Robert Kiyosaki’s real lesson in “Rich Dad, Poor Dad” isn’t “buy lots of buildings.” It’s how to have the right mindset for success.
The book is one of my favorites: I keep 20 copies in my office and hand them out all the time. In “Rich Dad, Poor Dad,” Kiyosaki tells the story of his “rich dad”—actually his friend’s father, who owned businesses and was really wealthy. He also tells the story of his “poor dad”—Robert’s real father, a university professor who worked really hard but died broke.
You need to read the book for yourself, but I can sum it up in this little anecdote:
Kiyosaki’s “poor dad” would see something he wanted and say, “I can’t afford that.”
Kiyosaki’s “rich dad” would see something he wanted and ask, “How can I afford that?”
The difference in language is subtle, but the difference is mindset is worlds apart.
Small Wins and the Long Game
A few weeks ago, I wrote about doing expense audits using the new Two-Brain App. I worked you through an exercise to determine whether you could afford to hire a new staff member or not. Read it here:
The most important part of the article was the question, “How can I afford that?”
This is the difference between “rich entrepreneurs” and “poor entrepreneurs.”
Let’s say you’re combing through your monthly expenses and something sticks out: a piece of software you’re not using or some expensive subscription with unclear ROI.
A poor entrepreneur says, “I need to cut off that billing! Get rid of that expense! I can’t afford to pay for something I’m not using!”
A rich entrepreneur says, “How can I use that thing better to improve its ROI?”
Now, you’re not in business to keep the software companies in business. You’re not in business to keep your mentor in business—the opposite is actually true: We’re in business to keep you in business and help you thrive.
But when I’m looking at my monthly expenses, my first question is this: “Why am I not getting the results I thought I would?”
I do the same with time investments: “Why isn’t this workout plan working for me?” Then I look at my diet, my sleep and my commitment to the program. If one of those is the problem, I call my coach and ask him how to improve my results.
I’ve even done the same with mentorship.
Whenever I’ve felt that my mentor calls were decreasing in value, I’ve thought about cancelling. When you pay $40,000-$80,000 per year for a program, you tend to notice the monthly billing. And since ROI on mentorship compounds forever, it can sometimes be murky. For example, I wouldn’t have scaled one business from $260,000 to $2,500,000 without mentorship, but it’s hard to track compounding effect.
So instead of saying, “Is mentorship worth the cost?” I ask, “How can I make mentorship show a more immediate ROI?” And then my mentor says, “Focus on this short-term thing for the next week.” I get a big return and then go back to the big-picture stuff. It’s even easier at Two-Brain because clients in our Growth Phase can move from mentor to mentor.
Another example: I was one of the first people to sign up for Healthy Steps Nutrition, and I did so because the value was obvious. But the staff person I chose to lead the program wasn’t “intrapreneurial.” We weren’t using the program to its full potential. So after many months I said, “How can I improve my ROI on this?”
I asked Miranda if she’d like to take the course. We started from scratch. Now we see a huge ROI on Healthy Steps.
The purpose of an expense audit isn’t to cut; it’s to maximize. Every expense should create value. If it’s not, before you cut it, ask: “How can I afford this?”
That’s the question separating good entrepreneurs from bad ones.