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The Secret to Winning at Life and Investing

The Secret to Winning

at Life and Investing
People ask me, what advice do I have for the average investor?

I tell them, “Don’t be average.”

When it comes to investing, you’re playing against some of the smartest, brightest,
most aggressive people in the financial world out there. They’re playing to win every
single day in the financial markets. For them, every day is the Super Bowl. If you’re
average and are trying to get by on a shoeshine and a smile, then the world is going
to run you over. You have to have the mindset that you will be the very, very best. You
must prepare and prepare every day.

I play to win and if you don’t have that kind of drive, the drive that says there’s no
second place, then you shouldn’t play the game. Let somebody else play it for you.

While I was serving in Vietnam, one of my friends said, “I’m alive today because dead
men kept fighting.” In other words, there were guys who should’ve been dead who kept
fighting and their spirit carried them. While for some people, Vietnam was a horrible
experience, for me it was a spiritual experience. It was there that I learned to trust in
God, not just merely say prayers and believe in God, but actually put my trust in God.

Every morning, when people get up to meditate or pray or whatever they do, they fail
to call on their spirit and take the test. In Vietnam, I had to take the test every morning.
I took the test regardless of whether my spirit was razor sharp or weak. So did the
soldiers against me, they took the test every morning, too. The average person does
what they’ve been taught from day one. They play it safe. Don’t take risks. Don’t make
mistakes. Don’t lose money. I’m not saying it’s right or wrong, but if you want to be rich
there’s a different spiritual basis to the way I approach life. I learned to trust in God, not
just pray.

I take the test in the business world and the investment world every day because I’m
playing against some of the smartest, brightest minds out there. They’re playing to
win and so should I. It’s not that I violate my ethics, my morals, or my integrity. I would
never do anything illegal because it’s not worth it. Why try to make money from jail?
It’s not worth it.

If you’re spirit is strong, you will succeed.

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So how strong is your spirit? I ask because it’s your spirit that ultimately makes you
an entrepreneur. Your spirit is what has you build a big business. It’s spirit that caused
Ray Kroc from McDonald’s to take an average hamburger and build a mega-billion-
dollar corporation. We can all build a better hamburger than McDonald’s, but Ray
Kroc’s spirit, knowledge, and tenacity is what built the worldwide business we know
today.

The Difference
Between Belief
and Trust
Years ago, a preacher told me a story about trusting God. He said a guy strung a rope
across Niagara Falls and told the crowd watching him, “I’m going to ride my bicycle
across this rope.” Everybody cheered and said, “Yeah, George. Go for it, George. Yeah,
we believe in you, George. We believe in you.”

Old George then climbs on his bicycle and he starts pedaling across, and pedaling,
and pedaling. He’s wobbling, but he gets to the other side. He then turns around
and pedals back. Everybody’s cheering, the closer he gets the louder they cheer and
everybody’s jumping up and down saying, “Yes, George. We believed in you. Yes,
George.”

Once he is safely back, he says to the crowd, “Who wants to sit on the handlebars and
go across with me?” No one accepts the offer. While they all believe in George, no one
trusts him. There’s a difference between belief and trust. Just then, out of the crowd,
a little girl raises her hand and says, “I’ll go with him.” The crowd gasps and pleads,
“Don’t go. That’s too risky. That’s dangerous. What do you think you’re doing?” George
says, “Come here little girl,” and with that she climbs on the handlebars. The crowd
begins screaming and calling George names. They’re yelling, “How dare you?”

George begins pedaling across the falls and the crowd is screaming at him. They don’t
like him at all. One moment they believed in him, now they hate him.

George pedals across, the crowd sees him turn around, and he gets closer again. The
crowd finally realizes that George and the little girl on the front handlebars are going to
make it. George and the little girl reach the end, the little girl climbs off, and the crowd

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starts cheering again, “George, you’re wonderful!”

A reporter goes up to the little girl and asks, “What caused you to get on the
handlebars when nobody else would?” The little girl answered, “I climbed in the basket
because this man is my father. I don’t just believe in him; I trust in him.” That’s the
difference between belief and trust. Do you just believe you can win or do you really
trust that you can win?

The greatest secret my rich dad taught me was that there is no losing when you trust.

Losing is a belief. Every time I made a mistake in my life, instead of blaming, justifying,
getting angry, or calling my attorney, I just took the responsibility and said, “What’s
the lesson here?” It’s no different than riding a bicycle and falling off. It doesn’t mean
you’re a loser, it means you fell off the bicycle. It means there’s something more for
you to learn. Every time you make a mistake, you have a learning experience. Mistakes
are very important. From mistakes come magic, so if you get the lesson in every
mistake, it’s a no-lose world.

The Spirit of
an Entrepreneur
When I lost my first business, I lost millions of dollars. Instead of blaming my
accountants, my attorneys, the market, and everybody else, I simply went back to my
investors and said, “I want you to know I did the best I could. I apologize. I lost your
money.”

Now, all of them were very sophisticated and wealthy investors, so I was expecting
the worst, but they said, “Oh, that’s good news.” I asked, “What do you mean it is good
news?” They said, “We need the losses. Would you sell me your losses?” In other
words, because my company had lost money, and it made a lot of money before, they
were going to buy parts of my company just for the losses.

You see, the average person or investor is not aware of the sophistication that goes
on in the financial markets. This is why your education is so important. To them, me
losing money or me making money made no difference because if I made money, they
were going to make money. If I lost money, they were going to make money because
the tax laws allow you to take losses. It’s called NOLs, or net operating losses.

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My education only really began when I was a failure. The moment I began to work my
way out, my rich dad said, “You know, you have a major opportunity here. Most multi-
millionaires lose three companies. You’ve lost one. You’ve got two more to go.”

The laws of most countries are set up for people to be rich, not for people to play
it safe, to be secure, to do it on your own. The laws are set up for the spirit of the
entrepreneur, the adventurer.

The spirit of the entrepreneur is very important for success, especially in today’s
changing world. I did a talk once in Hong Kong, of which I’m not too proud. I was
brought in to talk to a bunch of corporate people, and as I stood up to speak, I saw
a bunch of people whose bodies were at work, but spiritually and mentally they had
checked out. In other words, they had sold their soul for a steady job and a steady
paycheck. The people that brought me in wanted me to light a fire under these people,
but I wasn’t getting a response talking to them about the spirit of entrepreneurship. So
I told the crowd, “The reason it is called a corp-oration is because most people in large
corporations are a bunch of corpses. They’re dead but they don’t know it yet. They’re
just going through the motions.”

Now, people think that’s a very harsh way of looking at being an employee. Yet, my
point is that if you’re inefficient as a business and you have people whose bodies are
there physically, but spiritually and mentally they’re checked out, then your company is
going to be leveled in today’s world. So I say to people, “Whether you’re the head of the
company, or the lowest member of the company, you’re still part of a team.”

Today’s businesses need to revitalize the entrepreneurial spirit within their

organizations. That means to ask everybody on the team, from the president all the
way down to the janitor, to play to win. One of the most valuable lessons I learned
from Vietnam was that no one is more important than anyone else. If the Private didn’t
do his job, then the Lieutenant couldn’t do his job. When running or leading a business,
everybody’s important. Everybody must have the entrepreneurial spirit and the spirit is
to win.

If you were the janitor and you found one of the managers doing something that
damages the company, then that manager is not just damaging one or two people,
that manager is putting everybody in the company at risk. Somebody stealing supplies
is not just taking from the company. They’re putting everybody in the company at risk.
A company, big or small, is a living organism. Someone not doing his or her best is like
an infection and left untreated it can kill the entire organism. It’s very important today,
in business, for each and every individual to have the spirit of entrepreneurship. This
spirit of change, of new ideas, of revitalization is what keeps a team alive.

If the company starts to suffer, everybody suffers. That’s why I tell people that,
whether you are working for a big company or day one of a startup, play to win every

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day. Longevity in today’s world requires that you have the highest ethics, morals, and
integrity. When you see something wrong, you have to have the ability to call it as it is.
You have to tell the truth with compassion, but with conviction as well.

It takes a lot of conviction to say, “I really don’t think you’re doing your job today. I
don’t like it that you come to work and take personal phone calls all day. It damages
all of us.” But, a team holding each other accountable is what it takes to win.
Today’s marketplace is calling on all of us to call on our spirit of winning. It’s not that
somebody has to lose, but you and your team committed to being the best you can
be.

Thinking for
the Long Term
At the Rich Dad Company, while people may get a paycheck, I make sure they receive
education to help them start thinking like business owners. Many times the employee
is overly concerned with the “now.” They think, “I need a paycheck today so I can put
food on the table and keep a roof over my head.” That’s an employee’s mentality. To
think like a business owner, the emotion for success is patience—delayed gratification.
To be a business owner or an investor, there is a building process. That’s why
investors think for the long term.
The difference is this. Most employees need the paycheck now. Rich dad’s number
one rule is the rich don’t work for money. Employees work for money because they
need money now. Business owners and investors acquire assets that grow and
become more and more valuable with time.

The attitude I have in all my companies is that the people should take very small
salaries with the understanding that we’re building a company for huge stock options
down the road.

If you’re a business owner, I would suggest that you talk to your employees and
your specialists like your accountants and your attorneys about the spirit of the
entrepreneur. That’s how you build and you grow. To do that, your team must trust you
and they must know that you’re willing to share the rewards when you win.

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Rich dad believed that it’s impossible to win if you hang onto your excuses. Some
common excuses are:

• “I can’t do that.”
• “I can’t wait five years before I get another paycheck.”
• “Invest? You want me to lose all my money don’t you?”
• “I don’t have any money to invest.”
• “I need more information before I can do anything.”
• “I tried that before, it’ll never work.”
• “I don’t need to know how to read financial statements, I can get by.”
• “I don’t have to worry, I’m still young.”
• “I’m not smart enough.”
• “I would do it if I could find the right people to do it with me.”
• “My husband would never go for that.”
• “My wife would never understand.”
• “I would if I was younger.”
• “It’s just too late for me.”
• “It’s not worth it.”
• “I’m not worth it.”

The only reason people lose is because they don’t think long term. Instead they have
the emotion and the mindset of a loser.

Change
Takes Time
Now, if you’re considering becoming a business owner or investor, I would suggest
taking baby steps. Oftentimes, people want to make huge changes, but it’s as if you’re
out of shape and suddenly decide to run a four-hour marathon. It just doesn’t work.
That’s what really discourages people. They try to do too much, too soon, too quickly.
Coming from a family where my mother wanted me to be a doctor, the transition to
becoming a business owner and investor was really a slow transition. It was a mental,
spiritual, and physical change that came over time. It didn’t happen overnight.

I remember back in 1974, when I got out of the Marine Corps, I went to a big sales
rally. W. Clement Stone, one of the first motivational speakers, was there. That’s
how I started to change my thinking pattern. I started listening to mentors who

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had a different mindset. I listened to as many as I could because although I didn’t

necessarily agree with all of them, I learned something new. While the process can be
very slow, the fact is that most overachievers actually underachieve. In other words,
when you want to make a change, don’t try to do too much, do less.

For example, I’ve used the excuse of sitting at my computer writing as the reason I
don’t exercise much as I normally would. Instead of trying to overachieve, I set a goal
to underachieve. Instead of setting a goal like most people would of running for an
hour, my goal to underachieve was to run for ten minutes. That’s all I’m going to do
for a year. I’m going to run for ten minutes and walk for twenty. Most high achievers
overexert and fail and as a result, never achieve anything. Because I set a goal to
underachieve, I get up every morning and go to the gym. I underachieve, feel great
(because I kept my commitment), and come home. That’s the way I do it. As a result, I
accomplish what I set out to do.

I recommend that to people, rather than trying to say, “I’m going to quit my job and I’m
going to form a major corporation, I’m going to take on Apple.” Well, you might be able
to do that, you might be the next Steve Jobs, but the reality is, all of us take baby steps
at the start and baby steps eventually will let you climb massive mountains.

The Bottom
Line
Often, what makes people “average” is themselves.

Living only for the moment, trying to do too much, too soon, and thinking like an
employee all makes for a recipe of disappointment. If you’re serious about becoming
more than average and winning at life, take what I’ve shared with you in this eBook
and apply it in your life starting today.

The results won’t come over night, but they will come. I’ve seen it happen to countless
individuals. Best of all, you too will discover the secret to winning has been inside of
you all along.

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