(upbeat tempo) – So welcome back its Robert Kiyosaki with my dear friends’ daughter here Alexa. And we’re talking about
Millenials and money, and we gone through some lessons. I don’t know how many more, but let’s continue on
with another lesson here. And so we were talking about you know assets and liabilities, right? – Yes. And when you read Rich Dad Poor Dad I said your house is not an
asset what did you think? – Well, I think that’s a conception that many people believe, but as you demonstrated the last seminar that we went to in Argentina. My mom had her properties and she converted them into assets. Correct. – I think it just depends
on what you do with it and it would be great if you could show us how to turn your house into an asset. It’s very its really fundamentals. If I could go back I
probably covered it earlier, (marker rattling) but it’s a crucial
question and this is what financial education and
financial literacy really is. Again it starts with the financial
statement and I would say probably 95 percent of all
college graduates don’t know what a financial statement is. You took an accounting course right? – Yeah, I did. I know you go through parts of this, but I say to young people like
you there’s six basic words to financial literacy
and financial education. And the six words again are income, expense, asset, liability. See I don’t really care
about my FICO score a fico score just basically registers are you trustworthy with borrowing money, but a bank will never sel. I borrow in the hundreds
of millions of dollars. (chuckling) A fico score not gonna get me there okay. It’s so it’s kind of a
ruse I mean I don’t its, it’s important but not for me. So these are the four
words income, expense, asset, liability. Then the last two words
are the words cash flow. And that’s, why the
game is called cash flow (marker squeaking) and the secret to being rich
is not a college education, but can you control cash flow. And this is what cash flow in looks like. So this here you need this income, expense, asset, liability. (marker squeaking) Again this is you get a job
and this is my poor dad, go to school, get a job, get your PHD. And so this here is cash
flow so income comes in and it goes out this way. First line of expense is tax, but this is a poor
persons cash flow pattern. It’s not how much money
you make most people you know they. I don’t care if you what you have a Ph.D. or no school at all. They can’t control the cash flowing out through their expenses so that’s, why people like Susie or men say cut up your credit cards,
live below your means cause you’re a spend-a-holic. So that’s a poor person. This is a middle-class
persons cash flow patterns and this is where the house comes in. They, first thing you know most kids do when they get pay raise and all that they buy themselves a bigger house, now my house is an asset. Who tells you that? Your real estate agent of course! – Yeah. (Alexandra giggling) Right cause they they want to give you this false sense of security
while you’re getting screwed. – Exactly. Ya know but when you look at
what happens with the house a personal. I mean a personal residence that I live in the money comes in it goes
out and this is middle class, but also goes out through a mortgage. Mortgage payments, oh but
I don’t have a mortgage. You still have taxes you still you know. Hawaii just raised the
property taxes on me. Which is probably why I’m gonna sell. I’m gonna get out of Hawaii, but you have taxes and you have upkeep so monies always flowing out. So that’s why your house is
not an asset it’s because its taking money from your pocket. So very simply said assets
put money in my pocket, liabilities take money from my pocket. And then this here is, so I’m not saying don’t buy a house but here is a house that. And I started when I was
25 bought my first house it was an apartment with
an investment property. I didn’t live in it, I rented it out and it put money in my pocket. So very simple the definition
of asset and liability is not the house or this, its cash flow. Where is the cash flowing? So as a young person (Robert coughing) and to all millennials or if you’re old financial intelligence is the
ability to control cash flow. And that’s what they
don’t teach you at school. They tell you to go to school, get a job. First thing is tax you know, you’ll pay most of your money
will go out through taxes, in your lifetime. Then they tell you to buy a house, a car. Cars an asset, no cars a liability. You got insurance, gas,
upkeep, and all this. Now if you buy a, a taxi
car it could be an asset, its cash flow. And that’s very simply it, so this is a poor person. Money goes out there’s a lot we, we just interviewed some
national football league players who make millions of dollars in their 20s. And most of them are broke in two years because they can’t control cash flow. Intelligence IQ is can
you control cash flow not your college degree. College degrees are important, but they’re not gonna teach you this. So the cash flow game, trains you over and over and over again to get your money in here to
get the cash flow this way. So I started with this,
cost me 18,000 dollars. I paid for the credit card and
I put 25 dollars in my pocket okay. It’s an infinite return
because the cash flow paid for the mortgage, it paid the
expenses, pays the operating costs and I still made 25 dollars. Kim’s first year was the same, hers wasn’t 18,000 it was 50,000, 45,000 and it
put 25 dollars in her pocket, but Kim now owns 6,500 rental properties. And she pays no tax because
the income comes from here. – Mm-hmm If you have a job you pay tax, but income the rich get richer because when you have asset income taxes are less. You can get it down to zero if you want. But that’s financial intelligence, but can you control cash flow. Okay, so say that again. Assets what? – Assets put money into your pocket, liabilities take money out of your pocket. And so as a young person
you just focus on that so when you buying a new house, you’re gonna say is this
gonna take money or put money? You buy an apartment house
is it gonna take money or put money that’s it, its cash flow. Six most important words for
financial intelligence and IQ is income, expense, asset, liability, but its really cash flow. Now if I could bring up a
more horrible subject is, do you think people can
be assets or liabilities? – I think they could
be both, to be honest. So for most young people
they fall in love, they get married, they have kids. Is a child an asset or liability? – A child is definitely a liability. I’m not saying don’t have kids, but you gotta think the kid is expensive and they don’t get cheaper. They get more expensive every year, you know then they go to college and then it gets even more expensive. So a human being now this
sounds horrible to all those socialists and communists out there, but the fact is kids cost money. But as an old guy, I want
you to think about this as I get older as people get older family members become liabilities. So I have a friend whose
mother thank god she had long term I don’t know what they call it, but they just canceled it on her. She can go to a old age home and I think the price is 18,000 a month. Most so that as a young person
as your parents get older the question is can I afford
to spend 20,000 dollars a month on my mom or my dads’ long
term healthcare, yes or no? – No, not right now. No so. – No. And this is gonna happen to my generation many people don’t realize, but there brothers or
sisters or sisters kids and all this become liabilities to them. So as a person whose fairly well off, I’m and Kim and my
friends are thinking about two legged liabilities. So I know today that if
my sisters become ill I’m the one with the money
and it’s my responsibility to pay for them. Same as my brothers and their kids. So these are things that people
don’t think about a lot of times is what happens
not only as they grow up, but what happens as they age. Statistics show the average
person in my generation lets say have a million dollars. 80 percent of that million dollars will be gone the last two years of life. Because medical expenses go
through the roof and today insurance companies are canceling. I forgot the name of it, but my friends’ mother
it was just canceled. So he doesn’t have 18,000 a month so he had to bring his
mother into his house and you know create
another room and all this. Well, I love her which he
does but shes a big liability and all he had was savings. So the savings are being depleted
going out this way, okay? So with your question
about houses and people, but people are also
assets and liabilities. For most people with our favorite subject, a 401K is it asset or liability? – From what I’ve learned from you its definitely a liability. Or an IRA or a pension cause
it’s always going out this way. There’s no guarantee it’ll be there. So this is the basic of
financial intelligence, financial literacy stuff like this. Another thing about people
is you have a bad advisor, like a bad financial planner, or a crook, or a business partner that’s a crook, a wife that’s a crook and all of that. They can be human liabilities. I have two friends right
now who just joined a million-dollar club. They married beautiful women, got divorced and the women is now costing
a million dollars a year in alimony. So their beautiful wife and the
child support it’s a million dollars going and she’s only 40 years old. So she has a whole pile of boyfriends, but it’s costing him a
million dollars a year for her boyfriends. I said I wanna be her boyfriend. (both laughing) not really you know. That make sense to you? – Yeah, it makes sense. Financial IQ is can you control cash flow. IQ means how big a problem can you solve so if like my friend whose
mother is now costing him 18,000 dollars a month. Well, thank
God he has about 100,000 in savings but in one year its gone. – Yeah. That’s not high IQ, but for myself 18,000 dollars a month I ain’t gonna make that much
cash flow pretty easily. – yeah. okay. So when you’re like in your 20s per, well how am I going to make. Let’s say by the time
probably a 100,000 a month to take care of my parents, because like it or not its cash flow and they become liabilities. And the problem is getting worse
or because the bond markets are not providing income. So many insurance companies
have to renege on their promises to provide the cash flow to
take care of our loved ones the same as medical. – Wow. And so that’s why when people
say I’m gonna go out on my own and do all these things they’re
kinda doing what they love. Which is good, but they’ve
really gotta think about how many liabilities do they have. It’s not just your rent you know, it’s your family and so for me (marker tapping) and for Kim. We have family members, but they’re liabilities so
that’s why we stay over here. Hopefully, nothing will go wrong, but if one of my sisters got ill and she needs 100,000 a month
at least can provide it. – Yeah. otherwise she they go they go indigent whatever they call it kay. – Yeah. Any other comments or questions? – No thank you for sharing so much about this content and all this information. That’s gonna be super
valuable for all my friends and all the Millenials
out there just like me. So I have two friends that
are in the million-dollar a year club, it doesn’t mean
they’re making a million dollars it’s their wives
are taking a million dollars a year out of their pockets
and their kids and all this. And I go you should of thought
about that 20 years ago. – Yeah. But you don’t cause your in
love and you’re gonna have kids and gonna make it together. – mm-hmm. But your parents offer great role models. So once again the six
words you have to know and be masters at income, expense, asset, liability, cash flow. You can control cash flow
that’s financial intelligence, financial IQ and financial literacy, okay? – Okay. Thank you.


  • Ok I'm a single dad of two, I work day to day and have no credit, I don't use banks and pretty much everything I make goes to raising my kids and all the other bs. where do you start if you dont have much to start with in the first place, the system is designed to keep us in a rut, it seems like it's all a trap unless you have a lil money to start with and do smart things with it. I'm exhausted with the way all this crap works, tired of selling my time and my mental energy on the rat race

  • My best advice to you. Never ever own a credit card, don’t lease a car, do not buy a new car, only 1 or 2 years old. And don’t buy a house that takes 30% of your Net income and not gross. Don’t fall for the trap helping the economy by having an itchy hand and spend spend spend, every weekend eating out, buying stuff on sale 80% that you don’t need. If you fall, u will fall alone.

  • Kids are not liabilities.ask Japan they don't have enough workforce for next 50 years.its a loss in long-term.
    They become liabilities if you have too many of them

  • The little girl in this presentation is a liability as opposed to an asset as she contributes 0. I am sure he enjoys looking at her BUT her dubious presence is just not necessary . .

  • He repeats himself. Basically says the same thing every time. But looking at the comments here, maybe he needs to. No one seems to be getting this simple message of invest in income producing assets and control the liability. When the world is loosing middle class so fast like we have currently and the only reason is because people are not understanding this simple message, i question people’s taste for making jokes about this. I retired at age fifty four years ago. I practiced what he teaches. I am not helping people like he does, but at least I am not laughing.

  • But how can I get out of where I am now when I'm already hand to mouth? I can't even afford a house for myself let alone investing?

  • I will never consider my family members as my liabilities, because my asset is my sound mind and my health wellbeing. Only my loved ones can give me that kind of intangible assets!

  • Got initially intrigued by another video… yet found no profound message in the basic economic principals. Did however find multiple holes in the interpretation. For example, where will you be with 6,5k properties in an economic melt down? (BTW, tell your friend that is paying 18k per month for his mother's care, to employ an in-house keeper for less than 18k per year…). In my experience, the answer is rather maintaining a life in balance – living within your means …and be rather sceptical to all the "stuff" marketeers are trying to convince you are the elements in achieving happiness.

  • I understand him but where does he get the initial money to buy a house or a car before converting into an asset in the beginning man? Doesn't it mean you must first enter into a liability ie loan in order to do such?

  • This dude is a POS. He talks about human beings (kids) as financial issues and doesnt like paying his fair share. He just wants to use public resources without compensation.

  • Yea in china they throw away their kids and their elders. Let them die is what they do. Humans is a liability we have to learn to live with and love.

  • But how do you acquire the asset to rent out in the 1st place. Save up? That would take decades, considering the fact that land and house rates increase consistently. Or take loans? which would give you a liability in the form of interest rates, which we either pay from the rent of the asset, or from our salary.

  • I get it! Anything that return the fake money to the depository aka bank is liability. 😂 so money is liability, is debt, you can read it on every bill; “this note is a legal tender for all debts, public and private. The federal reserve prints bills every day, also bills are burned and destroyed. If there is a lot of bills in people’s hands then taxes go up to make bills go back. The only way to beat the banks is to have a thing that has real value that redirects the flow towards you no the banks. But once you have flow towards you. You do not save it all I n one basket because inflation will take it away through the time. You need the strategy to put bills to flow towards you so they can pay for the lifestyle you want but also to flow to contribute for a good cause. The more money 💰 you can move it towards a vision or visions the more wealthy you become. The mind blowing of it is that money literally don’t really touch your hands, money doesn’t belongs to you, belongs to the Federal reserve, so you win the money game when you create or use strategies to redirect money towards many visions, goals as possible before it get back to the fed. I am aware of what is money, now I need to know how to become wealthy.💰💰💰🤓😎

  • so then should you rent or buy a home for principle residence. Yes "cash" is going out while you're paying mortgage, but if you're in a market where the property is appreciating, then what's the right call?

  • Sir,i had read your book rich dad poor dad and it has gret impact on my life,thank you so much sir for giving us the financial knowledge of how we can make money work for us.

  • So he mortgaged for 18000 dolloars and rented for 25 dolloars
    But the following standard renting procedures the dude who he rented it out too keeps paying until it reaches 18000

  • Fo a negro, having another baby is cash flow/asset. Da mo kids yo have, da mo money uncly Sam do put in ma pocket and yo dummies white peoples paid fo it. lol 😂 😆 😝

  • The question is when he brought his first house when he was 25 how did he would have got money to do that?

    He took a loan?
    Then it's obvious that money don't come in his pocket it goes to the bank. May be he was paying extra to the bank if the rent didn't meet the Emi.

    Second I'd he got this money from his parents then obviously he is rich then money buys money.

    If he would have a job to earn that much money I don't buy that.

  • Is there's any concept of Good Liabilities and bad liabilities? Based on if good liabilities supports you to create better assets, like parents

  • Alot of ppl in YouTube talking about how they rented their property which brought them income out of rent, post paying EMI + maintenance cost… huh? How?

    So the renter never thought buying a apartment was cheaper than renting?

  • My daughter wants to make 5000.00 in a year to go on a school trip to spain. She wants to mow lawns, shovel snow and rake leaves to make that money but she needs to buy a lawn mower. I just realized that I can turn my child from a liability to an assest. I can buy her the lawn mower, then tell her she needs to pay be pack with interest. But, this seems wrong. Maybe I should just buy her the lawn mower and think of it as a way of onvesting in her future teaching her to never be afraid to ask for help. hmmm….

  • If everybody will get all focussed over money, who is gonna treat the patients, build the infrastructure that you call assets, do medical research & invent things?

  • Are people really so stupid to fall for this obvious con sales pitch?  What dad with a PHD who owns his own house tells his son that he is a fauilure and so his son should go and learn from his friends dad whos a school drop out, would NEVER happen in real life, this is all a big fat con to get suckers to buy shit.

  • This whole concept is predicated on having thousands of people who do not do what this man says and remain the "poor person" that he speaks of. Everyone cannot rent out homes. Someone has to actually rent the dang things. I am no expert but society needs many many many people to have "jobs". Jobs are what get things done. Everyone cannot be the boss. Someone has to do the work. This man is leveraging other peoples time and work for his gain. It is exactly how to become wealthy in our current society however not everyone can do this or this whole concept does not work. Its neither good or bad. It is what it is. His system will help a few but those people probably would succeed either way because they possess the where-with-all to get things accomplished. These days I am suspicious of anyone as wealthy as this guy claims to be selling a book or charging for seminars.

  • I would earn or value money to a point where I don't have to think in dream that my family means liability… They are my motivations to generate my cash flow 🙂

  • My 7 year old daughter has been taught what an asset is and what a liability is. She knows her aunts new car is a doo dad liability; and our rental property is an asset. Started her on her journey to financial freedom, lets just hope she follows through and has the discipline to do the right things.

  • This isn't easy to watch, people are a liability, its' a hard fact to accept and face…

  • Ok if I had millions of dollars I could do what you do but honestly there is no bank in the United States won't give me anything but if I had the money I could do what you do

  • The parents u r saying are ur liability should have took u as a liability. Before this moment I had respect for u. For whom you're earning? Children are liability, parents are liability and die with all the money you've earned and try to take that money with u when u die.

  • It’s very difficult to find positive geared properties. Tightening credit and deposit requirements further impacts on positive geared property.

  • Cash flow fortifications. The biggest payoffs are solidifying your property ownership, less the taxes. It's not enough to bend like a reed in the wind you'll have to cultivate a field to weather the climate as well.

    Thank you for your wisdom rich dad.

  • What about the deductions which u can make on your 1040 for property taxes paid?? Ur teaching part of the thing… First u need to understand tax in all its entirety. I don't agree with him as he is not well read on US tax… False teaching…

  • Not to be overly critical, but there was no explanation on how to convert (as the title implied). – Yes, there were statements on what could be either (and how they are such), but not on how to convert from liability to asset. – Unless it was the very subtly implied "Turn your family members into employees driving your vehicle to ferry others (as a type of taxi service)." statement.

  • In order to get were these people have made it you need to unlearn what youve learned. Basically you need to get out of your poor mindset that you were taught and then reteach yourself what you need to know to get a rich mindset. To the people that disagree with this dont understand this for them I hope they understand. Then for the 1 percent that see this and disagree means they are afraid that we will become one part of the one percent and this gives them fear of compitition

  • Wow, thank you, you explained what I have been trying to figure out. I never thought that the people around you can become liabilities. On the other hand, if they are wealthy, they can become your assets.

  • If you are here, just remember the chances of being even born a human is 1 to 750,000,000,000,000,000 and being here watching this video with 2 mil views is just incredible. So remember how lucky you are and take this info in and go out there and live to your fullest! 😀

  • So here is my million dollar question. When the economy collapses and the real estate market declines which it will as well. Where do I want to be other than PM’s?? We will need to look to take advantage of declining asset prices but what will we purchase them with if the dollar is tanking like Venezuela??

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