Buck: Welcome back to the show, everyone. Today my guest on Wealth Formula Podcast is the number one personal finance author of all time. He wrote the book Rich Dad, Poor Dad, which has influenced, I think, more millionaires than I bet you Harvard Business School. Certainly Harvard Medical School. There’s no problem with that one. He’s also what I would call really the godfather of Wealth Formula Podcast. I read Robert’s Cash Flow Quadrant about 14 years ago by accident in a dingy Mexican airport because I didn’t have any other books to read and I had no interest in finance. And the next thing you know, it was like I took a purple pill and my life changed. And here we are. So, Robert Kiyosaki, thank you for joining us on Wealth Formula Podcast today.
Robert: Thank you. I appreciate it. Interesting times we live in.
Buck: Yes, absolutely. And this is fun for me because like I said, I’ve been following you for so long, and I’ve heard you talk. We’ve met a few times. And one of the things that I found compelling in hearing you talk in more private settings is your experience in Vietnam and how that really opened your eyes to war and the underlying reasons for war and what they’re all about. And they’re so different from necessarily what we see in the media and what we think about or even what we read about in history books. And this, of course, is very timely because of what’s going on in Ukraine. And I would love to hear your thoughts on putting what you learned from your experiences in Vietnam together with what’s going on right now in the world.
Robert: Well, Buck, I’ll tell you about what we’re speaking about earlier. I mean, sweet talking double. You’re talking about my favorite, you’re talking about the subject that beats right next to my heart. It’s not money. It’s not real estate. It’s not anything like that. My background is I lived in a little sleepy town in Hilo, Hawaii. I had disciplinary problems, so I had to go to a military school. So Naval Academy and US Marine Academy because I need discipline, if you understand what I’m saying. Yeah. So I chose King’s Pointon with Merch Mountain Academy in New York, and my economics teacher didn’t have us study Keynes and Alphas and all those guys. The first book you had to read was The Communist Manifesto. And I’m going, que pasa, why am I studying the Communist Manifesto? And as a military school says, know thy enemy, know thy enemy. So I read Marxs’s book, it was written in 1848, quite a while ago. And I went, oh, my God, my family are Marxists without financial education. And financial education must include economic philosophy. Like if you’re going to study religion, what’s in Catholicism, Christianity, Judaism and Buddhism. So Marxism is like an economic religion. If you understand that point. Sure. So I’m reading this book by Marxist. It’s a tiny book, 50 pages. I said, My family are Marxist, my school teachers are Marxist. And I couldn’t say anything. Do you know what I mean? You go home, you call your father economy. It’s not enough. I called him Poor dad, but less economy. Yeah, that’s why I could say you’re a silver tooth you’re talking to beat under my heart. And the reason I wrote Rich Dad, Poor Dad on my cashflow board games, Cashflow Quadrant is because I’m anticommunist. And the question I’ve always asked is, what does school teach you about money? The answer is nothing. And to understand money, you must understand economic history, economic philosophy, and all this stuff. But I’m going, Holy mackerel, America is going Communist. So let me give you two dates that are important. I went to military school. I had a high paying job with Standard Oil of California. And my starting pay, not my pay, but my classmates pay was 120,000 a year. That wasn’t bad in 1969. Most people don’t make that much a day, but a 21 year old kid making 21K a year. But because I read Marxist Communist Manifesto, the reason I only made 48,000 a year was because I refused to join the Union. See if you understand Marx. Marx always said, Workers of the world unite. And today the people running the world are the NEA, National Education Association, the Aft, and all those labor unions, the teachers unions. That was back in 96. And I couldn’t tell my old mandate. Ramp, Lieutenant Governor’s, PhD, Stanford, Northwestern. But they don’t teach money, they don’t teach history, they don’t teach economic philosophy. So here I am in 69, I can’t join the Union because that would make me a Communist. And my father ran the teachers Union. So Buck, I was fucked up. So I ended up joining the Marine Corps because I’d say, my economics teacher was a West Point graduate. And he came back, went to Harvard, got his PhD in English in economics. And he was my teacher. So he said something to me is the power of teachers. I said, what’s it like to fly a B 17 in World War II? He says, now that I fly, I got shot down twice. I said, what’s that like? He says, Most exciting thing he ever did his whole life. You do it again. And I went, Kipassa, what the heck are you talking about? So with that, I was getting paid $48,000 non Union job with Standard Oil, California. I joined the US Marquee Corps, making 200 a month as a second Lieutenant. And I go to flight school in Pensacola, Florida. And two years later, I’m hanging in the sky flying a helicopter gunship in Vietnam. And I saw the Communist Manifesto. For real. If I hadn’t gone to Vietnam, it would just be a book, right? And being a doctor, I saw the war. There were so many times I picked up bodies. I picked up guys shot the crap and all this stuff. And I thought, what the hell are we doing here? And I realized it was the Communist Manifesto written in 48, and it really kind of disturbs you. When you shoot somebody, your life changes. Sure. And when you save somebody, your life changes. But when you kill people, your life changes also, if that makes sense. Yes. Here I am, a US Marine killing people. And I’m going, what the hell am I doing? But the bigger question I had, Buck, was how come their Vietnamese fight harder than our Vietnamese question? So today we’re in the Ukraine. Today we got the weakest President in the world. I’m not Republican or Democrat. Biden could be the weakest President, the most denial or demented President we’ve ever had. You have a strong man named Putin, and we’re at war. And I feel that Ukraine is just as corrupt as Russia. We’re not taking sides here, but you, as doctors, know how much damage is being done to people and their bodies, their lives and all that. And I’m going, what the hell is happening to our world? So when I read Communist Manifesto again, Mark said that communism would come in two stages. Stage one, socialism. So stage one, what happened in stage one was the Frankfurt School of Germany sent teachers to Columbia University, to the Teachers College. And that’s where communism started in America, at Columbia University Teachers College. And today is called Postmodernist Education woke critical race theory and all this stuff, it’s chilling us. And then stage two would be communism. So stage one, socialism. So you notice around stage one, Social Security chain was 1936 or something like that. Social Security, all Socialization. And what Marx wrote about Socialization was necessary to weaken the American people because the American spirit is too strong. Do you know what I mean? It’s too strong. So they have to teach political race theory, all this other crap. Government owes you a living collective Social Security check. And it made Americans weak. So that was 1930. That was stage one. And then in 2020, I’m not Republican or Democrat. In 2020, when Donald Trump gets censored by Silicon Valley, I’m going, que pasa. How can they censor Twitter and Twitter and all that stuff gets attacked? And I am going, Communism is here. So stage two came. This is the dangerous part at stage two, revolution puzzles, and we’re on the verge of revolution. That’s 2022 today. So that’s why I wrote Rich Dad, Poor Dad created the cashflow board game back in 1996. It’s part of my Capitalist Manifesto, which is my latest book. It’s how do you counter communism taught in our schools by teaching capitalism in our homes.
Buck: What do you think, Robert? Help us understand some of the dynamics. I think maybe that you understand what’s going on with Putin and why the invasion of Ukraine, just in terms of the energy and some of those issues that might be underlying that conflict.
Robert: Well, if you know the history again, it wasn’t Putin. It was Stalin. And like around 1918 or whatever, something around there, he invaded Ukraine. And Ukraine is a very rich country with minerals and all this stuff. So there’s no love lost from the days of Stalin, which is 1820, whatever it was that he murdered a lot of Ukrainians via starvation. That is the hallmark of communism to starvation. Mao starved millions of people because they killed the people that produced them. Again, I went to school in 1965, went to military school, while other people are reading Little Women and Little House in the Prairie. Whatever people read in school today, I’m at military school understanding communism, Marx, Mao, Hitler, and I can see it. So 2020, stage two of Marxist Communist manifesto came true. So what’s going on in the Ukraine is just stage two taking over. And they want Ukraine. Putin wants Ukraine back because it is kind of their Nebraska or Missouri or Montana where they grow the weight and they have a lot of minerals. So Putin the Ukraine’s. They don’t like Putin, obviously, but he’s already murdered so many of them, he might as well just keep going. So Taiwan is next because we have a weak President.
Buck: So you think the move right now is because as opposed to before, it’s just a sense of a weakened US government that maybe won’t respond and the Chinese will follow and then China will follow suit?
Robert: Well, it’s more than a weakened government. It’s a Communist education system. I’ll say it again. The Frankfurt School was in 33. Hitler came to power in Germany. The Frankfurt School of Berlin sent teachers to Columbia University Teachers College. And this guy named Dennis Prager, who runs Dennis Prager University, he called Columbia University a College of cowards. They teach people to be cowards. They teach you that if you’re rich, you’re an oppressor and you’re evil. And if you’re poor, your virtue wasn’t a victim. The American people are being weakened from the internal VR academic system. And that’s why I thank you very much for asking me the question. Just this morning. I went to military school. I didn’t go through Snowflake College. I didn’t have a trigger thing. They start yelling at you from day one. They insult your mother, your father and your best friend immediately. And if you can’t take it, then you shouldn’t be in the military. Right. And then I joined the Marine Corps and the insults kept coming. That’s funny.
Buck: I got to tell you, you’ve mentioned pretty much every school I’ve gone to. And I just feel lucky that I haven’t turned into a raging Communist. Columbia and Northwestern for medical school. So let’s talk a little bit about the latest book then, because ultimately this is where this is feeding in, which is the capitalist manifesto, how entrepreneurs can save capitalism. So how can they save capitalism?
Robert: Well, by being capitalist, number one. You’re a medical doctor, right?
Buck: Yes. Surgery.
Robert: I’m an old guy. I sit and watch Fox News and I see Joe Namath who is a quarterback. He comes on and he says I am Joe Biden. Get everything you deserve. You deserve more Social Security. I’m like, hey, asshole, the country is broke, right?
Buck: Yeah. The Joe Namath commercials are kind of fun to watch.
Robert: We’re broke. And he’s telling him, you deserve more Social Security.
Buck: Right. On Fox nonetheless, right. So they can be capitalist, but underlying that issue, the Capitalist Manifesto, is that entrepreneurs can save capitalism by continuing to be entrepreneurs, by innovating, by creating opportunity and jobs. But there is such a strong element as you’ve alluded to that’s really sweeping over the country right now of people feeling like they just deserve stuff. Right? So, I mean, entrepreneurs will do what they do. But if the majority of the country starts feeling like it’s owed something, then they’re the ones who put elected officials in place. How do we fight back?
Robert: Well, when you fly on the Airlines, if a mask drops from the ceiling, put your mask on first, right? That’s right. So if your kids are sitting there, put your mask on first. So you can save yourself first. And that takes education. I’m very pro education, but I’m not pro indoctrination. Again, 1930, the Frankfurt School sent teachers to Columbia University. Columbia University is called the University of Cowardice. They teach people to be weak if you understand that. So the way you combat that and this is as a medical person, as a surgeon and all this this is a book. First, what you read is a Cashflow Quadrant, right. Employee self employed, a specialist like a doctor. This is a big business owner. 500 employees are met. B also stands for Brand. I stands for Inside investor. I don’t have stocks. I don’t have bonds. I don’t have mutual funds. I am a capitalist. Right. Okay. Now this is the sad part, is that the doctors pay the highest taxes. Right. So you make a million dollars this year, you’re going to pay 60% in tax, 600K if you don’t do any evasive action. Sure, the employees will pay 40% and the big business guys pay 20%. And then the insiders pay 0%. The reason I bring up taxes is because if you look at history, America was born on the tax revolution. Boston Tea Party, 1773. And Marxism is based on taxes. He says if you want to kill the middle class, you kill them with two things, taxation and inflation. Right. That’s going on today.
Buck: Yeah. And you could argue inflation is taxation, right?
Robert: Yes. It’s the worst type of inflation. Taxes, the poor.
Buck: So in terms of the overall trying to change people’s mentality, the sweeping AOC contingency and the Bernie and the burners, where do you see this all headed? Because again, you said communism is here. What’s the next step after that?
Robert: Let me explain again because I was a C student. The other thing that Marx wrote in manifesto is what’s going to happen next? Again, this is 1848. He says there’s a flaw in capitalism. We all know there sure what happens to capitalism is the more freedom you have, the bigger the inequality. So guys like you and me, people with any kind of cajunes will take action, will do, start business, and will make more money. That’s the problem. You have the freedom to make more money in a free capitalist society. Unfortunately, when there’s freedom, there’s inequality. Inequality equals crime. So as the gap gets bigger and bigger and bigger, you see crime increase. So today I think in California, you can steal $900 and get away with it.
Buck: I think it’s more than that. I think it’s up to 10,000 now. There’s a real business here, a business opportunity.
Robert: We have a light rail system where they just arrive from stop to stop. They jump on, jump off. I know. Okay, so freedom equals inequality, inequality equals crime and revolution. So what Marx wrote in Communist manifested was the middle class would come down into the poor. And when the poor cannot move up, does that make sense? Yeah. So my generation of boomers, if the stock market crashes and the 401K disappears, not disappears, but crashes. The 401K came about. It’s called ERISA, the Employee Retirement Income Security Act. So 1974, ERISA kicks in. Guys my age. Oh, thank God I’m in the stock market. I’m an investor now. You’re a pawn of Wall Street and the Federal Reserve Bank, which is not America. The Federal Reserve Bank is a banking cartel, like OPEC is an oil cartel. But they don’t teach you that. Right. So that’s why I’m afraid what’s going to happen as the economy teeters and they start raising rates to try to quell in the name of saving inflation, the stock market will crash. It will wipe out the baby boomers. And I wrote another book called Who Stole My Pension? And it’s about how Wall Street steals the money out of public service and pensions, police, firefighters, school teachers, Ups, airline pilots. Our pensions are depleted. So this has been one big cash. Heist right. I’m not blowing smoke. You can check for sure. So we’re set for the middle class, my generation, the Boomer generation, which had the easiest of all generations. The reason I see the boomers headed the best is because in 1944, the Bretton Woods agreement was signed in Britain, Woods, New Hampshire. The US dollar became the reserve currency of the world, and we became the richest country in the world ever. Boomers had it easiest, but they at this cycle of the economy, 2022 and further may become they might not move up anymore. They might move down just as the poor are moving down, too. That’s the recipe for revolution.
Buck: So revolution, you mentioned that a few times so as the rates go up and all of a sudden you’ve got all these people feeling poor because their IRAs or whatever have been depleted, then the huge difference between the rich and the poor and the evaporation of the middle class becomes more apparent, and that makes it more likely for the revolution to occur. Is that what I’m understanding?
Robert: Historically yes. That’s what happened in Russia, 1918 was that the peasants were so pissed off that they couldn’t distinguish between the crooks and the real producers. So the real people who are producing stuff and that were rich, but they couldn’t see who was the real business person or farmer or whatever it was who was raised legally and the corrupt people. And today we have the same problem. We don’t know who’s stealing from us. Right. And I hate to say it, it’s our political leaders and the school system and the unions. And you look at what Big Pharma is doing right now. Somebody follow the money. You’ll find some interesting stories along there.
Buck: Is there anything that you feel like you can do to combat the revolution and prevent it from happening, or are we pretty much screwed?
Robert: Well, it depends on who you are. We’re a free market capitalist system. It’s about education, which medical doctors are able to read and write and are literate, but they lack financial literacy. Right. They don’t know assets and liabilities. Big, different assets. Liabilities? Yeah, their house and asset, their car and their whatever they call assets. But that goes back to this. It was the first book you read. These guys are opposite, but these are capitalists. These guys here are bourgeois and proletariat. I’m a capitalist. So when I came back from Vietnam, I had to study this site. Not this site. Sure. My poor dad, the PhD said, oh, go back to school and get your PhD. I was a pilot. I said, Pilots don’t need PhD. But in his mind, because he’s an academic, that means you’re smart. Pilots aren’t the brightest guys on Earth. My mom was a registered nurse, so she wanted me to become a doctor. I said, mom, doctors are smart. She goes, you got a point there. So just do what you’re doing. That’s fine. My rich dad said, Come over to this side. Yeah. Now this is where you and I match. That’s right. What’s the first course that I had to take? When I come back from 74, I’m getting spit on, hit by eggs, all that stuff by the hippies. I became a school teacher. But the first course my rich had had me take was real estate. He says, you’re going to protect yourself by understanding debt and taxes. And again, let me show you the picture here. If you can see it, employees pay 40%. Smart guys like you pay 60%, capitals can pay zero. Don’t understand real estate. You don’t get here. Right. So the reason I have about 12,000 rental properties, commercial buildings and all that is because I don’t want to pay taxes. America was born as a tax revolt. 1773, Boston Tea Party, not 1776.
Buck: Yeah, absolutely. That’s a big part of why I haven’t practiced medicine in five years. I used to just suck fat all the time.
Robert: It’s a worthy profession. When I used to go to the doctor and he put the gloves on and said, bend over. That’s what you guys did every day? Pretty much. At least the government was doing it to us. The IRS was doing it to us. At least.
Buck: Tell me, what books are you writing now? I mean, you’ve always got great ideas and interesting things going on. What are you thinking about right now?
Robert: Well, I just published The Capitalist Manifesto. It was a three year process, one of the hardest books ever had to write. Again, I had to start with my teacher having me read Communist Manifesto in 1965. How that book, The Communist Manifesto, affected the way I saw the world. So I wrote Capitalist Manifesto for people like you to see the sequence of events, how communism took over America. And it starts in education. 1930, the Frankfurt School sent Marxist over to Columbia University to infiltrate the school system. And then in 19 C one, I come back from Vietnam, I’m getting spit on, hit by eggs, by all these hippies in Northern California. And they became school teachers. They became Silicon Valley.
Buck: Yeah. And then it ended up becoming billionaires later on.
Robert: Like Nancy Pelosi.
Buck: That’s right. Robert, it’s always a pleasure to have you on the show. I have to tell you again, I think for my audience in particular, I think people who have not read the Cashflow Quadrant is a fantastic place to start. I feel like you wrote that really for our demographic, even probably more than Rich Dad, Poor Dad. Do you think that’s right?
Robert: Well, Rich Dad, Poor Dad is about postmodernist education, which is taught today, is about emotion and opinion. Right. So there’s no facts. Yeah. Poor data is about the financial statement, income, expense, balance sheet, assets, liabilities, the facts. And most people are operating opinions and emotions. Right. So I made a lot of you got to have Rich Dad, Poor Dad for the basic financial statement. And then how you maneuver through the financial statement depends upon whether or not you spoke to, which I am an employee, self employed, big business. So that’s why I said the first school I had to take, my poor dad wanted me to go back to my PhD, 1972. I take real estate. I made all the difference in the world. So today I make millions of dollars, pay no tax. Well, pay some tax, but I can drop my tax rates. But that’s because I’m a capitalist, not a Marxist. And Marx wanted inflation and taxation and labor units. So if you get those three points, you can get the bigger picture. Step back from the water cooler and take a look and say how come standing here working hard and getting fucked.
Buck: That’s right. Most people, especially listening to this show
Robert: I’m still a Marine, you know what I mean?
Buck: Absolutely. Well, fantastic. Robert, I want to thank you again for being on the show. It’s always a pleasure and looking forward to reading this book and seeing how this whole thing in Ukraine ends up. I’d love to have you back at some point again in the next few months and get your perspective on things again.
Robert: Well, it’s important because we need smart guys like you, academically smart. I was a C student at the Academy. I’ll tell you this, everybody, they want to be the honors role and all this. The guys at my level, the football players, we’re vying for Anchorman the lowest grade possible without flunking out still get through, right. But the Anchorman got $100 from everybody in the class. They didn’t reward the A student.
Buck: Yeah. I’ll tell you what, they never do.
Robert: You got it. So the world needs academically bright, gifted people like you to understand capitalist right. And that’s why I wrote Capitalist Manifesto. Otherwise, Nancy Pelosi is going to run the show.
Buck: Wonderful. Thanks again. I appreciate your time, Robert.
Robert: Thank you. It was fun. Keep up the good work, man.
Buck: Thanks. Take care.