Retire Rich

392 Pages·2014·8.28 MB·English

How to Get Rich

and Stay Rich

Rich Dad's
Retire Young
Retire Rich

How to Get Rich

and Stay Rich

Rich Dad's
Retire Young
Retire Rich

®

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CASHFLOW Technologies, Inc.

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Printed in the United States of America

082014

First Edition: January 2002

First Plata Publishing Edition: May 2012

ISBN: 978-1-61268-040-8

To all people who have gone before us...

people who have made all of our lives better and

more abundant today.

Author’s Note

This book was completed six months before the tragic events of

September 11, 2001. Nonetheless, the information in this book is
more important now than ever before.

During these uncertain times, your financial education becomes

even more valuable.

If you’re tired of the same old investment advice—such as

“Be patient,” “Invest for the long term,” and “Diversify”—then
this book is for you.

Contents

INTRODUCTION
Why David Met Goliath ...............................................................................1

SECTION ONE: The Leverage of Your Mind

Chapter One
How to Become Rich and Retire Young ......................................................15

Chapter Two
Retire as Young as You Can .........................................................................25

Chapter Three
How I Retired Early ...................................................................................33

Chapter Four
How You Can Retire Early .................................................................................. 47

Chapter Five
The Leverage of Your Mind .........................................................................61

Chapter Six
What Do You Think Is Risky? ....................................................................77

Chapter Seven
How to Work Less and Earn More ..............................................................91

Chapter Eight
The Fastest Way to Get Rich .....................................................................107

SECTION TWO: The Leverage of Your Plan

Chapter Nine
How Fast Is Your Plan? ..............................................................................117

Chapter Ten
The Leverage of Seeing a Rich Future ........................................................135

Chapter Eleven
The Leverage of Integrity ...........................................................................161

Chapter Twelve
The Leverage of Fairy Tales ...............................................................................173

Chapter Thirteen
The Leverage of Generosity .......................................................................193

SECTION THREE: The Leverage of Your Actions

Chapter Fourteen
The Leverage of Habits .............................................................................221

Chapter Fifteen
The Leverage of Your Money .....................................................................237

Chapter Sixteen
The Leverage of Real Estate .......................................................................251

Chapter Seventeen
The Leverage of Paper Assets .....................................................................271

Chapter Eighteen
The Leverage of a B-Quadrant Business .....................................................311

Chapter Nineteen
Hot Tips ....................................................................................................327

Chapter Twenty
Different Realities ......................................................................................355

SECTION FOUR: The Leverage of Your First Step

Chapter Twenty-one
How to Keep Going ..................................................................................361

In Closing .................................................................................................369

Contents

Introduction

WHY DAVID

MET GOLIATH

1

The story of David and Goliath was one of rich dad’s favorite stories.

I suspect he may have seen himself as David, a man who started with
nothing, yet rose to compete against the giants of business. Rich dad
said, “David could beat Goliath because David knew how to use the
power of leverage. A young boy and a simple slingshot were far more
powerful than the feared giant, Goliath. That is the power of leverage.”

My previous books were on the power of cash flow. Rich dad said,

“Cash flow is the most important term in the world of money. The
second most important is leverage.” He also said, “Leverage is the reason
some people become rich, and others do not.” Rich dad went on to
explain that leverage is power and that power can work in your favor
or against you. Because leverage is power, some use it, some abuse
it, and others fear it. He said, “The reason less than 5 percent of all
Americans are rich is because only 5 percent know how to use the power
of leverage. Many who want to become rich, fail to become rich because
they abuse the power. And most people do not become rich because
they fear the power of leverage.”

There Are Many Forms of Leverage

Leverage comes in many forms. One of the recognized forms of

leverage is the leverage of borrowing money. Today we are aware of the
severe problem of people abusing this powerful form of leverage. Millions
of people struggle financially because the power of debt leverage is used

Introduction

2

against them. Because of the consequences of the abuse of debt leverage,
many people now fear this form of leverage, saying, “Cut up your credit
cards, pay off your mortgage, and get out of debt.”

My rich dad would chuckle and say, “Cutting up your credit

cards won’t make you rich. Cutting up my credit cards only makes me
miserable.” Nonetheless, rich dad agreed that if you were abusive with
the power of debt leverage, you definitely should cut up your credit
cards, pay off your mortgage, and get out of debt. He said, “Giving
a credit card to some people is like giving a loaded gun to a drunk.
Anyone who is near the drunk is in danger, including the drunk.”

Instead of teaching us to fear the power of debt leverage, rich dad

taught his son and me how to use the power of debt leverage in our
favor. That is why he often said, “There is good debt and bad debt. Good
debt makes you rich and bad debt makes you poor.” Most people are
loaded down with bad debt and many others live in fear of debt and are
proud to be debt free, even to the point of being free of any good debt.

In this book, you will find out how my wife, Kim, and I retired

young and retired rich because we were deeply in debt, deeply in debt
with good debt, debt that made us rich and financially free. In other
words, we used the power of leverage, we did not abuse the power, nor
do we live in fear of its power. Instead we respect the power of leverage
and use it wisely and cautiously.

Can Everyone Be Rich?

During the hundreds of interviews I have given after the release

of the first Rich Dad book, I am asked this question: “Do you think
everyone can be rich?”

I reply, “Yes. I believe everyone has the potential to be rich.”
At that point, I am often asked, “If everyone has the potential to

be rich, why do so few actually become rich?”

My usual reply is, “I don’t have the time today to answer that

question.” they insist, I may say, “Many of the answers are found in
my first four books in the Rich Dad series.”

If the interviewer is persistent they may ask something like,

“When will you give us all the answers?”

Retire Young Retire Rich

3

I reply, “I don’t know if anyone has all the answers.”
Even though I do not have all the answers, I am very happy to be

finally bringing this book, book number five in the Rich Dad series, to
you. This book will explain why I believe all of us already have the power
and the potential to be very rich... and I do mean all of us, not just some
of us. It will also explain how my wife, Kim, and I could retire young
and retire rich, even though we started without any money. And it will
also explain why some people are rich and why others are poor even
though we all have the power and the potential to be very rich and retire
young. It’s all a matter of leverage.

The first four books in the Rich Dad series were primarily about the

power of cash flow. This book is about leverage. Why one entire book?
The reason is because leverage is a very big word, encompassing and
touching virtually everything in our lives.

This book will focus on three important forms of leverage;

leverage of your mind, plan and actions.

Section One: The Leverage of Your Mind
This is the most important section of the book. In this section, you
will find out why money does not make you rich. In this section,
you will find out that the most powerful form of leverage in the
world, your mind, has the power to make you rich or make you
poor. Just as someone can use, abuse, or fear the power of debt
leverage, the same is true when it comes to your brain, a very
powerful form of leverage.

Words Are Leverage
You will find out the power of words. Rich dad always said, “Words
are leverage. Words are powerful tools, tools for the brain. But just
as you can use debt to make you rich or poor, words can be used to
make you rich or poor. In this section, you will find out about the
power of words and how rich people use rich words and poor people
use poor words. Rich dad often said, “Your brain can be your most
powerful asset, or it can be your most powerful liability. If you use
the right words in your brain, you will become very rich. If you use

Introduction

4

the wrong words, your brain will make you poor.” In this section, you
will find out about rich words and poor words.

You will find out why rich dad said, “It does not take money to make
money.” He said, “Getting rich begins with your words, and words
are free.”

Why Investing Is Not Risky
In this book, you will find out why people who say, “Investing is
risky,” are some of the biggest losers in the investment markets.
Again it goes back to words. You will find out that what you think
is real becomes your reality. You will find out why people who
think investing is risky invest in the riskiest of all investments. It’s
caused by their reality. In this book, you will find out why investing
does not have to be risky. In order to find safer, higher-yielding
investments, people must first begin by changing their words.

As stated earlier, the power of leverage can be used, abused, or
feared. In this section, you will find out how to use the leverage
of your brain in your financial favor, rather than use it against you.
Rich dad said, “Most people take the most powerful leverage in
the world, their brain, and use that power to make them poor.
That is not the use of that power. It’s abuse. Every time you say,
‘I can’t afford it’ or ‘I can’t do that’ or ‘Investing is risky’ or ‘I’ll never
be rich,’ you are using the most powerful form of leverage you have
to abuse yourself.”

If you want to retire young and retire rich, you will need to use your
brain in your favor, not against you. If you cannot do that, the other
two sections of this book will not be possible for you, even though
they are easy to do. If you can gain control over your most powerful
form of leverage, the next two sections will be easy.