BiggerPockets Podcast 500: Robert Kiyosaki: America’s ‘Rich Dad’ Sees a Real Estate Crash Coming

BiggerPockets Podcast 500: Robert Kiyosaki: America’s ‘Rich Dad’ Sees a Real Estate Crash Coming

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Robert Kiyosaki is arguably the most influential author in the finance, real estate, and investing space. His book, Rich Dad Poor Dad, has sold over thirty million copies and has been translated into forty different languages across forty different countries. Since its inception in 2002, Rich Dad Poor Dad has become almost every investor’s favorite book, prompting them to get out of the rat race, pursue financial independence, and teach them everything Robert’s “Rich Dad” taught him.

Robert has seen numerous housing cycles, including crashes, booms, and busts. His knowledge of micro and macroeconomics is astounding (to say the least) and he has some strong predictions for the future of real estate investing and the global economy as a whole. We talk about capitalism, marxism, communism, inflation, debt, assets, liabilities, and everything in between. This episode is not only crucial for anyone who is a fan of Robert’s books, board games, and videos but anyone who truly wants to learn the game of real estate.

As a general word of advice: Robert has some very strong opinions that he voices throughout this episode, and even if you disagree with any (or many) of them, it may serve helpful to listen to his full explanations of his takes. Robert has built an incredibly successful life, but started as a child of a financially dependent family, served in the marines during the Vietnam war, and has fought hard to keep capitalism alive and well in the United States, and abroad.

Be sure to grab Robert’s new book, Capitalist Manifesto, and thank you for joining us for the 500th episode of The BiggerPockets Podcast!

Click here to listen on Apple Podcasts.

Listen to the Podcast Here

Read the Transcript Here

Brandon:
This is the BiggerPockets Podcast show 500.

Robert:
My Rich Dad said the same thing. He says the purpose of a business is to buy real estate. Now, if you understand that, your brain will shift. But it’s not about starting a business to make money. The purpose of a business is to acquire real estate, so you can use massive amounts of debt and pay no taxes.

Speaker 3:
You’re listening to BiggerPockets Radio, simplifying real estate for investors, large and small. If you’re here looking to learn about real estate investing, without all the hype, you’re in the right place. Stay tuned and be sure to join the millions of others who have benefited from biggerpockets.com, your home for real estate investing online.

Brandon:
What’s going on everyone? It’s Brandon Turner, host of the BiggerPockets Podcast here for Episode Number 500, crazy, with my co-host, Mr. David, The Capitalist, Greene. What’s up, man? How you doing?

David:
I’m doing really, really well with all my capitalistic ventures. The mortgage company is doing good, the real estate team is doing well. I’m buying real estate. I’m very lucky to be able to make a living through real estate, which is our passion.

Brandon:
As am I, and you know what, the reason that we’re… I don’t know about you. I don’t remember the impact of our guests on your life, but the impact on my life was profound. Robert Kiyosaki, author of Rich Dad Poor Dad, Cashflow Quadrant, and a lot of other books, including his new book, it’s called The Capitalism Manifesto, it comes out here in November. But he early on in my life, a guy I knew from high school named Darren sent me a link on Facebook Messenger and said, “Hey,” this is when I’m 21, “you should read this book. It’s called Rich Dad Poor Dad because I saw you post some stuff about being interested in real estate,” because I had posted about that.
So, I didn’t even have money to buy a book. I went to Barnes & Noble, and I went and sat at Barnes & Noble and read it cover to cover in three hours or whatever, one night, and it changed my life. What I would say is Rich Dad Poor Dad put words to this groaning in my soul that I knew the life that I was being prescribed. This go to law school and get a good job and work for 50 years and retire on government benefits and all that stuff. I was like, “There’s something wrong. There’s something almost evil about that, and I can’t put my finger on it.” And when I read Rich Dad Poor Dad I was like, “Ah, that’s it.” And hundreds and hundreds of other guests on the show have said the same thing. So, to say I am excited about today’s interview, and to release this to everybody is an understatement. So, I’m excited for you guys to hear it.

David:
I wonder who ended up getting that book with your beard hair in it when they actually bought it.

Brandon:
I wonder. Somebody up in the Tukwila area of Seattle, that’s who got it.

David:
I remember when I first read the book, everyone was telling me how life changing it was. Dude, you’ll never be the same after you read this book. And I read it and I actually had almost the opposite feeling as you where I thought, “Duh, there’s people that don’t think this way.” To me it was like reading a book telling you put your pants on one leg at a time, and the whole world has been trying to jump into it right. And so, I guess my eye opening was that I had an understanding of finances that not everybody else in the world shared and so in a sense it helped me relate a little bit better to everybody else. It didn’t change the way that I thought and so that’s funny that maybe like a yin and a yang it affected us both pretty significantly, but in different ways.

Brandon:
Yeah, that’s cool. And it’s follow up the second book of that sequel is called Cashflow Quadrant. We’re going to get into the interview in a second guys, but the Cashflow Quadrant. When the first time I read it right after Rich Dad Poor Dad I didn’t get it. I was like, “This is not Rich Dad Poor Dad. It’s not the same thing. I don’t understand it.” Being an employee versus self-employed versus business owner versus investor. I don’t get it. But then I re-read it 10 years later, and I was shocked at the impact that that book had that I didn’t even realize. I mean, the stories I would tell, the way that I thought was all impacted heavily by Cashflow Quadrant.
So, it’s been 500 episodes of the podcast. We’ve never had Robert Kiyosaki on the show. It’s probably our number one most in demand guests and we finally were able to make it work and get Robert Kiyosaki on the show today. So, that’s what you’re going to hear here shortly. It’s an awesome interview. We go over a lot of stuff, but just FYI, Robert is a wild ride. He is awesome, and he is blunt, and he doesn’t care what you think. And I love that about him. But just so you know, he’s awesome. You’re going to love this, but just be prepared for a wild ride on today’s show. So, I think you’ll enjoy it. And yeah, you know what, you might get offended on some stuff and that’s okay. It’s okay just know that, man, he comes at it from such a viewpoint of wanting to help people experience just freedom. That’s the message of today is real estate can give you freedom and he’ll explain how.
But first, let’s get to today’s quick tip. Hey, everyone likes to contest. Well, BiggerPockets is doing a massive awesome contest. And here’s the deal to giveaway. So it’s called, I don’t know, the BiggerPockets bundle I think is what they’re calling it. It’s basically a bundle of everything you need to do to finally get into real estate investing, or to at least propel you to the next level. Here’s what you get, a year BiggerPockets Pro, a year of the BiggerPockets Wealth Magazine, which if you’re not reading that is phenomenal. Every time I get it in the mail I’m like, “Yes, another BiggerPockets Wealth Magazine,” and $100 to spend on BiggerPockets books. So, to enter this contest to enter, it’s really, really tough. All you have to do is sign into your BiggerPockets account. That’s it. Or if you don’t have a BiggerPockets account, you can create one. But literally that’s it.
If you sign into your account, and this runs until 09/30. So, September 30th at 11:59pm. As long as you sign into your account before that you’ll be entered to win, no purchase necessary, obviously void where prohibited. And you got to be 18 to enter. And you can read the full rules at biggerpockets.com/bundle. But yeah, somebody, maybe a few people are going to win all this cool stuff. So that’s the deal. That was today’s quick tip. And now I think it’s time to get into the interview with Robert Kiyosaki. Anything you want to add, David, before we jump in? And we will debrief after the show as well. So, you guys hang tight for the very end of the show as well. But anything you want to add?

David:
I would just say that Robert’s opinions are stronger than what most people are used to hearing, and they may be different than what a lot of people are hearing. I think he mentioned his age where he says 76 years old-

Brandon:
74, I think, yeah.

David:
74. So, as you’re listening just keep in mind these are the perspectives of a person that’s seen a lot, that’s been through a lot. He mentioned he was a fighter pilot in the Vietnamese or in Vietnam, and that there was a lot of things he went through there. And he grew up in Hawaii in an area where he wasn’t always welcomed. And so, a lot of the perspectives that Robert has been forged in this fire of life that he’s gone through. And so, I appreciate Robert sharing his story and his perspective and how he came to see things and why he’s so passionate about those things. But it may not be the way that you are used to seeing things growing up in a different America and a different world than what Robert grew up in. So just keep that in mind as you listen. And there are a ton of gold nuggets to take out of this thing. I’d hate for people to miss out on those gold nuggets just because his perspective isn’t the same as what many people’s is today.

Brandon:
Yeah, we talk about everything from communism versus Marxism. We talk about cryptocurrency a little bit. We talk about the Federal Reserve and the gold standard. And we talk about real estate, what he’s investing in right now. In fact, he has a cool project that he’s building right now based on some macro trends in America that I think that part of the conversation could change your life if you start thinking that way. So, hang tight for all that. And if you like this show, don’t forget to leave us ratings and reviews over on iTunes and Google Play or Stitcher wherever you listen to this show at. Let the world know and feel free to share this on your Instagram or on your Facebook wherever you can do to help spread the word about what we’re doing here. Trying to build an army of people that are dedicated to freedom for their life, and you’re going to hear how to do that today. Without further ado, let’s get to our interview with the author of Rich Dad Poor Dad, Robert Kiyosaki.
Robert Kiyosaki, man, it is an honor to have you here today. Thanks for joining us.

Robert:
No, well, thank you. I mean, thank you guys, for all your success. I’m honored to be on your program. I’ve been hearing a lot about the waves you guys are making and the good work you’re doing. So, it’s an honor for me to be a part of your show today.

David:
Well, thank you.

Brandon:
Thank you, man. Well, we’ve interviewed what? This is episode 500, so we’ve interviewed almost 500 people before this, and we ask a question at the end of every show. We’ll ask you about it later, and it’s what’s your favorite real estate book? And the interesting thing is, I mean, 90% of the people say Rich Dad Poor Dad, at least 90%, maybe 95%. And we always laugh about it because we’re like, “Well, it’s not really a real estate book.” Yet, everyone calls it a real estate book. And I’m like, it’s… So, I want to start with that. Why does everybody call Rich Dad Poor Dad a real estate book? [crosstalk 00:08:48].

Robert:
I wish you could tell me.

Brandon:
When they ask me, early on when it was my turn to be interviewed on my own show my co-host asked me what, what’s your favorite real estate book. I was like Rich Dad Poor Dad. I was like, “Wait, that’s not a real estate book.”

Robert:
No.

Brandon:
But it changed something in here in between the ears that made real estate possible for me.

Robert:
Well, as the book talks about in there, I think it was a Ray Kroc, founder of McDonald’s, and my friend who was at the University of Texas. He was talking to Ray Kroc, and he said something about “Ray, what business are you in?” Ray says, “What business is McDonald’s in?” And everybody says hamburgers and Ray said, “No, McDonald is a real estate company.” And today, I think they own more real estate than the Catholic Church. And so, back in the ’70s when I was trying to figure my life out my rich dad said the same thing. He says the purpose of a business is to buy real estate. Now, if you understand that, your brain will shift, but it’s not about starting a business to make money. The purpose of a business is to acquire real estate, so you can use massive amounts of debt and pay no taxes. I mean, that’s why I do it.
I mean, just to get my background in real estate because I came back from Vietnam 1973 when I got spit on and hit by the eggs by the hippies. I was a marine pilot in Vietnam. So I have a very little love affair for the flower children of peace and peaceville. Here I’m out, I lost so many friends in Vietnam, and these hippies spit on me, hit me with eggs in California. I’m still seeing my therapist about that one. [crosstalk 00:10:36].

David:
You’re not bitter at all.

Robert:
I had no PTSD from Vietnam, but I had PTSD in California. So, the first thing my rich dad said to me. I said, “I want to be rich.” He says, “Well, take real estate courses.” I went, “What?” It’s not stocks, it’s not bonds, it’s not mutual funds, it’s not this. He said, “You have to understand real estate.” I didn’t understand why. But as you guys know, real estate is based on two things, debt and taxes, debt and taxes. And our pure capitalist will do everything possible to avoid paying debt and tax. I mean, using debt and paying no taxes. That’s what capitalists do. But these idiots go to school and they invest in a 401(k), which is possibly the riskiest of all long term asset acquisitions. I don’t blame them. I don’t blame them. They should do that because they have no financial education and no common sense. But if you really want to be a capitalist, you have to understand real estate and entrepreneurship.

Brandon:
Yeah, that concept of most people just don’t have the financial literacy or the education. They have just no interest in it, right? What do you say to those people who are just like, “I’m too busy. I’m working my job. I don’t have time to learn about all this complicated financial stuff.” I mean, how do you respond to people like that? Maybe you don’t hang out with them.

Robert:
I think that if you’ve seen the Cashflow Quadrant, ESB and the employees and self-employed small business guys they pay the highest taxes. Your employee will pay, this is worldwide, will pay 40% of their gross in taxes. And a self-employed person like a doctor, or lawyer, or mall entrepreneur will pay 60%, and ease and assets are what people go to school for. Go to school, become a doctor, or lawyer, an accountant or be a CEO. You’re just a tax life. And if that makes sense to you, then don’t study real estate.

Brandon:
Yeah, I have to say I’m stealing from I think Warren Buffett. Maybe he said it first, but last year, my intern who was only making just a little stipend to live and helped me out paid more taxes than I did because I own real estate and he doesn’t. I own a lot of real estate. And I’m like, this concept. I mean, he’s paying a lot in taxes. A lot of people think, “Well, I don’t really care. I mean, it comes out of my check automatically. I don’t have to worry about it.” But what when you look at the life of 40, 50 years of all the money that you’re losing and not compounding, it’s incredible.

Robert:
It is incredible.

Brandon:
One question I got for you, I get this a lot for myself. Me and David teach real estate a lot. We teach financial literacy and education, and all that. And I always get this question from people. This kind of, I don’t say almost reverse judgmental, well, What’s so wrong with being poor? What’s so wrong with not having money? Aren’t you just being greedy to want all this money? [crosstalk 00:13:29].

Robert:
Well, that’s right. I’m a pure Marxist. You know what I mean? The thing I hate to say and we’re discussing before I came on the air on my next book coming out is called Capitalist Manifesto. And the reason that’s… This is coming out November 10th 2021, that’s the US Marine Corps birthday, and I’m a US Marine, and I fought for our freedoms. And I went to Vietnam twice. And so, what most people haven’t done because I went to the academy, I went to New York Merchant Marine Academy at Kings Point. And my English teacher was English/economics teacher had us read the Communist Manifesto, Mein Kampf, and Mao’s little book. So, I studied Hitler, Mao, Stalin, and Marx. And once you study those books you go, “Holy moly,” then you realize people like my poor dad, a very good man Stanford University, Chicago, Northwestern, they’re Marxists. Because the academic system is based on Marx’s principles.

David:
Well, I think that comes from when people hear a saying you don’t have to pay taxes, it can easily be misinterpreted to sound like I don’t care about other people. I don’t care about anyone but myself. I’m a rich, greedy sob. And taxes are for the poor man. And it’s one of the things I’d like to clear up because many people will hear I don’t pay taxes, and that’s all they hear and then they use it as a way to dismiss anything else that’s said regarding capitalism because they’ve painted it with a selfish brush. But in exchange for not paying taxes because you’re making your money through real estate or entrepreneurialism, you are taking risk.
You are walking away from the safety of the sheep herd who isn’t using their capital to build money. They’re getting paid a guaranteed check from somebody else. In exchange for that, they’re going to pay taxes. So, when you hear about people like you, Robert, who’ve made a lot of money and haven’t paid taxes on it, you’ve taken on a massive amount of risk. And I’m imagining your military career that you first started had a lot to do with you being comfortable with the concept of risk. Obviously, as you’re flying planes into enemy territory, you have to understand that in order to accomplish my mission, I’m taking on risk. In order to have good there’s going to be bad. And I really just wanted to get your take on if you agree with the way I look at it. Or if you think there’s another perspective to be offered.

Robert:
Well, I would change the word risk because it’s not risky. It’s smart. So if you understand this the reason a capitalist like me on the B side, B stands for brand. Like rich dad is a brand. I intentionally built a brand. So Warren Buffett who invests in companies doesn’t invest in Joe’s startup. Warren Buffett only invest in brands like Coca Cola, Gillette, those guys, where the reason we don’t pay taxes. There’s a book by my personal accountant, his name is Tom Wheelwright. He may be a good if you had him on. He’d be a great guy to have on.

David:
I just met him in person. He was awesome. Yeah, we want to have him on.

Robert:
He is awesome. But he explains that from another point of view is that taxes are incentives from the government to do what the government wants done. So, think about this, I make millions of dollars and pay no taxes because I’m doing two big things. Number one, I’m using debt. I don’t use my own money. It’s called OPM or infinite returns, whatever you want to call it. And the reason I need people to use debt is because in 1971 the US dollar became debt when Nixon took the dollar off the gold standard. So, they’re incentivizing capitalist, not consumers to use debt because if guys like me don’t step up to the plate and borrow $25 million. I just created $25 million out of nothing. So, they need a capitalist step up and use debt.
Number two, the reason real estate is so important is because we provide housing, and if ever, you ever been to a communist country like Kazakhstan, or Kyrgyzstan, and all that you ever been to a communist house? I mean, a communist housing project? Or you been to the projects in the Bronx or in Brooklyn? That’s what happens when government provides housing. So the reason I get tax breaks, and there’s two big reasons it’s an incentive from the US government, the Treasury, and the Fed to say, “Please borrow money, please get into debt.” And that guy Dave Ramsey is a friend of mine is saying, “Live debt-free.” I go, “Yeah. How do you spell loser?” [crosstalk 00:18:09].
Ramsey is my friend, but I go, “How can you give people such bad advice?” But it’s good advice for people who have no financial education. It’s perfect advice. It’s perfect advice for my poor dad. Live debt-free. But if you’re a capitalist, when I borrow money, the US government says, “Thank you. Thank you. Thank you.” And when I put it into apartment houses, they go, “Thank you. Thank you. Thank you. Thank you again.” So I make all that cash flow, and I use appreciation, depreciation, amortization to pay no taxes. That’s called basic financial education. You could teach a 10-year-old to do that because that’s how old I was on my rich dad taught me that.

Brandon:
Man, if you could boil down a couple… I mean, the Rich Dad Poor Dad has been out for a long time now. But for those who maybe haven’t read it, are there a couple of key points that you want people to make sure they understand? Or maybe points that you get misunderstood about the concepts taught in Rich Dad Poor Dad?

Robert:
Well, number one I’m going to get my butt hung for this is the capitalist Manifesto. So we have the Communist Manifesto, and Rich Dad Poor Dad is a Capitalist Manifesto. And simply said, “Look, the Capitalist Manifesto starts with me flying in Vietnam looking at some of the most beautiful real estate in the world. It’s called the French Indochinese Riviera just outside the capital city of Vietnam called Hue. I flying along there. I’m looking at this burned out French chateaus, beautiful, beautiful French chateaus that burned out, blacked out, bombed out. I’m going, “What happened here?” But suddenly the lessons I learned at the Kings Point, the Merchant Marine Academy. What I learned in my textbook when I’m reading Communist Manifesto I could see playing out in front of me. This is 1972 I’m flying along this beach going, “Holy mackerel, that’s communism in real life.” I realized my family are Marxist, but they never read the manifestos. And that’s why they’re poor. And that’s why I kept asking, you guys probably asked the same question. Why don’t they teach that stuff at school? Well, because they need poor people to pay taxes, and do the work.
I want to say something. It’s not about communism and all this. It’s about freedom. I write for only one reason, I want my freedom. And as a marine pilot, we fought for our freedoms. I didn’t fight for the Republicans or Democrats. I fought for our freedom, our right to free speech, the right to bear arms, the freedom of religion. That’s what we fight for. So, what happened in Kabul the last few weeks makes me sick because I saw that in 1975 also, and I had several friends not come back. Two guys are A-6 drivers. There’s A-6, A-6 Intruder. One flew with the Navy, one for the Marine Corps. They’re still MIA. They’ve never come back. Never found the planes, never found the bodies.
Another friend when I came back from Vietnam in ’73, he was in the Hanoi Hilton. He was an Air Force F4 pilot. And then I had several friends who just never returned. They MIA. And so, when they say, “You’re anti this.” I said, “No, I fight for our freedoms. I just want my freedom of speech. Leave me alone. Just leave me alone. Let me say what I want to say.” But today with the council culture and in this new wokeness that’s Marxism and it’s taught in our schools.

Brandon:
Why do you do… I mean, freedom, you said the reason you write is for freedom. What you do, you podcast, you’re continuing to write these books. What are you hoping to change in the world? Is it to stop the spread of this Marxism idea? I guess, what’s your why? I get the question a number of times from people when I said I was going to interview you. They say, “Why is he doing this still?

Robert:
That’s exactly it because the Capitalist Manifesto actually started with my board game CASHFLOW, 1996. But that financial education, the average guy has no idea what an asset or a liability is. So they called their house an asset, they call their car an asset. They called their college degree an asset when they’re really liabilities. They’re long term debt that you have to pay for. And as I wrote about in Rich Dad Poor Dad, there’s two kinds of debt, good debt and bad debt. And the average moron out there with his PhD, which stands for poor, helpless, and desperate, they don’t know the difference between good debt and bad debt. They think all debt is bad. So, of course, they should listen to my friend Dave Ramsey, and of course, as Suze Orman, who says, “Cut up your credit cards.”

Brandon:
Let’s talk asset liability. This is one of the most I think maybe groundbreaking things people still talk about all the time when it comes to Rich Dad Poor Dad. It’s this idea that your house is not an asset, it’s a liability, or is it? How do you view home ownership today? And has your views changed on that at all?

Robert:
Nothing, it’s nothing to do with home ownership, it does to do with the definition. A definition of an asset is something that puts money in your pocket, whether you work or not. So, my personal residence, I have five personal residences, they’re liabilities. I don’t sit there and pretend, put Tinkerbell on it. Well, this is really an asset because it’s going up in price. I don’t play with myself. I call an asset, an asset, and a liability, a liability. So, my five houses are liabilities. Now, their value because they’ve gone up in equity. But just FYI, when refinancing all of my houses right now because interest rates drop, I’m going to borrow that money out and buy more real assets. So, it’s just a matter of definition. It’s not personal. Assets put money in pockets, liabilities take money from your pockets. It’s that simple. But people want to argue with me because you know what? They like to argue because they’re idiots and went to school.

David:
Well, I think that’s America right now where we never settle on the same definition before we start the argument. So, I found two people arguing and realize they’re actually making the same point, but they’re on a different definition. And it just allows the whole thing to get off the rails. And I like what you’re saying, Robert is your definition is if it’s an asset, it puts money in your pocket. If it’s a liability, it takes money away. And it’s that simple. If we could all get on the same page with things like that there wouldn’t be a controversy with the Dave Ramsey situation.

Robert:
And Dave is a friend of mine. And we both agree. If you have no financial education, live debt-free, because debt is a four letter word, it’s like a loaded gun. You misuse it, you get crushed. But if you look at what’s happening at the highest levels of government in the Fed, the Treasury, and Wall Street, debt is going to kill us. Our debt to GDP ratio today is at 130. That’s an all-time high, and the average guy is like, “What does that mean, debt to GDP ratio?” It means we’re screwed.

David:
Yeah, our country has taken on bad debt. We have taken on debt that does not actually get a return through the GDP. And if you raise your household like that, you had a bunch of debt that wasn’t bringing you money. At a certain point, the credit card companies would cut you off, and you would go to foreclosure, and you would have to start over. But because it’s a government that controls the currency that basically the whole world uses, there’s an unlimited line of credit is how it would appear. So, one of the things that I’m doing is sounding the drum that the rules of the game are changing, whether you like it, or you don’t. I don’t think it’s good that we’re printing all this money. I think it’s very bad. But David can’t stop it.
So, I’m adjusting my personal wealth building strategies to take advantage of the rules, which means owning assets is even more important than it was before. There’s almost an urgency to own real estate now as inflation is likely to just spread. And I wanted to get your take, Rob, because I know that you have the crow’s nest view of what’s going on. And you’ve been talking about this for a long time. Do you think inflation is a serious concern that should spur people to take action? Or do you think that we’re in the next five to 10 years going to have a crash, so people should hold out before they buy?

Robert:
Well, all I’m going to say to your listeners is amen they listen to you. You see, it’s not a matter of what you think. It’s you’ve got to look at what are the idiots doing? If the idiots are going to give you a free money, take it. But you better know what you’re going to do with it first. Like I always say that the most important piece of real estate is behind your left ear and your right ear. That’s a great vast wasteland in America. We have no financial education. So, you should listen to my friend Dave Ramsey and Suze Orman. You should invest for the long term in a well-defined portfolio stocks, bonds, mutual funds, and ETFs like Tony Robbins recommends. I wouldn’t do any of that garbage. But I don’t have to, there’s a difference. And so, the reason I’m very honored to be on your program is you guys and I are on the same team. If you’re going to be an idiot, don’t listen to us.

David:
That might be the best advice ever given on the show. Don’t listen to us. That might be the new slogan of the show.

Robert:
Yeah, if they’re going to print money, and they’re giving it to me now at under 2%. So, I refinance those five houses, I think I’m going to pull out a million dollars. And it doesn’t affect the cash flow at all because interest rates are so low, my personal cash flow, but I’m just going to buy more stuff. I ended up buy another apartment house in Austin. You know why? Because every time they print money, every time the Fed and the Treasury print money they screw the working class. Lower interest rates causes inflation, which makes it impossible for young people, and poor people, and working class people to afford their first house. So, naturally, they’re going to move into my apartment house.

David:
That’s right.

Robert:
And then those socialists who are in academia, like my poor dad, “Oh, you guys are capitalist, you take advantage of the poor people.” That’s not true. We provide housing, low income, affordable clean housing.

Brandon:
Where do you think like from an economic standpoint if you’re pulling out your crystal ball right now and saying, “This is what is the result of what’s happening today. This is the fruits of our labor.” Where do you see the US head in the next few years? Do we see another real estate crash coming or an economic collapse coming or just a slowdown? What do you think?

Robert:
Well, first of all, I love crashes. I see them as like Neiman Marcus having a sale. I don’t have to break in and loot the place. I just wait for the sale.

Brandon:
Do you think that’s happening? How much time we got? I mean, there’s always a crash coming, right?

Robert:
Yes.

Brandon:
It’s kind of a broken clock is right twice a day situation. But when do you think this is happening?

Robert:
Well, let me go back again. I don’t… This is called macroeconomics, but there’s a debt to GDP ratio. And when I was at 90%, that meant the Keynesian multiplier was one to one, 1.1 to one. So, if we borrowed money at 90% debt to GDP ratio, then the economy, the GDP grew by 1.1%. So, it was a healthy economy. When COVID hit, that was 106%. And then today it’s 130%. So, what’s the [inaudible 00:29:28]. So when I look at any decision I’m going to make first I want to look macro. So, when I see 130% debt to GDP ratio, and 90% is healthy we’re sick. And so, these three options is going to come about.
Number one, the US may default on the dollar. I doubt that’ll happen because we’re the US. Number two is hyperinflation, and number three, they’re going to raise taxes. So, when I make a decision and people ask me, “What should I do?” I first check the big picture, I check macro, the debt to GDP ratios and all that, and then I make my decisions and then I start looking for property that’s going to fit that. So, what I see happening is that we have these college kids coming out who have student loan debt, they’ll never afford a house. They’re screwed. And so, I hate to say this, I’m going to provide housing for them. Is that cruel? Or should I just give it to them like the woke crowd wants me to give them like Marxist wanted me to give them free housing. And like I said, if you want to see what free housing looks like, go look at a government housing project, and you won’t live there.
I live in Arizona. I look at high end, I mean, I look at Scottsdale, which is the rich guys’ apartments, and I look at the government low income housing projects. The Scottsdale projects for the affluent are so much better than the low income projects, but the low income projects cost more money. Because any time the government touches that it, it gets more inefficient as you know. So when people say capitalists are criminals, and all that is because they’re morons. They really don’t know what’s going on. They haven’t studied Karl Marx. I mean, it was Marx who said, “We must have a central bank.” It was Lenin who said, “If you want to destroy capitalism, you must de-botch the currency,” which is exactly what Nixon did in 1971. And then both, and then Stalin and Marx said… Lenin said, “If you want to crush the middle class, you grind them through taxes and inflation,” and that’s what we’re doing.
And so when people say, “Well, you’re an idiot for writing this Capitalist Manifesto. Well, it goes back to 1996. Come on, I created the CASHFLOW board game so people could protect themselves from Marxism. The motto of the Capitalist Manifesto is how do you prevent, how do you protect yourself from Marxism taught in schools? You prevent being crushed by Marxism taught in schools by teaching capitalism at home.

Brandon:
I’m such a big believer in the idea that school doesn’t end… I got two little kids at home. One’s five, she’s just starting kindergarten. But school doesn’t end at three o’clock. I’m such a big believer. That’s where they go maybe to go get some education, but school for Rosie, my five-year-old. And for Wilder, when he becomes old enough, he’s two now, almost two. What happens between 03:00 and 08:00, that’s school. That’s where I get to teach them what happens. I tell this story a lot on the podcast, but I don’t think you heard it. But one thing I did for my kids is for each my kid, I buy them a piece of real estate when they’re young. And I just put it on a 15-year mortgage, with the idea of being over 15 years by the time they’re ready to go to college, they’ve got this asset that the tenant has paid off.
I get all the tax benefits, I get the cash flow in the meantime, and now they can take that money and use it for college if they want. But if I did my job right, the real goal of all of this is for them to see a real life picture of the course of 15, 20 years of what you teach in Rich Dad Poor Dad. I’m trying to just instill that in them. So, I hope they don’t go to college. I hope they take that money, and they invest it in their own real estate or their own business or their own whatever. But that stuff’s not taught. That’s not taught in school.

Robert:
I commend you because that’s when my financial education started. It started at 10, when I was 10. My rich dad just started teaching me about money playing Monopoly. And you wonder why I’m so screwed up today. We all know the formula, four green houses, 1031 red hotel.

David:
Every once in a while you come across somebody whose parents were in martial arts, and they started when they were five, and you see at 25 and they’re a ninja. And you’re just like, “God, how did they get that good?” Or you meet that real estate agent that sells 50 houses a year at 19 years old. And every time it’s because their mom or dad were an agent and they grew up seeing it. It’s obvious that that is what human beings work. What you see over and over what you’re exposed to. And the timeframe you have of practicing those concepts leads to being really successful. And yet so many Americans don’t teach children how money is supposed to work even though money might be the only thing you could ever get good at that allows you to be good at everything else. If you have money and you have time, you could go train martial arts, you can go do all the things that you want to go do.

Brandon:
I feel there’s an analogy for like the one ring to rule them all here that you missed out on-

David:
Lord of the Rings.

Brandon:
That’s the one skill that rules them all is knowing how money works.

Robert:
Amen. And that’s why the Capitalist Manifesto was started in 1996 was to teach capitalism at home because they’ll be taught communism at school.

Brandon:
Hey, let me ask you a question about the CASHFLOW board game. When I played that a lot when I was younger, and got really into I mean, read Rich Dad Poor Dad, played the game and I got everyone I knew to play the game with me. And I found this thing over and over is that the lawyers and the doctors in that game. For those who haven’t played it, you start with a character. You start as a job. The lawyers and the doctors had such a hard time winning that game. Yet the janitors had a much easier time. Was that on purpose? And if so, what were you trying to teach there?

Robert:
Well, if you understand the whole… All Rich Dad Poor Dad is a book on accounting, income statement, balance sheet, statement of cash flow. You don’t have to go to college to know that stuff. But the other thing too, is if your expenses are lower, it’s easy to get out of the rat race. But what happens to most people as we know, they go to school, they think they’re John Wayne or something, and then they buy the big house, they got a big car and all that. So, they’re trapped in debt. And that’s when guys like Dave Ramsey jump on them and say, “I live debt-free.” I go, “Well, they have debt in the wrong places.” If you had bought like exactly what you’re doing with your child, they’re using debt to get rich. But the average person even if they went to college, or Harvard, or Stanford, they use debt to get poor. It’s not rocket science.

David:
There’s certain debt that hurts one person and helps the other. So that would be if I borrow money to go buy a ski boat, that’s great for the person who let me borrow the money, because they’re going to make interest on the payments. It’s great for the person that made the boat. It’s bad for me. Then there’s other debt that helps both parties. When I go buy an asset that goes up in value, and it helps my financial future. And I made money for the person that let me borrow the money, who doesn’t want to take their time to go do it. And that is such a simple concept, but it gets mixed up in the whole debt versus no debt debate.

Robert:
Well, also, if you understand what happened in ’71. Again, it was Lenin who said, you want to kill capitalism, and debauch the currency. That’s happened in ’71. I’m a student of economic history. The fact is money is created. It doesn’t even exist. You go to the bank, they don’t have… Let’s say, you want to borrow a million dollars. They don’t have a million dollars there. So, you sign your name, they give you a million dollars. It just pops up. That’s called the fractional reserve system and all that stuff. So, that’s why the whole system is so screwed up. But we have these college professors who don’t even know what I just said. Money doesn’t exist. You walk up to the bank and say, “I want to borrow money.” They lend it to you, but they just created it. Money is created out of debt. That’s happened in 1971. You think a credit card has any money in it? No. Money is only created the moment you say, “Hey, I’m an idiot. Here it is.” It’s created. And if you understood that you’ll understand real estate.

Brandon:
That’s exactly where I was going. As you were speaking, I was thinking if what he’s saying is right, that money’s not real, it’s just created, then you want to exchange it for an asset as fast as you can because an asset is real, right?

Robert:
Yes. Well, it’s even worse than that. Is you’re helping the banker out because you’re going, “Mr. banker, I’m giving you an excuse to make some money here.” You’re going to… Like I just borrowed about 25 million bucks. The banker was ecstatic. Do you know what I mean? That money did not exist. That’s why they dropped the interest rates now to blow 2% is so you’ll borrow money. And then my buddy Ramsey is saying live debt-free. I’m going, “Well, you’re anti-American if you do that.”

Brandon:
Yeah, I’ve been buying mobile home parks lately. Partially because I like them. I bought 2,000 units in the past year or something crazy like that. But I look at this I’m like, “They’re giving us loans on mobile home parks at two and three, four percent, really low interest rates that are locked in for a decade at these rents that are two, $300 a month. So, even if we do see a decline in the economy I’m like, “I can hold through.” And some buying low income housing as well, lower income housing apartment complex. It’s not like government housing, but just cheaper apartments because I’m like, “People can afford to pay this.” The government’s just given me almost free money. And then they’re printing so much that that should just go up. I’m excited about this stuff.

Robert:
Well, that’s why there’s three possibilities. Again, you looked at the debt to GDP ratio. One of them is default, number two is inflation, number three is taxes. They’ll probably inflate. The way they do that is MMT, Marxist Monetary Theory, and UBI, Universal Basic Income what you’re doing right now, they don’t give the poor people the money directly to give to us. [crosstalk 00:39:31]. They go say, “Hey, you need to pay your rent. Here’s the money to pay their rent.” I go, “Thank you.”

Brandon:
I see the exact same thing. I think the government is going to more and more get into this housing as a right mentality. But I don’t think they’re just going to go build housing, necessarily. I think they’re going to give tenants money to pay us and then we’re just going to make more and that’s going to make real estate go up even more valuable, and our debt stays the same.

Robert:
So, that’s why I start this whole thing with start with macro first. What’s the debt to GDP ratio? At 90, it’s good. It’s a one to one, 1.1 with a Keynesian multiplier, but when COVID hit it was already a 106 and today it’s 130. And so, you better start protecting yourselves. And I still endorse real estate because you can use debt and you pay no taxes, pay less taxes. But you’ve got to be smart. And if you’re not going to be smart then listen to Dave Ramsey and live debt-free. I mean, it’s a free country. I agree with him. If you don’t have any financial education, you don’t want to listen to you guys. Listen to Dave Ramsey or listen Tony Robbins.

David:
I think that’s fantastic advice. I’ll just throw this in Brandon, if you didn’t know how to drive a car. The best advice someone could give you would be don’t get behind the wheel.

Robert:
Yeah, call an Uber.

David:
But if you know how to drive a car, walking to work instead of driving is sort of foolish, right? That’s probably the best way I could think about the whole is Dave Ramsey right or wrong? Well, it depends on the person listening and what they’re capable of handling.

Robert:
If you don’t want to study, listen to Dave Ramsey. That’s as simple as that. When I was going to fly in Vietnam, I decided so who I’m going to fly with? I said since the Marines are the biggest psychopaths, I’ll just join them. I wanted to fly with guys who wanted to fight. I didn’t want to fly with guys who are draftees. So, it’s just common sense, and it’s not right or wrong. It’s just what’s works for you. All the people listening right now, is real estate good for you? Well, it depends. If you want to study, it’s great. Don’t want to study, don’t do it.

David:
That’s very good. And a lot of people that bought real estate in 2005 are nodding their heads right now saying yep. I didn’t want to study. I just wanted to speculate and they all got burned.

Robert:
I tell you a funny story? Because somebody says, “What if the market crashes?” Oh, boy, that’d be exciting because 2008 I thought I died and went to heaven. They are giving away property at bargain basement prices. Interest rates were dropping, people were screaming, they’re complaining. I was going, “Thank you, Jesus. This is wonderful.” So, the other night I was with my friend. He’s a very, very, very, very big real estate developer. And here I talk about when’s this bus going to come? It’s overdue. And so, we walked into this restaurant in Scottsdale, Arizona, and there are all these women in evening gowns, and he and I looked at each other and said, “It is time to sell.”
And the reason is, this is one of most important lessons. At the top of a market people are the happiest. If you can understand that one. So when the markets are really, really high, everybody’s happy. They’re spending money. That’s always on Stansbury research as well. Maybe it was a prom night. I said, and Daniela, these women were about four decades out of the prom season. They were just celebrating, champagne was flowing. I don’t know what the heck they were celebrating, but it was about 20 of them. And I said that to me is a top of a market, so I call it now the prom night indicator.

David:
I worked in restaurants during that time. And I can attest to the fact that selling more expensive bottles of wine and more of them was a lot easier. I mean, it was just people were, yep, take another one, take two, and they take one drink of it leaving the whole bottle there. And then when I got out from what I heard from the other people I got into law enforcement was that it just got so hard to sell anything, right? If people feel rich, they spend money freely. If people don’t feel rich they become tightwads.

Robert:
But when people are happiest is the top. If you could understand that one, then what you’re waiting for is the depression. Like when Neiman Marcus has a sale, I’m happy. I don’t know why people think it’s bad to have a crash. It cleans house, except when the Fed cleans it up for you and pumps it up fake. That’s terrible.

David:
Well, we haven’t had that crash. We should have had it a few times at least from my perspective just like a human being has a sleep cycle. We’re awake, we spend energy, then we need to sleep and refuel. And the economy works that way too. You have a big boom, too many businesses are there that shouldn’t be they need to go out. It’s like a forest fire. You have a depression, it cleans out the bad ones. The capital gets reallocated to better places, the companies do better. We get better products, like better iPhones and better cars, and it works. It seems like every time it’s time for us to crash and sleep the government pumps us full of methamphetamine. And so, the experience is we’re doing great, I feel wonderful, but underlying it’s not healthy for the body to go through that. Do you think that I’m off with that perspective?

Robert:
No. It’s basically what’s happening today is that people are addicted. It’s like giving a heroin addict more heroin. And that’s where we’re at today. It’s sad. I mean, it’s really sad. I laugh about it and all this. But like I said, in 1996 my wife and I created the CASHFLOW board game so people could understand income statements, balance sheets, statements or cash flow. And it’s not that it’s the answer. But if you continue on with your education, learning, making mistakes, and dealing with good people, bad people, which is all part of being an entrepreneur, you actually get smarter, and better deals coming your way. So today, I just turned 74. I have more deals coming my way just because I’ve made so many stupid mistakes and dealt with all my crooked people. But it doesn’t mean I have to be stupid or I have to be crooked.

Brandon:
What are you investing in these days? I mean, what’s the focus for you? Is it real estate? Is it crypto? Is it businesses or all of it?

Robert:
I started buying gold in 1971. So, I flew to Hong Kong and I bought my first gold coin. It was a South African Krugerrand, and the whole world changed. Oh my god, this is money. And the problem was I had to smuggle it in because in 1973 or two, it was illegal for Americans to own gold. So, I smuggled that Krugerrand into America. It’s not hard to do. You tuck it in your pocket. But I still have that Krugerrand I paid 50 bucks for today’s worth 2,000. Nothing’s changed. So, I became an advocate on gold, silver, and today Bitcoin, and bullets. I mean, I made more money with bullets because I was buying it by the pallet load. I was buying 556 or 223 ammunition for seven cents around and today got I can get a buck for it.

Brandon:
Wow, bullets. I haven’t heard anybody say they invest in bullets. That’s fascinating.

Robert:
Yeah, but it just take study. Do you know what I mean? You just sit there, observe what stupid people are doing. Just don’t do it.

Brandon:
Now, for somebody like me, I’ve not ventured very deeply into the crypto world, but I know you’ve got to look more into it than I have. You sound bullish on crypto and you think that’s the future? And if so, there’s so many coins out there? Where does somebody even start thinking about that?

Robert:
Well, it’s the same way I do anything is I don’t talk to myself. I talk to people who are smart. Guys who are actually like Peter Schiff hates it. He’s a friend of mine, and the guys at Rutgers won’t touch it. But I talk to guys who will touch it. This is a while ago, when Bitcoin hit 20K is tempting because that’s like prom night. Everybody’s happy. But you know it’s going to retrace. So, I talked to several people like Ron Paul and all that stuff. I said, “What do you think?” Talk to Max Keiser. He said just wait. So, when it retraced down from 20K to 3K then went to seven. I picked it up at nine, and today it’s about 50. So, it’s a matter of just a little financial education. All booms bust. I don’t know much about it. I just don’t trust the US government. I don’t trust the Fed, and I don’t trust the Treasury, and I don’t trust Wall Street. It’s that simple. So, I want to trust what I can control. So when I talk to people that said real estate’s the best because of debt and taxes. Who else is going to lend you millions of dollars at low interest rates, and then you don’t have to pay tax on it? Oh, no, that’s to risky. I’m like, “Okay.”

Brandon:
What are your thoughts on building right now? I know one of our mutual friends, Ken McElroy is doing a little bit of apartment complex building. I like the idea but what are your thoughts? Where’s the building headed right now? Is that a good investment?

Robert:
Well, because I invest with Kenny it’s a good investment. Kenny has made me a millionaire over and over and over and over. He is the smartest guy I know in real estate. At the same time, I have another project going up. It’s much bigger than Kenny’s deals, but it was a longer term project. It’s an old age home, which I’m going to be the first client. If you look at demographics, and they had this massive thing called the Baby Boomers who are set for retirement. So, I have the most luxurious. They call it the assisted living home. It’s right next to my house in Phoenix, and it’s massive. It’s an infinite deal, too. I have no money in the deal. But that’s why I just love real estate. But you have to have guys like Kenny on your team or Tom Wheelwright, my tax guy, or I listen to you guys because it is higher risk if you’re dealing with idiots.

Brandon:
Yeah, that’s so true. I 100% agree. When I went into mobile home parks I was debating in my head between mobile home parks and senior housing because I see the macro trends of where we’re headed next five… I don’t invest for tomorrow. I invest for 20 years from now.

Robert:
Very smart.

Brandon:
Yeah, and there is something, there’s a massive problem right now and there’s a lot of people getting older and older and older and the technology is improving. We’re going to live way longer than our parents lived. I heard a guy this weekend at a GoBundance event, and I know you’ve been to a GoBundance event before.

Robert:
Fabulous organization.

Brandon:
Yeah, I love GoBundance. We’re at this event and this guy there, I think he’s a Harvard PHD, whatever guy studying longevity. He’s like, “Yeah, you guys are all living to 150.” Now, it doesn’t mean we’re going to live… I mean, if they can extend our life to 150, fine, but we’re still going to need a place for all these people to live. And even if it’s not 150 there’s a growing problem, then the two I see right now are there’s a problem of affordability in America, and there’s a problem with elderly care in America. So, if we can get ahead of that curve I think there’s a lot of money to be made.

Robert:
Yeah, this homelessness is a major, major disaster. I mean, it breaks my heart. [crosstalk 00:50:32]. It just breaks my heart. But in California I think the tents are costing them $250 a tent. I’m going, “Jesus, I can buy one at REI for 50.” But anyway, it’s just a mess. And then so housing will always be a mess starting with tents and homelessness and all the way up to high end affordable, I mean, elderly care, which I’m going to be the first tenant.

Brandon:
What do you envision for that? I want to know a little bit more about this project you’re working on? What is it like? I mean, how many beds is going to be here or rooms? And what are you excited about with it?

Robert:
You’re talking to a marine here, man. I don’t even know. I set that project up 25 years ago.

Brandon:
That’s cool.

Robert:
And then what happened was, it was a no money down deal again. It’s right next to my house. It’s on 32nd and Camelback, which is the location. It was a health club, and it was a triple net lease. So, I borrowed $3 million off of my house. I paid for the property. I borrowed money for that, too. So the 3 million was amortized by the triple net. Now, they paid me 50,000 a month, which then amortize my $3 million debt on my house. And then we rolled… So, after the whole thing was paid off, which was and I got all these tax breaks for and all this. And then we sold it to a development company who sold it to this senior living housing, luxury high end property. So we didn’t want to take the money so we sold it to them on 100-year lease.

Brandon:
Oh, wow.

Robert:
And so, they send me a lot of money every month, but I still own the property.

Brandon:
That’s fascinating.

Robert:
Yeah, it’s a structure. So, how many units? I don’t really care. Just something in my check.

David:
So, here’s the one I want to highlight from that. You also incorporated leverage into this deal, which is the best business people answer exactly how you just did. What are the details? I don’t know. That’s that person’s job, right? I had the vision and I had the money and I let them and that’s what capitalists do is they create opportunity for the person who is going in and managing all those details. So, yeah, that’s gold right there.

Robert:
I did a joint venture with my friend Marin Katusa out of Vancouver, and we now sell carbon credits. It’s a green new deal thing. So we’re making fortunes because these greenies are going to force every airlines, every steamship company, every trucking company to buy carbon credits. Yeah, so we just manufacture the carbon credits, and we sell it to them. There’s so much opportunity if you’re an entrepreneur, if you’ve had the experience. If they listen to guys like you who are for real in the market.
The key is finding for real people who are your teachers. It is the key. When I talk about flying in Vietnam, I flew there, and I know what it feels like. I know what it feels like to shoot people. I know, we did it. But when I talk, “Oh, you’re so mean.” Well, what the heck do you think we’re doing out there? Playing holding hands singing Kumbaya? People are just so out of reality today. I don’t know where they’re at. So, I’d rather be a capitalist. I’d rather listen to you guys. I’m honored to be part of your program. Kenny McElroy and I have made millions together, but I do deals with other people, too. I hang out with people smarter than me, and being a marine that ain’t hard to do.

Brandon:
I love it, man. Well, we got to start wrapping this thing up. I mean, this has been phenomenal. We’ve got four or five more questions. It’s our last segment of the show. It’s called our (singing). The famous four is the part of the show where we ask the same four questions every week to every guest. And so, we’re going to ask you. This is the part where everyone says Rich Dad Poor Dad, but I’ll ask you the first question. Is there a real estate specifically related book or resource that’s been impactful on your life? What would be your favorite source of real estate education?

Robert:
Well, actually, I’ve read a lot of them. Laurie Nickerson, but these are old guys. I mean, they’re gone already. But I think the books had really affected me were the macro books like The Creature from Jekyll Island on the Fed. And once you understood the Fed, you understand why you’ve got to be in real estate. Do you know what I mean? It’s macro. It’s not micro. And because it’s all debt and taxes. So, once I understood The Creature from Jekyll Island, then I understood real estate.

David:
That’s a great point. It’s kop like that scene in The Matrix where Neo has to travel back to the computer source and see where everything flowed from. We’re not just beating the real estate drum because real estate is a cool thing. There’s a reason that money flows that way.

Robert:
Yeah. And you said it perfectly earlier. You have to watch what’s going on then you make your decision. If they’re going to raise interest rates tomorrow, I’d probably back off.

David:
That’s exactly right. You got to watch how the rules are being developed.

Robert:
Yeah. And as long as we’re going to keep luring us, and all this, and making it more affordable I’m coming in. But you’ve got to be smarter because more people are in today. Ken McElroy are partners for about 25 years. That boy has made me a multimillionaire over and over and over and over and over and over again. But I don’t know as much as he does. I’m quite happy not knowing. You’ve got to hang out with real people. That’s all I’m saying. And then Tom Wheelwright, I suggest people listen to him. It’s called Tax Free Wealth. If you understand that it’s debt and taxes that make you rich, then you’ll understand real estate.

David:
I was just on Ken McElroy’s podcast not too… Maybe a week ago, and he was on ours, what? A couple weeks ago, Brandon?

Brandon:
Yeah, yeah.

David:
Very smart that he’s experienced. He’s like you said, he’s flown the planes. He’s not just talking. There’s a lot of people out there that put one or two deals together with other people’s money benefited from a great market, and they’ve got podcasts, and they’ve got YouTube channels, and they’ve got courses, and they’ve got everything. Kenny’s not one of those guys. He’s been through it. He’s seen deals that went bad, which is just as important as seeing people that have deals ago good that know what went wrong. Next question, what is your favorite business book?

Robert:
Well, it’ll probably be again macro. I’m writing a book with a guy named Jim Rickards who was CIA. He was part of Long Term Capital Management and all that. And the book is The Road to Ruin. He wrote the new case for gold. he and I are writing a book called The Ravens is how you protect the future, but I can’t… Everything starts with the biggest picture. If I could recommend that if you step back and look at the big picture, then you know what to do. So, being a pilot, that’s probably my MO. I look at the big picture, then I figure out where to go.

David:
So next question, maybe about you personally, a little more, Robert, what are some of your hobbies?

Robert:
I’m a politically incorrect hunter.

Brandon:
The last question for me for the day, and then Dave’s got one more for you. But if you were to really boil it down between the successful real estate investors that you’ve met in your life from all those who they get excited, they want it, they try or they give up, they fail. What’s the difference? If you really had to boil it down what’s the difference between people who succeed in real estate and people who don’t?

Robert:
Well, it’s the same thing as they teach in the Marine Corps. It’s the words, dedication, honor discipline, discipline.

Brandon:
Yeah, that’s a great answer.

Robert:
Yeah, I don’t do it to get rich. I mean, that’s the intent. But I know I better know the game. So, I study the game. The reason I don’t like stocks is because I love gold. I bought a gold mine in China for nothing down years ago when the Chinese was kicking out, whatever they were doing, but I got a gold mine for nothing down. All I had to do is take it public, and took it public for the Toronto Stock Exchange and made $27 million for it, and we struck gold. So, I bought 100 million ounces of gold, over a billion dollars in gold, and the Chinese government took it.

Brandon:
Oh, no.

Robert:
But I learned more about the stock market. China is China, and they just took over Afghanistan. But anyway, I learned more about the stock market taking a company public, and that’s why I’m in real estate. It’s a whole different world. I am a control freak. I like knowing who I’m doing business with, why I’m doing business with them. Do I trust them? I didn’t trust anybody in the stock market.

Brandon:
I’m right there with you, man. Right there with you.

David:
That’s a great argument for why real estate. You have control over your asset as opposed to owning a share of a company you have no control over.

Robert:
Absolutely. And debt and taxes and tenants and all that stuff. It’s so much different.

David:
When I first heard you speak, Robert, it was at a GoBundance event in Lake Tahoe. And you said something that it changed my perspective on money and life forever. And I’ve said this before, but I don’t know if I ever told people it came from you. You mentioned that most people look at the coin as heads or tails and that’s often expresses itself as Republican or Democrat. It’s one way or the other. If it’s tails that you’re looking at and you like heads, you just get angry. And you said, “I don’t play that game. But I stand on the third side of the coin which is the edge, and I can look over on either side and I can see what is the government doing, and how can I make my move?” And I just thought that was so much more brilliant than wasting energy railing about things you can’t control is to look at what each side is doing, and then position yourself in the best spot. Is there any insight you can share on that before we wrap this up?

Robert:
Just thank you for taking… I think that’s probably the most… Thank you for remembering that. It’s called all coins have three sides, heads, tails, and the edge. And intelligence is found on the edge, especially today when people yelling and screaming at each other all day long. I just stand on the edge and take a deep breath and watch both sides. But by standing on the edge, the edge is also intelligence. That’s where you gain more from both sides. And so, one of the reasons I know so much about real estate and stocks is because I’ve been on both sides. And for me personally, it fits my personality and my beingness better on the real estate side. But chasing down a real estate deal is fun.

David:
It is fun.

Robert:
It’s the most fun game I know. It’s exciting. I could do it all day long. And that’s what it comes down to. Not is one right or wrong? Is Dave Ramsey right or am I wrong and all this is what works for you? If you want to study then real estate is good. Get into debt. If you don’t want to study, listen to Dave Ramsey.

David:
You summed that up so beautifully. Thank you for doing that. Because I know there’s a lot of people are listening, they hear us make statements that immediately create a knee jerk response. And they just want to shut down. I don’t want to learn. I don’t want to… That’s not what I like to hear. I don’t like to look at the tails, I only like to look at the heads. But the point of sharing information, the point of a podcast like this is to empower the average American or wherever you’re listening to improve your life by improving your financial education, your knowledge to what happens, and then the decisions that you make. And you cannot do that if you don’t know what’s happening on each side of the coin.
And so, that’s just what I want to encourage everybody who’s listening to hear is that knowledge can never hurt you. It can help you. It can help you know what not to do. But running away from information is never the answer to putting yourself in a better spot, and that’s where our hearts are. So, we want people to have better lives without relying on others, whether that’s the government or a system, or whatever your family taught you, at one point that’s all you know how to rely on. You want to be empowered, which is like you said, Robert, you were fighting for freedom to empower us through capitalism. You were fighting for our freedoms.

Robert:
And you’ve just described freedom. You’ve just described freedom. One last thing about practicing what I preach. As I come up with this book, the Capitalist Manifesto, it’s against the Communist Manifesto. So Jordan Peterson is one of my heroes, and he goes in… He’s like an idiot. He debates as communists. So I go, I crank onto YouTube, Jordan [Katsav 01:02:46], he debates like Richard Wolff and all this stuff, and it’s white knuckling. It takes everything in my power to listen to a communist tell me why capitalism is bad. But I still have to sit there, probably let’s say a 35-minute talk. I will listen to the communists just rip apart capitalism. But if I don’t listen, I’m not practicing what I preach. So, I still hate listening to them. But I sit there and listen to them and try and understand their point of view. I still don’t understand it but I do listen to them.

David:
He’s still wrong, but you listen to him. Funny.

Robert:
That’s what I love about YouTube and all this stuff. I mean, I hate the de-platform people. But I can access different points of view so quickly in a few minutes. So, it’s great. It’s a great thing.

Brandon:
Yeah. That’s awesome, man. Well, this has been phenomenal. I loved having you on today. I just admire everything that you’re doing right now. And you’re making such an impact on the world. So thank you, and I’ll let David wrap things up with the final question.

David:
No, I just missed meeting Jordan Peterson. He was scheduled to speak at a TED talk that I was speaking at, and he was unfortunately hospitalized right before he was supposed to fly into California. So, my prayers are with him, but that’s one brilliant mind right there. We’d love to have him on the show. I don’t know if Brandon and I would ever get a word in if we had him on the show, but that’s okay.

Brandon:
I’d let him to talk for an hour [crosstalk 01:04:09]-

David:
That’s exactly right.

Robert:
He is one of those geniuses walking the planet, and he’s got guts. He’s not on the fence. Another guy is Gad Saad. He’s not on the fence. So, hardcore capitalist and an academic. And then there’s so many guys coming out now. Victor Davis Hanson, they’re academics coming out against communists in academics. It’s really an exciting time, but I encourage people to listen to both sides.

David:
All right, last question of the day, Robert, where can people find out more about you?

Robert:
Richdad.com is the probably the best spot. I’m turning into a hermit. I sit at home… No, it’s wonderful because I go to the gym and all that I meet the second and third generation. These guys come to me and say, my dad or my granddad gave me your book. If there’s a rush, that’s it. The highest of highs is it changed my life. Most of them go into real estate because they’re entrepreneurs. They said they’re stating in business, but we’re also investing in real estate. So I just remind them what Ray Kroc of McDonald’s said, McDonald’s business is not hamburgers, McDonald’s business is real estate. And the perfect reason you start a business is to buy real estate. And you use debt, and you pay no taxes, and you have freedom, and that’s what it’s all about.

Brandon:
Robert, this has been amazing. Thank you so much. I hope you… I wish you best of luck on all your endeavors, all your real estate, all your everything else, and can’t wait to see where you head in the future.

Robert:
Thank you. Well, thank you and congratulations on your success and say hello GoBundance. I appreciate them.

Brandon:
All right. That was our show with Mr. Robert Kiyosaki. By the way I do want to pull out here at one point in the show David you casually just refer to your buddy Robert as Rob and I thought that was pretty big flex. You can just shorten Robert’s name to Rob just like you’re buddies. So, good job on that. I wasn’t going to go there.

David:
He took it in stride. Obviously, he’s doesn’t have as big of an ego as you do. I can’t call you Bran.

Brandon:
You cannot call me Bran. No. No, you’re just so casual. He’s just like, “Oh, here’s my buddy Rob over here. I’m like, “This is Robert Kiyosaki, the godfather of every thing that we do here at BiggerPockets.” He’s like the guy that-

David:
Yeah, but he and I go way back, all the way back to Lake Tahoe and GoBundance.

Brandon:
He’s impacted millions of people, maybe even billions of people. You guys go way back. I was sure you guys met before. I had not met Kiyosaki before. So, anyway, that was a fun interview. Man, he downplays his brilliance. He plays up the Marine, not very smart, trust of the people. But he is a thinker. He is a Jordan Peterson in himself. A very smart guy, but also very good at explaining complex topics in a way that the rest of us can grasp, us mere mortals. Things like Rich Dad Poor Dad, that whole concept or the rat race that was his thing, or the Cashflow Quadrant, or all these things that he talks about. Yeah, phenomenal. What are your thoughts?

David:
I think it’s worth pointing out he is very critical of certain institutions. But if you look at his motive for that, it’s that he loves freedom so much he sees those as enemies to those things. So, if something is an enemy of getting you out of the rat race, if it’s an enemy of giving you the freedom to make your own choices, or to build your own wealth, or to carve your own path, he sees that as something that should be attacked as he’s defending freedom and our ability to improve our own lives. And so, I think that’s what I really like about his demeanor, which can be rough around the edges at a time is that he values freedom, and real estate’s ability to grant you that so much that he takes that other, like a stance we don’t hear about too often.

Brandon:
What are your thoughts on the tax thing? He’s talked a lot about we invest in real estate for debt and taxes. I’ve heard him say that before at places. When people talk about taxes, there’s a lot of the world, I would say the majority of the world do not like us when we talk about not paying taxes, right? That was a big thing that everyone railed against Trump about is how he didn’t pay taxes. And when I said in the show, I paid less taxes than my intern. That ruffles a lot of feathers, and we kind of hit it on the show, but I wanted to ask you, if you could maybe expand on that and give your thoughts on that. Are we just evil capitalists?

David:
Well, I think Donald Trump and Robert Kiyosaki say, “I don’t pay taxes, you shouldn’t pay taxes, you’re an idiot if you pay taxes,” in a sort of clickbaity fashion. It gets your attention and makes you go, “What, why?” And what they’re trying to do is get you down a path of learning how wealth building works because it’s a more efficient way to build wealth without paying taxes, but what it like every clickbait article if you just hear that phrase it’s very easy to become critical of it and say, “Oh, you’re anti-American, or you’re anti the people that benefit from taxes, you don’t want people that are starving to get food or medicine.” That’s not the case at all.
The government incentivizes business owners and specifically real estate investors with tax incentives that can cover all your income so you don’t pay taxes because they’re providing good to the world. They are providing housing for people. They’re making bad things better. You start a business that wasn’t doing… There was a need in the market, you created a way to fulfill that need. In the process of that you created a bunch of jobs for other people that wouldn’t have normally been able to do what you did. Those people pay taxes, the government’s happy. If you created 20 jobs that pay taxes, and you didn’t have to pay any taxes are you an evil person? Not at all.
The other thing I would point out is that when you do pay taxes, let’s say that you pay 30% of your income to the government, you are now depending on them to go use that money in a way that would best seem fit. The government recognizes themselves through the tax code. We’re not always the best at using money. Opportunity zones would be a great example of that. They’ve given investors incentive to go revitalize areas that fell apart to make the world a better place.
And so, you’re not avoiding taxes so that you can keep all this money to just go eat caviar and drink champagne. You’re pouring it back into the business that you have to grow it to make the world a better place. And that’s really what I like to highlight. Don’t just take the knee jerk response of, “Oh, you don’t pay taxes, you’re bad.” Ask why. Ask what you do with that money instead. Ask yourself, “Well, why is the government IRS code written to benefit? Is it because they’re wealthy?” No, it’s because they’re using that money in a way that makes the world a better place more efficiently than the government would.

Brandon:
Well said, man, that’s awesome. Well, we got to wrap this thing up and get out of here. But I hope people took a lot out of this episode, and especially I thought about where’s the world headed? What are the rules that are being rewritten right now? And how can you take advantage of that to better you, better your kids, better the world around you, better the planet by playing the rules as they’re written? So, thank you, everyone for joining us today. Again, if you have not left us a rating or review in iTunes, that’d be much appreciated. Follow at BiggerPockets everywhere you can on social media, so Twitter, Instagram, Facebook, YouTube, all that. You can follow David personally @davidgreene24, and you can follow me @beardybrandon, that’s beard with a Y. I’ll let you take us out of here David. I almost did it but then I was like, “I can’t take your job on episode 500.”

David:
It’s really the only reason I’m here. I have an hour and a half to come up with a clever nickname.

Brandon:
There you go, you’re still struggling.

David:
This is David Greene for Brandon the Ronald McDonald of Mobile Home Parks Turner, signing off.

Brandon:
That was pretty good.

Speaker 3:
You’re listening to BiggerPockets Radio, simplifying real estate for investors, large and small. If you’re here looking to learn about real estate investing without all the hype, you’re in the right place. Be sure to join the millions of others who have benefited from biggerpockets.com, your home for real estate investing online.

 

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In This Episode We Cover:

  • Why Rich Dad Poor Dad remains a timeless classic in the investing world
  • Why Robert favors real estate, precious metals, and cryptocurrency above other assets
  • The difference between an asset and liability, and why so many Americans confuse them
  • Writing (and fighting) for freedom, prosperity, and wealth 
  • Paying attention to the macroeconomic trends and using them to make smarter investing decisions
  • The assets that Robert is bullish on in today’s market
  • Why you need to love studying real estate to become successful
  • And So Much More!

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