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Shooting
the Sacred Cows
of Money
knowledge: the new money
™
TM
Save Yourself from the Crisis!
Rich Dad's Truth About Money
Go to school Get a job Work hard Save Money
Live below your means Your home is an asset Get out of debt
Invest for the long term in a retirement plan filled with stocks,
bonds and mutual funds
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Shooting the Sacred Cows of Money
Putting a bullet in the head of bad
financial advice
A Quick Note from Robert
roughout history, cultures have tightly grasped their “sacred cows” (dearly held beliefs so commonly accepted, so
religiously observed, that to question them is sacrilege).
Our culture is no dierent. Our beliefs are no less sacred.
Especially when it comes to money.
A year or so ago, Kim and I did something we’d never done before. We assembled all the Rich Dad advisors in one
room to talk about the common myths our culture holds about money.

education,empoweringpeopletoescapetheRatRaceandndnancialfreedom.
A successful entrepreneur and investor, Robert is the author of 19 books, including Rich Dad Poor Dad—the#1
personalnancebookofalltime.He’sregularlyfeaturedonshowssuchasLarry King Live, Oprah, and Your World with
Neil Cavuto.
Robert’s bestseller, Conspiracy of the Rich: e 8 New Rules of Money, pioneered online book publishing as a free online
interactive book with contributions from over a million readers in over 167 countries. Frequent updates appear on
www.conspiracyoftherich.com
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Hislatestrelease,Unfair Advantage, addresses what schools will never teach you about money and incorporates both
audioandvideointoRichDad’srstenhancedeBook.
Atrueadvocateofeectivenancialeducation,Robertisn’tafraidtochallengethestatusquo.Heoersnancialadvice
thatexposestheabsurdityofconventionalattitudesaboutmoneyanddebunkstheso-callednancialexperts.Kim Kiyosaki
As an internationally renowned speaker, author, entrepreneur, and real estate investor, Kim knows what it takes to
succeedandbeananciallyindependentwoman.She’sasought-afterspeaker,televisionandradiotalk-showguest,the
hostofaPBSRich Woman show, and a columnist for www.WomenEntrepreneur.com.
rough her international brand, Rich Woman, Kim draws on a lifetime of experience in business and investing
tobeanadvocateforwomeninthemarketplace.Aself-mademillionaire,Kimisahappilymarried(butercely
independent)womanandoftentravelsandspeakswithherhusband,RobertKiyosaki.Herrstbook,Rich Woman
,
was a Business Weekbestsellerandisoneofthetop50best-sellingpersonal-nancebooksofalltime.
Ken McElroy
Ken is a founding partner of MC Companies, a real estate investment company that specializes in management,
investment,development,andconstructionwithaportfolioacrossthesouthwesternUnitedStatesofover10,000
apartment units valued in the hundreds of millions of dollars.
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As a Rich Dad Advisor, Ken brings 20 years of real estate experience to the team and speaks to thousands of people
acrosstheglobeeachyear.HeistheauthoroftheRichDadAdvisorbooks e ABCs of Real Estate Investing, e

strategies. Find out more at www.provisionwealth.com.
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Garrett Sutton
GarretisafounderandpartnerwithSuttonLawCenter,P.C.,alawrmwithocesinNevada,Wyoming,and
California.Hehasover20yearsexperienceassistingandadvisingentrepreneurs,families,andbusinessesinselectingthe
appropriatecorporatestructurestolimittheirliability,protecttheirassets,andadvancetheirpersonalnancialgoals.
AsaRichDadAdvisor,GarrettspeaksfrequentlyatRichDadeventsonthetopicofcorporateformationand
assetprotection.HeistheauthoroftheRichDadAdvisorbookse ABCs of Writing Winning Business Plans,
e ABCs of Getting Out of Debt, Own Your Own Corporation, and How to Buy and Sell a Business. Find out more
at www.garrettsutton.com and www.sutlaw.com.
Mike Maloney
Mikeistheownerandfounderofwww.goldsilver.com,anonlineprecious-metalsdealershipthatspecializesinthe
delivery of gold and silver and secured storage. Additionally, www.goldsilver.com provides research and commentary for
itsclients,assistingthemintheirwealth-buildingendeavors.
Mikehasspokentoaudiencesthroughouttheworldonthebenetsofprecious-metalsinvesting.Astudent
of economics, Mike is regarded as an expert on economic cycles and capitalizing on the opportunities they aord.
HeistheauthoroftheRichDadAdvisorbook, Guide to Investing in Gold and Silver. Find out more at
www.goldsilver.com.
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Kathy Heasley
KathyisthefounderandprincipalofHeasley&Partners,Inc.,abrandingandmarketingrm,whichpioneeredand
championsHeart&Mind™Branding.Asuccessfulauthor,entrepreneur,businesscoach,andpublicspeaker,Kathy
servesastheRichDadAdvisorformarketingandbranding.Shehasover20yearsofexperiencehelpingtoshape
brandslikeColdStoneCreameryandMassageEnvyandisaninternationalspeakeronbranding,marketing,and
communications. Find out more at www.heasleyandpartners.com.
Trina White Maduro
Trinaisabusinesswoman,investor,andsocialentrepreneur.Shegrewupinthemidstofviolence,drugs,andgangson
thesouthsideofChicagoandwasraisedinasingle-parenthomewith14othersiblingsandfamilymembers.
Trinaexcelledinsportsandinitiallyviewedprofessionalbasketballasherdestinyandvehicletosuccess.Shelaterchose

Wewerebrokeandbuildingabusiness,butwewerehomelessforaperiodoftime,westrugglednancially,anditwasa
really tough time to go through.
Robert
So,in1986IaskedKimtomarrymebecauseIguredifshehadputupwithmewithnomoney,she’dputupwithme
anytime.Iaskedherdadandhisrstquestionwas 
Kim
Mydad’srstquestionwas,“Doeshehaveajob?”
Robert
eanswerwas,ofcourse,no!Butanyway,by1994KimandIwerenanciallyfree,andwediditwithoutajob,
without a retirement plan, and without government support.
Kim
Yes,andIthinkoneofthemostbeautifulthingsaboutbeingnanciallyfreewasthatitwasthersttimewewereable
toask,“Whatdowewanttodowiththerestofourlives?”Because,upuntilthatpoint,weweresobusyworkingday
to day and paying the bills that we never had that luxury.
And that’s when we started e Rich Dad Company.
Robert
And in 1996, we created the CASHFLOW boardgametogivepeoplethesamenancialeducationmyrichdad
gave me.
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Kim
PriortomeetingRobert,Ihadvery-little-to-nonancialeducation.AndwhatRobert’srichdadtaughthimandwhat
welearnedonourjourneytobecomingnanciallyfreewasnotwhatweheardfromnancialadvisersandplanners.In
fact, it was almost the opposite.
Wefoundthatlotsofpeoplewereaskingushowweachievednancialfreedom,sowecreatedtheCASHFLOW game
toteachpeoplejustwhatwedid,whichwasquitetheoppositeofwhatmanypeoplearetaught.
Robert
Todaywe’reinanancialcrisis.KimandIsawthiscrisiscoming,andthatwasthereasonbackin1996thatwecreated
eRichDadCompany—toprovidenancialeducationsopeoplecanlearntotakecareofthemselves.
Iwasalwaystaughttheimportanceofteachingpeopletoshinsteadofgivingpeoplesh.Unfortunately,whatour
governmentsdotodayisgivepeopleshratherthanteachthemtosh.Andthemoreyougivepeoplesh,themore

Youneedtoknowtheveelementsofnancialeducation.
Element number one is history. ere are many interesting dates, but one important one is 1913 when the Federal
ReserveBankwascreated.Alsoofimportance,in1913theInternalRevenueService(IRS)wascreatedsothatthey
could tax us. ey had to tax us if they were going to print money.
In1971,PresidentRichardNixontooktheU.S.othegoldstandard.After1971,moneystoppedbeingmoney.It
becameacurrencybackedbydebt.Oneofthereasonswe’reinthismassivenancialcrisistodayisbecause,after1971,
the Federal Reserve Bank could print as much money as it wanted.
In1974,therulesofretirementchangedwiththeEmployeeRetirementIncomeSecurityAct(ERISA),whichpaved
thewayforthe401(k).Andthat’swhytodaysomanypeopleofmygenerationareafraidofrunningoutofmoney
during retirement.
Element number two is taxes. As you know, taxes are not fair. ere are many reasons why the rich pay much less in
taxes than people who work for the rich.
Element number three is nancial vocabulary. In other words, understanding the language of money. For example,
what’sthedierencebetweenanassetandaliability,capitalgainsversuscashow,orfundamentalsversustechnicals?
at’sallpartofanancialvocabulary.
Numberfouriswealth protection. As we all know, people out there are trying to steal your money. But there are also
peoplewhomyoutrustwhoaretakingyourmoney.Becauseofthis,nancialeducationisnotonlyhowmuchmoney
you make, but how much money you keep.
Andelementnumberveisthatthere are two sides to every coin. When you put your money in the bank,
the bank gives it to somebody else. When you put your money in your retirement plan, the bank gives it to
somebody else.
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Sacred Cow #1: Go to School
Animportantpartofnancialeducationishavinganancialstatement,whichincludesanincomestatementand
abalancesheet.Whenyougotoyourbanker,yourbankeralwaysasksforyournancialstatement,notyourreport
card,becauseyournancialstatementisyourreportcardonceyouleaveschool.Yournancialstatementwilltellyou
whetherornotyou’resmartwithmoney.enancialstatementisthereportcardofyournancialintelligence.
One of the biggest sacred cows of all is go to school.ManypeoplethinkI’manti-school.atisnottrue.I’manti-
ignorance.So,I’mverypro-education.I’mjustnotproofbeingstupidaboutmoney.
Anita

We’ll forgive you.
Tom
ankyou.ButwhenIwenttoschool,theonlynancialeducationIgotwasspecictomyprofession.erewasno
generalnancialeducation.Icouldhavegottenamaster’sdegreeandaPhDinmyeldwithoutanyspecicnancial
education at all about how to handle myself once I got out of school.
Robert

Right.Andpeoplesaytome,“Well,Ilearnedeconomicsinschool.Economicsisnancialeducation,right?”Notreally.
It’s not about investing. It’s not about the law. It’s not about taxes, not about history.
Garrett
Robert,asalawyer,Iseeallsortsofpeoplewalkthroughthedoor.Somearehighlyeducated,andsomehaveno
educationatall,butlikeyousaid,they’restreetsmart.AndthersttimeIsawthistypeofclient,Ithought,“Wow!He’s
doingprettywell.Hedidn’tgotocollege,buthe’sgotallthisrealestate.”Andthenthere’sapatternthatdevelopswhere
you see a lot of people who never went to college but are street smart and have done very well.
Kim
Iwastalkingtoawomantheotherday.She’sahighlysuccessfulmedicaldoctor.She’sverysmartinmanyways,but
whenweweretalking,shenallylookedatmeandsaid,“Ohmygosh.Ihavenotaclueaboutmymoney.”
She’s45yearsold,andshehasnotaclue.Manytimesyouthinkthat,becausepeoplearesuccessful,theyknow
something about money. But they really don’t because they never had the education.
Andy
Schoolcreatesacultureofdependence.Wedependonthreethings.Wedependonacorporationtotakecareofus.
Wedependongovernmenttotakecareofus.And,thescaryoneIthinkis,wedependoninstitutions—youknow,the
peoplewhorunour401(k)s—totakecareofus.
We rob ourselves of the independence to think freely as entrepreneurs or investors, and we become dependent on those
three entities. It’s brutal.
Robert

Mr.Maloney,younevernishedschool,didyou?
Mike
No,no.Ifailedschool,butmorethanthat,schoolfailedme.Iwasdyslexic.

ConeofLearningprovidessomeinterestingclues.
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Cone of Learning
After 2 weeks we
tend to remember
90% of what we say
and do
70% of what we say
50% of what we hear
and see
30% of what we see
20% of what we hear
10% of what we read
Source: Cone of Learning adapted from Dale, (1969)
Doing the Real Thing
Simulating the
Real Experience
Doing a
Dramatic Presentation
Giving a Talk
Participating in a Discussion
Seeing it Done on Location
Watching a Demonstration
Looking at an Exhibit
Watching a Demonstration
Watching a Movie
Looking at Pictures
Hearing Words
Reading
Nature of Involvement

startedmyownbusiness—myownCPArm—andIwasnowself-employedandpayingmoretaxes.So,itwasn’t
untilIstartedactinglikeabiggerbusiness,andwasreallyasignicant-sizedbusiness,thatIstartedpayinglessintaxes.
It’sbecausethebusinessowners,theentrepreneurs,andtheinvestors—theactiveinvestors—reallypaytheleastamount
of taxes.
Time Out: e CASHFLOW Quadrant
InthiseBook,you’llhearalotaboutE,S,B&I,alsoknownastheCASHFLOWQuadrant.Estandsforemployee;
employeeshaveajob.Sstandsforself-employed,smallbusiness,orspecialistlikeadoctororalawyer.esepeople
ownajob.Bstandsforbigbusiness,500employeesormore,andthesepeoplehaveotherpeopleworkingforthem.
And I stands for investor, and investors have their money work for them.
Nowmypoordadalwayssaidtome,“Gotoschoolandgetajob.”Hewantedmetobecomeanemployeeora
specialist like a doctor or a lawyer. My rich dad said, “If you want to be rich, you have to be a business owner on the
B-Iside.”Andthat’sthedierencebetweenmyrichdadandmypoordad.
Robert
IfyoulookattheCASHFLOWQuadrant,youhavetheE,S,B,&Iquadrants.epeoplewhogotoschoolareon
theEandSside.eSstandsforspecialistlikeadoctororalawyer,andtheE’sareemployees.Butdoctorsandlawyers
paythehighesttaxes,right?
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Tom
Oh,byfar.It’stheself-employedpeoplebecause,notonlyaretheypayingthehighestincometaxes,theyalsogetthe
privilegeofpayingSocialSecuritytaxesandMedicaretaxesoneverythingtheyearn.So,they’repayingextrataxesjust
tobeinthatSquadrant.
Robert
Right. My mother wanted me to be a doctor. If I had followed that advice, I’d be paying the highest tax possible. ey
makealotofmoney,buttheypaythehighestpercentageintaxes.Sothat’swhythisrelatesbackto“gotoschool.”
Tom
at’s right. And they actually have the fewest options to reduce their taxes. But the tax laws are really geared towards
thosepeoplewhoarecreatingjobs,theentrepreneurs—thosewhoarecreatinghousing,realestateinvestors—because
the government understands that’s what we need. ey want the private sector to do that, and so they reward them for
doing so. And that’s really all the tax law is. It’s a system of rewards for people doing what the government wants you
to do.

right or wrong to be an employee, but I’d like to know what my options are.
Anita
Whenyouwereinschool,didtheysay,“Gotoschool,getyourdiploma,andbecomeanentrepreneur?”No.Imean
you’ll never hear that in the school system.
Kim
No,theysaid,“Workyourwayuptheladder,getthebiggerpaycheck,getabetterjob,andhigherpay.”
Anita
Butyou’reright.Getajobistheonlyoptionthatyou’llhearinschoolasarule.
Robert
AndjobstandsforJustOverBroke,youknow.
Tom
Tome,therealissuewithajobisthatit’sthehighest-riskprofessionyoucanhavebecauseyouonlyhaveoneclient.
WhenIstartedmybusiness15yearsago,itwasafterbeingredfromajob.WhatIrecognizedwasthatIhadno
controlovermylifebecauseIhadoneclient,myemployer,whereasnowIhavethousandsofclients.Now,ifoneclient
resme,it’snottheendoftheworld.Nowmyriskhasgonedownconsiderably,almosttonothing.Whenyouhavea
job,it’sjustahigh-riskplay.
Ken
Well, the other thing is, you’re in complete control. at’s the piece that I like.
Robert
You’reanentrepreneurbecausenobodywouldhireyou!(Grouplaughter.)
Ken
Butit’snice.Ifyou’regoingtolosesomebusiness,oryoudolosesomebusiness,youcangooutanddosomething.You
cangoout,generatebusiness,andllthatgap.
Robert
Financialsecurityismoreimportantthanjobsecurity.E’sandS’sgetpunishedformakingmistakes,ortheylosetheir
job.B’sandI’sgetricherfromtheirmistakesbecausetheylearnfromtheirmistakes.
20
Sacred Cow #3: Work Hard
e next sacred cow is work hard.
My poor dad, a schoolteacher, a great guy with his PhD, always said, “I’m a good, hardworking man.”

Canwebringinthebagsofcoinsrightnow?ankyou.
21
Kim
I’m not going to hold that!
Robert
I’llgiveyouanexample.Intheyear2000,onegoldcoincost$300.ishugebagI’mholdingis$300in
U.S.quarters.
Today,in2010,thatsamegoldcoincoststhousandsofdollarstobuy.Sothereasonpeoplehavetoworksohardto
keepupisbecausethevalueofourdollarsisgoingdown.einsanityofgettinganotherjob,payingmoretaxes,and
workingharderwhen HowmanydollarsdidtheFedprintin2009?
Mike
FromAugustof2008through2009,theycreatedabout1.5timesmorepaperdollarsthantheyprintedintheprevious
200 years.
Robert
So,that’swhypeopleareworkingharder,becausetheirmoneyisworthless.
Mike
Anditisn’tthecointhatchanged.Peopledon’tunderstandthatitisn’tthepricegoingup.It’sthevalueofthedollar
falling. It’s the currency that’s changing. e can of Campbell’s soup in the grocery store is the same can with the same
contentsfrombackin1950whenitcost15cents.Todayit’s$1.95orwhateveritis.What’schangedisthedollar’s
value, not the can of soup.
Robert
Sothat’swhytheruleshavechanged.In1971theU.S.dollarstoppedbeingmoneyandit
Mike
It became a currency. It became debt.
Robert
It became an IOU from the federal government. And the thing is, they can print as much as they like. e more they
print, the harder you have to work.
It all takes place in your head.
Takethisglasshere.Inthiscase,theglasshereis“context.”Itholdsthe“content,”inthiscase,thewater.E’sandS’s
haveadierentcontextthanB’sandI’s.Havingadierentcontext,E’sandS’sattractthesacredcowslike“goto

because we kept adding assets every year. And we continue to do the same thing today because it’s fun and exciting.
at’soneofthebest-keptsecrets—gettingrichisfun!
Kim

Itisfun!It’salotoffun.IfRobertandIwanttobuyaluxurylikeanewcar,werstacquireanasset.Soweacquirethe
asset and the cash ow from the asset pays for the car payment.
Soit’sneverlivingbelowyourmeans.It’sexpandingyourmeansthroughacquiringassetsthatgiveyoucashowthat
gives us all those good things in life.
23
Robert
epointhereisthis:ereareassetsandliabilities.ewayyouincreaseyourmeansistoacquiremoreassets—not
housesorcars—butassets.ereasonsomanypeoplestrugglenanciallyisthattheyhavenonancialeducation.ey
may be a good doctor or lawyer or accountant or rock star, but if they don’t know the dierence between assets and
liabilities and they keep buying liabilities instead of assets, they have to keep living below their means.
Ifyou’resingleornot,ifyou’reonaxedincome,ifyou’reanEandanS,yourincomeislimited.erearefourmajor
expensesthatkeepE’sandS’spoor.
Numberoneistax,andtaxesaregoingtogoupbecausetheFedisprintingsomuchmoneyallovertheworld.
Two is debt.Peopleleavecollegewithtonsofdebt,usecredit-carddebttomakeendsmeet,andthenusedebttobuy
their house because they think it’s an asset.
ree is ination. Ination goes up because, as taxes go up and prices go up, then ination goes up.
And fourth is retirement.Youmustputsomethingawayforthedaywhenyoustopworking.
osearethefourmainreasonsE’sandS’s,asageneralrule,havetolivebelowtheirmeans.Butifyouhavenancial
educationandliveontheB-Iside,youcanincreaseyourmeansbyincreasingcash-owingassets.
Andy
I think a lot of people accept mediocrity, and in order to be able to grow in business, in order to make more money,
you have to step out of that comfort zone and stop being mediocre.
Robert
Orhopingthegovernmentisgoingtosaveyou.Ithinklivingbelowyourmeansisoneofthegreatestspirit-killersthere
is.ere’salotofpeoplewholikebeingpoor.I’mnotmakingitrightorwrong,butthat’sdenitelynotwhatIliketo
do.KimandIdenitelydon’tlivebelowourmeans.

at’s why I think it’s absolutely criminal that our school system does not teach us much about money. And what
theydoteachusistoputyourmoneyinthebankwhichmeansyoulosemoremoney,andthentalktoanancial
plannerwho’llputyouintomutualfunds.atisnotnancialeducation.atiseducatingpeopletogivemore
money to the rich.
Kim
at will also cause you to have to live below your means. at’s what they’re training you to do. Create a budget.
Mike
Andwhileyou’reatit,you’regoingtopaymoreandmoreintaxesbecauseyougetnotaxbenetforlivingbelow
your means.
Robert
Andthat’saproblem.Yousaytoachild,“Gotoschoolandgetajob.Becomeadoctororalawyer.”atchildwillpay
more than his or her fair share of taxes and then will have to live below his or her means.
Marco
Ifyou’replayingdefenseinsteadofoense,you’rejusthidingandtryingtoplayitsafe,savingmoney,andyounever
manifest.Youcannotbewhoyou’resupposedtobe.
Kim

Isayit’stimetogetnanciallyeducatedandtakecareofyourself.
25
Sacred Cow #5: Save Money
e fth sacred cow is save money. In 1971 President Nixon took the dollar o the gold standard, essentially taking the world
o the gold standard, and money was no longer money. So people are no longer saving money. ey’re saving debt.
Robert
As I’ve said in my books for years, the big reason that savers are losers is very simply because in 1971 the dollar stopped
beingmoneyandbecamedebt.Right,Mike?
Mike
Yes,therulesallchangedin1971.Beforethen,whensomeonebecameworkingage,theycouldexpecttoputaway10
percent a year, and by the time they got into their 60s, they could retire on their savings account and expect to live o
that interest. In 1971, everything changed and they started creating currency on a massive scale.
Robert