The story of David and Goliath was one of rich dad’s favorite stories. I suspect he may have seen himself as David, a man who started with nothing, yet rose to compete against the giants of business. Rich dad said, “David could beat Goliath because David knew how to use the power of leverage. A young boy and a simple slingshot were far more powerful than the feared giant, Goliath. That is the power of leverage.” My previous books were on the power of cash flow. Rich dad said, “Cash flow is the most important term in the world of money. The second most important is leverage.” He also said, “Leverage is the reason some people become rich, and others do not.” Rich dad went on to explain that leverage is power and that power can work in your favor or against you. Because leverage is power, some use it, some abuse it, and others fear it. He said, “The reason less than 5 percent of all Americans are rich is because only 5 percent know how to use the power of leverage. Many who want to become rich, fail to become rich because they abuse the power.
And most people do not become rich because they fear the power of leverage.” There Are Many Forms of Leverage Leverage comes in many forms. One of the recognized forms of leverage is the leverage of borrowing money. Today we are aware of the severe problem of people abusing this powerful form of leverage. Millions of people struggle financially because the power of debt leverage is used against them. Because of the consequences of the abuse of debt leverage, many people now fear this form of leverage, saying, “Cut up your credit cards, pay off your mortgage, and get out of debt.” My rich dad would chuckle and say, “Cutting up your credit cards won’t make you rich. Cutting up my credit cards only makes me miserable.” Nonetheless, rich dad agreed that if you were abusive with the power of debt leverage, you definitely should cut up your credit cards, pay off your mortgage, and get out of debt. He said, “Giving a credit card to some people is like giving a loaded gun to a drunk.
Anyone who is near the drunk is in danger, including the drunk.” Instead of teaching us to fear the power of debt leverage, rich dad taught his son and me how to use the power of debt leverage in our favor. That is why he often said, “There is good debt and bad debt. Good debt makes you rich and bad debt makes you poor.” Most people are loaded down with bad debt and many others live in fear of debt and are proud to be debt free, even to the point of being free of any good debt. In this book, you will find out how my wife, Kim, and I retired young and retired rich because we were deeply in debt, deeply in debt with good debt, debt that made us rich and financially free. In other words, we used the power of leverage, we did not abuse the power, nor do we live in fear of its power. Instead we respect the power of leverage and use it wisely and cautiously.
Can Everyone Be Rich? During the hundreds of interviews I have given after the release of the first Rich Dad book, I am asked this question: “Do you think everyone can be rich?” I reply, “Yes. I believe everyone has the potential to be rich.” At that point, I am often asked, “If everyone has the potential to be rich, why do so few actually become rich?” My usual reply is, “I don’t have the time today to answer that question.” If they insist, I may say, “Many of the answers are found in my first four books in the Rich Dad series.” If the interviewer is persistent they may ask something like, “When will you give us all the answers?” I reply, “I don’t know if anyone has all the answers.”
Even though I do not have all the answers, I am very happy to be finally bringing this book, book number five in the Rich Dad series, to you. This book will explain why I believe all of us already have the power and the potential to be very rich… and I do mean all of us, not just some of us. It will also explain how my wife, Kim, and I could retire young and retire rich, even though we started without any money. And it will also explain why some people are rich and why others are poor even though we all have the power and the potential to be very rich and retire young. It’s all a matter of leverage.
The first four books in the Rich Dad series were primarily about the power of cash flow. This book is about leverage. Why one entire book? The reason is because leverage is a very big word, encompassing and touching virtually everything in our lives. This book will focus on three important forms of leverage; leverage of your mind, plan and actions.
Section One: The Leverage of Your Mind This is the most important section of the book. In this section, you will find out why money does not make you rich. In this section, you will find out that the most powerful form of leverage in the world, your mind, has the power to make you rich or make you poor.
Just as someone can use, abuse, or fear the power of debt leverage, the same is true when it comes to your brain, a very powerful form of leverage. Words Are Leverage You will find out the power of words. Rich dad always said, “Words are leverage. Words are powerful tools, tools for the brain. But just as you can use debt to make you rich or poor, words can be used to make you rich or poor. In this section, you will find out about the power of words and how rich people use rich words and poor people use poor words.
Rich dad often said, “Your brain can be your most powerful asset, or it can be your most powerful liability. If you use the right words in your brain, you will become very rich. If you use the wrong words, your brain will make you poor.” In this section, you will find out about rich words and poor words. You will find out why rich dad said, “It does not take money to make money.” He said, “Getting rich begins with your words, and words are free.”