Page 79 - Rich Dad Poor Dad for Teens: The Secrets about Money--That You Don't Learn in School!

The better I was at understanding the accounting and cash management, the
better I would be at analyzing investments and eventually starting and
building my own company.

I would not encourage anyone to start a company unless they really
want to. Knowing what I know about running a company, I would not wish
that task on anyone. There are times when people cannot find employment,
where starting a company is a solution for them. The odds are against
success: Nine out of 10 companies fail in five years. Of those that survive
the first five years, nine out of every 10 of those eventually fail, as well. So
only if you really have the desire to own your own company do I

recommend it. Otherwise, keep your daytime job and mind your own
business. When I say mind your own business, 1 mean to build and keep
your asset column strong. Once a dollar goes into it, never let it come out.
Think of it this way, once a dollar goes into your asset column, it becomes
your employee. The best thing about money is that it works 24 hours a day
and can work for generations. Keep your daytime job, be a great hard-

working employee, but keep building that asset column.
As your cash flow grows, you can buy some luxuries. An important
distinction is that rich people buy luxuries last, while the poor and middle
class tend to buy luxuries first. The poor and the middle class often buy
luxury items such as big houses, diamonds, furs, jewelry or boats because
they want to look rich. They look rich, but in reality they just get deeper in
debt on credit. The old-money people, the long-term rich, built their asset

column first. Then, the income generated from the asset column bought
their luxuries. The poor and middle class buy luxuries with their own sweat,
blood and children's inheritance.
A true luxury is a reward for investing in and developing a real asset.
For example, when my wife and I had extra money coming from our
apartment houses, she went out and bought her Mercedes. It did not take

any extra work or risk on her part because the apartment house bought the
car. She did, however, have to wait for it for four years while the real estate
investment portfolio grew and finally began throwing off enough extra cash
flow to pay for the car. But the luxury, the Mercedes, was a true reward
because she had proved she knew how to grow her asset column. That car
now means a lot more to her than simply another pretty car. It means she
used her financial intelligence to afford it.