Kim Kiyosaki is the co-founder and CEO of The Rich Dad Company and a spirited advocate and educator of financial education. Since launching The Rich Dad Company with her husband, Robert, in 1996, she realized there was a huge void for women when it came to financial education. As Kim says, “When it comes to money, what we women have been taught is to not take care of ourselves, but to depend upon a husband, family member or government for our financial well-being.”
In this interview with Stellar Woman Magazine, she shares tips on how to win at the cashflow game.
Who is Kim Kiyosaki, and what is your backstory?
Since I was young, I always wanted to be independent. Even as a child, I remember riding my bike on early Saturday mornings to go to a soccer game alone. I felt free at 12 years old, able to do whatever I wanted. I’ve always been independent, even when I went to college. I worked my way through college and told my parents to stop sending extra money because I was making enough. There was always something in the back of my head; money was connected to freedom for me, but I didn’t fully realize it until college.
I graduated with a marketing degree, learning little about business or entrepreneurship. I then started working in Honolulu, Hawaii, but after nine months, my boss fired me. I was like, “You can’t fire me… because I’m going to quit!” So, my boss said, “If you quit, you don’t get your two weeks’ severance.” I replied “Okay, so I’m fired.” She rehired me a few months later but fired me again after six months. This time I realised that I might be the issue and that working for someone else (and having people telling me what to do…) might not be for me. That’s when I met Robert in 1984. He introduced me to the world of entrepreneurship.
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Then I met Robert in 1984. He asked me out and on our first date he asked me, “What do you want to do with your life?” I replied “Well, seeing the way things are going, I’m really a terrible employee. I hate being told what to do. I want my own business.” I added: “But I didn’t grow up around entrepreneurs, I know nothing about how to start or grow a business.” He said, “Well, I have started many businesses and all of my friends are entrepreneurs.”
That’s how I got started in the world of entrepreneurship. I love business, I still love marketing, I am now the CEO of The Rich Dad Company and loving it. So that’s how I got into the business world. I’ve been an entrepreneur since 1984. Robert and I started several businesses together. Of course, the most popular one is The Rich Dad Company. When it came to investing, I didn’t know anything about that either. I didn’t know anything about finance or about money. When I asked him about money and real estate investing, he said, “Okay, go find something.” I was like, “Do what…? To make a long story short, I found this little two-bedroom, one bath house that would make a great rental, but I was scared to death. It was $46,000 and I had to come up with $5,000 as a down payment. I didn’t have it and I thought Oh, my god, what if I make a mistake? What if I lose money? What if the roof leaks, what if the tenant leaves? All the ‘what ifs!’ However, something propelled me to take that step and I bought that first rental property. Every month after I collected the rent, paid the expenses, paid the mortgage, I had a grand total of $25 positive cash flow. That’s how it started. From there I bought more properties. Today, I have lots of properties — commercial, apartment buildings, as well as other investments. I just started very small, taking baby steps. That’s what I suggest for most people today, to just start small, take little steps, because there’s a lot of learning in every action that you take. So that’s a little bit about me.
What are your ideal Stellar Woman Attributes?
I found out that there were some things happening in the company that were not stellar by any means. I realized that our company was moving away from its mission of elevating financial well-being for humanity, focusing more on making money and needed to let go of some people. By then I was not in the day-to-day operations of the company. I was more like a chairman. I realized that the company was going in a direction that wasn’t aligned with the mission of the company which is to elevate the financial wellbeing of humanity. The mission of the company, as it was then, was how do we make more money and put more money in our pockets? That was never how Robert, and I ever approached the business. We never decided based on money. We made our decision based on the mission of the company.
So, I’m very MISSION oriented. I think that’s one of my strengths.
It led to a major change. We had to let go of many people, but we had a small, strong team left that I sat down with.
I said to them, “I don’t know where we’re going to go, I don’t know how we’re going to get there, but we’re going back to the mission of the company. We’re going back to Rich Dad Poor Dad, we’re going back to the CASHFLOW® game, and we’re going back to the CASHFLOW Clubs.” The team and I came together, we made a pact; we had our rules of the game, how we were going to play together. This was a six-month process, making all this change happen.
So, mission and team are two of the most important things to me. You’ve got to have a strong team if you’re going to carry out a mission — especially a big mission. You need a strong team that’s going to back you up and support you in any way possible. I can’t praise our Rich Dad team enough. They jump in and they do whatever’s needed. They’ve already answered my question before I have asked it. I don’t have to do a lot. So, I think those are two of the most important things. Mission- and team-focused are the attributes of the stellar woman.
When you gained financial independence, did you retire at 37?
No, but I had the choice to retire at 37 because we achieved financial freedom. I was 37, and Robert was 47 at the time. Achieving financial freedom doesn’t necessarily mean having millions in the bank or a significant portfolio. For us, it was about having our cash flow from real estate surpass our living expenses. We were financially free with $10,000 in cash flow from our real estate but our monthly expenses were only $3,000. So, at that point, the money coming in from our investments, our assets, was greater than our monthly living expenses. We were financially free. For the first time I could ask myself, “What do I want to do with my life?”
As people kept asking us what we did to become financially free. We thought, what if we could create a board game that could teach people to do what we did? This is because we love board games. So instead of us traveling all over the world talking about it and teaching it, people could play that game and they could teach each other? The game could teach how to get out of the Rat Race on enjoy financial freedom. So, while I could have retired, I’ve never wanted to retire.
No… ‘retirement’ is not a word in my vocabulary.
Why are you focused on raising financial literacy for women?
I’m the youngest of three girls, so I never believed that success had anything to do with gender. So, I never really focused on women only. However, what happened was that when Robert and I travelled the world, we taught Rich Dad Poor Dad philosophies and concepts, I would at the end talk to women about money. I noticed that all the women be it in Singapore, New York, South Africa or London had similar questions and issues.
There is a difference between men and women when it comes to money and a lot of it has to do with education. And our current education system teaches little about money. I realized that there was a demand for solid financial education. So, I thought, Okay, it’s time to start focusing on women and supporting women to become financially secure and financially free.
What inspired you to write Rich Woman?
To get on stage I needed to travel and be the one presenting the information. This means that the message would not reach as many women as I want to reach. A book was the ideal medium, as it could reach people even in places I couldn’t physically visit. We have a philosophy that we follow at Rich Dad and it’s a principle by a man named R. Buckminster Fuller. He said the more people we serve, the more effective we become. So, we always work to demonstrate that at Rich Dad. We always work to figure out how we can serve more people. The question we use is: How do we get our message to more people more effectively? That’s why I wrote the book. This also explains why we created the CASHFLOW game. So that the games can travel all over the world — in multiple languages — to places that Robert and I will never reach.
What inspired you to write It’s Rising Time?
A lot of women I met, who read Rich Woman or the Rich Dad books, or attended seminars would get excited about what they learned… but they never took that first step. ‘Analysis paralysis,’ as they say. So, I wrote It’s Rising Time to get women to take that first step, to get them in the game. To get them started. Because it does you no good if you read about stuff and you study stuff, but don’t act. As another wise saying goes: If nothing happens, nothing happens. And Einstein said, “Nothing happens until something moves.” You got to move! So that’s why I wrote it.
What does wealth mean to you?
We have a very different — very simple — definition for wealth. And, again, this comes from Buckminster Fuller. He was a visionary philosopher, and inventor, he created the geodesic dome. He basically dedicated his life to the betterment of humanity. He came up with this definition of wealth: A person’s ability to survive X number of days forward. It’s about being financially secure for the future. So, if you stopped working today, how long could you survive at your current standard of living? It requires looking carefully at your monthly expenses then making a list of all those monthly expenses. Add them up, and let’s say its $5,000 a month. Then you look at how much liquid money you have in cash, current and incoming. This includes savings, from your assets, real estate and from businesses — anything that is liquid that will keep you going without working. That’s the number. For most people, they have more expenses every month than they have cash coming in. Let’s say $5,000 is your expenses every month and you have $20,000 in cash, and other forms that are liquid today, It means that you have four months of wealth. The goal is to have infinite months of wealth. We have cash flow coming in every month that’s greater than our living expenses. When it gets to that point, when your cash flow is higher than your living expenses, then you have achieved financial wealth. As I mentioned, we started with $10,000 and our expenses were $3000. This meant that we had infinitely wealth. So that’s always been the goal. It is the goal in the CASHFLOW game as well — to have your monthly cash flow exceed your monthly living expenses. That’s what we mean by wealth.
Please share the part of the story in Rich Woman when you stopped viewing investing as a hobby to help us understand how you came to achieve financial freedom.
Let’s start with the fact that you have income and expenses. If you look at a Balance Sheet you have Assets and you have Liabilities. Of course, in The Rich Dad world, an Asset is something that puts money in your pocket, whether you work or not, and a Liability is something that takes money out of your pocket. I was taught to focus on the Income column — get a good job, get pay raises and promotions. If you worked at an hourly rate, you’d focus on increasing your hourly wage, and work more hours. It was always about how much income you could generate. I owned some real estate and handled it as a hobby. It wasn’t my main source of income. Then one day, the lights went on and I was like, You know what, I think I’m focusing on the wrong things. Instead of focusing on acquiring income, I shifted my focus to acquiring assets that created income and that made all the difference. That shift in both mindset and focus — from working for income to creating and building assets — led me to become financially free! Mindset is key to your financial freedom. I encourage others not to treat investing as a hobby but as a strategic path to wealth.
Any key lesson from real estate investment for women embarking on this journey?
That’s a good question. I personally have no crystal ball, but I do talk to a lot of smart people. That’s probably one of the biggest keys to success: the people you surround yourself with. I surround myself with a lot of very smart, self-made people who understand economics, macroeconomics, the markets, and business.
Real estate markets change rapidly, and there’s a correction coming. Don’t rush into investing without understanding the market. Begin small, take little steps, and be patient. You’re going to make some mistakes. Mistakes are good as you will learn from them and grow. If you’re new to real estate, start with education.
In real estate right now, we’ve had a big bubble, especially during COVID, when real estate went nuts. If you are interested in buying real estate, getting started is both the first step and the most important step. Opportunities are coming in the months ahead with real estate because there are a lot of people with adjustable mortgages and the challenges that presents as interest rates continue to rise. This isn’t about commercial real estate here because that sector is in serious trouble. My take on real estate here is more about residential real estate, apartment buildings, warehouses, and things like that. So, several people I know are holding on to cash and being patient until the time comes when they can “buy right.” Patience is a key here. I would start preparing, and if you know little or nothing about real estate, this is a good time to study — but not jump in yet. Education is the first step. As your knowledge and education increase, your risk goes down. The more you know, the more experience you have, the more knowledge you have, the greater your chances of success.
Start by putting a little bit of cash into the game. Take baby steps, buy small properties, and learn, learn, learn. The only way I know how to really learn is through experience. If I want to learn about something, and especially in the world of investing, I take a little bit of money and get started. For example: If you buy a silver coin today, it is going to cost you around $25. I always start by buying what I want to learn about.
For example, when I bought my first two-bedroom, one bath house, I learned so much. I studied, I read about rental real estate properties and did everything possible to educate myself. I learned about property management and everything I could about the investment. The same would hold true for a silver coin. Once you own a silver coin, you’re going to start looking at the price of silver every day. Is it up? Is it down? You’re going to start becoming aware of articles or news about silver… because you have invested in silver. Your interest and awareness is high because you have that coin in your hands, you can hold and touch it. I have come to realize that one of the greatest ways I learn about investments and business is to get in there and do it — and put some money on the line. I get in the game. If you get in the game, your interest level will go up.
What do you mean when you say the 21st century is our century as women? But do you feel like this is happening now?
I do. I look at the women around me, those I surround myself with. They’re strong, determined, and successful. We have fun together, often travel together, do book studies together. The women in my company, our A team, consists of three women, and we make things happen quickly. However, I think the old stigma and the traditional education are gradually fading away. I see women growing stronger, more independent, and displaying greater tenacity. I’m concerned about the younger generation, as there seem to be two sides to it. Some appear entitled, expecting things to be handed to them, which frustrates me. On the other hand, there are those, including some in my family, who are driven and aspire to be successful or entrepreneurs. So, there are two facets to this upcoming generation, and I encourage people to avoid the entitlement mentality. It’s crippling. These young individuals may not experience the satisfaction of achieving something, setting a big goal, and making it come true, which builds character and strength. I’m concerned about this, and it’s up to the parents to address it.
What does financial freedom mean to you?
It’s about choices. I have choices and options. Many people lack these. I can choose to fly coach or first class or charter. I can choose where I want to live, and what city I want to reside in. I’m not tied to a job or a place. It provides total freedom to be with the people I want to be with and do the things I want to do.
What advice do you give to a woman who feels like she’s late to the party?
You can start right now; you can start today. Begin with education, such as reading a book or watching a show — The Stellar Woman. Listen to other podcasts, play the CASHFLOW game, start learning about money. I could also start with a small goal. Once you start learning about money, you’re going to find that there are four asset classes. There’s business, real estate, paper assets — stocks, bonds, and mutual funds — and commodities, like gold, silver, oil, gas etc. As you study more about the different asset classes, there’s going to be one that will resonate with you. There’s so much information, focus on what interests you the most. For me, it was real estate because I liked it, understood it, and could touch and feel it. The stock market never interested me; I didn’t do well in it. If you’re not interested, don’t study it. Find investment channels that interest you!
For a woman who has aspired, acquired, and applied but hasn’t seen results, what advice would you give her?
Aspire, acquire, and apply is the Triple A Triangle that I present in It’s Rising Time. You aspire when you have a dream, a goal, and then you acquire the information knowledge you need, and then you apply that information and knowledge when you do something. If you’ve done these three steps and haven’t seen results, you’re missing one key element: feedback. I might add this in the next time I write this book. Every action you take provides feedback. It’s essential to look for feedback with every action. Sometimes it’s small but pay attention to it. It’s important to be aware and conscious of the feedback you receive. If you launch a product that doesn’t sell, it’s feedback telling you something needs to change. If you launch a successful product, that’s also feedback. With every action, there is feedback.
Is there a way someone can shift from being self-employed to a business owner?
The Cashflow Quadrant is about the four types of people in the world of business. So on the left side is E, which stands for employee, that if you are working for somebody else. Below the E is the S — self-employed — which is you working for yourself. At the top on the right side of the quadrant is B — business owner who has other people and systems working for them. Below the B on the right side of the quadrant is I… for investors who have money working for them.
This is a good question, Stella, because the hardest transition to make is from the S quadrant (self-employed) to the B quadrant (business owner). The reason for that is the self-employed person is used to doing it all themselves. The ‘Nobody does it better’ mindset. If you want it done right, “do it yourself” — that’s their mantra. That’s what they live by. Oftentimes Ss are perfectionists.
Ss must learn to trust and bring in other people to move to that B quadrant. That’s when they have a business with a team behind it. You’re never going to become a B, a big business owner, doing it all yourself. There was a statistic that cited the biggest increase in the world of business was in women-owned businesses… but the problem was that 90% of those women-owned businesses had one employee — the woman who started the business. To grow to the B quadrant, you have to start building a team. That’s priority number one. I would say the first person on your team should be a bookkeeper. This is because you want somebody who’s going to be very honest with you about your income and your expenses. That applies both in business or in your personal life. You can hire a bookkeeper by the hour. It is one of the most beneficial things I ever did because it’s very easy to lie to yourself about how much income you have, and especially what your total expenses are. You’re going to need a team and systems. Moving from S to B is more of a mindset change. When you bring people on it’s important to let them make mistakes, let them fail… so there are opportunities to learn. At The Rich Dad company we say, “If you’re not making mistakes, you’re not pushing yourself enough.” We encourage people to make mistakes because that’s where real learning and real growth happens. However, if they are making the same mistake repeatedly, then that’s another story. It is important to start trusting people, bringing them in and trusting that they’re going to do a job and accepting that they’re probably not going to do it as well as you are. The Business-owner quadrant takes a lot. It’s not easy. When we started The Rich Dad, it took us 10 years to get from S to B. We were Ss, self- employed, for that long. It’s not an overnight thing. It’s going to happen gradually, as you bring on the first person and bring on the next person you start putting systems in place.
What is your view on the fear of failure?
Failure is your greatest gift. When I make a mistake, I don’t like it, but I step back and ask, “What’s the lesson?” A mistake or failure reveals something you didn’t know. The only way humans learn is by making mistakes. To succeed, you must fall and get back up, just like learning to ride a bicycle. Embrace failure; it’s where real learning and growth happen. Make more mistakes, make them quickly, and learn from each one. If you don’t learn from a mistake, then it’s a waste of a good mistake.”
I won’t go into a lot of stories here, but there are many stories of major failures that turned into incredible successes because of what they learned through the failures.
Other than the fear of failing, what do you think is stopping women from achieving their dreams?
Women are often taught to be dependent. They may feel they’re not smart enough. However, these beliefs are false. Education is readily available, and you’re smarter than you think. It’s hard sometimes to know where to start, but you can start with the Rich Woman book or with your program, Stella. Not being ‘smart enough,’ is just a lie you’re telling yourself. Gain confidence and self-esteem through financial education.
The other thing I think that holds women back is the misconception is that you need a lot of money to start investing, which isn’t true. As a matter of fact, when Robert and I started investing, we didn’t have any money. When I had to come up with that $5,000, I had to figure out a way. We had to get very creative with the first four or five properties we bought. So that’s why I like to say “Find the investment first — whether it’s real estate, or whatever it is — and touch it and feel it. See it there.” You’re going to get excited about it. Put your mind to work and say How can I get this? How can I do it? The best way is to find the investment first and then figure out how to get the money.
Have you failed at anything before?
Absolutely, I fail daily, sometimes thousands of times… I fail every day. Failure is a part of learning and growth. Recently, we had a project at The Rich Dad Company where we found our initial assumption was entirely wrong. The foundation that we based our entire initiative on was flawed. We were like, Oh God, we’ve spent all this time and money. But now, because of that failure and mistakes, we have taken this project to a level that we had never dreamed possible. So that’s the beauty of mistakes and failures. You must get in and do something and if it fails, then look at it and ask Why did it fail? All you’re doing is getting smarter. I can’t tell you how many times I fail. It is every single day. I embrace failure as an opportunity to become smarter and more knowledgeable.
What challenges have you faced on your wealth-building journey?
I’ve faced various challenges, from dealing with bad partners to lawsuits, losing, and making money. I’ve had more life experiences than I ever expected. Every challenge makes me smarter and more experienced. I now view challenges as opportunities to learn and grow, rather than obstacles.
This is very different from how I used to look at things that seemed negative. Today I will be like Okay this is just another life experience being put in front of me, for me to learn from and then I do my best. I’m not always good at it but I do my best to keep my emotions and my reactions out of it. I can’t say I do it all the time by any means. I say “Okay, I’m being given this gift called ‘disaster’ and I need to figure out what to do and how to overcome it — and I’m going to learn so much.” Yes, that’s my kind of a new approach that I have taken over only the last few years really. Now it’s like Okay, here we go again. Let’s do it.
If you had a magic wand, what change would you bring?
I would like to see the world go back to free markets, free trade, entrepreneurship, and capitalism, where we can operate as a business, and operate logically. Get rid of the emotions, and deal with facts. That would be my wish.
Are there any women who have helped you reach the top?
Well, that’s a good question because as I said earlier, I was raised with a view that gender isn’t a factor in success. So, I just look for the best people to learn from. I’d love it to be women. And yes, there have been some very influential women in my life. People often comment that “Well, you know, if you’re going to put this team together, you better have some women.” My reply is “Sure, if they’re the best.” I want the best people around me. However, I have to say my mom is number one, by far. When I was nine years old, she said, “Kim, if you don’t want to spend your life in the kitchen, don’t learn how to cook.” To this day, I don’t know how to cook. And then she said, “If you don’t want to be a secretary don’t learn how to type.” Mind you, this is when there were typewriters and women were secretaries, nurses, and teachers… What she was telling me was not to put yourself in a box. Do not go along with this stigma of what a woman is stereotyped to be. You can be anything you want to be, do anything you want to do. That’s how I was raised. So, both my dad and my mom were very similar in that respect. She encouraged me to go for my dreams. It started right there.
If we could go back in time, what key lessons would you tell your 15-year-old self?
I would tell my 15-year-old self to make more mistakes and not be afraid of them. School often teaches that mistakes are bad, but they are essential for learning and growth. Don’t worry about what people think of you.
What is your life mantra?
My life mantra is simple: “Life is meant to be joyous.” I’ve believed in this mantra since I was a child, and it continues to guide me.
Leave a challenge for Stellar Woman subscribers to help them on their journey to building wealth.
My challenge to Stellar Woman subscribers is to assess how they use their free time. I want to express my gratitude to everyone who’s watching. You’re already taking a significant step towards your financial education, which is crucial. Just by being here, you’re showing dedication. Now, let me present a challenge to all Stellar Woman subscribers.
Many say they have no free time, but let’s debunk that myth. Take a moment to map out your day, hour by hour, or even minute by minute. You’ll likely discover pockets of free time when you chose to do various activities – whether it’s watching TV or playing video games. Now, let’s put this time to good use.
I challenge you to examine how you spend your spare moments and commit to financial education during that time. Read a book, watch podcasts, go online, study, talk to people, meet individuals, attend investment groups – whatever aligns with your interests. Dedicate your free time to your financial education and your path to financial freedom.”
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