A problem with school is that you often bee what you study。 So if you study； say； cooking； you bee a chef。 If you study the law； you bee an attorney； and a study of auto mechanics makes you a mechanic。 The mistake in being what you study is that too many people forget to mind their own business。 They spend their lives minding someone else's business and making that person rich。
To bee financially secure； a person needs to mind their own business。 Your business revolves around your asset column； as opposed to your ine column。 As stated earlier； the No。 1 rule is to know the difference between an asset and a liability； and to buy assets。 The rich focus on their asset columns while everyone else focuses on their ine statements。
That is why we hear so often： 〃I need a raise。〃 〃If only I had a promotion。〃 〃I am going to go back to school to get more training so I can get a better job。〃 〃I am going to work overtime。〃 〃Maybe I can get a second job。〃 〃I'm quitting in two weeks。 I found a job that pays more。〃
In some circles； these are sensible ideas。 Yet； if you listen to Ray Kroc； you are still not minding your own business。 These ideas all still focus on the ine column and will only help a person bee more financially secure if the additional money is used to purchase ine…generating assets。
The primary reason the majority of the poor and middle class are fiscally conservative…which means。 〃I can't afford to take risks〃…is that they have no financial foundation。 They have to cling to their jobs。 They have to play it safe。
When downsizing became the 〃in〃 thing lo do； millions of workers ｜ found out their largest so…called asset； their home； was eating them alive； j Their asset； called a house； still cost them money every month。 Their car； another 〃asset；〃 was eating them alive。 The golf clubs in the garage that cost 1；000 were not worth 51；000 anymore。 Without job security； they had nothing to fall back on。 What they thought were assets could not help them survive in a time of financial crisis。
1 assume most of us have filled out a credit application for a banker to buy a house or to buy a car。 It is always interesting to look at the 〃net worth'1 section。 It is interesting because of what accepted banking and accounting practices allow a person to count as assets。
One day； to get a loan； my financial position did not look too good。 So I added my new golf clubs； my art collection； books； stereo； television； Armani suits； wristwatches； shoes and other personal effects to boost the number in the asset column。
But I was turned down for the loan because I had too much investment real estate。 The loan mittee did not like that 1 made so much money off of apartment houses。 They wanted to know why I did not have a normal job； with a salary。 They did not question the Armani suits； golf clubs or art collection。 Life is sometimes tough when you do not fit the 〃standard〃 profile。
I cringe every time I hear someone say to me that their net worth is a million dollars or 100；000 dollars or whatever。 One of the main reasons net worth is not accurate is simply because the moment you begin selling your assets； you are taxed for any gains。
So many people have put themselves in deep financial trouble when they run short of ine。 To raise cash； they sell their assets。 First； their personal assets can generally be sold for only a fraction of the value that is listed in their personal balance sheet。 Or if there is a gain on the sale of the assets； they are taxed on the gain。 So again； the government takes its share of the gain； thus reducing the amount available to help them out
Of debt。 That is why I say someone's net worth is often 〃worth less〃 than they think。
Start minding your own business。 Keep your daytime job； but start buying real assets； not liabilities or personal effects that have no real value once you get them home。 A new car loses nearly 25 percent of the price you pay for it the moment you drive it off the lot。 It is not a true asset even if your banker lets you list it as one。 My 400 new titanium driver was worth S150 the moment I teed off。
For adults； keep your expenses low； reduce your liabilities and diligently build a base of solid assets。 For young people who have not yet left home； it is important for parents to teach them the difference between an asset and a liability。 Get them to start building a solid asset column before they leave home； get married； buy a house； have kids and get stuck in a risky financial position； clinging to a job and buying everything on credit。 I see so many young couples who get married and trap themselves into a lifestyle that will not let them get out of debt for most of their working years。
For most people； just as the last child leaves home； the parents realize they have not adequately prepared for retirement and they begin to scramble to put some money away。 Then； their own parents bee ill and they find themselves with new responsibilities。
So what kind of assets am I suggesting that you or your children acquire？ In my world； real assets fall into several different categories：
1。 Businesses that do not require my presence。 I own them； but they are managed or run by other people。 If I have to work there； it's not a business。 It bees my job。
2。 Stocks。
3。 Bonds。
4。 Mutual funds。
5。 Ine…generating real estate。
6。 Notes （lOUs）。
7。 Royalties from intellectual property such as music； scripts； patents。
8。 And anything else that has value； produces ine or appreciates and has a ready market。
As a young boy； my educated dad encouraged me to find a safe job。 My rich dad； on the other hand； encouraged me to begin acquiring assets that I loved。 〃If you don't love it； you won't take care of it。〃 I collect real estate simply because I love buildings and land。 I love shopping for them。 1 could look at them all day long。 When problems arise； the problems are not so bad that it changes my love for real estate。 For people who hate real estate； they shouldn't buy it。
I love stocks of small panies； especially startups。 The reason is that I am an entrepreneur； not a corporate person。 In my early years。 I worked in large organizations； such as Standard Oil of California； the U。S。 Marine Corps； and Xerox Corp。 I enjoyed my time with those organizations and have fond memories； but I know deep down I am not a pany man。 I like starting panies； not running them。 So my slock buys are usually of small panies； and sometimes I even start the pany and take it public。 Fortunes are made in new…stock issues； and I love the game。 Many people are afraid of small…cap panies and call them risky； and they are。 But risk is always diminished if you love what the investment is； understand it and know the game。 With small panies； my investment strategy is to be out of the stock in a year。 My real estate strategy； on the other hand； is to start small and keep trading the properties up for bigger properties and； therefore； delaying paying taxes on the gain。 This allows the value to increase dramatically。 I generally hold real estate less than seven years。
For years； even while I was with the Marine Corps and Xerox； I did what my rich dad remended。 I kept my daytime job； but I still minde