What did you study in school today?" my Rich Dad asked me.

I thought about my day for a while, then finally replied, "We've been studying the life of Thomas Edison."

"That's an important person to study," said Rich Dad. "Did you discuss how he became rich and famous?"

"No," I replied. "We only discussed his inventions, like the light bulb."

Rich Dad smiled and said, "Well, I hate to contradict your teacher, but Thomas Edison did not invent the light bulb. However, he did perfect it. There were other light bulbs invented before his; the problem was, they weren't practical. The early bulbs didn't burn long enough. Also, the other inventors couldn't explain how their light bulbs might have any commercial value."

"Commercial value?" I repeated in a puzzled tone.

"In other words," he continued, "the other inventors did not know how to make money from their invention. Edison did."

"So," I ventured, "while he did not invent the first light bulb, he invented the first useful light bulb--and he also knew how to turn that light bulb into a business."

Rich Dad nodded. "And it was his business sense that made so many of his inventions so useful to millions of people. Thomas Edison was more than an inventor; he was also the founder of General Electric and many other major companies. Did your teachers explain that to you?"

"No," I replied. "I wish they would have. I would have been more interested in the subject. Instead, I was bored and sat there wondering how Thomas Edison was relevant to real life. If they had told me how he became rich, I would have been much more interested and would have listened more closely!"

 

Genesis of a Business Genius

Rich Dad laughed, and went on to tell me how Thomas Edison the inventor also became a multimillionaire and founder of a billion-dollar corporation.

Edison dropped out of school, Rich Dad explained, because his teachers thought he was not smart enough to succeed in school. He then took a job selling candies and magazines on the railroads as a young boy. There he developed his sales skills. Soon he began to print his own newspaper in the back of the train and then hired a team of boys to sell not only his candies, but also his newspapers. While still a boy, he went from employee to business owner, employing a dozen other boys, in about a year.

"So that's how Edison began his business career?" I asked.

Rich Dad nodded and smiled. "There's more."

The young Edison soon bored of his business on the train, Rich Dad explained, and began learning how to send and receive Morse code so he could get a job as a telegraph operator. Soon, Edison was one of the best telegraph operators around, traveling from city to city using his telegraph operator skills.

"It was what he learned from being a young entrepreneur and a telegraph operator," Rich Dad said, "that gave him the edge as a businessperson and inventor."

"How did being a telegraph operator help him become a better businessman?" I asked, now confused.

"Give me time to explain," said Rich Dad. "You see, Thomas Edison was more than just an inventor....

 

The System Behind the Invention

"As a young boy," Rich Dad continued, "Edison became a business owner. That's why he became rich and famous. Rather than go to school, he was gaining the business skills required for success in the real world. What made him famous relative to the light bulb was his past experience as a businessperson and a telegraph operator. Being a telegraph operator, he knew that what made the inventor of the telegraph so successful was the fact that it was a business system--a system of lines, poles, skilled people and relay stations. As a young man, Edison understood the power of a system."

I jumped in. "You mean, he realized that the system was more important than his invention!"

Rich Dad nodded. "Most people go to school to learn to be an employee of a system. Most see only the value of their own job, because that's all they are trained to see; they don't see the big picture. They see the trees, but not the forest."

I added, "Most people work for the system, rather than owning the system."

Nodding in agreement, Rich Dad went on: "All they see is the invention or the product, but not the system. Most people fail to see what really makes the rich rich. What made the light bulb so powerful was not the bulb itself but the system of electrical lines and relay stations that powered the bulb. What made Thomas Edison rich and famous was that he could see the big picture, while other people saw only the light bulb."

"And he could see the big picture because of his experience on the train and his experience as a telegraph operator," I added.

Rich Dad nodded again. "Another word for system is 'network.' If you really want to learn how to be rich, you must know and understand the power in networks.

"The richest people in the world build networks. Everyone else is trained to look for work. Without the electrical network, the light bulb would have very little value. What makes the rich rich is that they build and own the system--the network. Owning the network makes them rich."

"So, if I want to become rich, I need to learn how to build a business network?" I queried.

Rich Dad smiled. "Now you're getting the idea."

 

This passage is excerpted with permission from The Business School for People Who Like Helping People, Second Edition, by Robert T. Kiyosaki, with Sharon Lechter, authors of Rich Dad Poor Dad.