The power of your words

“If you want to see a person’s past, present, and future, just listen to his or her words.” – Rich dad

Rich dad believed that what it took to make money was something everyone had access to—something completely free but very valuable: Rich dad believed it took words.

“The idea that it takes money to make money is one of the worst ideas there is, especially if a person wants more money,” he said.

Listen carefully

The power of words to make one successful is one of the more counterintuitive things rich dad taught Robert Kiyosaki. To drive it home, he gave Robert an assignment to go to dinner with his poor dad (Robert’s natural father) and listen to what he said, the words he used, and the message behind them.

After dinner, Robert realized poor dad’s basic premise: “I’ll never be rich.” Robert realized he’d heard this from his father for the entirety of his life. 

Words carry weight

Poor dad often carried this rhetoric, saying things like:

• “Do you think money grows on trees?”
• “Do you think I’m made of money?”
• “The rich don’t care about people like I do.”
• “Money is hard to get.”
• “I’d rather die happy than rich.”

Poor dad talked like a schoolteacher. He used words like:

• Test scores
• Grants
• Grammar
• Literature
• Government appropriations
• Tenure
• Security
• Safe

Conversely, rich dad talked like a businessman. He used words like:

• Cap rate
• Financial leverage
• EBITDA
• Producer price index
• Profits
• Cash flow

“It doesn’t take money to make money,” said rich dad. “It takes words. The difference between those who are rich and those who are poor is their financial vocabulary. And the best news is words are free.”

Increase your vocabulary

During the 1980s, Robert spent a lot of time teaching entrepreneurship and investing. Rich dad’s lesson on the power of words became evident. Robert was acutely aware of people’s vocabulary and how their words related to their financial well-being.

Words represent knowledge. Success in a certain investment begins with increasing your financial vocabulary in that subject.

In school, lawyers learn the vocabulary of law, medical doctors learn the vocabulary of medicine, and teachers learn the vocabulary of education.

Most people, however, do not learn–or are not taught– the financial vocabulary of investing, finance, money, accounting, corporate law, and taxation. Given that it’s an absolute certainty that these things will impact a person’s entire life, that borders on criminal.

If you want to change your words, change who you follow

If Robert had followed in poor dad’s footsteps, he’d still be talking like poor dad today. Had he gone to law school, he’d talk like a lawyer; medical school, like a doctor, and so on. 

Thankfully, Robert followed rich dad. He emulated him, and learned to talk like him along the way. 

But he didn’t stop there. Robert also found new heroes and new people to emulate. And emulation is one of the most powerful ways to grow…both yourself and your vocabulary.

Modern day heroes

Just look at children. When playing basketball, they’re not little Johnny on the court. Instead, they’re pretending to be someone else, someone better than they are. They understand what most of us forget: copying and emulating our heroes is one of the best ways we learn.

Now that we’re older, we have new heroes. Perhaps you have golf heroes, whose swings you do your best to replicate. Or maybe you have business investing heroes such as Warren Buffett, Steve Jobs, Peter Lynch, George Soros, and Jim Rogers. Do you  follow what they invest in and how they build their businesses? Are you reading everything you can about them, and written by them? Are you doing everything to emulate how they invest and negotiate deals?

The power of emulation

One of the most powerful phrases in human history is, “If they can do it, so can I.”

Rather than think something is too hard to accomplish, the rich understand that it’s important to find those who make it look easy and to follow their lead.

The rich have heroes, and they emulate them. The funny thing is, when you do that, you often become someone else’s hero in the process. That is the power of emulation.

Emulating the words of your heroes

One of the great things about studying the lives of those we wish to emulate is that we will also intuitively pick up their vocabulary. We will begin to talk like them. Following the right hero can change your perspective on the world, and change your life. 

For instance, Warren Buffett said:

• “Rule No. 1 is never lose money. Rule No. 2 is never forget Rule No. 1.”
• “Price is what you pay, value is what you get.”
• “Risk comes from not knowing what you are doing.”
• “Never invest in a business you cannot understand.”
• “When trillions of dollars are managed by Wall Streeters charging high fees, it will usually be the managers who reap outsized profits, not the clients.”

And Jim Rogers said:

• “If everyone thinks one way, it is likely to be wrong. If you can figure out that it is wrong, you are likely to make a lot of money.”
• “I cannot invest the way I want the world to be; I have to invest the way the world is.”
• “The biggest public fallacy is that the market is always right. The market is nearly always wrong. I can assure you of that.”
• “Following what everyone else is doing is rarely a way to get rich.”
• “If anybody laughs at your idea, view it as a sign of potential success!”

Who are your heroes? Who does what you want to do and makes it look easy? Who talks the way you want to talk? Get to know everything about them and begin copying what they do and say. That’s an integral part of financial education.

Perhaps you admire Mark Zuckerberg, Jeff Bezos, or Marissa Mayer. Each generation has its own heroes. The point is not who they are but what they do. And if they can do it, so can you. Eventually, you’ll find your own style, but no one starts ready for the majors. The good news is that you can and will get where you want to be. We all just need a little help—and a little hope—along the way.

Start your financial education

Robert and Kim Kiyosaki started The Rich Dad Company to help people increase their financial vocabulary through financial education.

One reason they created the tabletop game, CASHFLOW, was to familiarize people with a financial vocabulary. The Kiyosaki’s could only reach so many people with their seminars. It’s not just a game; it’s a seminar in a box (well, now an app too).

In all Rich Dad games and apps, people quickly learn the relationships behind the words of accounting, business, and investing. By repeatedly playing the games and using the apps, the players learn the true definition of misused words such as asset and liability.

Other ways you can increase your financial education is through books and online courses. All of which are a modest cost for the value they can return.

Ultimately, the world is better served with financially educated people – no matter where they received their education.Change your vocabulary. Change your life. Start now.