Think Big / Think Small Lyrics

Now contrasting this idea of thinking big

The way you get big is by actually thinking smaller

Now this may sound like a contradiction, and it is meant to be

But what I mean by thinking smaller is thinking more accurately

One of the reasons I created Cashflow in my board game

Was very simply to get people to be more minute

With their financial statements, how to keep their numbers accurately

Numbers make you more accurate, the more accurate you are

The better results you can have

For example, a spaceship going into space

Its tolerances, its accuracy needs to be far more

Than somebody building a car

So to get more and more performance, you need greater and greater accuracy

It's not just a matter of thinking big, it's also thinking smaller, more accuracy

My poor dad always said, you know, words are important, words are tools

But like I said, he had the vocabulary of a schoolteacher

My rich dad had the words and vocabulary of a rich man

But he also had the alphanumerical accuracy to pinpoint more accuracy with his words

For instance, somebody comes up to me and says, how much money are you making?

"Oh, I'm making a lot." Well, that's inaccurate

If you say, "I'm making $10,000 a month,"

Well, the next question my rich dad would ask him

"What's your income to expense ratio? What's your debt to equity ratio?"

In other words, my rich dad wanted greater accuracy or smaller ideas

So he could measure how big this person could get

A person who thinks big but doesn't think accurately eventually collapses

So the point here is this: to get big, you also need to think smaller or more accurately

In the stock market, people talk about P-E ratios today

Not that they mean much, but they're still a good indicator

So somebody says, this stock has a P-E of 2, and this stock has a P-E of 20

That's a way of measuring more accurately some kind of performance within that stock

You're not saying, "I just bought a stock, man, the price is going to go up."

That's a very inaccurate way of thinking

So numbers give accuracy, and the more accurate you are, the bigger you can grow

So that's why accuracy is so important

Another reason I'll say numbers are important

I was on a talk show, and a person called in and says

"You say that starting a business is the way to go,

Because then going to the middle-class value, he thinks job security is important

And starting a business is risky

Did you know that 9 out of 10 businesses fail?"

I said, "Yes, that's accurate. That's the same number I have."

"What do you have to say about that?"

And I said, "Well, 9 fail, but 1 makes it."

And he was quiet for a while

I said, "I want you to know, since it's 9 out of 10,

All that means to me is that I need to start 10 businesses."

It doesn't mean I stop, it doesn't mean I don't do anything

It doesn't mean I can become paralyzed like a deer in the headlight

It means 9 out of 10 failing means I need to be able to go 10 times for that 1 that makes it

Whereas most people see the 9, and they go, "Well, they look at the cup being half empty

Rather than that 1."

And I said to him, "I said, once I made up my mind that I was going to start 10 businesses

So I could have that 1 that made it," he said, "Well, what does that mean?"

I said, "Well, it meant that I failed twice. That means 2 times in my life I was 1 of those 9 out of 10."

But on the third time, I hit it. And that third time, I made all the money I lost back

Whereas what you did was see the stat of 9 out of 10 and did nothing

So that's part of the accuracy of numbers

As we go on in this series, people say, "Well, how do you find a good real estate deal?"

You can ask my wife this question

"How many real estate deals do we look at?"

I had a friend the other day just come back from California

He says, "Guess what? He bought an investment property like you recommended."

I said, "How many did you look at?"

He says, "2."

In other words, he did an extensive market research of 2

He didn't go to school to learn how to invest in real estate

He knows nothing. He let the sales real estate broker talk him into it

And the reason they're called brokers is because most brokers are broker than you

So he sells him this deal. He looks at 2 properties, buys 1

And he thinks he is now Donald Trump or some real estate guru

I mean, that is not intelligent. He's going against the odds

So what my wife and I do, if we're going to buy 1 property, we have to look at 100

So we do analysis on 100 properties before we buy 1

When people say, "How did I get smart?"

Number 1, I took a real estate course, and number 2, I look at real estate constantly

In other words, you're not looking at 10 to 20 deals a week. You're not in the market

The same as buying a stock. If you're going to buy a stock on fundamentals

You've got to be looking at at least 100 of them to find 1

That's the ratio. But the average person doesn't understand the numbers

They just think it's risky, and they don't use the numbers in their favor

So these are some of the things, where the smaller, more accurate you are,

The smaller you think, the bigger performance or the greater performance you can achieve

And that's called leverage. And that's how your mind is so crucially important

So when people say, "Well, how does it apply to me in real life?"

It's the same thing as getting married.

You know, you don't marry the first person you kiss

You go around and kiss a lot of people before you marry 1, hopefully

So that's how numbers and accuracy can improve your chances of success

The average person just says it's risky, "I'm making a lot of money,

It's a good investment, it's a nice stock."

They speak in words and not numbers

And going on again to Rich Dad's rule

Money is just an idea. Money is your idea

So many people say, "Well, you know, you can't build a business. You can't make money working for free.

You shouldn't take risk. Or you'll go to jail if you do that. Did you know it's illegal?"

I hear so many of these negative thoughts on the subject of, you know, it's illegal

I asked the person, "Are you an attorney? Are you an accountant?"

"No, but my brother-in-law told me that."

And so many people are running around with "I can't," "You can't," and this

Instead of saying, "How can I? How can I afford it? How can I do it? How could I do that?"

It's just the can't or can that forms the reality of a person's mind

And that's where it all starts. It starts in your mind