Part 2 - The Hidden Genius Behind Rich Dad Poor Dad

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.

So 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 the tsunami of success that came from that. You really struck a nerve. That made sense to a lot of people. It 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 was okay. And I met the inventor of the first talking children's book. So 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. 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 show up and okay, we want to get in. And all of a sudden you're dealing with Disney and Time Warner. How did you. I mean, connections of people you'd done.

That, had the network and very, very strong licensing 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 therefore they would be more likely to purchase the books than if it was an off brand, not knowing what it was. So 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 would bring them in locally, compile them locally to that.

Did you have. 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 spinning the idea to them and see if they buy it or how much of that did you have nailed down?

Well, 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. And some, you know, at that time they were little tiny chips. First time ever that they'd condense 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.

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 strips made and manufactured and brought over. So it was, there was a, about a nine month, almost nine months 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 in the hallway is 18 months. We've got to set a policy who's going to flip the switch, 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, 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 when 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 upfront, we were able to get some established relationships with our manufacturing partners. There's a lot that goes into these little things, you know, with all the individual pieces and having to get the molds made for the sound strips, all that so and that knowledge of the manufacturing system, cycles and resources allowed me to step in to the rich dad organization. So if I then now I'll transfer, you know, transition to rich dad Okay, I got. 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 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. I always say, you know, my hair used to be red, but if you work with school systems, why, it's white now and then accelerate a few years. I got a phone call from my husband in 96, 1996, and he, 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 and the connections. And he and I started working together just as a volunteer, helping him. And he told me he 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. And we were partners for 10 years. Built the company. I was a 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.

So wow, that's like in moving into the category of biggest sales of all time for 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 and it was on the Rich Dad, Poor dad was on the New York Times bestseller list for over seven years.

So yeah, very interesting. And so when you met Robert Kiyosaki, he was not in his suit and tie and 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 exceeds 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've got one of the titles in there. What would you say the message is pretty clear. What was the impetus behind like, okay, we need to write a book on this as well. Expanding it. How did you get into the expanding the series?

Well, typically we created the first trilogy, which was really the Rich Edward had 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 around every nine months on various topics and was retire young, retire rich. You know, don't quit your day job. 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 that many countries? Is that a natural progression? I mean, you get people calling you or how does that.

We were very fortunate early on when we actually first launched the book. We only printed a thousand copies. And we had a friend in Austin, Texas that had car washed. We sent a few books. There we go. They would only take on consignment. And somebody picked up the book and read it. And he was a diamond in 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, you know, I, 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. 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, and we became the darling of the network marketing industry. Was never our intention, but it was because our message validated that industry.

Right.

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 that had the systems and so I went there and worked with them to establish Rich Dad Coaching so that it would be answered the phone Rich Dad Coach. You know, 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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Yeah, I love those phrases. Elevate your speed to market best in class. That's what I've always been interested in about a thousand different things and had very little time, but because of success in business, had the resources. So when I put my time in, I was able to be able to maximize the results. But that best equipment, best person I could find in the world doing that, that I could get my conversation with and that I found that you make the fastest possible growth. In fact, when I was learning how to play the banjo, I had a Grammy Award winning banjo player teach me. And just like that, I won't go into all of the things. But from skiing.

Yeah, Having the right mentor, so important and so many people that are in business, they have, they may even have a mentor, but the mentor's gotten them to where they are today, but may not be the right mentor to get them to where they deserve to be. Everybody deserves to play a bigger game.

So that's another phrase right there. So how do you advise people talk about that system, that phrase you used earlier, CEO to CEO or you like systems, Go and find someone who's already in that world and partner up with them or get them involved, talk about that process.

Well, the vast majority of business owners sell to consumers. So it's B2C. So I make a sale, then I have to find the next person to make a sale to, then I have to find somebody else. And the power of association allows you to elevate your brand, elevate your standing, just like we did with the talking children's book. By connecting with Disney, all of a sudden, we opened ourselves up to the millions of Disney lovers, which allowed us to impact more children more quickly. And so when we were publishing these books, I was able to establish relationships with publishers all over the world using their systems, their people, their technology, their distribution system to be able to translate the book into over 50 languages and get it into over 100 countries. I, I didn't do that work. They did. And so instead of just being B2C, which you want to be, you want to have customers directly. But if you can go B2B, CEO to CEO. At one time, right before I left, I probably had 5,000 people working for the Rich dad organization, but only 17 were on my payroll. The rest of them were on somebody else's payroll. And so I managed them through CEO to CEO relationships and that their CEO was managing the individual people, which is a much easier way to go. Plus, as I said, speed to market is everything. Even more important today than back then. And so you find somebody who already got the systems, already got the technology, already have the opportunity for you to hit the ground running. It's going to get you to elevate your business much more quickly.

Well, that's always been the ideal way to do it. That's why big businesses always partner and that's why you see even the Googles, the Amazons and they're buying these companies, they need to go in this world or what, let's just go buy that company, buy all the people running to buy their brains, their experience and saves them, it saves them experimenting, in other words, trying to figure out, develop their own people, get some ideas, go through all the stumble and fumble, then maybe have it go belly flop and then it's all for another. Rather you get something proven these people know. Finding people to know how to make things go. That's really the idea behind this podcast. It's like you want to hear things from people who know how to make things go. And because you got some thinking to do out there, you got a massive amount of work to do. But figuring out things that nobody's figured out before, especially you've never figured out and getting the information you need going through that process, the best way to figure that out is to hear from someone who's been down that road. I bet now you really stumbled into or you partnered up with a guy on the Electric Electronic children's book and he was a well known writer, whatever, he had contacts at Disney. I bet you have not had things fall in your lap where you always knew the top guy, you always knew the best of the best and it's just a matter of making a phone call and say John, Mary Jane, whatever saw you last, remember we met last week, got an idea for you. I'm sure you had to hunt and work your way somewhere along the way.

Oh absolutely. I've always had the power of association is not an easy thing to do. You often you have to figure out who's the right person in the right seat in the right chair is going to be interest in what you have to offer and you have to do your homework. Business is not easy. It's definitely a team sport. But you have to do your homework and you have to make sure you're speaking to the right person. And that's, you know, it's really, it's been I have the personal success equation which is in my first book with the Napoleon Hill Foundation. And after I left Rich dad, I had that opportunity to work with them. And it was called three feet from gold. And the personal success equation talks about your passion and your talent. That's all about us, right? And that's what we're taught in school. It's all about us do everything by ourselves. But true success is times a power of association, right? Who's on your team? Do you have a mentor? Do you have people on your team who are strong, where you are weak, making sure that business is a team sport and then times a taking action. How many times do we know what we're supposed to do? We just don't do it. And then plus f faith in yourself, faith in what you're doing, faith that is needed and necessary, and faith that you will succeed. A successful business does one of two things. Solves a problem, serves a need. That's it. And if you keep your eye focused on what problem you're solving, what needs you're serving, that takes it outside of you personally. And surround yourself with people who share that passion, that have the strengths that you don't have, have the mentorship that have been where you want to go, you're going to have the ability to have your success much quicker. And that personal success equation you can get a free way for to work out your own. If you go to personal success equation.com it's free as a guide that I've developed. But when I start working with somebody, Larry, I share this on every interview, every talk, but I also use it with my clients because usually it's the power of association and that confidence that need the most work. Somebody's been successful and then they plateau. And they usually plateau because they've stopped meeting new people, they've stopped networking, they start growing their power of influence. And so when you have the right people around you, the right people on your team and that confidence isn't there. You have a bad day, they won't let you stay there, they bring you back up. And so usually people walk through that formula and they can realize, I need to get out, I need to expand my sphere, I need to stand in my own power, I need to be my own hero. And amazing things happen when they start following the formula.

And so as you've gone out there, like when you started the ranch, how did you learn about the ranching and the cattle and all of that?

We brought in the right people. We brought in people who were very connected within the industry here you can know a lot about cattle, but if you're not, it's a good old boys club, quite frankly. And people know each other. And we were the. They were considered us the rich people coming into this little town, we not well liked because they felt we were invading them. And so it was like supporting the initiatives in the town, doing a fishing retreat for the kids, all that stuff. Trying to elevate our goodwill within the community. But as we started with the cattle ranching, we had to bring in people who understood kettles and not just understood how to raise them, but understood our territory. Our grazing rice is very rocky. It's not, you know, it's not your nice long big pastures. People that are experienced in that understand it. We'd had to bring somebody in that had a good relationship with the forest Service to communicate and do our grazing plans. So yeah, there's a lot of technical side of it. And we brought in somebody who knew how to do that to work alongside us so that we weren't like. Because we were. We consider us city slickers. Right. So we needed to bring somebody in that knew what they were doing and have them help support what our goals were.

Yeah. And it's not that these people, it's not what they cost, it's what it's going to cost you if you don't have them involved. If you have to learn their lessons for yourself, life is short. Life is too short to learn all the lessons yourself. Trial and error is the best teacher.

That's why I say about having a mentor. Having a mentor is they've been where you want to go. They're going to steer you around those pitfalls and they're going to open doors of opportunity. They're going to create powers of association that have. Accelerate your success. Yeah.

And just like you said there, it's not just necessarily business or technical skill. It's like someone who knows the community, knows how they think, knows how you can come in and get through those hurdles to get to know people and make those, those fears go away. That's priceless. It allows you to get settled and get integrated community in record breaking time. And they probably didn't have to have a college degree in that. They just had to live in the town and know everybody. And so how did you go about finding the people to associate with in this arena? That was not your forte, not something you have a lot of experience with. And the point I'm bringing up here that I want to let people know is how transferable these skills are. Sharon. It's not just you apply it to business, to finance or to whatever. It's being successful in any area of life. The Same skills like power of association, things like that.

Well, you know, your strategy may change. Our strategy when we first went in was we wanted to use all local materials. We wanted to use all local people. We wanted to invest in the community. We wanted people to see that we were bringing in good commerce to the community. We quickly found out the local materials were not the right kind of materials. They were inferior. And it's like, okay, I guess that's out. And then we found out one of the days we went up there and half the people at the bar were on our payroll. So instead of working, they were at the bar. So you get to the point where you have to understand, you had to find, yes, you want to support the community, you don't want to be the big bad wolf coming into the community, but you also want to make sure that you do it and do it properly and do it correctly. And so it takes management, it takes trial and error. And we built a beautiful lodge. It took us three different construction companies to get it done. But that doesn't change who we are. We're continuing to support whatever we can do to support the community. But we, with our eyes wide open as opposed to with our finger, we're. We're no longer doing things with our fingers crossed. So. But it's really important, no matter what you do, any new business you go into, you need to study it. You need to find the people that are in it. You need to see what they're doing. That's correct. You need to see what they're doing and the mistakes they've made. And, you know, don't go blind, because that's just crazy with it. As much information as there is available today, particularly with the Internet, when you want to do something new, somebody's already done it. So learn from them, do the research, get studied as to what the mistakes are, what those pitfalls are. Find a mentor to help you make sure it works.

I'd like to thank you for listening to part two of this episode of the million dollar Mastermind podcast. Timing is everything. You may feel that now, now is the time to get moving forward so.

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