Don't Work For Money / Financial Literacy Lyrics

So a very important point I want to make

On this series *Choose to Be Rich* is there's

Nothing magical about being rich.

There's nothing the rich know that's beyond anybody else.

Many times they're not smarter than many people,

They just do things a little bit differently.

So my book *Rich Dad Poor Dad*, in that book, my

Rich dad had six very simple lessons about money.

Like lesson number one, for example, was

The rich don't work for money.

The rich learn how to have money work hard for them.

And so the way my rich dad taught me that as a little boy

He used to break out the game of Monopoly

And we've all played the game of Monopoly, I'm sure.

And he said on this board game is the formula for great wealth.

If you will recognize this formula and follow it for the rest of your life,

You will wind up a very rich man.

Now I was only nine years old when my rich dad was telling me all this,

So he said the great formula, and we all know it is

Four green houses, red hotel,

Four green houses, red hotel.

Now most of us know that formula,

Except for some reason, most of us don't follow that formula.

The reason I am a wealthy person,

I was able to retire at age 47,

Was I followed the formula,

Four green houses, red hotel.

It's not rocket science, it's not hard,

You don't have to be very smart,

You don't even need a calculator,

Your ten little fingers can do all the work for you.

Another important lesson that my rich dad taught me

Was lesson number two,

The importance of financial literacy.

My rich dad was a man who believed in reading financial statements.

My poor dad was a man who believed in reading books.

And my rich dad always said,

If you want to be rich, you have to read numbers.

So if you've seen *Rich Dad Poor Dad's*

Different income, expense, asset, liabilities,

That was fundamental to financial literacy.

The problem is we don't teach that in school,

So where people get into financial trouble once they leave school

Is because they don't know the difference between assets and liabilities.

For example, my poor dad, the head of education, a schoolteacher,

Always said our house is an asset and it's our most important investment.

And my rich dad would say, instead, your house is not an asset.

If you could read a financial statement,

You'd see that your house is really a liability.

Now most people think their house is an asset,

And that's what upsets them when they read the book.

I'm not trying to upset people.

I'm not saying don't buy a house or not to buy a big house

Or not to pay off your mortgage.

I'm just saying don't call a liability an asset.

So very simply, I can give you an idea how simple it is.

My rich dad said an asset is something that puts money in your pocket,

Regardless if you work or not.

And a liability is something that takes money from your pocket,

Whether you work or not.

Putting it even more simply, my rich dad said,

If you stop working, assets feed you and liabilities eat you.

I mean, that is that simple.

Whereas my highly educated dad,

He kept saying, well, he doesn't know what he's talking about.

You know, everybody knows your house is an asset.

And there was this argument.

The point here I'm making is that the ideas between my rich dad and my poor dad,

And they're just ideas, cause the biggest differences over their lifetime,

The main message in this tape is about choosing to be rich really starts with choosing your ideas.

It is that simple.

Let me go back really quickly to assets and liabilities.

Let's say I buy a house, I rent it out,

The rent is $1,000 a month and my expenses are $800.

That means I put $200 a month in my pocket.

At that moment, that house is an asset.

Now let's say, due to bad luck, the renter trashes it or whatever renters do sometimes,

And they don't pay the rent.

So I have to pay the $800 in expenses,

But I have no income from it.

At that moment, that very same house becomes a liability.

So I'm not saying don't buy a house.

I'm not saying anything like that.

I'm just saying don't call liabilities assets.

My poor dad became poor because he didn't know the difference.

He couldn't read a financial statement.

So he'd buy a house,

You get a pay raise,

You get in tax trouble because he was, you know,

Go to his account and say, you know, how can I reduce my taxes?

And the accountant would say, buy a bigger house.

So he'd buy a bigger house because he thought it was an asset.

And now he's paying more taxes and he's paying a higher mortgage.

And then he'd work harder and he'd go back to his account and say,

What can I do?

He says, buy a bigger house.

And so instead of buying assets,

My poor dad kept buying liabilities and that's why he was poor.

He simply did not know the difference between an asset and a liability.

One last thing.

A house can be an investment.

It may not necessarily be an asset.

In other words, many times we put money into investments and we lose the money.

So an investment does not need to be an asset.

The point I'm making here, which is lesson number two of my rich dad,

Was you had to be financially literate.

And financial literacy began with financial statements but also understanding vocabulary.

When people say, what's the first step in becoming rich,

I said you have to have the vocabulary of a rich person.

You see, that having two fathers, I was able to see that my poor dad,

The schoolteacher, very educated man, had the vocabulary of a schoolteacher.

You know, gerunds, verbs, geometry, trigonometry, those things.

And my rich dad had a different vocabulary.

When I researched it, I found out that the English language has approximately two million words in it.

And each and every one of us has command of approximately 5,000 words.

So when people say, what's the first step to becoming rich,

I say change your vocabulary.

For example, we often use the term mortgage.

What does the word mortgage mean?

The word mortgage comes from the French word *mortier*, which means death.

So what mortgage really means is engaged in debt until you die.

And that's what happened to my poor dad.