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Kiyosaki, being a true teacher of this secret how to become rich, also asserts that one can easy learn it in the actual practice, in a good and properly selected MLM company.
“I have had friends (singers in a band) ask me to invest money in developing a new music CD, and others who want me to help form a new nonprofit to change the world. As much as I might like the project, the product or the person, I will turn them down if they have little or no experience in creating and running business systems.
Just because you can sing does not mean you understand the system of marketing, or the system of finance and accounting, and the system of sales, and the system of hiring and firing people, and the legal system, and the many other systems that are required to keep a business afloat and make it successful.
For a business to survive and thrive, 100 percent of all the systems must be functioning and accountable. For example:
An airplane is a system of systems. If an airplane takes off and, let's say, the fuel system fails, there often is a crash. The same things happen in business. It’s not the systems that you know about that are the problem - it's the systems you are not aware of that cause you to crash.
The human body is a system of systems. Most of us have had a loved one die because one of the body systems has failed - like the blood system, which causes disease to spread to all of the other systems.
That is why building a tried-and-true business system is not easy. It is the systems you forget about or do not pay attention to that cause you to crash and burn. That is why I rarely invest with an “E” or “S” who has a new product or idea. Professional investors tend to invest in proven systems with people who know how to run those systems.
So if banks lend based only on tried-and-true systems, and look to the person who is going to run them, then you should do the same - if you want to be a smart investor.
3. Network marketing. Also called multilevel marketing or direct distribution systems. Just as with franchises, the legal system initially attempted to outlaw network marketing, and I know of some countries that have succeeded in outlawing or severely restricting it. Any new system or idea often goes through this period of being classified as "strange and suspicious." At first, I also thought that network marketing was a scam. But over the years, I have studied the various systems available through network marketing, and I have watched several friends become successful at this form of “B”. I have changed my mind.
After I dropped my prejudices and began researching network marketing, I found that there were many people who were sincerely and diligently building successful network marketing businesses. When I met these people, I saw the impact their business had on other people's lives and financial futures. I began to truly appreciate the value of the network marketing system. For a reasonable entry fee (often around $ 200), people can buy into an existing system and immediately start building their business. Due to the technological advances in the computer industry these organizations are totally automated, and the headaches of paperwork, order processing, distribution, accounting and follow-up are almost entirely managed by the network marketing software systems. New distributors can focus all of their efforts in building their business through sharing this automated business opportunity instead of worrying about the normal start-up headaches of a small business.
One of my old friends who did more than a billion dollars in real estate in 1997 recently signed on as a network marketing distributor and began building his business. I was surprised to find him so diligently building a network marketing business because he definitely did not need the money. When I asked him why, he explained it this way:
“I went to school to become a CPA, and I have an MBA in finance. When people ask me how I became so rich, I tell them about the multimillion-dollar real estate transactions I do and the hundreds of thousands of dollars in passive income I receive each year from my real estate. I then notice that some of them withdraw or shy away. We both know that their chances of doing multimillion-dollar real estate investments like I do are slim to none. Besides not having the educational background, they do not have the extra capital to invest. So I began to look for a way I could help them achieve the same level of passive income I developed from real estate… without going back to school for six years and spending 12 years investing in real estate. I believe network marketing gives people the opportunity to build up the passive income they need for support while they learn to become professional investors. That is why I recommend network marketing to them. Even if they have little money, they can still invest ‘sweat equity’ for five years and begin to generate more than enough passive income to begin investing. By developing their own business, they have the free time to learn and the capital to invest with me in my bigger deals.”
My friend joined a network marketing company as a distributor, after researching several, and started a network marketing business with people who someday want to invest with him. He is now doing well in his network marketing business as well as in his investment business. He told me, “I did it initially because I wanted to help people find the money to invest, and now I’m getting rich from a whole new business.”
Twice a month, he holds classes on Saturdays. At the first meeting, he teaches people about business systems and people, or how to develop into a successful “B”. On the second meeting of the month, he teaches them about financial literacy and financial intelligence. He is teaching them to be savvy “I’s”. His class sizes are growing rapidly.
The pattern he recommends is the same one I recommend.
A PERSONAL FRANCHISE
And that’s why today I recommend people consider network marketing. Many famous franchises cost a million dollars or more to buy. Network marketing is like buying a personal franchise, often for less than $200.
I know much of network marketing is hard work. But success in any quadrant is hard work. I personally generate no income as a network marketing distributor. I have researched several network marketing companies and their compensation plans. While doing my research, I did join several companies, just because their products were so good and I use them as a consumer.
Yet, if I could give you a recommendation as to finding a good organization to help you get over to the right side of the Quadrant, the key is not so much the product but the education the organization offers. There are network marketing organizations that are only interested in having you sell their system to your friends. And there are organizations primarily interested in educating you and helping you succeed.
From my research into network marketing, I have found two important things you can learn through their programs that are essential in becoming a successful “B”:
1. To be successful, you need to learn to overcome your fears of being rejected, and to stop worrying about what other people will say about you. So many times I have met people who hold themselves back simply because of what their friends might say if they did something different. I know because I was the same way. Coming from a small town, everyone knew what everyone else was up to. If someone did not like what you were doing, the whole town heard about it and made your business their business.
One of the best phrases I said over and over to myself was, “What you think of me is none of my business. What is most important is what I think about myself.”
One of the reasons my rich dad encouraged me to work in sales for Xerox Corporation for four years was not because he liked copiers, but because he wanted me to overcome my shyness and fear of rejection.
2. To learn to lead people. Working with different kinds of people is the hardest thing about business. The people I have met who are successful in any business are those who are natural leaders. The ability to get along with and inspire people is a priceless skill. A skill that can be learned.
As I said, the transition from the left quadrant to the right quadrant is not so much what you do, but who you have to become. Learn how to handle rejection, how not to be affected by what other people think of you, and learn to lead people and you will find prosperity. So I endorse any network marketing organization that is first committed to developing you as a human being, more than developing you into a salesperson. I would seek organizations that:
1. Are proven organizations that have successful track records and a distribution system and a compensation plan that has been successful for years.
2. Have a business opportunity you can succeed with, believe in and share confidently with others.
3. Have ongoing, long-term educational programs to develop you as a human being. Self-confidence is vital on the right side of the Quadrant.
4. Have a strong mentor program. You want to learn from leaders, not advisers. People who are already leaders on the right side of the Quadrant and want you to succeed.
5. Have people you respect and enjoy being with.
If the organization meets these five criteria, then and only then look at the product. Too many people look at the product and not the business system and organization behind the product. In some of the organizations I have looked into, one of their pitches was, “The product sells itself. It’s easy.” If you are looking to be a salesperson, an “S”, then the product is the most important thing. But if you’re developing into a long term “B”, then the system, lifelong education, and the people are more important.
A friend and colleague of mine knowledgeable in this industry reminded me about the value of time, one of our most precious assets. A true success story in a network marketing company is when your commitment of time and hard work in the short term results in significant long-term passive income. Once you have built a strong organization below you, you can stop working and your revenue stream will continue from the efforts of the organization you have built. The most important key to success with a network marketing company is still, however, a long-term commitment on your part, as well as the organization’s part, to mold you into the business leader you want to become.
A SYSTEM IS A BRIDGE TO FREEDOM
Being homeless was not an experience I want to repeat. Yet, for Kim and me, the experience was priceless. Today, freedom and security are found not so much in what we have, but what we know we can create with confidence. (Emphasis added - Analytic)
Since that time we have created or helped develop a real estate company, an oil company, a mining company, and two educational companies. So the process of learning how to create a successful system was beneficial for us. Yet, I would not recommend the process to anyone, unless they truly want to go through it.
Until only a few years ago, the possibility of a person becoming successful in the “B” quadrant was only available to those who were brave or rich. Kim and I must have been brave because we certainly weren’t rich. The reason so many people stay stuck in the left side of the Quadrant is because they feel the risks involved in developing their own system are too great. For them, it is smarter to remain safe and secure in a job.
Today, primarily due to changes in technology, the risk in becoming a successful business owner has been greatly reduced… and the opportunity to own your own business system has been made available to virtually everyone.
Franchises and network marketing took away the hard part of developing your own system. You acquire the rights to a proven system, and then your only job is to develop your people.
Think of these business systems as bridges. Bridges that will provide a path for you to cross safely from the left side to the right side of the CASHFLOW Quadrant… your bridge to financial freedom.
In the next chapter, I will cover the second half of the right side of the Quadrant, the “I”, or investor.
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Download for FREE here:
Rich Dad Poor Dad: http://www.middleastpost.com/87/rich-dad-poor-dad-pdf-download/
Cashflow Quadrant: http://www.middleastpost.com/189/cash-flow-quadrant-rich-dads-guide-to-financial-freedom/
