Chapter One - LESSON 1

THE RICH DON’T WORK FOR MONEY

The poor and the middle class work for money.
 

The rich have money work for them.

“Dad, can you tell me how to get rich?” My dad put down the evening paper. “Why do you want to get rich, Son?”

“Because today Jimmy’s mom drove up in their new Cadillac, and they were going to their beach house for the weekend. He took three of his friends, but Mike and I weren’t invited. They told us we weren’t invited because we were poor kids.”

“They did?” my dad asked incredulously.

“Yeah, they did,” I replied in a hurt tone.

My dad silently shook his head, pushed his glasses up the bridge of his nose, and went backto reading the paper. I stood waiting for an answer.

The year was 1956. I was nine years old. By some twist of fate, I attended the same publicschool where the rich people sent their kids. We were primarily a sugar-plantation town. The managers of the plantation and the other affluent people, such as doctors, businessowners, and bankers, sent their children to this elementary school. After grade six, theirchildren were generally sent off to private schools. Because my family lived on one side ofthe street, I went to this school.

Had I lived on the other side of the street, I would have gone to a different school with kidsfrom families more like mine. After grade six, these kids and I would go on to the publicintermediate and high school. There was no private school for them or for me. My dadfinally put down the paper. I could tell he was thinking.

“Well, Son… ,” he began slowly. “If you want to be rich, you have to learn to make money.”

“How do I make money?” I asked.

“Well, use your head, Son,” he said, smiling. Even then I knew that really meant, “That’s all

I’m going to tell you,” or “I don’t know the answer, so don’t embarrass me.”

A Partnership Is Formed

The next morning, I told my best friend, Mike, what my dad had said. As best as I could tell, Mike and I were the only poor kids in this school. Mike was also in this school by a twist offate. Someone had drawn a jog in the line for the school district, and we wound up in schoolwith the rich kids. We weren’t really poor, but we felt as if we were because all the otherboys had new baseball gloves, new bicycles, new everything.

Mom and Dad provided us with the basics, like food, shelter, and clothes. But that wasabout it. My dad used to say, “If you want something, work for it.” We wanted things, butthere was not much work available for nine-year-old boys.

“So what do we do to make money?” Mike asked.

“I don’t know,” I said. “But do you want to be my partner?”

He agreed, and so on that Saturday morning, Mike became my first business partner. Wespent all morning coming up with ideas on how to make money. Occasionally we talkedabout all the “cool guys” at Jimmy’s beach house having fun. It hurt a little, but that hurt wasgood, because it inspired us to keep thinking of a way to make money. Finally, thatafternoon, a bolt of lightning struck. It was an idea Mike got from a science book he hadread. Excitedly, we shook hands, and the partnership now had a business.

For the next several weeks, Mike and I ran around our neighborhood, knocking on doors andasking our neighbors if they would save their toothpaste tubes for us. With puzzled looks,most adults consented with a smile. Some asked us what we were doing, to which wereplied, “We can’t tell you. It’s a business secret.”

My mom grew distressed as the weeks wore on. We had selected a site next to her washingmachine as the place we would stockpile our raw materials. In a brown cardboard box thatat one time held catsup bottles, our little pile of used toothpaste tubes began to grow.

Finally my mom put her foot down. The sight of her neighbors’ messy, crumpled, usedtoothpaste tubes had gotten to her. “What are you boys doing?” she asked. “And I don’t wantto hear again that it’s a business secret. Do something with this mess, or I’m going to throw it out.”

Mike and I pleaded and begged, explaining that we would soon have enough and then wewould begin production. We informed her that we were waiting on a couple of neighbors tofinish their toothpaste so we could have their tubes. Mom granted us a one-week extension.

The date to begin production was moved up, and the pressure was on. My first partnershipwas already being threatened with an eviction notice by my own mom! It became Mike’s jobto tell the neighbors to quickly use up their toothpaste, saying their dentist wanted them tobrush more often anyway. I began to put together the production line.

One day my dad drove up with a friend to see two nine-year-old boys in the driveway with aproduction line operating at full speed. There was fine white powder everywhere. On a longtable were small milk cartons from school, and our family’s hibachi grill was glowing withred-hot coals at maximum heat.

Dad walked up cautiously, having to park the car at the base of the driveway since theproduction line blocked the carport. As he and his friend got closer, they saw a steel potsitting on top of the coals in which the toothpaste tubes were being melted down. In thosedays, toothpaste did not come in plastic tubes. The tubes were made of lead. So once thepaint was burned off, the tubes were dropped in the small steel pot. They melted until theybecame liquid, and with my mom’s pot holders, we poured the lead through a small hole inthe top of the milk cartons.

The milk cartons were filled with plaster of paris. White powder was everywhere. In myhaste, I had knocked the bag over, and the entire area looked like it had been hit by asnowstorm. The milk cartons were the outer containers for plaster of paris molds.

My dad and his friend watched as we carefully poured the molten lead through a small holein the top of the plaster of paris cube.

“Careful,” my dad said.

I nodded without looking up.

Finally, once the pouring was through, I put the steel pot down and smiled at my dad.

“What are you boys doing?” he asked with a cautious smile.

“We’re doing what you told me to do. We’re going to be rich,” I said.

“Yup,” said Mike, grinning and nodding his head. “We’re partners.”

“And what is in those plaster molds?” my dad asked.

“Watch,” I said. “This should be a good batch.”

With a small hammer, I tapped at the seal that divided the cube in half. Cautiously, I pulled up the top half of the plaster mold and a lead nickel fell out.”

“Oh, my God!” my dad said. “You’re casting nickels out of lead.” “That’s right,” Mike said.

“We’re doing as you told us to do. We’re making money.”

My dad’s friend turned and burst into laughter. My dad smiled and shook his head. Alongwith a fire and a box of spent toothpaste tubes, in front of him were two little boys coveredwith white dust smiling from ear to ear.

He asked us to put everything down and sit with him on the front step of our house. With asmile, he gently explained what the word “counterfeiting” meant.

Our dreams were dashed. “You mean this is illegal?” asked Mike in a quivering voice.

“Let them go,” my dad’s friend said. “They might be developing a natural talent.”

My dad glared at him.

“Yes, it is illegal,” my dad said gently. “But you boys have shown great creativity and

original thought. Keep going. I’m really proud of you!”

Disappointed, Mike and I sat in silence for about twenty minutes before we began cleaningup our mess. The business was over on opening day. Sweeping the powder up, I looked at Mike and said, “I guess Jimmy and his friends are right. We are poor.”

My father was just leaving as I said that. “Boys,” he said. “You’re only poor if you give up. The most important thing is that you did something. Most people only talk and dream ofgetting rich. You’ve done something. I’m very proud of the two of you. I will say it again: Keep going. Don’t quit.”

Mike and I stood there in silence. They were nice words, but we still did not know what todo.

“So how come you’re not rich, Dad?” I asked.

“Because I chose to be a schoolteacher. Schoolteachers really don’t think about being rich. We just like to teach. I wish I could help you, but I really don’t know how to make money.”

Mike and I turned and continued our cleanup.

“I know,” said my dad. “If you boys want to learn how to be rich, don’t ask me. Talk to your dad, Mike.”

“My dad?” asked Mike with a scrunched-up face.

“Yeah, your dad,” repeated my dad with a smile. “Your dad and I have the same banker, and he raves about your father. He’s told me several times that your father is brilliant when it comes to making money.”

“My dad?” Mike asked again in disbelief. “Then how come we don’t have a nice car and a nice house like the rich kids at school?”

“A nice car and a nice house don’t necessarily mean you’re rich or you know how to make money,” my dad replied. “Jimmy’s dad works for the sugar plantation. He’s not much different from me. He works for a company, and I work for the government. The company buys the car for him. The sugar company is in financial trouble, and Jimmy’s dad may soon have nothing. Your dad is different, Mike. He seems to be building an empire, and I suspect in a few years he will be a very rich man.”

With that, Mike and I got excited again. With new vigor, we began cleaning up the messcaused by our now-defunct first business. As we were cleaning, we made plans for how andwhen to talk to Mike’s dad. The problem was that Mike’s dad worked long hours and oftendid not come home until late. His father owned warehouses, a construction company, a chainof stores, and three restaurants. It was the restaurants that kept him out late.

Mike caught the bus home after we had finished cleaning up. He was going to talk to his dadwhen he got home that night and ask him if he would teach us how to become rich. Mikepromised to call as soon as he had talked to his dad, even if it was late.

The phone rang at 8:30 p.m.

“Okay,” I said. “Next Saturday.” I put the phone down. Mike’s dad had agreed to meet with us.

On Saturday I caught the 7:30 a.m. bus to the poor side of town.

The Lessons Begin

Mike and I met with his dad that morning at eight o’clock. He was already busy, having beenat work for more than an hour. His construction supervisor was just leaving in his pickuptruck as I walked up to his simple, small, and tidy home. Mike met me at the door.

“Dad’s on the phone, and he said to wait on the back porch,” Mike said as he opened the door.

The old wooden floor creaked as I stepped across the threshold of the aging house. Therewas a cheap mat just inside the door. The mat was there to hide the years of wear fromcountless footsteps that the floor had supported. Although clean, it needed to be replaced.

I felt claustrophobic as I entered the narrow living room that was filled with old mustyoverstuffed furniture that today would be collectors’ items. Sitting on the couch were twowomen, both a little older than my mom. Across from the women sat a man in workman’sclothes. He wore khaki slacks and a khaki shirt, neatly pressed but without starch, andpolished work boots. He was about 10 years older than my dad. They smiled as Mike and Iwalked past them toward the back porch. I smiled back shyly.

“Who are those people?” I asked.

“Oh, they work for my dad. The older man runs his warehouses, and the women are the managers of the restaurants. And as you arrived, you saw the construction supervisor who is working on a road project about 50 miles from here. His other supervisor, who is building a track of houses, left before you got here.”

“Does this go on all the time?” I asked.

“Not always, but quite often,” said Mike, smiling as he pulled up a chair to sit down next to me.

“I asked my dad if he would teach us to make money,” Mike said.

“Oh, and what did he say to that?” I asked with cautious curiosity.

“Well, he had a funny look on his face at first, and then he said he would make us an offer.”

“Oh,” I said, rocking my chair back against the wall. I sat there perched on two rear legs of the chair.

Mike did the same thing.

“Do you know what the offer is?” I asked.

“No, but we’ll soon find out.”

Suddenly, Mike’s dad burst through the rickety screen door and onto the porch. Mike and Ijumped to our feet, not out of respect, but because we were startled.

“Ready, boys?” he asked as he pulled up a chair to sit down with us.

We nodded our heads as we pulled our chairs away from the wall to sit in front of him.

He was a big man, about six feet tall and 200 pounds. My dad was taller, about the sameweight, and five years older than Mike’s dad. They sort of looked alike, though not of thesame ethnic makeup. Maybe their energy was similar.

“Mike says you want to learn to make money? Is that correct, Robert?”

I nodded my head quickly, but with a little trepidation. He had a lot of power behind hiswords and smile.

“Okay, here’s my offer. I’ll teach you, but I won’t do it classroom-style. You work for me, I’ll teach you. You don’t work for me, I won’t teach you. I can teach you faster if you work, and I’m wasting my time if you just want to sit and listen like you do in school. That’s my offer. Take it or leave it.”

“Ah, may I ask a question first?” I asked.

“No. Take it or leave it. I’ve got too much work to do to waste my time. If you can’t make up your mind decisively, then you’ll never learn to make money anyway. Opportunities come and go. Being able to know when to make quick decisions is an important skill. You have the opportunity that you asked for. School is beginning, or it’s over in 10 seconds,” Mike’s dad said with a teasing smile.

“Take it,” I said.

“Take it,” said Mike.

“Good,” said Mike’s dad. “Mrs. Martin will be by in 10 minutes. After I’m through with her, you’ll ride with her to my superette and you can begin working. I’ll pay you 10 cents an hour, and you’ll work three hours every Saturday.”

“But I have a softball game today,” I said.

Mike’s dad lowered his voice to a stern tone. “Take it, or leave it,” he said. “I’ll take it,” Ireplied, choosing to work and learn instead of playing.

Thirty Cents Later

By 9:00 a.m. that day, Mike and I were working for Mrs. Martin. She was a kind and patientwoman. She always said that Mike and I reminded her of her two grown sons. Althoughkind, she believed in hard work and kept us moving. We spent three hours taking canned goods off the shelves, brushing each can with a feather duster to get the dust off, and then restacking them neatly. It was excruciatingly-boring work.

Mike’s dad, whom I call my rich dad, owned nine of these little superettes, each with a largeparking lot. They were the early version of the 7-Eleven convenience stores, littleneighborhood grocery stores where people bought items such as milk, bread, butter, andcigarettes. The problem was that this was Hawaii before air-conditioning was widely used,and the stores could not close their doors because of the heat. On two sides of the store, thedoors had to be wide open to the road and parking lot. Every time a car drove by or pulledinto the parking lot, dust would swirl and settle in the store. We knew we had a job as longas there was no air-conditioning.

For three weeks, Mike and I reported to Mrs. Martin and worked our three hours. By noon,our work was over, and she dropped three little dimes in each of our hands. Now, even atthe age of nine in the mid- 1950s, 30 cents was not too exciting. Comic books cost 10 centsback then, so I usually spent my money on comic books and went home.

By Wednesday of the fourth week, I was ready to quit. I had agreed to work only because Iwanted to learn to make money from Mike’s dad, and now I was a slave for 10 cents anhour. On top of that, I had not seen Mike’s dad since that first Saturday.

“I’m quitting,” I told Mike at lunchtime. School was boring, and now I did not even have my Saturdays to look forward to. But it was the 30 cents that really got to me. This time Mike smiled.

“What are you laughing at?” I asked with anger and frustration.

“Dad said this would happen. He said to meet with him when you were ready to quit.”

“What?” I said indignantly. “He’s been waiting for me to get fed up?”

“Sort of,” Mike said. “Dad’s kind of different. He doesn’t teach like your dad. Your mom and dad lecture a lot. My dad is quiet and a man of few words. You just wait till this Saturday. I’ll tell him you’re ready.”

“You mean I’ve been set up?”

“No, not really, but maybe. Dad will explain on Saturday.”

Waiting in Line on Saturday

I was ready to face Mike’s dad. Even my real dad was angry with him. My real dad, the one I call the poor one, thought that my rich dad was violating child labor laws and should beinvestigated.

My educated, poor dad told me to demand what I deserve—at least 25 cents an hour. Mypoor dad told me that if I did not get a raise, I was to quit immediately.

“You don’t need that damned job anyway,” said my poor dad with indignation.

At eight o’clock Saturday morning, I walked through the door of Mike’s house when Mike’sdad opened it.

“Take a seat and wait in line,” he said as I entered. He turned and disappeared into his little office next to a bedroom.

I looked around the room and didn’t see Mike anywhere. Feeling awkward, I cautiously satdown next to the same two women who were there four weeks earlier. They smiled and sliddown the couch to make room for me.

Forty-five minutes went by, and I was steaming. The two women had met with him and left 30 minutes earlier. An older gentleman was in there for 20 minutes and was also gone.

The house was empty, and here I sat in a musty, dark living room on a beautiful sunny Hawaiian day, waiting to talk to a cheapskate who exploited children. I could hear himrustling around the office, talking on the phone, and ignoring me. I was ready to walk out, butfor some reason I stayed.

Finally, 15 minutes later, at exactly nine o’clock, rich dad walked out of his office, saidnothing, and signaled with his hand for me to enter.

“I understand you want a raise, or you’re going to quit,” rich dad said as he swiveled in his office chair.

“Well, you’re not keeping your end of the bargain,” I blurted out, nearly in tears. It was really frightening for me to confront a grown-up.

“You said that you would teach me if I worked for you. Well, I’ve worked for you. I’ve worked hard. I’ve given up my baseball games to work for you, but you haven’t kept your word, and you haven’t taught me anything. You are a crook like everyone in town thinks you are. You’re greedy. You want all the money and don’t take care of your employees. You made me wait and don’t show me any respect. I’m only a little boy, but I deserve to be treated better.”

Rich dad rocked back in his swivel chair, hands up to his chin, and stared at me. “Not bad,” he said. “In less than a month, you sound like most of my employees.”

“What?” I asked. Not understanding what he was saying, I continued with my grievance. “I thought you were going to keep your end of the bargain and teach me. Instead you want to torture me? That’s cruel. That’s really cruel.”

“I am teaching you,” rich dad said quietly.

“What have you taught me? Nothing!” I said angrily. “You haven’t even talked to me once since I agreed to work for peanuts. Ten cents an hour. Hah! I should notify the government about you. We have child labor laws, you know. My dad works for the government, you know.”

“Wow!” said rich dad. “Now you sound just like most of the people who used to work for me—people I’ve either fired or who have quit.”

“So what do you have to say?” I demanded, feeling pretty brave for a little kid. “You lied to me. I’ve worked for you, and you have not kept your word. You haven’t taught me anything.”

“How do you know that I’ve not taught you anything?” asked rich dad calmly.

“Well, you’ve never talked to me. I’ve worked for three weeks and you have not taught me anything,” I said with a pout.

“Does teaching mean talking or a lecture?” rich dad asked.

“Well, yes,” I replied.

“That’s how they teach you in school,” he said, smiling. “But that is not how life teaches you, and I would say that life is the best teacher of all. Most of the time, life does not talk to you. It just sort of pushes you around. Each push is life saying, ‘Wake up. There’s something I want you to learn.’”

“What is this man talking about?” I asked myself silently. “Life pushing me around was life talking to me?” Now I knew I had to quit my job. I was talking to someone who needed to be locked up.

“If you learn life’s lessons, you will do well. If not, life will just continue to push you around. People do two things. Some just let life push them around. Others get angry and push back. But they push back against their boss, or their job, or their husband or wife. They do not know it’s life that’s pushing.”

I had no idea what he was talking about.

“Life pushes all of us around. Some people give up and others fight. A few learn the lesson and move on. They welcome life pushing them around. To these few people, it means they need and want to learn something. They learn and move on. Most quit, and a few like you fight.”

Rich dad stood and shut the creaky old wooden window that needed repair. “If you learn thislesson, you will grow into a wise, wealthy, and happy young man. If you don’t, you willspend your life blaming a job, low pay, or your boss for your problems. You’ll live lifealways hoping for that big break that will solve all your money problems.”

Rich dad looked over at me to see if I was still listening. His eyes met mine. We stared ateach other, communicating through our eyes. Finally, I looked away once I had absorbed his message. I knew he was right. I was blaming him, and I did ask to learn. I was fighting.

Rich dad continued, “Or if you’re the kind of person who has no guts, you just give up everytime life pushes you. If you’re that kind of person, you’ll live all your life playing it safe,doing the right things, saving yourself for some event that never happens. Then you die aboring old man. You’ll have lots of friends who really like you because you were such anice hardworking guy. But the truth is that you let life push you into submission. Deep downyou were terrified of taking risks. You really wanted to win, but the fear of losing wasgreater than the excitement of winning. Deep inside, you and only you will know you didn’tgo for it. You chose to play it safe.”

Our eyes met again.

“You’ve been pushing me around?” I asked.

“Some people might say that,” smiled rich dad. “I would say that I just gave you a taste of life.”

“What taste of life?” I asked, still angry, but now curious and ready to learn.

“You boys are the first people that have ever asked me to teach them how to make money. I have more than 150 employees, and not one of them has asked me what I know about money. They ask me for a job and a paycheck, but never to teach them about money. So most will spend the best years of their lives working for money, not really understanding what it is they are working for.”

I sat there listening intently.

“So when Mike told me you wanted to learn how to make money, I decided to design a course that mirrored real life. I could talk until I was blue in the face, but you wouldn’t hear a thing. So I decided to let life push you around a bit so you could hear me. That’s why I only paid you 10 cents.”

“So what is the lesson I learned from working for only 10 cents an hour?” I asked. “That you’re cheap and exploit your workers?”

Rich dad rocked back and laughed heartily. Finally he said, “You’d best change your pointof view. Stop blaming me and thinking I’m the problem. If you think I’m the problem, thenyou have to change me. If you realize that you’re the problem, then you can change yourself,learn something, and grow wiser. Most people want everyone else in the world to changebut themselves. Let me tell you, it’s easier to change yourself than everyone else.”

“I don’t understand,” I said.

“Don’t blame me for your problems,” rich dad said, growing impatient.

“But you only pay me 10 cents.”

“So what are you learning?” rich dad asked, smiling.

“That you’re cheap,” I said with a sly grin.

“See, you think I’m the problem,” said rich dad.

“But you are.”

“Well, keep that attitude and you’ll learn nothing. Keep the attitude that I’m the problem and what choices do you have?”

“Well, if you don’t pay me more or show me more respect and teach me, I’ll quit.”

“Well put,” rich dad said. “And that’s exactly what most people do. They quit and go looking for another job, a better opportunity, and higher pay, actually thinking that this will solve the problem. In most cases, it won’t.”

“So what should I do?” I asked. “Just take this measly 10 cents an hour and smile?”

Rich dad smiled. “That’s what the other people do. But that’s all they do, waiting for a raisethinking that more money will solve their problems. Most just accept it, and some take asecond job working harder, but again accepting a small paycheck.”

I sat staring at the floor, beginning to understand the lesson rich dad was presenting. I could sense it was a taste of life. Finally, I looked up and asked, “So what will solve the problem?”

“This,” he said, leaning forward in his chair and tapping me gently on the head. “This stuff between your ears.”

It was at that moment that rich dad shared the pivotal point of view that separated him fromhis employees and my poor dad—and led him to eventually become one of the richest men in Hawaii, while my highly educated but poor dad struggled financially all his life. It was asingular point of view that made all the difference over a lifetime.

Rich dad said this point of view over and over, which I call lesson number one:  The poorand the middle class work for money. The rich have money work for them.

On that bright Saturday morning, I learned a completely different point of view from what Ihad been taught by my poor dad. At the age of nine, I understood that both dads wanted me tolearn. Both dads encouraged me to study, but not the same things.

My highly educated dad recommended that I do what he did. “Son, I want you to study hard,get good grades, so you can find a safe, secure job with a big company. And make sure it hasexcellent benefits.” My rich dad wanted me to learn how money works so I could make itwork for me.

These lessons I would learn through life with his guidance, not because of a classroom.

My rich dad continued my first lesson, “I’m glad you got angry about working for 10 cents anhour. If you hadn’t got angry and had simply accepted it, I would have to tell you that I couldnot teach you. You see, true learning takes energy, passion, and a burning desire.

Anger is a big part of that formula, for passion is anger and love combined. When it comesto money, most people want to play it safe and feel secure. So passion does not direct them.

Fear does.” “So is that why they’ll take jobs with low pay?” I asked. “Yes,” said rich dad.

“Some people say I exploit people because I don’t pay as much as the sugar plantation or thegovernment. I say the people exploit themselves. It’s their fear, not mine.”

“But don’t you feel you should pay them more?” I asked.

“I don’t have to. And besides, more money will not solve their problems. Just look at your dad. He makes a lot of money, and he still can’t pay his bills. Most people, given more money, only get into more debt.”

“So that’s why the 10 cents an hour,” I said, smiling. “It’s a part of the lesson.”