Smart Wife,
Rich Wife

A Conversation
with Kim Kiyosaki

By John David Mann

Robert Kiyosaki, author of the Rich Dad Poor Dad books and creator of the CASHFLOW(R) games, is a man who clearly needs no introduction. But there is another side to the force behind the extraordinarily popular and successful Rich Dad phenomenon. In Retire Young Retire Rich, Kiyosaki wrote: "I told her of the journey I was embarking on. For some reason she wanted to come along. ... Kim was the first woman I met who was willing to entertain such a crazy thought." Elsewhere he has written, "If it weren't for Kim, none of this would have happened." The cliche says, "Behind every great man...," but Kim Kiyosaki is just as often out in front as she is "behind." Most of all, she is side by side. The two have held onto each other in a partnership that has weathered both good times and bad. For this issue, we wanted our readers to meet the other half of the team that has transformed how we all view financial and career goals. -- JDM

When did you and Robert meet?

In February of 1984 I had just given notice at the magazine in Honolulu where I was working. I was bored and needed something new; my plan was to move to New York City and go to work on Madison Avenue. This man, a friend of a friend, asked me out; I said, "No, no, no, I'm moving to New York City, I'm not interested!" I was just breaking up with another boyfriend, I was getting ready to move on, I was on my way to New York! But he was very, very persistent. He's very good at sales! Finally, after about five months of this, I relented and said, "Okay, we'll go out, just this one time." We went out, just one night...and we've been together ever since.

On our very first date, he asked me what I wanted to do with my life. I told him I wanted to run my own business, and he said, "I can help you with that." Within a month, we'd started a small side business to fund our education and travel as we started our real new business. I quickly learned about cash flow, about manufacturing and inventory, copy writing and sales.

At the same time, he was talking to me about things I had never really looked at before. He would talk about spirituality, ask me about my life's purpose...and I began to realize that this was why I'd wanted to move to New York. This was what I'd been looking for!

To hear Robert tell it, you were the first person who actually listened to his "crazy ideas."

That's probably true; I got very excited about them. He and I are very similar in many ways; we're a good team. I was so ready for a change, and while he may not have known it, I think he was looking for a life partner as well.

He was also going through a pretty major shift in his whole life direction, wasn't he?

Yes. Robert's nylon-and-Velcro(R) surfer wallet business had crashed in 1979 and he'd spent the past five years building it back up. It was going well now, but something had happened. He had spent a lot of time studying with Buckminster Fuller and his thinking had really grown. Robert had gone to Asia to visit their manufacturing facility--and when he saw these young kids in their sweat-shop environment, squatting on their heels, breathing in fumes from the paint, he knew it had to change.

He came back and told his partners, "In all good conscience, I can't continue doing this. Either we need to make some changes in the business, or I need to get out." He got out.

Which brings us to the New Years Eve scene he describes in Retire Young.

Right: December 31, 1984, sitting there with Robert and his best friend Larry. That was the beginning of a whole new direction for us.

What was that night like for you?

I remember thinking, "Hey, it's New Years Eve, what are we doing writing our goals? We're supposed to be out partying!" [laughs] Actually, I was very excited about it. I knew we needed to start fresh and go onto something new. If I'd known what was to come, I probably would have taken a different direction--so I'm glad I didn't know! 1985 was the year from hell; but going through all that hardship together made us both a lot stronger. Really, it helped shape who we are today.

How did that year unfold?

We moved to southern California and he began studying under a gentleman who was leading seminars on entrepreneurial business. We had something like $900 between the two of us, which soon ran out. We had no place to live; we would literally knock on doors of people we knew and say, "Hey, could we spend the night?" Some nights we slept in our car.

That year there was a lot of fighting and a lot of stress. My self-esteem plummeted. I'd always been very optimistic, always had enough money to do whatever I wanted--and now my foundation was suddenly pulled out from under me. I started taking a serious look at my life: what did I really believe? Who was I?

The stress of having no income was enormous; we had people telling us, "Just go back to work and get a paycheck!" But we knew we really didn't want to do that.

Finally we got fed up with our situation and said, "Let's go do something." I went to a friend who had a clothing line and said, "Let me market your clothing line to small salons." I set up little mini-boutiques in these hair salons and got her fashion shows set up in various places. There was no paycheck; I didn't know if I was going to make any real money--and in fact, I made very little; but just getting into action primed the pump, so to speak.

Robert was just teaching some courses through this man's seminar business; one thing led to another, and by the summer of '85 we'd taken over the business. I remember the very first time we got paid: it was December of '85, and between the two of us, we made a whopping $1500!

Was that business what eventually pulled you out of being broke?

Yes; it was a hard build and we really had to work at it. We ended up teaching seminars on entrepreneurial business and had 11 offices in seven countries around the world. After eight years of building the seminar business, we sold it to our partner.

In November of '93, when we made the decision to let go of the business, we had a cash flow from investment properties of maybe $1000 a month--practically nothing. Once again, we were letting go of something without having a solid backup in place. We had to work hard and fast. It took us a while, but by September of '94, nearly a year after our decision to let go of the seminar business, we had brought our property investments to the point where they were bringing in about $10,000 a month--not a lot, but certainly enough to live on.

The statistics about the financial state of women are shocking. 47 percent of women over the age of 50 are single and responsible for their financial well-being. The first year after a divorce, a womanÕs standard of living drops 74 percent. Of the elderly living in poverty, three out of four are women.

Was this a crash course in real estate for you?

I had started investing in real estate a little bit back in 1989. One day Robert said, "It's time you started investing." I said, "I don't even know what that is! What is that?!" Robert's not one to tell you how to do something; he just plants the seeds.

Ah: he teaches the same way he learned.

Exactly! So I started looking, and that's when we bought my first rental property, a little two-bedroom-one-bath house in Portland. We eventually bought about six properties up in Oregon, including apartment buildings and single-family homes, and expanded on that in 1994.

You said, the two of you are "a good team." Do you literally work businesses together, side by side?

We do. I recently heard someone say, "If you're building a business and your spouse is not behind you 100 percent, then your chance of success is almost nil." I've seen couples where one is driving forward but the spouse has no interest, and the business just doesn't quite get off the ground. It's really hard to build a business on your own--especially in network marketing.

I'm a big advocate of couples in business together who really want to be in business together. Building a business is hard work and you're going to take a lot of rejection; you're going to need a partner to do that with; it's not for everybody. Robert and I are not actually in network marketing, but we support the industry, and I see people in network marketing blossom and grow together. I see their marriages and their family lives improve because they're building something together--and that's the most rewarding thing about the business.

How are the two of you different in business?

Robert is the visionary; he's got the ideas, the concepts and vision. My skill is more in figuring out how to get things done.

It's almost like a chain of command, only more like a chain of realization: He will tell me about this great idea, and I'll say, "Okay, great, let's put that into practice." Then I'll start asking, what do we need to do to put this together? What do we need to do to make this happen? Then we have a team of people around us who make the specific pieces happen.

For example, the first project we did with the Rich Dad brand was the CASHFLOW(R) game.

By 1995, about a year after we'd gotten out of our seminar business, we were bored and looking for something new to do. We'd actually talked about whether or not the two of us ought to try going our separate ways in business, each doing our own thing, building our own businesses instead of being business partners.

If you ever watch the Today Show, when they take the show outside there's a coffee shop in the background called Dean and Deluca. In December of 1995, Robert and I were sitting at that coffee shop, talking about what to do next, and he suddenly said, "I have this idea for a game; I think I want to call it Cashflow." I loved the idea, so he began to work on the concept while I went out and found the people who could help put together all the pieces and actually build it.

We launched the board game in October of '96 in Singapore, and the next month in the US. The book Rich Dad Poor Dad came out the following April.

Did you already have in mind creating a "Rich Dad" brand as a business strategy?

We actually thought our brand would be CASHFLOW(R), which is why our company is called CASHFLOW(R) Technologies. One day we were talking with some marketing people in Australia and one fellow said, "You know, your brand's not CASHFLOW(R); your brand is Rich Dad." It was one of those moments where the truth suddenly hits you over the head. "Rich Dad! Of course it is! I see it!"

We did some research and found that most people didn't really know what "cashflow" meant; people thought of it as cash flowing out of your pocket! So we made the shift to Rich Dad.

Back in the early days of the nylon-and-Velcro(R) wallet business, Robert hadn't bothered to trademark or patent the design. They hadn't had the money to do it, and besides, they'd wanted to get to market as fast as possible and beat potential competitors. This time we were going to do things differently. When we came out with the CASHFLOW(R) game, the first thing he did was go find a patent attorney--in fact, he went to a man who we were told was one of the best in the US, a man named Michael Lechter.

I had an appointment one day to go see Michael; I'd been tempted to cancel, because I didn't think I really had anything to talk with him about at $500 an hour! But I'm glad I went. While I was there, I just happened to ask, "Michael do you know anyone who can write? Anyone who could help Robert put a book together?" Robert was carrying around this 300-page manuscript called Rich Dad Poor Dad, but it was nowhere near ready for publication. And Michael said, "Why, yes, my wife Sharon."

That's how we met Sharon--another husband-and-wife team! Sharon, of course, put out the Rich Dad books with Robert and is now the CEO of our company. Sharon and Michael have been integral in making sure we had the intellectual property rights, trademarks and patents we needed to take this worldwide and protect it. In the early days, Sharon kept saying, "If we get really big, we're going to be glad we have this." Thank goodness we paid attention!

Your books are about more than simply managing money; they're also about examining our values, asking ourselves what we really want our lives to mean. I wonder if one reason the Rich Dad material has been so popular is that it reflects a contemporary shift in values toward taking more seriously what really matters.

Yes, this rings true. I do think this shift has been happening, most dramatically after 9-11 but before that, too. In the '80s people were all workaholics and proud of it. In the '90s they suddenly started asking, "What happened to our lives?"

Our number one goal at Rich Dad is for people to get financially free, whatever that means to them.

Right now I'm working on a book on investing for women. I hear women say, "I don't have the time or money to start investing." No? Well, here's the key: you've got to find out what it is that's so meaningful in your life, that's so important to you that you'll be willing to take the time, make the effort and spend the money. What is it that's important enough to you so that you'll get educated about investing and make something happen? Because if you don't identify what that is, it's just not going to happen.

Freedom is different for everybody. Here's a woman whose goal is to spend each day with her kids, because she didn't have that growing up. She had a pretty miserable childhood, in fact, so now her dream is to not have to work any more so she can be part of her kids' growing up. I talk to a lot of kids today who say, "I don't want to work as hard as my parents worked; work was their whole life, I never saw them!" I think this is a really good shift.

Now here's another woman: what she's always wanted is the freedom to build her own business, to be an entrepreneur and not answer to a boss. It's different for everyone--and it's personal for everyone. It has to be. If it's not personal, it won't be important enough to drive the actions that will create success.

The same thing is true for network marketers: What is so important to you that you are going to go out there, knock on doors, take the rejection and keep going and going and going?

Like the two of you in 1985: you passionately didn't want to work for someone else.

We just wanted to be free. I hate people telling me what to do--absolutely hate it! [laughs]

In our Rich Dad office, the number one statistic we track is how many people get out of the rat race, how many people actually get free. If we can keep pushing up that number, then we're in good shape.

In all that you've done with CASHFLOW(R) Technologies and Rich Dad, what has given you the single most satisfaction?

The stories. We meet all kinds of people who come to our events, and they tell their stories about how their lives have changed. "I got out of debt, turned my life around, I'm financially free...." They'll talk with the greatest excitement and passion about whatever it is they're doing now, and often it's about things they're doing with their partners, which is wonderful.

It's the stories we hear and all the testimonials people send us. If we didn't get any testimonials, we'd probably quit--that's what drives us. We hear stories about guys in prison playing CASHFLOW(R), changing their lives! We heard about a woman in prison who decided that the most important thing she could give her son was the CASHFLOW(R) for Kids game. Stories like that, of single moms getting off welfare and changing their's overwhelming. It's very humbling to see the impact our work has. That's what it is for us.

You're writing a book on investing for women; can you say more about that?

The statistics about the financial state of women are shocking. 47 percent of women over the age of 50 are single and responsible for their financial well-being. The first year after a divorce, a woman's standard of living drops 74 percent. Of the elderly living in poverty, three out of four are women.

What all these figures are saying is that women are not prepared to take care of themselves financially. Especially as we get older, more and more of us are responsible for our own financial well-being--but we have no idea how to take on that responsibility. It's not what we were raised to expect. We were raised to depend on a man, to think, "Oh, I'll be taken care of for the rest of my life." And the odds are, that's simply not going to happen.

This is also an excellent argument for why women should get into network marketing: to get in control of their financial lives.

Where do you go from here? What's next for you?

The next big goal is to do a Rich Dad TV show. We're starting to get pretty well known, but we've really just scratched the surface, especially in the US. With a TV show we'll start to really reach the masses.

What keeps you going? You're way past successful and could easily retire; why are you doing all this?

It's the game of business and money, and the relationships. It's so rewarding and so much fun! Why would we ever stop?