Rich Dads Before you Quit Your Job Notes taken from the book pertinent to this course:

: 10 Rea !ife !essons e"ery #ntrepreneur shou d kno$ about bui din% a &u timi ion Do ar Business By: Robert '( )iyosaki $ith *haron !( !echter +,- .*BN 0/001/12134 .n the introduction of this book5 the author poses the 6uestion: -re some peop e born entrepreneurs or are they trained to be entrepreneurs7 .n the intro 8pa%e 9i: ;,eop e are trainab e( 'hey can be trained to be either emp oyees or entrepreneurs( 'he reason that there are more emp oyees than entrepreneurs is that our schoo s train youn% peop e to become emp oyees( 'hat is $hy so many parents say to their chi d( < %o to schoo so you can %et a %ood =ob( . ha"e yet to hear a parent say5 <%o to schoo to become an entrepreneur(> ;'he transition from emp oyee to entrepreneur is more than chan%in% =obs( .t is a true metamorphosis ike the caterpi ar to the butterf y(> &any peop e do not become entrepreneurs because they are afraid of bein% fai ures( ?umans are desi%ned to earn by makin% mistakes( .n ife and in turn in business5 there are many tria s and tribu ations( &ost authors dont discuss the emotiona stuff ike: Business fai ures .nso "ency ?irin% @ firin% .n"estors @ +reditors 'his author took a fe$ deser"ed shots at co e%e professors for not teachin% students to become entrepreneurs( Ahat is entrepreneurship7 Bne of the better definitions comes from ?o$ard *te"inson 8a professor from ?ar"ard: $ho says ;#ntrepreneurship is an approach to mana%ement that $e define as fo o$s: the pursuit opportunity without regard to resources currently controlled.

.ntroduction: What Makes Entrepreneurs Different? ;Bne of the most fri%htenin% days of my ife $as the day . 6uite my =ob and officia y became an entrepreneur( Bn that day . kne$ there $ere no more steady paychecks5 no more hea th insurance or retirement p an( No more days off for bein% sick or paid "acations( Bn that day5 my income $ent to Cero( 'he terror of not ha"in% a steady paycheck $as one of the most fri%htenin% e9periences . had e"er e9perienced( Aorst of a 5 . did not kno$ ho$ on% it $ou d be before . $ou d ha"e another steady paycheckD it mi%ht be years( 'he moment . 6uit my =ob . kne$ the rea reason $hy many emp oyees do not become entrepreneurs( .t is fear of not ha"in% any moneyD no %uaranteed income(( no steady paycheck( Eery fe$ peop e can operate for on% periods of time $ithout money( #ntrepreneurs are different5 and one of those differences is the abi ity to operate sane y and inte i%ent y $ithout money( Bn that same day5 my e9penses $ent up( -s an entrepreneur5 . had to rent an office5 a parkin% sta 5 a $arehouse5 buy a desk5 a amp5 rent a phone5 pay for tra"e 5 hote s5 ta9is5 mea s5 copies5 pens5 and e"en coffee for the office( . a so had to hire a secretary5 an accountant5 an attorney5 a bookkeeper5 a business insurance a%ent5 and e"en a =anitoria ser"ice( 'hese $ere a e9penses my emp oyer had once paid for me( . be%an to rea iCe ho$ e9pensi"e it had been to hire me as an emp oyee( . rea iCed that emp oyees cost far more than the number of do ars ref ected in their paychecks( *o another difference bet$een emp oyees and entrepreneurs is that entrepreneurs need to kno$ ho$ to spend money5 e"en if they ha"e no money(> Employees Are A Rather New Phenomenon Durin% the a%rarian a%e most peop e $ere entrepreneurs( &any $ere farmers5 bakers5 tradespeop e5 butchers5 cand estick makers( 'heir ast names ref ect their business that is $hy today there are many peop e $ith names ike *mith5 Baker5 Farmer( 'hey $ere entrepreneurs and most chi dren fo o$ed in their footsteps a so becomin% entrepreneurs( It is a matter of training. The Difference between Freedom and Sec rity ;-rent security and freedom the same thin%7> -ctua y they are in fact opposites( 'he more security you seek5 the ess freedom you ha"e( 'he peop e $ith the most security are in =ai ( 'hat is $hy it is ca ed ma9imum security( .f you $ant freedom you need to et %o of security( #mp oyees desire security and entrepreneurs seek freedom(

.f one is to be an entrepreneur it be%ins $ith a desire for more freedom than security( &ost successfu entrepreneurs earned from many mistakes( !hy tal" abo t fail res# ;&any peop e do not become entrepreneurs because they are afraid of fai in%(> 'he authors intent in $ritin% this book $as to brin% out the ups and do$ns of bein% an entrepreneur( #ntrepreneurs earn from their mistakes( ;Bne of the missin% e ements $e ha"e found in readin% many of the book about entrepreneurship5 especia y those $ritten by co e%e professors5 is that they do not %o into the emotiona tria s and tribu ations an entrepreneur %oes throu%h( 'hey do not discuss $hat happens to entrepreneurs emotiona y $hen the business fai s5 $hen they run out of money5 ha"e to et emp oyees %o5 and $hen their in"estors and creditors come after them(> The Power of E$c ses &any peop e $ant to become entrepreneurs but a $ays make e9cuses: 1( ;. dont ha"e the money(> G( ;. cant 6uit my =ob because . ha"e kids to support(> 3( ;. dont ha"e any contacts(> 0( ;.m not smart enou%h(> H( ;. dont ha"e the time( .m too busy(> 1( ;. cant find anyone $ho $ants to he p me(> 4( ;.t takes too on% to bui d a business(> I( ;.m afraid( Bui din% a business is too risky for me(> 2( ;. dont ike dea in% $ith emp oyees(> 10( ;.m too o d(> Street Smarts %ers s School Smarts &Employees are often trained to be specialists. 8*omeone $ho kno$s a ot about a itt e:( Entreprene rs need to be generalists. 8*omeone $ho kno$s a itt e about a ot: Entreprene rs need to "now a little abo t acco nting' the law' engineering systems' b siness systems' ins rance' prod ct design' finance' in%esting' people' sales' mar"eting' p blic spea"ing' raising capital' and dealing with different people trained in different specialties. Tr e entreprene rs "now there is so m ch to "now and so m ch they do not "now' they cannot afford the l $ ry of speciali(ation. They m st always be learning.)

A list of differences between Employees and Entrepreneurs 1( -bi ity to chan%e phi osophy from security to freedom( G( -bi ity to operate $ithout money( 3( -bi ity to operate $ithout security( 0( -bi ity to focus on opportunity rather than resources( H( ?a"in% different mana%ement sty es to mana%e different peop e( 1( -bi ity to mana%e peop e and resources they do not contro ( 4( 'eam and "a ue oriented rather than pay or promotion oriented( I( -cti"e earner no %raduation day( 2( Jenera iCed education rather than specia iCed( 10( 'he coura%e to be responsib e for the entire business( ;.f you ha"e the mind/set and tou%hness of a farmer5 you $i be a %reat entrepreneur(> No *ore +igh,Paying -obs &Today many Americans are panic"ed at the idea that o r high,paying .obs are being o tso rced' shipped not only to India' b t all o%er the world. Today' e%en tas"s performed somewhere else in the world for a lower price.) ;*o $hat does this do to the .ndustria -%e ad"ice5 ;Jo to schoo so you can find a %ood secure =ob $ith hi%h pay5> or5 ;Aork hard and c imb the corporate adder>7 'he o d .ndustria -%e ad"ice is toastK &any emp oyees $i ha"e ess $ork to find5 much ess5 since the person competin% for their =ob i"es thousands of mi es a$ay( &ost of us kno$ that $a%es ha"e not %one up for many $orkers( ?o$ can their $a%es %o up $hen someone e se is $i in% to $ork for so much ess7> -nother difference bet$een emp oyees and entrepreneurs is an entrepreneur is e9cited about chan%es and emp oyees are terrified about chan%e( !ook at ho$ fear is incorporated in business5 ife and education( 'he author %oes on to state: ho$ a teacher moti"ates students out of fear ;.f you dont study you $i fai (> &any students study out of fear and not because they $ant to earn( 'he reason peop e cra"e security is fear( 'he prob em $ith security is that it does not cure fear( ?o$e"er5 fear is a $ays there e"en for those $ho cra"e freedom( Fear is the dri"in% force for security and coura%e is the dri"in% force for freedom(

RI/+ DAD0s ENTREPRENE1RIA2 2ESS3NS 2esson 4. A s ccessf l b siness is created before there is a b siness. you start by bein% sure that you ha"e the ri%ht mind/set that you think ike an entrepreneur instead of an emp oyee( You do your home$ork study the market5 your tar%et customers5 and the competition( You identify the ski s needed for a successfu business in that market5 and assemb e a team of co"enturers and ad"isors that pro"ide the ski s you need( You identify some ad"anta%e o"er the competition and $ays to distin%uish yourse f from them in the minds of potentia customers( You put to%ether a business p an mappin% out your route to success( You ay the proper e%a foundation for your business( i( You choose a form of e%a entity for the business that pro"ides the best imitation of iabi ity and minimiCes ta9es( ii( You obtain a necessary icenses and permits makin% sure that c ear and comp ete $ritten a%reements are in p ace to a"oid any future misunderstandin%s( iii( You put the appropriate e%a protections in p ace so that you can sustain your competiti"e ad"anta%e( You bui d a fort around your inte ectua property(

!hat is yo r personal reason for starting a b siness# Ahy do . $ant to o$n my o$n business7 ?o$ bad y do . $ant to o$n my o$n business7 -t $hat e"e of p ay am . $i in% to p ay the %ame7 -t $hat e"e of p ay am . $i in% to e9tend myse f to p ay the %ame7 -m . $i in% to spend the time to earn about other successfu entrepreneurs and their businesses7 -m . afraid to fai 7 +an . turn my fear of fai in% into a stren%th that $i he p me dri"e the business7 +an . earn from my mistakes7 +an . bui d a team5 or do . ike to $ork by myse f7 -m . $i in% to pay the price7 -m . $i in% to put in the time no$ to be re$arded ater7 -m . $i in% to de ay financia re$ards unti the business succeeds5 or do . need a paycheck7

Additional 5 estions6 Ahat ha"e been your %reatest successes7 Ahat ha"e been your %reatest fai ures7 ?o$ many times ha"e you $orked for free7 Aou d you $ork for this company e"en if you $ere not paid7 -re your fami y and friends emotiona y supporti"e of your efforts in this "enture7 -re you $i in% to educate yourse f in a the areas re6uired to be successfu 7 2esson 7. 2earn +ow to T rn 8ad 2 c" into 9ood 2 c" Ahat makes peop e smart is that they earn from their mistakes( ,eop e need to understand that fai ure is a critica and necessary step to$ards success( 'he #ntrepreneuria ,rocess *tart the business Fai and earn Find a mentor Fai and earn 'ake some c asses )eep fai in% and earnin% *top $hen successfu +e ebrate +ount your money5 the $ins and the osses Repeat the process 2esson :. ;now the difference between yo r .ob and yo r wor"#

!hy wor" for free# !hat is the difference between a .ob and wor"# According to this a thor' a .ob is something yo get paid for. I do not get paid for wor" s ch as homewor". !or" is what I do to prepare me for my .ob. !hen it comes to money' the more homewor" yo do' the more money yo earn on yo r .ob. People who do not do their homewor" ma"e less money' regardless if they are an employee or an entreprene r.)

If yo are an employee' it0s to gh to get promoted and earn more money if yo don0t ha%e a trained s"ill or college degree.) &And if yo want to be entreprene rs' we need to do a different type of homewor". & &And many entreprene rs 5 it their .ob witho t doing their homewor". That is why so many small b sinesses fail or str ggle financially.) &*any employees don0t nderstand the concept wor"ing for free. They e$pect to get paid for anything they do. That is why they fail. They contin e to thin" li"e employees. They want that steady paychec".) &*any people e$pect the go%ernment to pro%ide them with .ob training for free. .. And that is why yo say they are poor people. It0s more than financial' it is a poor attit de toward the %al e of ed cation' training' and preparing oneself to ha%e a s"ill people will pay for. 'he author in another book 8Rich Dads %uide to .n"estin% LG000M: introduced a concept of the B/. trian% e $hich refers to the Business B$ner and .n"estor 6uadrants of the +-*?F!BA Quadrant(

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,roduct !e%a *ystems +ommunications +ash F o$ &.**.BN

!#-D#R*?.,

.t is important to note the si%nificance that the product is on y the tip of the iceber%K

?ere is an interestin% poem that discusses the concept of bein% ri%ht and sti Here lies the body of Justin Grey.

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He died defending his right of way, He is right his case is strong, But hes as dead as if he was wrong. You Do Not Have to e !irst to Win "Many people think #homas Edison was the first person to invent the electric li$ht bulb and bein$ first helped him found %eneral Electric& #he facts are he was not first& #he records show that he was actually twenty'third on the list of people who invented workin$ li$ht bulbs& (o why does history reco$ni)e Edison as the inventor and why did his company become the bi$$est in the world?* #he author $oes on to demonstrate how Edison was first and foremost a $ood sales person and self promoter& He demonstrates how you must be able to cover all the elements of the trian$le to be successful& Want to be entrepreneurs must learn to be $ood sales people first and foremost& 2esson <. S ccess Re%eals =o r Fail res.

Nothing to 2ose &Sometimes we win the most when we ha%e nothing to lose.) &The hard part for most people is getting to nothing. *ost people wo ld rather hang on to a little than let go and get to nothing.) The lesson is if yo want to s cceed' yo need to be prepared and willing to fail> =o r strengths will re%eal yo r wea"nesses. Three big mista"es entreprene rs ma"e6 4. The entreprene r does not ha%e or does not see" proper legal and acco nting ad%ice before setting p his or her b siness. 7. The entreprene r listens to his or her acco ntant or attorney too m ch. =o need to decide the co rse of yo r b siness. :. The entreprene r has an acco ntant or attorney who is not part of the entreprene r0s team. This does not mean yo ha%e to employ them f ll, time. It simply means yo need to tr st them. They need to "now e%erything and want to "now e%erything. The Difference between School Smarts and Street Smarts A,Thin"er /,Thin"er Analytical s"ills?critical thin"er /reati%e thin"er?fle$ible logic T,Thin"er P,Thin"er

Technical s"ills?e$pertise

People s"ills?personal leadership

&All fo r types of thin"ers are important for a b siness. Small b sinesses stay small beca se they lac" one or more of these types of thin"ers.) &So before 5 itting yo r .ob' "now that the most important .ob is to de%elop yo rself.) 2esson @. The Process Is *ore Important than the 9oal. )9oals are important' b t the process of obtaining the goal is far more important than the goal.) &The reason the process is more important than the goal is that the process determines who yo become in attaining yo r goals. 2esson A. The 8est Answers Are Fo nd in =o r +eartBNot =o r +ead. The a thor spo"e of his days in the Cietnam war as a helicopter pilot with little combat e$perience getting into the fray of a m ch more powerf l and armed enemy. +e had to decide whether to fight' r n or what to do. In the end he called o t for help drew fire to pinpoint the enemy and bac"ed off to allow friendly fighter .ets to finish them off. +is team li%ed another day d e to not attac"ing. I fo nd these words prophetic. &All wars are horrible. !ar is simply h manity at its worst. !ar is a time when we se o r best technology and o r bra%est people to "ill o r fellow h man beings. D ring my years in Cietnam' I saw the worst of h manity. I saw sights I wish I had ne%er seen. I also ca ght glimpses of a spirit al power' a dedication to a higher calling' I wo ld ne%er ha%e witnessed if I had not gone to war. !hen the term A and of rothers is sed to describe the bond between soldiers' I wonder if someone who has ne%er fo ght in a war can e%er "now what that bond feels li"e. For me' it is a spirit al bond dedicated to a higher calling Dsomething "nown as a mission.) The A thor refers to 7 other a thors that he recommends.. 9ood to 9reat E7FF4G by -im /ollins and The !ar of Art E7FF7G by Ste%en Pressfield 933D T3 9REAT The opening line of 9ood to 9reat is &9ood is the enemy of great) Among other things this boo" tal"s abo t are6

The world is f ll of good people Egood b siness people' good athletes' good parents' good teachers' good wor"ers etcG.. b t the world is short of great people.. why beca se for most of s' good is good eno ghB bringing o t o r gift is abo t bringing o t o r greatness and not . st what we are good eno gh at.) &9reatness is a choice. It is not abo t being gifted' or talented' or more fort nate than others. It0s abo t a choice we all can ma"e.) RESISTAN/E In The !ar of Art' Ste%en Pressfield identifies resistance as that force inside each of s that holds s bac". It0s not abo t the money. &!hy do yo "eep wor"ing# If yo ha%e all this money' why don0t yo . st go on permanent %acation#) - st as 2ance Armstrong states' &It0s not abo t the bi"e.) For this a thor Eand I share his sentiment on thisG &It0s not abo t the money.) It0s abo t the mission. &It0s not abo t me or the money or the wor"..its abo t being of ser%ice.) &So before yo 5 it yo r .ob remember that yo r mission starts at yo r core' in yo r so l' felt in yo r heart' and spo"en thro gh yo r actions D not . st yo r words.) 2esson H. The Scope of the *ission Determines the Prod ct Finding Passion 'he author continuous y refers to not ikin% the traditiona education system( ?e did not ike bein% tau%ht by the fear of fai in%5 earnin% to memoriCe a the ri%ht ans$ers5 and bein% afraid to make mistakes( ?e prefers education that %oes beyond fears and imitin% thou%hts( 'he $or d is about resu ts not reasons( .t is about actions not $ords( 'he mission shou d be first5 the team second and the indi"idua ast( .n his mind5 a it takes to earn is the desire to earn( ;the more peop e you ser"e5 the richer you become(> -s you p an your business5 start $ith your mission( Ahat is your %oa 7 Ahat need $i you be fi in%7 Bnce you ha"e your mission estab ished5 you need to bui d on the other parts of the 'rian% e( But most important5 take action and %et started $ith your business(

A !INNIN9 TEA* *uccess or fai ure in business has to do $ith $ork ethic5 determination5 and desire( 8*ide barD "ery much ike 'urcos D-D princip e Determination -ttitude and Discip ine: .n order to bui d your business: First you must be ab e to se ( *econd5 you ha"e to be ab e to attract5 bui d5 and moti"ate a %reat team( 'hird5 you must be ab e to teach others in the business ho$ to se 5 ho$ to be %reat team p ayers5 and ho$ to succeed( .t is this ski that ensures %ro$th5 profit5 and on%e"ity( /+33SE T+E RI9+T ENTIT= ;Fe$ peop e appreciate it5 but choosin% the ri%ht entity structure for your business ranks up there $ith choosin% the ri%ht partner for your business( .f you %o into business $ith the $ron% person5 your efforts may be doomed from the start( 'he $ron% person may too free y spend your money5 may ob i%ate the company to contracts it cannot fu fi 5 and may a ienate co$orkers before the first product or ser"ice is e"er de i"ered( 'he $ron% partner can ea"e you unprotected and $aste a of your efforts and ener%y( !ike$ise5 choosin% the $ron% e%a structure can a so ead direct y to fai ure( *tartin% out5 you $ant to ha"e as much asset and e%a protection as possib e( But by choosin% a so e proprietorship or a %enera partnership5 bad entities that offer no protection $hatsoe"er5 you stand to ose e"erythin% you ha"e bui t in your business5 a on% $ith a of your persona assets as $e ( , aintiffs and their attorneys o"e to see businesses operate as a so e proprietorships and %enera partnerships5 because they can reach both business and persona assets $hen they brin% a c aim( 'hey ha"e free rein to reach a of your assets( .nstead5 use a %ood entity such as a corporation5 imited iabi ity company or imited partnership( 'hese entities protect your persona assets from attack a%ainst the business( -nd ike the ri%ht partner5 the ri%ht entity $i he p you ad"ance your protection and prospects in the future(> 8From Jarrett *utton5 #s6( Rich Dad -d"isor and author of Own your Own orporation, How to Buy and !ell a Business, "he #B s of Getting Out of $ebt and "he #B s of %riting Business &lans'

2esson I.

Design a 8 siness That /an Do Something That No 3ther 8 siness /an Do.

+ere are a list of items Eaccording to the a thorG that a b siness leader sho ld do. 1( G( 3( 0( H( 1( 4( I( + ear y define the mission5 %oa s5 and "ision of the company( Find the best peop e and for%e them into a team( *tren%then the company on the inside( #9pand the company on the outside( .mpro"e the bottom ine( .n"est in research and de"e opment( .n"est in tan%ib e assets( Be a %ood corporate citiCen(

Desi%n the business around a uni6ue tactica ta ent( 'he easiest $ay for your business to set itse f apart is throu%h inte ectua property and creatin% a competiti"e ad"anta%e( 2esson I. Don0t fight for the 8argain 8asement 8e choose when choosing c stomers. 8ad c stomers can destroy yo r rep tation and ta"e yo to the cleaners financially. =o need to be choosy of yo r c stomers and fire some of them and discriminate when getting c stomers. As an entreprene r' yo r .ob is a people .ob. People are yo r biggest assets and also yo r biggest liabilities. 3ne day yo will ha%e to fire someone and it will not be pleasant b t necessary. If yo cannot hire?fire people incl ding yo rself/ you shou d not be an entrepreneur( ;- business is one bi% ba of friction( .t is a $orkin% mode of human conf ict( .t is a me tin% pot of e%os that is a $ays boi in%(> ;- business is a b endin% of different peop e5 different a%es5 different se9es5 and races( #"eryday $hen you come to $ork5 most of the prob ems $i be peop e prob ems( sa esman made promises the company cannot keep( 'he customer is irate( Your attorney $i not a%ree $ith your accountants( -ssemb y ine $orkers $i not a%ree $ith the en%ineers $ho desi%ned the assemb y ine( &ana%ement is at $ar $ith abor( 'echnica peop e are fi%htin% $ith creati"e peop e( -na ytica peop e do not %et a on% $ith the peop e/peop e( +o e%e/educated peop e fee theyre smarter than peop e $ho did not %o to co e%e( -dd to this inter/office po itics5 or $orse5 se9ua affairs $ithin the company

and you $i ne"er need to $atch 'E a%ain( .n most cases5 a business does not need a competitor( - norma business has so many competitors inside the business that its amaCin% that anyone %ets any $ork done at a (> ;Dont fi%ht for the bar%ain basement5 it attracts the cheap customers(> F3/1S 3N T+E RI9+T TAR9ET RE/39NIJE T+E 2IFETI*E CA21E 3F A /1ST3*ER P3SITI3N =31R PR3D1/T F3R T+E *AR;ET In S mmary' here are the a thor0s tips before yo 5 it yo r .ob. 4. /hec" yo r attit de. -ttitude is a most e"erythin%( Dont %o into business =ust make money( .f you dont o"e business and its cha en%es5 then dont %o into business( 7. 9et as m ch e$perience as possible with the triangle. :. Always remember Sales K Income. <. 8e optimistic as well as br tally honest with yo rself. @. +ow are yo at spending money# A. Start a b siness to practice on. H. 8e willing to as" for help. L. Find a mentor. I. -oin an entreprene r0s networ". 4F. 8e faithf l to the process. *ISSI3N KKKM PR3/ESS K 93A2.