Book summary of “The Business of the 21st Century!” By Robert T Kiyosaki.
Business of the 21st century!
PART I: Take Control of your future
1.Rules have changed.
American economy went thru turbulence. It saw Great Depression in 1929, financial crisis in 1971 and 2008, where people had reached the financial crisis in the later years and realised that much of plastic money wouldn’t be of help when financial crisis hits. It’s the same case in India today, when large population of our country is young n bubbling with Energy, we are on the same path of what US had taken 50 years back. Being Entrepreneurial & nurturing it in people will have a great foundation for India. Single source of income is no more a security. Having multiple source would actually make life secure even during crisis like covid times.
2.The Silver lining.
Tough situations won’t last long, tough people do. It is during the tough times that Leaders and Entrepreneurial mindset people are born.
Employment myth:
If you trace down civilisation, in agrarian age, most of the farmers were Entrepreneurs and no one was employee. The farmer paid the king a tax for the right to use his land. And others ran their business - tailor, goldsmith, blacksmith etc and their kids learnt those skills and continued their family business. And industrial age turned around the everyone into employees as industry needed millions of employees globally.
Entrepreneurial Fever:
When the world has moved forward to IT revolution, it has level the field for people. Opportunities & exposure, support to nurture Entrepreneurial spirit is all time high. Md.Yunus is awarded noble prize fr “micro credit concept for third world Entrepreneurs“. He narrates that all people are Entrepreneurs but they don’t have the opportunity to find that out.
3 Where Do You Live?
Stephan covey : Where is the ladder planted?
‘It doesn’t matter how fast or high you climb on the ladder if it’s leaning against the wrong wall’.
Cash flow Quadrant | Different ways how people make money Where Do You Live?
So you’ve been working hard for years, climbing the ladder.
E - Employee
S - Self employed or Small business
B - Big business
I - Investors
80% of the people live in the left side of the quadrant ES and rest of the ppl live in BI side. Where do u live ?
4.Your core Financial Values
4 different mindsets has 4 different values that believe in and follow.
E - Security
Value: “I am looking for a safe, secure job with good pay and excellent benefits.”
S - Independence
Val: “If you want something done right, do it yourself.”
B - Wealth building
Val: “ I’m looking for the best people to join my team.”
I - Financial Freedom
Val: What’s my return on investment?
Just because you’re successful in one quadrant, such as the E, S, or B, does not mean you will be successful in the I quadrant. Doctors are often the worst investors.
If you want to get rich, you’re going to have to move. You don’t need a new job; you need a new address.
5.Mindset of the Entrepreneur
It takes courage to discover, develop and donate your genius to the world.
Wealth is the product of man’s capacity to think.
Putting a horse farmer behind the wheel of a Maserati doesn’t make him a racing car driver. He needs the skills, the training, and, most important, the mindset of a racing car driver.
6.It’s Time to Take Control!
If it doesn’t take money to make money, and it doesn’t take a formal education to learn how to become financially free, then what does it take? It takes a dream, a
lot of determination, a willingness to learn quickly, and an understanding of which
sector of the cashflow quadrant you’re operating in.
Working hard at making money will never create wealth.
Power of passive income : What you want is a money faucet that you can let go of once you’ve turned it on, because it stays on by itself
PART II: Eight Wealth Building Assets
1.It’s not about Income. It’s about Assets that create Income.
The B and I quadrants are not about earning more income; they’re about owning assets that generate income.
The things that most people think of as assets are not assets at all; in fact, they’re liabilities. What defines whether something is an asset or a liability is cash flow, not some abstraction of value. In other words, is it generating money that goes into
your pocket, or is it taking money out of your pocket? Everything will either make you money or cost you money. If it doesn’t make you money, it’s not an asset, it’s a liability.
I only invest in things that make me money. If it makes me money, it’s an asset; if it takes money from me, it’s a liability. I have two Porsches. They’re liabilities. I own them free and clear, but they’re not putting money in my pocket; they’re taking money out of my pocket. It’s not rocket science. For people who understand this, the No. 1 asset is usually a business, and the No. 2 asset is typically real estate. And even with real estate, you have to understand the difference between cash flow and capital gain. Most people don’t understand this distinction. When they invest, they invest for capital gain. They’ll say, “My house went up in value. My car went up in value.” That’s capital gain, not cash flow.
It’s like selling your cow for money. I’d rather own the cow and sell the milk.
2.Asset 1: Real world Business Education
a) Scholastic education: read, write, do math & regular education.
b)Professional education: that prepares you for E n S quadrant.
c) Financial education: where you learn to have money work for you rather than to have you work for money.
Skills : ability to get organized and set your own agenda., skills like knowing how to balance a checkbook, write a financial plan, and read an annual report., Tax Advantages. And critical skills that the real-world education are
An attitude of success
• Dressing for success
• Overcoming personal fears, doubts, and lack of confidence
• Overcoming the fear of rejection
• Communication skills
• People skills
• Time-management skills
• Accountability skills
• Practical goal-setting
• Money-management skills
• Investing skills
3.Asset 2: Profitable path of Personal Development.
You are actually making a change in your core values. It’s not just about changing what you do; in a very real sense, it’s about changing who you are.
Even more important, it was an education that set me free. And the most important things I learned in the course of that education were not about business or money—they were about me.
Inside each of us is the winner and the loser, the rich guy and the poor guy, the one who works out and the one who sits on the couch. That’s the battle.
In fact, we each have an entire cast of characters inside us, a whole spectrum of who we could potentially turn out to be. I wanted the person who was happily married, who made a contribution to the planet, and who was spiritually inclined for freedom.
Every time we let our fears, our doubts, or our low self-esteem win, the loser emerges and holds sway. Learning to share your vision and tell a powerful, persuasive story is learning how to override the loser inside you and allowing the winner to rise to the surface. Learning how to tell a powerful story is learning how to show up as the winner you are.
About eight months into the program at Camp Pendleton, something changed inside me. During one training flight, I finally became a pilot who was ready to go to war. Up to that point, I was flying mentally, emotionally, and physically. Some people call it “flying mechanically.” On that one training mission, I changed spiritually. The mission was so intense and frightening that, suddenly, all my doubts and fears were forced out of the way, and my human spirit took over. Flying had become a part of me. I felt at peace and at home inside the aircraft. The aircraft was part of me. I was ready to go to Vietnam.
I suddenly found that quality that is often called entrepreneurial spirit. That is the spirit that keeps me on the B and I side of the cashflow quadrant map, no matter how tough things get.
4.Asset #3: A Circle of Friends Who Share Your Dreams and Value
You may have heard that your income tends to be about equal to the average income of your five closest friends.
My rich dad often said, “If you want to become rich, you need to network with those who are rich or who can help you become rich.”
If you are considering building your own business, you need to be acutely aware of who you’re spending your time with and who your teachers are. It’s a crucial consideration.
You can’t get rich in isolation; you are only as good as the community of people you hang out with, talk with, work with, and play with.
5.Asset #4: The Power of Your Own Network.
If you want to become rich, the best strategy is to find a way to build a strong, viable, growing network.
While Edison is famous for tinkering with the light bulb and perfecting the filament that made the bulb practical, Edison’s true stroke of genius was to create a company that strung the electric lines that allowed the light bulb to penetrate society. The company Edison founded would make him a multimillionaire. It was called General Electric.
What made Edison’s business so revolutionary was not the light bulb itself, but the system of electrical lines and relay stations that powered the light bulb. It was the network.
Metcalfe’s Law
Robert Metcalfe, the founder of 3Com and one of the creators of Ethernet, is credited with creating an equation that defines the value of networks:
V = N
In other words, a network’s economic value equals the number of the network’s users squared.
Think of a network of telephones. If you have just one telephone, that single telephone has no real economic value. (If you’re the only one with a phone, who would you call?) The moment you add a phone, according to Metcalfe’s Law, the economic value of the phone network is squared. The economic value of the network would go from zero to two squared, or four. Add a third phone, and the economic value of the network is now nine. In other words, the economic value of a network goes up exponentially, not numerically.
6.Asset #5: A Duplicable, Fully Scalable Business
Henry Ford did not create an empire and change the face of the planet by building a business model around his workers’ unique skills and talents.
Now, he could have hired craftsmen to hand-make his cars. They would have been amazing cars—and he would have sold maybe a few hundred of them. Instead, he designed a model where ordinary people could plug in their time and effort and mass-produce millions of cars. Ford thought like a person who lived smack in the B quadrant.
Real power is not what you can do; it’s what you can duplicate. In other words, you want to build your business in a way that virtually anyone else can readily copy. Why? Because others copying what you do is exactly what you want to happen—what you need to have happen. That’s what creates your success.
The power of your business is in its scalability. A business that is scalable simply means a business that can operate on any scale.
This is often the make-or-break issue with entrepreneurs. The world is full of would-be entrepreneurs who create businesses that are wonderful, as long as they’re operating on a scale so small that they can personally control every aspect of the business. But there are very few entrepreneurs who grasp how to design their tiny little business model so it can be multiplied and replicated many times over without their direct participation.
You don’t need highly skilled salespeople to duplicate what you do. You need people who are willing to learn basic business and communication skills and grow themselves personally into self-determining entrepreneurs and team-builders.
7. Asset #6: Incomparable Leadership Skills
It’s developing the ability to speak directly to other people’s spirits. This is a quality that goes beyond words. This is genuine leadership.
truth is, having the capacity to lead is a skill set so valuable, so powerful, and so rare that it is genuinely an asset unto itself.
All the other business skills are important ingredients. Leadership is the force that makes it all come together. Leadership is what builds great businesses.
Speaking Directly to Spirit:
The power to make things happen through the sheer force of the vision you share. Genuine leaders can move mountains.
Money does not go to the business with the best products or service. Money flows to the business with the best leaders.
All great leaders have been master storytellers who were able to communicate the vision in such a vivid way that others saw it, too. Look at Jesus Christ, Buddha, Mother Teresa, Gandhi, Muhammad. They were all great leaders, which means they were great storytellers.
A business that has forgotten how to tell its own story is soon out of business, even if it has tons of inventory. When I find a business that is struggling financially, it is often because the leader of that business cannot communicate the company’s vision—he or she cannot tell the story. They may be smart, but they are poor communicators.
The Four Elements of Leadership
Mental , physical, emotional & spiritual.
Military schools prepare you to be a great leader by focusing not only on your mind, but also on your emotional, physical, and spiritual abilities. They teach you how to operate under extreme pressure. Having these four elements—mental, emotional, physical, and spiritual—working in harmony helped me make it through my missions.
Elements of leadership required to be successful in business. Mind; spirit; body; emotions:
If you cannot control these four aspects of yourself, then you will fail. And if you are not able to help develop these four elements in your employees, and in so doing help them to become effective leaders, then you will fail. It’s as simple as that.
8.Asset #7: A Mechanism for Genuine Wealth Creation
Wealth is not the same thing as money. Wealth is not measured by the size of income. Wealth is measured in time.
Wealth is measured by the richness of your life experience today plus the number of days into the future that you have the capacity to continue living at that level of experience. One reason the rich get richer is that the rich work for a different kind of money. They don’t work to generate income—they work to build wealth. There is a vast difference between the two.
Simple Four-Step Path to Financial Freedom
1) Build a business
2) Reinvest in your business
3) Invest in real estate
4) Let your assets buy luxuries
There are many types of assets that can generate income, but the one I recommend most often is real estate, for two principal reasons.
First, the tax laws are written in favor of business owners who invest in real estate.
Second, your banker loves to lend you money for real estate. Try asking your banker for a thirty-year loan at 6.5 percent to buy mutual funds or stocks. They’ll laugh you out of the bank.
9.Asset #8: Big Dreams and the Capacity to Live Them.
don’t just have dreams; but live those dreams.
Replace “We can’t afford it.” With “How can I afford it?”
My rich dad, however, forbade his son and me from saying those words, and insisted instead that we ask ourselves, “How can I afford it?”
It is striving, learning, and doing your best to develop your personal power to be able to afford the big house and who you become in the process that are important.
Everyone has dreams, but not everyone dreams in the same way. My rich dad
taught me that there are five kinds of dreamers:
• Those who dream in the past
• Those who dream only small dreams
• Those who achieve a dream, and then live bored
• Those who dream big dreams, but with no plan on how to go about
achieving them, so end up with nothing
• Those who dream big, achieve those dreams, and go on to dream even
bigger dreams!
As you know, I’ve been broke—totally, flat-out broke, living in my car with my bride. I know what it’s like. But broke is a temporary condition. Poor is different. Poor is a state of mind. You can be broke and still be rich in spirit, rich in ambition, rich in courage, rich in determination. It costs nothing to dream big, and it costs not one cent more to dream huge. No matter how broke you might be, the only way you will become poor is by giving up on your dreams.
I learned this, at least, by my experiment: that if one advances confidently in the direction of his dreams, and endeavors to live the life which he has imagined, he will meet with a success unexpected in common hours.
10.Know What’s Important ~Kim Kiyosaki.
On our very first date, Robert asked me what I wanted to do with my life. I told him I wanted to run my own business someday. He said, “I can help you with that.” Within a month, we had a business going together.
But he also started talking to me about larger things, too—about spirituality, and asking me about my life’s purpose. This was in the 1980s, when people were workaholics and proud of it. By the ’90s, people began taking a closer look at their lives and asking some harder questions. But it was really after 9/11 that people started saying, “Whoa, wait a minute. Why am I running around like a hamster on a wheel? What am I doing with my life? Where is it all going?”
Early in our marriage, Robert and I were both passionately committed to being in business for ourselves, to not having other people tell us what to do, and to being in control of our own financial destinies. That was so important to us that we were willing to put up with just about any hardship to make it happen.
PART III : Your Future Starts Now.
1.Choose Wisely
Here are a few questions to ask yourself
• Who’s running the ship?
• Does the company offer a proven plan of action?
• Does the company embrace both business skills and personal development as
a regular part of its educational and training programs?
• Does the company have a strong ,high-quality,andhighlymarketableproduct
line that you can be passionate about?
In a word: buzz. Now, don’t get me wrong: I’m not talking about hype. I’m talking about genuine qualities and attributes. Your product has to be the real deal.
Do you believe in the product’s value, and will you use it personally? Does it have a great story to tell? When you are genuinely passionate about the product you’re sharing with others, they’ll be more likely to become excited about it, too.
2.What It Takes
You do need a burning desire and determination fueled by a strong dose of passion.
It Takes Being Honest with Yourself
Building a B quadrant business is not an easy task. You need to ask yourself, “Do I have what it takes? Am I willing to go beyond my comfort zone? Am I willing to be led as well as to learn to lead? Is there a rich person inside of me, ready to come out?”
It Takes the Right Attitude
For me, becoming an entrepreneur is an ongoing process, one that I am still involved in. I believe I will be an entrepreneur-in-training till the end. I love business, and I love solving business problems. It is a process that brings me the kind of life I want. So, although the process has been tough for me at times, it has been worth it.
It Takes Real Growth
business is a formative period, a time of laying your foundation. Keep it in perspective. Keep your eye on the real goal: wealth-building.
It Takes Time | The Five-Year Plan
If you are serious about starting your journey, I recommend committing to a minimum of five years of learning, growing, changing your core values, and meeting new friends. Why? Because that’s realistic.
Ten thousand hours: Do the math. If you work eight hours a day, five days a week, you hit the 10,000-hour mark after five years of full-time effort.
When I decide to learn something new—for example, investing in real estate—I still allow myself five years to learn the process. When I wanted to learn how to invest in stocks, I again gave myself five years to learn the process. Many people invest once, lose a few dollars, and then quit. They quit after their first mistake, which is why they fail to learn. But losing is part of the process of winning. It’s only losers who think that winners never lose, who think that mistakes must be avoided at all costs. Mistakes are priceless opportunities to learn essential lessons.
Give Yourself Time to Unlearn, Too
As much learning as you’ll do in this business, chances are good there is also a
substantial amount of unlearning that needs to happen.
Take your time to unlearn as well as to learn. For some people, the hardest part of switching from the left side of the quadrant to the right side of the quadrant is to unlearn the point of view of the E and S quadrants. Once you have unlearned what you had learned, the change will go much faster and easier.
It All Comes Down to Action
You can plan all you want, study all you want, and learn all you want, but the only people who win are people who take action—today, tomorrow, and every day.
3.Living the Life
What makes you rich?
Most people would answer, “Money, of course!” And they would be wrong. Having money does not make you rich, because you can always lose money. Owning real estate does not make you truly rich, because (as we have seen dramatically in the last few years) real estate can always lose value.
So what makes you rich? Knowledge.
Golden Lesson:
It is not real estate, gold, stocks, hard work, or money that makes you rich; it is what you know about real estate, gold, stocks, hard work, and money that makes you rich. Ultimately, it is your financial intelligence that makes you rich.
Financial intelligence has little or nothing to do with academic intelligence. You can be a genius when it comes to academic intelligence, but a moron when it comes to financial intelligence.
1) Knowing How to Make More Money
2) Knowing How to Protect Your Money
3) Knowing How to Budget Your Money
4) Knowing How to Leverage Your Money
A Magnificent Life
The purpose of your business is not simply to make you money, but to give you the skills and financial intelligence so that you will use that additional money to build genuine wealth.
But even that is not the end goal. The end goal of building that wealth is so that you can live a magnificent life.
Three ways to live. These three ways are driven by three different emotions, and also correspond closely to three different financial and emotional states:
LIvING IN FEAR
LIvING IN ANGER AND FRUSTRATION
LIvING IN JOY, PEACE, AND CONTENTMENT
4.The Business of the 21st Century.
Is some thing which has below characteristics
Genuine equal-opportunity business.
The future of genuine wealth lies in pioneering ways of doing business that elevate the financial well-being of humanity.
Democratic Wealth-Building
Henry Ford did not invent the automobile, but he did something radical that forever changed the invention’s destiny, along with the destiny of millions of people. At the turn of the century, the automobile was seen as a curiosity, a rich person’s toy. And indeed, they were so inordinately expensive that only the rich could afford to own one. Ford’s radical idea was to make the automobile available to everyone.
By slashing production costs and adapting the assembly line to mass-produce standardized inexpensive cars, Ford became the largest automobile producer in the world. Not only did he make his car affordable, he also paid the highest wages in the industry and even offered profit-sharing plans, redistributing over $30 million annually to his workers—and $30 million was worth a lot more in the early 1900s than it is today!
Ford’s mission statement was to “Democratize the automobile,” and in the course of fulfilling that mission, he made himself a very rich man.
I don’t necessarily condemn greed; a little greed and personal self-interest are always healthy. But when the goal of personal gain grows out of perspective and people pursue it at the expense of others, it becomes repugnant. I believe that most people are inherently generous, and that we gain the greatest satisfaction and fulfillment from our own achievements when they also serve to lift up others, and not to keep them down.
An Economic Foundation for Peace
I flew helicopter missions over the jungles of Vietnam, and I know from firsthand experience what war is like. I also Know that inequity is one of the core causes of war.
As long as the gap between the rich and the poor widens, it is going to be tough to create conditions of peace. We can march for peace, give speeches endorsing peace, form committees to study peace, and promote peace, but it’s going to be impossible to actually create that peace we talk about unless and until we can begin to bring substantially more economic opportunity to many millions of people.
It is time that people all over the world had an equal opportunity to enjoy a rich and abundant life, rather than spend their lives working hard only to make the rich richer.
It’s time you had that opportunity.
Welcome to the 21st Century!
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