Episode #650 - Success From Strategic Partnerships with Sharon Lechter, CEO at Pay Your Family First

Welcome to this edition of the Million Dollar Mastermind podcast. This is where we pick the brains of high achievers from all walks of life and get their hard earned real world insights on winning. I'm your host, Larry Wydell.

And of course, you have magnificently with. I'm curious, did your parents always make great financial decisions when they were buying those houses and, you know, accumulating those rental properties, or did you live through some tough times or some reversals there too? Because the real estate market, you know, is always, is always a crapshoot.

You know, we had some weight all.

The time, you know, so, yeah, we.

Have some tough times. My, I have a sister four years older and she went to a private college in Georgia. Was very expensive. So I remember my parents concerned about, you know, with some weeks. We had vegetable dinners all week because they were concerned. But my fat. My father was just a brilliant money manager and we had multiple rental properties. He owned orange groves. He always believed in cash flow. We would sit at the dinner table and talk about assets, cash flow appreciation really. And some of his orange groves are now where SeaWorld is. Right. So he, you know, he was a man before his time and you know, he was not at all. He was, he didn't want to build an empire. He just wanted to build a foundation for his family. And he, he, he did, you know, he bought a piece of property that was the last undeveloped part of Winter Park, Florida, if you're at all familiar with Florida. And so when, when they, when he passed, we had this 30 acre piece right in the middle of the, you know, largest, most desirable area in central Florida. And that, you know, he was, he was always worried, not worried about, but he was always looking to leave a legacy for my sister and I.

So. Well, pretty, pretty good decision. So how do you, as, how did you get into. I didn't even know there was a co author of Rich Dad, Poor Dad. So how did you get involved in that project? And you know, the, the tsunami of success that came from that. You really struck a nerve that made sense to a lot of people and still does and is a topic of conversation still all over the country. And so talk about how you got in that. Did it look like a gold mine or. It looked like a big hit right from the beginning.

Well, let me, yeah, let me back up one second because you mentioned the talking children's book. That company was first, that was my first global brand and I met the inventor of the first talking children's books, the books that have the sound strips down the side. And at that time, our kids were up to the point where they didn't really like to read that much, their friends didn't like to read and they had nothing electronic, they had no screen time. So we said, how can we get parents to trust us? And that's why we did deals with little companies like Disney, Warner Brothers, Sesame Street, Marvel Comics and allowed us to explode that around the world. We thought we were hot stuff. A million in sales the first year, then went to 9 to 23 to 52 million, totally self funded. And so we had a tremendous. How did you do that?

I mean, how do you. You show up and okay, we want to get in. And all of a sudden you're. You're dealing with, with Disney and Time Warner. How, how did you. I mean, connections of people. You've done that, had the network.

Yeah. And, and very, very strong license and agreements with them that allowed us to have that kind of brand association and that validity because parents trusted Disney, they trusted Sesame street. So there to purchase the books than if it was an off brand, not knowing what it was. So that, that alliance, yeah, we paid big fees to Disney, Sesame Street, Warner Brothers. But it was well worth it because it allowed us to expand globally. And in that process, the expansion of understanding how the resources of where to get things made and to be able to bring them in from China or bring them in locally, compile them locally to bring them.

How much of that did you have, information did you have when you made that first contact with Disney and was this all kind of, you know, spinning the idea to them and see if they buy it or how much of that did you have nailed down?

Well, the, the inventor was well known in the music industry. He had a long history in one of the biggest companies in sheet music. And then he had this idea for the talking children's book. And he actually is the one who made the original contact with Disney. But it was a long time. It took us a long time to negotiate that deal. And because we started at the top, right, And Disney's lawyers, so. And my husband is the one who negotiated the licensing arrangements with all those. Because it is intellectual property, it's very important that you protect it. And they had very stringent quality control. The voices had to be approved by them. At that time they were little tiny chips. First time ever that they'd condensed sound on these little tiny chips. So it was a really exciting time to see as we progress and got these deals done. But it took a long time.

And what's a long Time?

Well, it took us probably six months for the first chip to get approved and then each one after that was about the same because they, it had to go through their huge corporate environment to get the approval the sounds. And then of course we had to have the, the strips made and manufactured and brought over. So you know, it was, there was a, about a nine month to almost nine month manufacturing cycle.

Yeah, but actually in dealing with big corporation that seems like lightning fast actually because usually, usually to get permission to turn the light bulb on or the, you know, in the hallway is 18 months, you know, we've got to set a policy, who's going to flip the switch, you know, who's going to train them. And so exit sounds pretty fast. Now what were you doing while this was going on?

Well, we were actually, you know, when you talk about length of time because we weren't going from the bottom up, we were at the top. So we were the top of the company to the top of the company with their lawyers and quality control people. So I think that's what allowed us to speed that up. And we were in the development phase. I was looking for ways for us to build our ability to grow more quickly through self funding. Instead of having to do letters of credit up front, we were able to get some established relationships with our manufacturing partners. So there's a lot that goes into these little things. It was all the individual pieces and having to get the molds made for the sound strips. All that and that knowledge of the manufacturing system, cycles and resources allowed me to, to step in to the rich dad organization. So if I then, now I'll transfer, transition to rich dad. So this was, we sold.

Okay, okay, I got you.

Yeah, we sold the talking book company in 1991 and that's when we moved to Arizona because that was when we lived in, this was in Wisconsin. And in 92 my oldest son went off to college and came home in credit card debt. So so his first semester he had a really good time. He got there and they greeted him with table free pizza, free money, another table free T shirt, free money. And we didn't even know he had a credit card. So he had a really good time his first semester. And then he asked us to bail him out at Christmas. And that was December of 1992, Larry. And that's when I dedicated the rest of my career to financial education and entrepreneurship education for young people, for women and personal finance education. And I'm as passionate about it today as I was back then. But that really was when I really knew what the rest of my life, what my mission was. And that was in December of 92. I started working with school systems. Always say if you. My hair used to be red, but if you work with school systems, you know why it's white now. And then accelerate a few years. I got a phone call from my husband in 96, 1996, and Robert Kiyosaki had gone to his office with Bermuda shorts, flip flops, and this idea for board game. So I met Robert at the first beta test for the board game Cash Flow. I was the only one that got out of the rat race. I thought it was brilliant. I volunteered to help him commercialize it because all of the resources I had, the connections. And he and I started working together just as a volunteer, helping them. And he told me, wanted to charge $200 for the board game. And I said, that's pretty pricey. We're talking 1996 board game, $200. Said, well, maybe you ought to write a brochure that explains the philosophy, convince people that they want to invest $200. And that brochure, that's when he asked me to become his partner.

Ah.

And we were partners for 10 years, built the company. I was the CEO. I put it all together and we wrote that brochure called Rich Dad, Poor Dad. So we never expected it to take on a life of its own, but it just exploded. Then we thought, well, maybe we'll do three books, a trilogy, Rich Dad, Poor Dad, Cash Flow Quadrant, Rich Dad's Guide to Investing. And then. Oh, no. Over 10 years, we wrote 15 books together. And then I launched the Rich Dad Advisor series, which are books in individual topic areas by the experts in those areas as well. And we exploded around the world. 110 countries, over 50 languages.

Wow. What is the. That's like in moving into the category of biggest sales of all time for any, any book pretty much up in that category at least to be considered up in that category.

It's the largest personal finance brand in the world. We sold 35 million books. It was on the Rich Dad. Poor dad was on the New York Times bestseller list for over seven years.

Yeah, very interesting. And so when you met Robert Kiyosaki, he was not in his suit and tie.

And so he actually lived in a two bedroom condo, had two small apartment complexes. His passive income was $100,000 a year and his living expenses were like 35, 36,000. But that was the message I wanted the world to hear. He was financially free at $100,000 worth of income and you're financially free when the income from your assets exceed your monthly expenses. And that was the message I wanted the world to hear, the importance of buying, building and creating assets.

And as you expanded that, I noticed that, you know, rich dad, poor dad for women. You know, you've got one of the titles in there. What, what would you say? You know, the message is pretty clear. What was the impetus behind like, okay, we need to write a book on this as well, you know, expanding it. How did you get into the expanding the series?

Well, typically, you know, we created the first trilogy, which was really the rich dad, poor dad, the basic parable. And then we had cash flow quadrant, the way you think about money mindset, and then Rich dad's guide to investing, thinking that we covered all the bases. But then we had people coming to us wanting more and more. And so we just started pretty much a book a year, almost every nine months on various topics. And, you know, it was retire young, retire rich. You know, don't, don't quit your day job. You know, there's things before you quit your job. There's lots of different topics that we covered that added to the arsenal and to the library of the rich dad Organization.

How does this thing expand to where you're in all, you know, that many countries? Is that a natural progression? I mean, you get people calling you or what?

Yes. Well, we were very fortunate early on. When we actually first launched the book, we only printed 1,000 copies. And we had a friend in Austin, Texas, had car wash. We sent a few books there. He would only take on consignment. And somebody picked up the book and read it. And he was a diamond and Amway. And he sent it to Dexter Yeager, who was one of the top dogs in Amway. And I still remember him calling me and saying, I read this book and I'm going, you did? Because we really had just done the launch and probably we printed a thousand. I still had 950. You know, it was like we were just family and friends. And it's like, where did you get this? And, you know, it was amazing. And he said, yeah, I gave it to Dexter. And how many do you still have? I said, about 950. And he said, I'll buy them all. And so this was before Amazon. Hard to believe. It was before the Internet. Hard to believe. And so the expansion of the Rich dad organization was word of mouth, people talking about it all over the world. And we became the darling of the network marketing industry was never our intention, but it was because our message validated that industry and so that helped us also expand internationally. And the beauty of what I teach people, Larry, is the power of association, CEO to CEO. And when we needed to do infomercials, I didn't want to build all those systems. So we time life came to us and I said, if I'm going to do it, I'm going to do it with number one quality. And so they use their money, their people, their resources and helped us develop infomercials that were the top selling infomercial for a couple of years. When we wanted to start Rich Dad's Coaching, I found the best coaching company company that had the systems and so I went there, worked with them to establish Rich Dad Coaching so that it would be answered the phone. Rich dad Coach. Rich dad Coaching. And the people that were doing the coaching were trained by us and we had the ability to have quality control. And so it's again, the way we expand is through the power of association, finding the best in class. And by doing that, it elevates your speed to market your ability to serve more people more quickly.

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