What would you do if you never had to work again? What if you had all the time in the world to spend exactly as you wanted? How would your life be different if money were not a worry? These are just a few questions posed by Kim Kiyosaki in her book Rich Woman: A Book on Investing for Women, Because I Hate Being Told What to Do! (Rich Press, 2006).
Honestly, when I first read that title, I was a little insulted. Why can’t it just be a book on investing? Why does it have to be different for women? But I was curious.
Ryan McGuire/Bells Design, 2014
I recognized the author’s name instantly. Kim’s husband is the famous (or infamous) entrepreneur Robert Kiyosaki. He is the author of the New York Times bestseller, Rich Dad Poor Dad. He is also the author of Cashflow Quadrant and many other books covering real estate, business and investing. So it is quite possible she knows a wee bit about investing.
Turns out, Kim Kiyosaki is more than worth her salt. She began her career in advertising, started her own business venture in her 20s and subsequently began numerous businesses with Robert. Her passion is teaching women the importance of investing and taking control of their financial futures. She believes the key to freedom for women is becoming financially free.
“We’ve spent our entire lives taking care of our families but have no ability to care for ourselves in this vital way. We are either depending upon someone else to do it for us—a husband or partner, a boss, a family member, or the government. Or we figure it will all work out. The fairy tales we grew up with were just that.”
We’ve all heard that supposedly half of all marriages end in divorce. But Kiyosaki adds some startling statistics to the conversation, in order make her point about the importance of independence.
- Nearly 7 out of 10 women will at some time live in poverty.
- Of the elderly living in poverty 3 out of 4 are women—and 80 percent of them were not poor when their husbands were alive.
- 47 percent of women over the age of 50 are single.
- In the first year after a divorce a woman’s standard of living drops an average of 73 percent.
The book details a wide variety of investment strategies that include but are not limited to real estate, paper assets, businesses, and commodities. It is written as a casual conversation among close friends. It begins with Kiyosaki sitting down for lunch with three of her girlfriends, which represent a single working mom, an overworked business owner and a stay-at-home mom, respectively.
Chapters 1 through 4 detail Kim’s personal story, wherein she describes Robert’s “cashflow quadrant.” This quadrant represents the four types of people in business: employee, self-employed worker, business owner, and investor. The final quadrant is the goal, where your money is working hard, so that you have more time for living.
Chapters 5 through 17 deal with her friends’ objections to and fears about investing. Kim’s argument is that, “When it comes to money, men and women are different—historically, psychologically, mentally and emotionally.” It is interesting to note that she doesn’t start to explain the actual how-to of investing until chapter 18. The first half of the book focuses on getting her friends—and readers—into the investor mindset.
She also spends a fair amount of time asking readers to uncover their “big why.” Why is investing important to you? What makes it personal for you? She uses a male friend’s reason why as an example, “I’m an engineer. I see my son for a few minutes in the morning, then he gets picked up for school by one of the other child’s parents, and I go off to work. If I’m lucky I get home before he goes to bed. The reason why I want to become financially free was very simply so that I could drive my son to school every day.”
Chapter 11 asks you to take an honest look at your finances. Kiyosaki uses Buckminster Fuller’s definition of wealth: “A person’s ability to survive X number of days forward.”
She then suggests that the reader create a personal financial statement and use it to determine how many months they could survive without working:
Savings + income coming in without you working
monthly living expenses
This number might be eye opening. As a real estate professional you might earn a substantial income with many commissions coming in monthly. But how would you afford your expenses if the commissions stopped? In sales we are all too familiar with the ebb and flow of the market and how they affect our paycheck. But what if you didn’t work because you were injured, wanted to raise a family, needed to take care of an ailing parent or just wanted to take a month off to travel? Is this possible in your current financial situation?
Chapter 20 reveals the nine keys to being a successful investor:
- Arm yourself with education: Kiyosaki lists a variety of resources available to you, including books, CDs, DVDs, seminars, newspapers, newsletters, websites and investment organizations.
- Don’t dive in head first: “Start small and expect to make mistakes.”
- Put a small amount down: “A little money means little risk.”
- Stay close to home: It is much easier to get to know the market in your hometown. You will spend less time travelling and more time learning.
- Set yourself up to win: Start with small deals, knowing that “a little success early on builds your confidence as an investor.”
- Choose your circle wisely: “Surround yourself with people who will cheer you on, who will be honest with you, and who will encourage you to keep going, during the ups and downs, to achieve your goals.”
- Ignore the get rich quick schemes: Remember that investing is a process and that financial independence does not happen overnight. “You don’t become fluent in the language in one day. You first learn a few words and phrases and you keep expanding your vocabulary.”
- Always be open to learning new things: “Nothing stays static. The markets are always changing. The rules are always changing. To be a winning investor you’ve got to change as the market trends change.”
- Have fun: “Celebrate each win along the way. Acknowledge yourself when you have successes.”
A helpful glossary of financing and investment terms follows at the end of the book. Overall this book is a great introduction to the investing world. Some of the dialogue feels sappy, but it is definitely food for thought. Even if you love your job as a real estate professional so much that you would do it for free, you have to have a plan B.
Gaining this investment knowledge will give you options. If you can master investing you won’t have to work as hard for money, because your money will work hard for you.