Page 50 - Rich Dad's Increase Your Financial IQ: Get Smarter with Your Money

In the book, I wrote about how my business went to extreme success in
about a year, making me a millionaire, and then failed suddenly. I described

the feelings of depression and loss, and a strong desire to run away and hide
after the business collapsed. I was deeply in debt and facing the biggest
financial problem of my life up to that point.
Rich dad, however, encouraged me to face my problems and rebuild the

business instead of run and declare bankruptcy. He reminded me that
solving this messy problem would increase my financial intelligence. It was
some of the best advice I’ve ever received. Although painful, the process of
facing my problem and rebuilding the business was the best education I

could have asked for. It took a number of years to solve the problem and
rebuild the business, but the process increased my financial IQs #1 through
5 and made me a financially smarter entrepreneur.
Rebuilding the wreckage of my business was my business school. The

first thing I had to do was put together the eight parts of my business, the B-
I triangle. The second thing I had to do was redefine my business by finding
a competitive niche. You see, by 1981, the year I was rebuilding the
business, the market was inundated by other wallet makers. Nylon wallets

from countries such as Korea, Taiwan, and Indonesia were flooding the
world market. Prices for wallets dropped from $10 at retail, the price I had
established, to $1 a wallet on the streets of Waikiki and the world. Nylon
wallets had become a commodity, and as you know, the market for

commodities goes to the lowest-priced producer. In order to compete as a
commodity, I needed a market niche. I needed to become a brand. That
opportunity came in the form of rock and roll.
As described in Before You Quit Your Job, I stumbled into the rock and

roll business, and saved my business by licensing the rights to use rock
band names on my wallets. Soon I was producing wallets for Van Halen,
Judas Priest, Duran Duran, Iron Maiden, Boy George, and others. Because I
was a legally licensed product, I got my retail price back up to $10 a wallet.

Although I now had to pay a royalty to the bands, being a legally licensed
rock and roll product opened doors to retailers across America and
throughout the world. My business boomed and money came pouring back
in.

As I’ve said, the way to increase one’s financial intelligence is by
solving the problem in front of you. By 1981, I had solved the problem of