If you want to be rich DON’T focus on making money. Instead focus on building assets that generate you passive income.
Resources Related To This Episode
We want to step a bit away from property today to talk about this concept of the rich don’t work for money, which comes from Robert Kiyosaki’s book, Rich Dad, poor dad, if you haven’t read it already, but it’s this idea that the rich don’t work for money, which sounds really strange on the surface because you think you’re rich. Then you’re gonna have lots of money, so the bridge to work for money, but it’s just kind of a bit of tweaking in your mindset and what you focus on that can change the whole trajectory of your life and the whole trajectory of your finances to move towards being rich, to move towards financial freedom. So we want to spend an entire episode talking about this concept that the rich don’t work for money and hopefully get it across to you so that you can start making little practical changes in your life today to set you up to be Richard, to be financially free in the future.
Yeah. Like can you sort of explained to me what you might mean by this? Because I sometimes grapple with this concept as well. Like to me it means something and then you say something else. I’m like, oh, I kind of get that high level meaning. Yeah, because I think as you said, like it flies over a lot of people’s heads and would’ve flying over mine for a long time as well.
Yes. I think the concept the rich don’t work for money is it’s only a partial statement. It says the rich don’t work for money, but the rich work to acquire assets or to build assets is really the crux of it. And so what that means is Robert Kiyosaki divides assets as things that generate you passive income or that put money into your pocket. So if you were to stop working, if you were to quit your job, you were to get fired like Ben did all those years ago. Then assets we put money into your pocket and liabilities are things that take money out of your pocket, so require ongoing expense that you need to pay. And so the idea is that the rich don’t work for money in the form of income or even in the form of a lump sum cash or things like that, but the rich work to build or to create or to acquire assets in that life.
And I think you’re really cool way of explaining is from my perspective is you know, obviously we still continued to work, but what that work is, is a transfer of money that is transactional into an asset which provides great care and in a completely different way hopefully for the rest of your life, or at least for a period of time where you can take that income and again put it into something else that is going to create income for life. So it is almost the transfer of money from one class into a completely separate class. At least from my perspective. That’s how I said it. It’s the truth. It’s the really the transfer of money from one place to another. But for you,
for you, with property investing, you’re not. You’re working to acquire an asset. You’re not working to make a particular amount of 100 percent. It’s different. It’s hard because you are working to make a particular amount of money and you’ve done your sons on it and stuff like that, but you’re working to acquire the. You’re not going to get paid $50 an hour, $100 an hour or anything like that to do the job or to acquire the property you’re acquire. You’re working and you’re putting in all this effort to acquire an asset that you hope will pay off for you in the future
hundred percent and he’s such a different concept like it is. That asset from my opinion, becomes and now the you in a way that works whether you’re awake or whether you’re asleep and therefore completely changes the employee. Like since I’ve Read Rich Dad Poor Dad at age 23 and then started buying properties at 24. That concept has been in the back of my mind the entire time. The first concept that I really, really understood was acquiring assets because at the time I didn’t have the skillset, the knowledge or the confidence to go start a business and then you know, after I’d build that asset basically support me and my family. It was very easy to take that next step. Yeah.
I initiate for the business which, you know, business can be a great asset class as well. Whereas I took a different avenue because I didn’t want to work for the man. I quit. I decided to create my assets from scratch, which at the time were websites or still are that website that deliver passive income for me. So you went down the path where you would work hard and then you would use money to acquire assets. And then I went down the path where I’ll create assets and poor in the short term. Building that up and I think the hardest time to have this strategy in the hardest time to work like a rich person is in the beginning when you’re rich and you’ve got no assets, your name, you’ve got no passive income coming in because there’s no leeway there. Especially being in a situation if you’re married, if you have kids, there’s expenses in your life and you say, well, how can I work to okay acquire assets or how can I work for assets because I’ve got bills to pay and that’s.
That’s the roadblock. That’s the hardest thing to get past in order to become rich is I’ve got these bills to pay. I need to work for money to be able to pay my bills and to be able to step outside of that immediate pressure that says I need to work to pay my bills and to be able to then say you got flooded. To then be able to say, well, I’m going to work to acquire assets and for me the way that I did it was that most of my time was spent acquiring assets and I was poor in the short term in order to do it, but people can do it in other ways where you continue to work and you continue to pay the bills, but then you also work on the side to create assets or you invest to create asset so you take the money that you’re earning to create assets like that’s the hardest time in your life, but as you start to do it, as you continue to do it and you’re building up assets in your life, whether they be all assets like a small share portfolio or property or a small side business, as you start to build them up, got income coming in.
Then you get this snowball effect where you no longer need to spend your time working for money and you can now spend all of your time building. It’s such
a powerful position to be in like it is very, very, very difficult. Who did the start? Because one, you don’t have the financial resources or the skill set to actually allow that plane to take off and it takes so much momentum and energy to get up the grand to save that first deposit. I don’t think there’s anything harder that you can actually do in life. Like I really think that mentally if you can save your first deposit, you can end up paying financial ray and wealthy just because of the energy that it takes to get into that position. Yeah. But once you’re over that hurdle, you know, it becomes scalable. Definitely easier. And our member, when I used to be very much just to be attracted when I was working my way towards this journey and I think at 26 or 27 years, years of age, I looked at all of the income that I was generating from like the side business that I had at the time, the projects that I was involved in time my conditions in my job, plus my base salary in my job and my rental properties.
And then I also that year overlaid the capital gains that are made thinking that particularly the capital gains that I’ve made on those properties that are holding was something like six times my actual combined income from all the hard work that I was doing. And so it does get to a point where over time that momentum builds like a four percent return on a property that’s worth $200,000 is you know, 8,000 bucks in your hand effectively, but a four percent return on 2 million bucks is, you know, 80,000 bucks in your pocket. And so when you start getting to that point where you’ve got leverage and you’ve got more money working for you and more assets working for you exponentially becomes easier. And you know, like all good exponential growth curves that kind of looks really hard. And then it starts to spike.
Yeah. And I think the idea here is to get away from just trying to make more money as the solution to your financial problems. So a lot of people think, oh, adjust, need to earn more in my job or I just need to make a bit more on the side or something like that to get away from that
to be able to step outside of that, like I’ve already said,
that instant pressure that you’re feeling right now, to be able to actually step outside of that to say, okay, how am I going to build assets in my life and you can go about it so many different ways so you can do what Ben did, which was he focused on his career and he built his career so. And he say like a dog. So he started earning not a whole lot, how much we in 50 grand a year. So 45 then was my first year salary in my graduate program and then it went up to 55. Yeah. And so he started doing that, but then obviously build his career and then took all the extra money from that to build assets on the side through his property portfolio, which then eventually gave you the passive income that you needed to take the risk to start your own business and to start building that asset so you can take that path where you’re still working for money, you’re still building your career, but the is not on earning extra for the sake of earning extra focuses, earning extra for the sake of building assets, and that’s what I think changes you from being a regular person to becoming a rich person.
It’s just that shift in focus from money to acquiring assets that deliver you that passive income. It’s a complete shift of mindset because as you said, like when I was working for someone,
what else? I always knew that I was going to start my business and I wasn’t working for somebody else in those hours. I was working for myself because it’s your time that you’re trading and trading time for money. I was trading my time for a foundation of marketing skills, sales skills management skills in business should tag or strategy related skills to business that would enable me to start my own business and if you start thinking about everything that you’re doing in your life from that perspective, not, you know, how my trading dcf for these stolen but what, you know, return in terms of the foundation that you’re building, texture rate, something thing in the future that is such a better way to look at it. And then, you know, Ryan and I did a video recently on budgeting. We both hate budgeting and we talked about that in that video. But what I do love them, I think what you’re into now is just paying yourself a small amount verse. I think at that time in my life I was saving 150 bucks away, but I was paying myself that hundred and 50 bucks a week before everything else came in. And you know, it all compounds and adds up over time. You know what I mean? Yeah.
And then the other strategy will. What I did was I still had a young family at the time and so I was still working originally working in a part time job, got to
in time sales role where I was doing crazy hours, but for me, because I was so bad at budgeting at the time, whereas you saved like a dog and then invested to build assets and that’s how you build your assets. I was cracking up but
budgeting and so I would work, but then on the side I was working to build assets so I was creating assets from scratch in the way that I knew how and I tried so many things and failed so many times and that’s the thing as well that you have to be comfortable with trying to become rich is that assets on a guaranteed payoff. If you go to a job and you know that you get paid 20 bucks an hour, 30 bucks an hour, $50 an hour, you know if you put in that hour how much exactly you’re going to make, but when it comes to buying an asset or especially when it comes to creating an asset from scratch, there’s never going to be a guarantee that you’re going to get a return from that. The amount of effort that I put into projects that have delivered zero return months of my life going on, something that just didn’t pan out the way that I thought it would cost me money.
It’s crazy. But then because I was consistently looking at building businesses, looking at creating passive income, string value doesn’t matter if you can go again because you only need to succeed once. To then have that passive income and so that’s a big thing as well. So many people say, well, how can you start a business when nine out of businesses fail within the first five years? And that’s another Robert Kiyosaki thing that he said. He’s like, but you only need one to succeed, and if you start a business in such a way that if it fails, you can go again. Then you just keep going
until you get it right. Yeah. I think that’s. I think that’s another thing that you know, wealthy people do that a lot of other people too and that is, you know, they take care of activated risk and failure is not valued diaries, purely learning and pivoting from that value point to something that he’s ultimately going to lead to that success that you’re after, whatever that may be. Whether that is time, whether that’s health, whether it’s relationships, whether it’s money old, hopefully it’s all of those things and it becomes much, much easier over time to do these things. It’s just tammy can be very, very challenging at the start when you’re sort of plucking at straws to see what’s going to work out for ya.
Yeah. I think that’s why we love the two property to financial freedom strategy because it is focusing on building assets. These are longterm assets that are going to deliver you cashflow, that are going to pay themselves off and put money in your pocket. I love that, and so it’s something that everyone can do. If you’re in a job, you might not be like me, where you just want to spend all your time creating assets and taking huge amounts of risk. You might enjoy your job or feel more comfortable doing what Ben did, which is saving and then acquiring assets were purchasing them, but to be able to purchase something, know that it’s high quality, that it’s positive cashflow that it’s going to pay itself off, and if you lose your job, if you get fired, if you decide to throw in the towel and quit and change career paths.
Those assets pay for themselves and some and so even in the short term, you could maybe even take some of that cash flow out to keep your lifestyle going while you find another job. But it’s not that goal with you are focusing on acquiring assets and not focusing on investing in property for a quick buck. Just for the sake of it. You’re focusing on acquiring assets and that doesn’t pay off in year one. It doesn’t pay off in year two or does, but not as much and then, but over time, as you spend time acquiring those assets, then it really starts to pay off in your life and then you shift from being paycheck to paycheck. So then being, okay, I’ve got some surplus money. I’ve got some freedom here to make choices. Do I want to invest again? Do I want to cut back? Do I want to focus on acquiring other assets or building assets? What do I want to do? And so the shift doesn’t happen immediately, but slowly over time you start to getting this better cashflow position.
Well, you’re not as stressed and you’re more free to make those choices and once you know your financial life is getting injected with little pieces of income from maybe a part time business, maybe some bonuses, maybe some tax return, maybe your base salary, maybe a super, you know, maybe a couple of properties that you had. All of a sudden that base grows over time. I repeat 10 year period. It exponentially starts to grow and in the choices that you can get at that time, once you know your sole source of income isn’t what you trade your time doing is rick and powerful, you know, and you can shoot for the stars and keep pushing it as far as you want or you can just peel back and enjoy your life and the choices that you have based on whatever it is that your passion is at that time.
But it is challenging at the start. It does get someone. I’ll look at all of the mistakes that I’ve made. Just if you just look at property, not business or not my career, like I’ve lost so much money from having the wrong strategy. I’ve bought properties in poor markets where I’ve lost literally like 35 grand in a year when I was only making 70,000 bucks here and didn’t. Wasn’t in a place to do it. So I work for six months for free that year. Like I’ve had more advice from accounts for mortgage brokers that have cost me texts that have cost me opportunities that I’ve looked for. I’ve sold properties to early companies at the wrong time. I bought units instead of houses, bought single income properties instead of dual income properties. Just so many little lessons over time and all of those lessons now have resulted in a set of rules for financial freedom and if I, if I follow those rules from a property perspective, then it’s very, very difficult for me to make all of those mistakes that are made in the past because each time I made that mistake, I just added it to my ultimate checklist of things to never do again.
If you know what I mean, and I didn’t treat it as like I don’t dwell on any of that stuff. I just focus on how can I use all of that combined knowledge to make the best decision moving forward and the best decision next time around and to get myself into a lower risk, higher cashflow position faster and no matter what you’re earning in your job or your business. I talked to people that are earning a million bucks a year that have 40 grand savings. I talked to people that are earning 60 grand a year that have 190 grand savings, you know what I mean? It’s not what you earn, it’s what you do with that dollar. And that was the biggest thing that I picked out of Robert Kiyosaki spoken. My position now is a result of earning really shitting come for a long time, but putting a percentage of that income away consistently.
Um, there’s a really, really cool guy that talks about this in a big way that really wrapped my head around this stuff. His name’s Jim Roan and he talks about the seasons of life and he comes from a farming background but ended up becoming probably the most influential business coach of all time. He was Tony Robbins boss originally and then mentor and he talks about sowing the seeds of what you want in your feature today. That could be relationship, that could be financial, but financially it takes time to like bear the fruit of that harvest. And I was listening to that stuff when I was training for my marathon. And so unlikely you’re doing it in six months. I thought I needed to try and for like a year to build up to it and let’s be honest, I’ll probably fight so. But yeah, I mean it’s just the journey, like it was so sick. Taking all of that information during days, like long runs on the road that it just became such a part of it like that. Delaying gratification is another thing that wealthy people do that, you know, April they don’t have money, don’t do. It’s all about temporary short term thinking, you know, building longer term assets and thinking about things is a 10, 15, 30 year journey is just such a different way of looking at it for nice people. But those people that end up getting all the choices that they want. Ultimately. You all had that same philosophy.
Yup. And so that finishes today’s episode.
The idea here is the rich don’t work for money,
build assets and then it’s up to you how you do that in your life. Whether you want to take the path that I took in create assets from scratch in the full of businesses, or you want to take the park bench where you work hard, save your money and acquire assets or property or do both.
It’s really, it’s really up to you what you want to do and I do think the two properties to financial freedom strategy fits in really nicely with this idea that you can it
work and you can do your regular job so you have to change your life too much and be crazy like I was in high risk like I was, but then you can work and build these assets on the side that will go on to create financial freedom for you in the future. So if you haven’t checked out that video yet, go to on property.com dot EU five, oh eight. To check out that strategy where we talked through that. Or if you want to start building these assets in your life, you want to buy these high quality properties, build a granny flat, get that passive income, but you just want some help getting started with that strategy, or you want some help finding those good properties than Ben and the team over at pumped on property, a offering listeners, free strategy sessions, and so if that’s you and you want to start acquiring these assets in your life, you’re ready to go, but you want the right strategy.
You want to buy the right stuff, go to on-property dot Condo, you ford slash session, and you can pick a time over there that suits you. We can talk about your situation, you can say where you’re at, where you want to be, and then get the next steps for you and then you can hire pumped on property to help you buy those properties. Or you can go out and do it yourself. It really doesn’t matter, but that sessions completely complimentary. So again, go to on property.com, forward slash session to check that out. Don’t forget to subscribe to the channel as we got new videos coming out every week. Day. Amazing spot. It’s king speech, so fun to film on the beach. We hope that this has helped you in your life. Go out there, build assets, and until next time, stay positive.