Grow Up

In Investor Lesson #1, which was the importance of choice, there were three financial core value choices offered. They were:

1. To be secure

2. To be comfortable

These are very important personal choices and should not be taken lightly.

In 1973, when I returned from the Vietnam War, I was faced with these choices. When rich dad discussed my option of taking a job with the airlines as a pilot, he said, "A job with the airlines may not be that secure. I suspect that they will be having a rough time in the next few years. Yet, if you keep your record clean, you might find job security in that profession.. .if that is what you really want."

He then asked me if I wanted to get my job back with Standard Oil of California, a job I held for only five months . . . the five months before I went to flight school for the Marine Corps. "Didn't you receive a letter saying that Standard Oil would take you back as an employee once your military duty was over?"

"They said they would be happy to have me reapply," I replied. "But they guaranteed nothing."

"But wouldn't that be a good company to work for? Wasn't the pay pretty good?" asked rich dad.

"Very good," I said. "It was an excellent company to work for, but I don't want to go back. I want to move on."

"And what do you want most?" asked rich dad as he pointed to the three choices. "Do you want security, comfort, or to be rich the most?"

From deep inside me, the answer was a loud "To be rich." It had not changed in years, although that desire and core value was pushed down quite a bit in my family, a family where job and financial security was the highest priority and rich people were considered evil, uneducated, and greedy. I grew up in a family where money was not discussed at the table because it was an unclean subject, a subject not worthy of intellectual discussion. But now that I was 25 years old, I could let my personal truth out. I knew the priority of core values of security and comfort were not first on my list. To be rich was core value number one for me.

My rich dad then had me list my core financial priorities. My list went in this order:

2. To be comfortable

3. To be secure

Rich dad looked at my list and said, "OK. Step one is to write out a financial plan to be financially secure."

"What?" I asked. "I just told you I wanted to be rich. Why should I bother with a plan to be secure?"

Rich dad laughed. "Just as I thought," he said. "The world is filled with guys like you who only want to be rich. The problem is, most guys like you don't make it because you don't understand being secure, or being comfortable financially. While a few people like you do make it, the reality is, the road to wealth is littered with wrecked lives .. . wrecked lives of reckless people.. .people just like you."

I sat there ready to scream. All my life, I had lived with my poor dad, a man who valued security above all. Now, I'm finally old enough to be outside of my poor dad's values and now my rich dad is saying the same thing. I was ready to scream. I was ready to get rich, not be secure.

It was three weeks before I could talk to rich dad again. I was very upset. Everything I had done my best to get away from he put back in my face. Finally I calmed down and called him for another lesson.

"Are you ready to listen?" rich dad asked when we met again.

I nodded, saying, "I'm ready but not really willing."

"Step one," rich dad started. "Call my financial advisor. Say, 'I want a written financial plan for lifetime financial security.'"

"Step two," said rich dad. "After you have a written plan for basic financial security, call me and we'll go over it. Lessonis over. Goodbye."

It was a month before I called him. I had my plan and I showed it to him. "Good" was all he said. "Are you going to follow it?"

"I don't think so," I said. "It's just too boring and automatic."

"That is what it is supposed to be," said rich dad. "It's supposed to be mechanical, automatic, and boring. But I can't make you follow it, although I do recommend you do."

I was calming down as I said, "Now what?"

"Now you find your own advisor and you write a plan on how to be financially comfortable," said rich dad.

"You mean a long-term financial plan that is little bit more aggressive?" I asked.

"That is correct," said rich dad.

"That is more exciting," I said. "That one I can get into."

"Good," said rich dad. "Call me when you have that one ready."

It was four months before I could meet with rich dad again. This plan was not that easy.. .or as easy as I thought it would be. I checked in by phone with rich dad every so often, but the plan was still taking longer than I wanted. Yet the process was extremely valuable because I learned a tremendous amount talking to different financial advisors. I was gaining a better understanding of the concepts rich dad was trying to teach me. The lesson I learned was that unless I am clear, it is hard for the advisor to be clear and able to help me.

Finally, I was able to meet with rich dad and show him my plan. "Good" was all he said for a while. He sat there looking at the plan and then asked, "So what did you learn about yourself?"

"I learned that it is not that easy to really define what it is I want from my life because today we have so many choices . . . and so many of them look exciting."

"Very good," he said. "And that is why so many people today go from job to job or from business to business . . . but never really get to where they want to go financially. So they often spend their most precious asset, their time, and wander through life without much of a plan. They might be happy doing what they are doing, but they really do not know what they are missing out on."

"Exactly," I agreed. "This time, instead of just being secure, I really had to think what I wanted to do with my life . . . and surprisingly, I had to explore ideas that would never have occurred to me before."

"Like what?" asked rich dad.

"Well, if I really wanted to be comfortable with my life, then I had to think about what I wanted to have in my life. Things like travel to far away lands, fancy cars, expensive vacations, nice clothes, big houses, etc. I really had to expand my thoughts into the future and find out what I wanted for my life."

"And what did you find out?" asked rich dad.

"I found out that security was so easy because I was planning on being secure only. I did not know what true comfort meant. So security was easy, defining comfort was more difficult, and I now cannot wait to define what rich means and how I plan to achieve great wealth."

"That's good," said rich dad. "Very good." He then continued on by saying, "So many people have been conditioned to 'live below their means' or 'save for a rainy day' that they never know what could be possible for their lives. So people splurge, get into debt by taking the annual vacation or buying a nice car, then feel guilty. They never take the time to figure out what could be financially possible if only they had a good financial plan. . . and that is a waste."

"That is exactly what happened," I said. "By meeting with advisors and discussing what was possible, I learned a lot. I learned that I was really selling myself short. In fact, I felt like I have been walking in a house with a low ceiling for years, trying to scrimp, save, be secure, and live below my means. Now that I have a plan of what is possible relative to being comfortable, I am now excited about defining what the word 'rich' means."

"Good," said rich dad with a smile. "The key to staying young is to decide what you want to be when you grow up, and then keep growing up. Nothing is more tragic than to see people who have sold themselves short on what is possible for their lives. They try to live frugally, scrimping and saving, and they think that is being financially smart. In reality, it is financially limiting . . . and it shows up in their faces and in their attitude in life the older they get. Most people spend their lives mentally caged in financial ignorance. They begin to look like wild lions trapped in small cages at the zoo. They just pace back and forth wondering what happened to the life they once knew. One of the most important discoveries people can make by taking the time to learn how to plan is to find out what is financially possible for their lives . . . and that is priceless.

"The continual planning process also keeps me young. I am often asked why I spend my time building more businesses, investing, and making more money. The reason is I feel good doing it. While I make a lot of money doing what I do, I do it because making money keeps me young and alive. You wouldn't ask a great painter to stop painting once he or she was successful, so why should I stop building businesses, investing, and making more money? That is what I do, just as painting is what artists do to keep their spirits young and alive, even though the body ages."

"So the reason you asked me to take the time to plan at different levels is for me to find out what is financially possible for my life?" I asked.

"That's it," said rich dad. "That is why you want to plan. The more you find out what might be possible for this tremendous gift called life, the younger at heart you remain. People who plan only for security or who say, 'My income will go down when I retire' are planning for a life of less, not a life of more. If our maker has created a life of unlimited abundance, why should you plan on limiting yourself to having less?"

"Maybe that is what they were taught to think," I said. "And that is tragic," rich dad replied. "Very tragic."

As rich dad and I sat there, my mind and heart drifted to my poor dad. I knew he was hurting and struggling to start his life over again. Many times I had sat down with him and attempted to show him a few of the things I knew about money. However, we usually got into an argument. I think there is often that kind of breakdown in communication when two parties communicate from two different core values, one of security and the other of being rich. As much as I loved my dad, the subject of money, wealth, and abundance was not a subject we could communicate about. Finally, I decided to let him live his life and I would focus on living mine. If he ever wanted to know about money, I would let him ask, rather than trying to help when my help had not been requested. He never asked. Instead of trying to help him financially, I decided to just love him for his strengths and not get into what I thought were his weaknesses. After all, love and respect are far more important than money.

Mental Attitude Quiz

In retrospect, my real dad had a plan only for financial security via job security. The problem was that his plan failed when he ran for public office against his boss. He failed to update his plan and continued to plan only for security. Luckily, he did have his financial security needs covered by a teacher's pension, Social Security, and Medicare. If not for those safety nets, he would have been in very bad financial shape. The reality was that he planned for a world of scarcity, a world of bare minimum survival, and that is what he got. My rich dad, on the other hand, planned for a world of financial abundance, and that is what he achieved.

Both lifestyles require planning. Sadly, most people plan for a world of not enough, although a parallel world of financial plenty is also possible. All it requires is a plan.

So the mental attitude question is:

Do you have a written financial plan to be:

2. Comfortable? Yes_ No_

Please remember rich dad's lesson that all three plans are important. But security and comfort still come before being rich, even though being rich may be your first choice. The point is that if you want to be rich, you will need all three plans. To be comfortable, you need only two plans. And to be secure, you need only one plan. Remember that only three out of every hundred Americans are rich. Most fail to have more than one plan. Many don't have any kind of written financial plan at all.

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