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The Consumer Economy and “Rich Dad. Poor Dad.” What The Wealthy Teach Their Kids About Money That The Poor And Middle Class Don’t.

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Presentation on theme: "The Consumer Economy and “Rich Dad. Poor Dad.” What The Wealthy Teach Their Kids About Money That The Poor And Middle Class Don’t."— Presentation transcript:

1 The Consumer Economy and “Rich Dad. Poor Dad.” What The Wealthy Teach Their Kids About Money That The Poor And Middle Class Don’t.

2 The Consumer Economy Continuous growth through continuous consumption. Most of us define ourselves in terms of: How much and what we consume. Our role in the making of what we consume. Our ability to persuade others to consume. Its philosophy is spreading throughout the world. “If your reason for becoming rich is so that you can look rich, you will never become rich.”

3 The Consumer Economy We are a free country, not necessarily a fair country. We are all free to fail. We’re being brainwashed to be “Good Employees.” What’s said: Go to school Study hard Get good grades Get a good “JOB” Work hard What’s NOT said: So you can consume lots of stuff. And look like you’re wealthy. Why aren’t we learning/being taught about Wealth?

4 The Consumer Economy “J.O.B.” for most of us means “Just Over Broke.” A job is a short-term solution to a long- term problem. What’s that problem? The wealthiest people I know all have their own businesses.

5 Most of the following ideas about money and wealth creation are From Robert Kiyosaki and his partner and co-author, Sharon Lechter. I highly recommend that you study their writings more deeply on your own.

6 Some Books and Resources by Robert Kiyosaki and Sharon Lechter Rich Dad. Poor Dad. Who Took My Money Cashflow Quadrant Cashflow Game Cashflow, The E-Game Rich Dad’s Guide to Investing Retire Young. Retire Rich. Rich Kid. Smart Kid.

7 Financial Intelligence It is not your boss’ job to make you wealthy or secure. It’s her job to give you a paycheck... nothing more. Making more money will not solve your problem if money management is your problem. The key is not how much you make. It’s: How much you keep. (Delayed gratification) How hard it works for you. (Smart investing) How much you have left over for family and your favorite charities. (Giving back)

8 Financial Intelligence Money is a drug. Money pushes you around. You will obey those who provide or take your money. Employers/Bosses Bill collectors Tax collectors Landlords Family and friends Will you push back?

9 Financial Intelligence Question: Are you smarter than your money? Answer: Do you work for money, or does money work for you? Your money can work for you, or it most certainly will work for someone else. When money works for you, every dollar is an employee. Each dollar works to bring you even more dollars while you’re asleep. That’s called Passive Income.

10 Sources of Passive Income “What do you do?” versus “What do you own?” “What investments do you own that brings you passive income?” Interest from savings and CD’s Dividends from stocks Assets that appreciate in value (e.g., stocks, real estate) Self-operating businesses that generate cash (e.g., income properties, websites, network marketing) Royalties from books, software, games, patents, licensing, franchising fees, etc. Residuals from acting, music, software, games, etc. Profit-sharing arrangements by consultants, celebrity, endorsers Residuals for insurance and securities agents’ sales Pensions, retirement plans, Social Security

11 Financial Intelligence “Being Rich” and “Being Wealthy” are not the same. Being Rich is about how much money you possess. Can a person be rich and poor at the same time? Being Wealthy is about having Passive Income that equals or exceeds your lifestyle. Therefore, you never have to work another day in your life. How long you can survive without ever having to go to work?

12 Financial Intelligence You have two professions: One for you and one for your money. So you must find a job for your money that is: Safe Pays well Receives great benefits Free from abuse and thief You wouldn’t hand your children over to total strangers for their care and keeping. Why do you do it with your money. Take care of you money and it will grow and multiply and take care of you.

13 Financial Intelligence Rich Dad/Poor Dad’s Basic Philosophy Know the difference between an ASSET and a LIABILITY, and only buy assets. A True Asset gives a positive cash flow each and every month. Live below your means, while constantly increasing your means. Make your PASSIVE INCOME cover your Lifestyle Expenses forever.

14 Entrepreneurs: The Driving Force Behind Small and Micro Businesses

15 The Age of the Entrepreneur A new business is born in the U.S. every 11 seconds. Study of influential Americans: THE defining trend of the 21 st century is Entrepreneurship. Entrepreneurs launch 3.5 to 4.5 million businesses a year in the U.S. The Micro-Business: 14% of Inc. magazines top 500 fastest growing businesses were started with less than $1,000. Survey of college seniors: 49% of men and 31% of women said they were interested in pursuing entrepreneurship after graduation.

16 Small Businesses... Are defined as having less than 100 employees and $10 million in sales. Make up 98.5% of all the businesses in the U.S. Employ 52% of the nation's private sector workforce. Create more jobs than big businesses. Lead the way in training workers for jobs. Produce 51% of the nation's GDP. Account for 47% of business sales. Create 4X more innovations per R & D dollar spent than medium-sized firms and 24X as many as large companies.

17 What Is an Entrepreneur? A person who creates a new business in the face of risk and uncertainty for the purpose of achieving profit and growth by identifying opportunities and assembling the necessary resources to exploit those opportunities.

18 Types of Entrepreneurs Classic Entrepreneurs start a business from scratch and does whatever it takes to make it strong and profitable. Managerial Entrepreneurs take over when the business is up and running and use their management and communication skills to keep it operating smoothly. These businesses need a careful, polished hand. So these CEO’s are as much concerned about protecting the existing asset as they are about making it bigger. Most entrepreneurs are either one type or the other, not both.

19 Entrepreneurs and Business Models Entrepreneurs design and execute Business Models to exploit opportunities they’ve identified. Business Models are systems or formulas generate revenue for the business. “Am I hauling buckets or building a pipeline?” Can you make a better hamburger than McDonald’s? Can you build a better system for making burgers than McDonald’s? There are tons of great ideas, but few great models/systems. Success = A Good Model/System + Discipline How good is your personal business model?

20 Business Model vs. Business Plan A Business/Revenue Model is a one-page diagram that describes the specific way the business expects to make money. Certainly there can be extras - notes and explanations - but the business model itself is a single concept. A Business Plan is a detailed document, typically 50 to 100 pages, with a lot of financial projections. If you want investors or to apply for a loan for a new business, a business plan is expected.

21 Marshall Reddick Real Estate Network Business Model Escrow SoCal College Seminars SoCal College Seminars SoCal Club Meetings SoCal Club Meetings Nationwide Brokers Nationwide Brokers Select Properties Select Properties Collect Commission Collect Commission SoCal Prospects Close Sale Close Sale Financing Property Manager Property Manager E-Commerce Website E-Commerce Website World Prospects

22 Simple Product-First Business Model “ Make It, and They Will Come.” Select/Make Product Select/Make Product Decide Message Decide Message Select Media Select Media Get Consumers Get Consumers Customers need what I think they need. “Here’s the product. It’s what you need. It’s the best.” Spray and pray. Repeat process.

23 Simple Customer-First Business Model “ Let’s Go Fishing.” Decide Customers Decide Customers Select Media Select Media Decide Message Decide Message Make Product/Brand Make Product/Brand What’s my favorite fish? What’s my Niche? Am I passionate? Do I have expertise? Which ponds have my favorite fish? Find Big, Addicted fish--high probability prospects. What bait are my fish eating? Find a Competitive Advantage. Start fishing. Build Database Build Database Stock your Private Pond Test

24 Decide Your Customers Do you have a passion, hobby, interest or talent (PHIT)? How many people/businesses share your PHIT? Do you know what makes them tick? How/what have competitors marketed to them in the past? Where/how can you learn more about your PHIT? Do you have a particular knowledge base, expertise, or skill (KES)? How many people/businesses need your KES? How have competitors provided your same KES? Where/how can you learn to get more KES?

25 Ideas for Micro Businesses Network Marketing Companies List of Network Marketing Companies Online Auctions E-Bay Yahoo Overstock.Com Retailing/Wholesaling Café Press Amazon Info-preneurship Books, manuals, newsletters, CD’s, podcasts, teleseminars Finding Existing Business to Buy What’s are the hot topics and products? Buzz Yahoo

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