I could hear him rustling around the office, talking

on the phone, and ignoring me. I was ready to walk out, but for some

reason I stayed.

Finally, 15 minutes later, at exactly nine o’clock, rich dad walked out

of his office, said nothing, and signaled with his hand for me to enter.

“I understand you want a raise, or you’re going to quit,” rich dad

said as he swiveled in his office chair.

“Well, you’re not keeping your end of the bargain,” I blurted out,

nearly in tears. It was really frightening for me to confront a grown-up.

“You said that you would teach me if I worked for you. Well, I’ve

worked for you. I’ve worked hard. I’ve given up my baseball games to

work for you, but you haven’t kept your word, and you haven’t taught

me anything. You are a crook like everyone in town thinks you are.

You’re greedy. You want all the money and don’t take care of your

employees. You made me wait and don’t show me any respect. I’m

only a little boy, but I deserve to be treated better.”

Rich dad rocked back in his swivel chair, hands up to his chin,

and stared at me.

“Not bad,” he said. “In less than a month, you sound like most

of my employees.”

“What?” I asked. Not understanding what he was saying, I

continued with my grievance. “I thought you were going to keep

your end of the bargain and teach me. Instead you want to torture

me? That’s cruel. That’s really cruel.”

“I am teaching you,” rich dad said quietly.

“What have you taught me? Nothing!” I said angrily. “You haven’t

even talked to me once since I agreed to work for peanuts. Ten cents an

hour. Hah! I should notify the government about you. We have child

labor laws, you know. My dad works for the government, you know.”

“Wow!” said rich dad. “Now you sound just like most of the people

who used to work for me—people I’ve either fired or who have quit.”

“So what do you have to say?” I demanded, feeling pretty brave

for a little kid. “You lied to me. I’ve worked for you, and you have not

kept your word. You haven’t taught me anything.”

“How do you know that I’ve not taught you anything?” asked rich

dad calmly.

“Well, you’ve never talked to me. I’ve worked for three weeks and

you have not taught me anything,” I said with a pout.

“Does teaching mean talking or a lecture?” rich dad asked.

“Well, yes,” I replied.

“That’s how they teach you in school,” he said, smiling. “But

that is not how life teaches you, and I would say that life is the best

teacher of all. Most of the time, life does not talk to you. It just sort

of pushes you around. Each push is life saying, ‘Wake up. There’s

something I want you to learn.’”

“What is this man talking about?” I asked myself silently. “Life

pushing me around was life talking to me?” Now I knew I had to quit

my job. I was talking to someone who needed to be locked up.

“If you learn life’s lessons, you will do well. If not, life will just

continue to push you around. People do two things. Some just let life

push them around. Others get angry and push back. But they push

back against their boss, or their job, or their husband or wife. They

do not know it’s life that’s pushing.”

I had no idea what he was talking about.

“Life pushes all of us around. Some people give up and others

fight. A few learn the lesson and move on. They welcome life pushing

them around. To these few people, it means they need and want to

learn something. They learn and move on. Most quit, and a few like

you fight.”

Rich dad stood and shut the creaky old wooden window that

needed repair. “If you learn this lesson, you will grow into a wise,

wealthy, and happy young man. If you don’t, you will spend your

life blaming a job, low pay, or your boss for your problems. You’ll

live life always hoping for that big break that will solve all your

money problems.”

Rich dad looked over at me to see if I was still listening. His eyes

met mine. We stared at each other, communicating through our eyes.

Finally, I looked away once I had absorbed his message. I knew he

was right. I was blaming him, and I did ask to learn. I was fighting.

Rich dad continued, “Or if you’re the kind of person who has

no guts, you just give up every time life pushes you. If you’re that

kind of person, you’ll live all your life playing it safe, doing the right

things, saving yourself for some event that never happens. Then you

die a boring old man. You’ll have lots of friends who really like you

because you were such a nice hardworking guy. But the truth is that

you let life push you into submission. Deep down you were terrified

of taking risks. You really wanted to win, but the fear of losing was

greater than the excitement of winning. Deep inside, you and only

you will know you didn’t go for it. You chose to play it safe.”

Our eyes met again.

“You’ve been pushing me around?” I asked.

“Some people might say that,” smiled rich dad. “I would say that

I just gave you a taste of life.”

“What taste of life?” I asked, still angry, but now curious and

ready to learn.

“You boys are the first people who have ever asked me to teach

them how to make money. I have more than 150 employees, and not

one of them has asked me what I know about money. They ask me for

a job and a paycheck, but never to teach them about money. So most

will spend the best years of their lives working for money, not really

understanding what it is they are working for.”

I sat there listening intently.

“So when Mike told me you wanted to learn how to make money,

I decided to design a course that mirrored real life. I could talk until

I was blue in the face, but you wouldn’t hear a thing. So I decided to

let life push you around a bit so you could hear me. That’s why I only

paid you 10 cents.”

“So what is the lesson I learned from working for only 10 cents an

hour?” I asked. “That you’re cheap and exploit your workers?”

Rich dad rocked back and laughed heartily. Finally he said,

“You’d best change your point of view. Stop blaming me and thinking

I’m the problem. If you think I’m the problem, then you have to

change me. If you realize that you’re the problem, then you can

change yourself, learn something, and grow wiser. Most people want

everyone else in the world to change but themselves. Let me tell you,

it’s easier to change yourself than everyone else.”

“I don’t understand,” I said.

“Don’t blame me for your problems,” rich dad said, growing impatient.

“But you only pay me 10 cents.”

“So what are you learning?” rich dad asked, smiling.

“That you’re cheap,” I said with a sly grin.

“See, you think I’m the problem,” said rich dad.

“But you are.”

“Well, keep that attitude and you’ll learn nothing. Keep the

attitude that I’m the problem and what choices do you have?”

“Well, if you don’t pay me more or show me more respect and

teach me, I’ll quit.”

“Well put,” rich dad said. “And that’s exactly what most people

do. They quit and go looking for another job, a better opportunity,

and higher pay, actually thinking that this will solve the problem. In

most cases, it won’t.”

“So what should I do?” I asked. “Just take this measly 10 cents an

hour and smile?”

Rich dad smiled. “That’s what the other people do. But that’s all

they do, waiting for a raise thinking that more money will solve their

problems. Most just accept it, and some take a second job working

harder, but again accepting a small paycheck.”

I sat staring at the floor, beginning to understand the lesson

rich dad was presenting. I could sense it was a taste of life. Finally,

I looked up and asked, “So what will solve the problem?”

“This,” he said, leaning forward in his chair and tapping me

gently on the head. “This stuff between your ears.”

It was at that moment that rich dad shared the pivotal point of

view that separated him from his employees and my poor dad—and

led him to eventually become one of the richest men in Hawaii, while

my highly educated but poor dad struggled financially all his life.

It was a singular point of view that made all the difference over

a lifetime.

Rich dad explained this point of view over and over, which I call

lesson number one: The poor and the middle class work for money. The

rich have money work for them.

On that bright Saturday morning, I learned a completely different

point of view from what I had been taught by my poor dad. At the age

of nine, I understood that both dads wanted me to learn. Both dads

encouraged me to study, but not the same things.

My highly educated dad recommended that I do what he did.

“Son, I want you to study hard, get good grades, so you can find a

safe, secure job with a big company. And make sure it has excellent

benefits.” My rich dad wanted me to learn how money works so I

could make it work for me.

These lessons I would learn through life with his guidance, not

because of a classroom.

My rich dad continued my first lesson, “I’m glad you got angry

about working for 10 cents an hour. If you hadn’t got angry and had

simply accepted it, I would have to tell you that I could not teach you.

You see, true learning takes energy, passion, and a burning desire. Anger

is a big part of that formula, for passion is anger and love combined.

When it comes to money, most people want to play it safe and feel

secure. So passion does not direct them. Fear does.”

“So is that why they’ll take jobs with low pay?” I asked.

“Yes,” said rich dad. “Some people say I exploit people because

I don’t pay as much as the sugar plantation or the government. I

say the people exploit themselves. It’s their fear, not mine.”

“But don’t you feel you should pay them more?” I asked.

“I don’t have to. And besides, more money will not solve their

problems. Just look at your dad. He makes a lot of money, and he

still can’t pay his bills. Most people, given more money, only get into

more debt.”

“So that’s why the 10 cents an hour,” I said, smiling. “It’s a part

of the lesson.”

“That’s right,” smiled rich dad. “You see, your dad went to school

and got an excellent education, so he could get a high-paying job. But

he still has money problems because he never learned anything about

money in school. On top of that, he believes in working for money.”

“And you don’t?” I asked.

“No, not really,” said rich dad. “If you want to learn to work for

money, then stay in school. That is a great place to learn to do that.

But if you want to learn how to have money work for you, then I will

teach you that. But only if you want to learn.”

“Wouldn’t everyone want to learn that?” I asked.

“No,” said rich dad, “simply because it’s easier to learn to work for

money, especially if fear is your primary emotion when the subject of

money is discussed.”