Page 171 - Rich Dad's Increase Your Financial IQ: Get Smarter with Your Money

1. Can the business make more money?
2. Does the business have a protected niche?

3. Does the business budget its money and resources well?
4. Can the business be leveraged and expanded?
5. Is it run by a team of smart, well-informed people?

In even simpler terms, intrinsic value means:

1. Niche. This means the business has a core competence, something that

will make money in good times and bad. Coca-Cola fits this requirement.
People will always drink sugared water regardless if plain water is better for
them.
A big advantage Coca-Cola has is its trademark, which is protected by
law. You may recall that financial intelligence #2 is protection. In this case,

Warren likes this product because it’s a product that is a legally protected
brand, not just a commodity. A well-recognized brand, protected and
defended from pirates, increases Coca-Cola’s intrinsic value.

The brand Rich Dad is a trademark protected by law in every country we
do business in. Being a brand gives my business greater intrinsic value.
Many authors write books but fail to build a brand. As you know, Harry
Potter is a megabrand. So is Donald Trump. If you are not a brand, you are
a commodity. Brands have more intrinsic value, and to maintain this value,

a brand must be true to its message and customers.
A few years ago, a large mutual fund company approached me and asked
if I would endorse its fund. Although the fee it would have paid me was

very high, I turned the offer down. In my mind, endorsing a mutual fund
would not be true to the Rich Dad brand. To me, it would have shown a lack
of integrity, which would diminish the brand’s intrinsic value. Besides, I
couldn’t do it with a straight face.

2. Leverage. This point separates the small business owners from the big
business owners. For example, if I am a doctor, it is hard for me to leverage
my value if my patients come only to see me. But if that same doctor

invented a new cure or kind of medicine, then that doctor’s medical
intelligence can be leveraged via a product.