Book Excerpt: Rich Dad's Before You Quit Your Job
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Book Excerpt:
Rich Dad's Before You
Quit Your Job: 10 Real-Life Lessons Every
Entrepreneur Should Know About Building a
Multimillion-Dollar Business
by Robert T. Kiyosaki and Sharon L. Lechter
C.P.A.
ISBN: 0446696374
$16.95/U.S., $22.95/CAN
WARNER BOOKS
Order this book from Amazon.com
Chapter 1
What Is the Difference Between Get free marketing, sales
advertising and
an Employee and an Entrepreneur? management ideas
delivered to your inbox.
Starting with the Right Mind-set
When I was growing up, my poor dad often said, "Go to school, get
good grades, so you can find a good job with good benefits." He was
encouraging me to become an employee.
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My rich dad often said, "Learn to build your own business and hire Smart Employee
good people." He was encouraging me to become an entrepreneur. ID
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One day I asked my rich dad what the difference was between an Smart Card
employee and an entrepreneur. His reply was, "Employees look for a
8/8/2008
Book Excerpt: Rich Dad's Before You Quit Your Job Page 2 of 6

Management job after the business is built. An entrepreneur's work begins before System:
Money & Finance
there is a business." See how Smart Employee ID
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converges physical and
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2. The skills to be a good employee are not the same skills required to
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3. Many entrepreneurs fail to build a business. Instead they work hard

building a job that they own. They become self-employed rather than
business owners.

4. Many entrepreneurs work longer hours and are paid less per hour
than their employees. Hence, many quit out of exhaustion.

5. Many new entrepreneurs start without enough real life experience

and without enough capital.

6. Many entrepreneurs have a great product or service but don't have

the business skills to build a successful business around that product
or service.

Laying the Foundation for Success

My rich dad said, "Starting a business is like jumping out of an airplane

without a parachute. In midair the entrepreneur begins building a
parachute and hopes it opens before hitting the ground." He also said,
"If the entrepreneur hits the ground before building a parachute, it is
very tough climbing back into the plane and trying again."

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Book Excerpt: Rich Dad's Before You Quit Your Job Page 3 of 6

For those of you familiar with the rich dad books, you know that I have
jumped out of the plane many times and failed to build the parachute.
The good news is that I hit the ground and bounced. This book will
share with you some of my jumps, falls, and bounces. Many of my
failures and successes were small ones, so the bounce was not that
painful-that is, until I started my nylon and Velcro wallet business. I will
go into further detail throughout the book because I made many
mistakes, and learned from them along the way. The success of that
business was sky high and so was the fall. It took me over a year to
recover from that powerful bounce. The good news is that it was the Rich Dad's Rich Kid,
Smart Kid
best business experience of my life. I learned much about business Robert T. Kiyosaki...
and about myself through the process of rebuilding. New $10.85
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The Crack in the Dam Rich Dad Advisor's

Series
Garrett Sutton, Ro...
One of the reasons I fell so hard in the nylon surfer wallet business
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to the age-old statement, "The bigger they are, the harder they fall." My
little surfer wallet business grew so fast that the business was a lot Rich Dad's Prophecy
bigger than the capabilities of the three entrepreneurs who created the Robert T. Kiyosaki...
business. Instead of creating a business, we had created Dr. New $10.85
Best $4.95
Frankenstein's monster and did not realize it. In other words, our
sudden success was accelerating our failures. The real problem was Rich Dad's Increase
we did not know we were failing. We thought we were successful. We Your Financial I...
thought we were rich. We thought we were geniuses. To the extent Robert T. Kiyosaki...
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Rich Dad's Advisors
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As three successful entrepreneurs in our late twenties and early New $19.95
thirties, we took our minds off the business and partied into the night. Best $2.88
We actually thought we had built a business. We actually thought we
were entrepreneurs. We actually believed our own story of success. Rich Dad's Before You
We started bragging. Champagne started to flow. It was not long Quit Your Job
Robert T. Kiyosaki...
before we each had fast sports cars and were dating even faster New $11.53
women. Success and money had blinded us. We could not see the Best $4.90
cracks forming in the wall of the dam.

Finally, the dam broke. The house of cards started tumbling down
around us. Our parachute did not open. Privacy Information

Too Much Success

The point in sharing my entrepreneurial stupidity is that many people

think that it is the lack of success that kills a business. And in many
cases that is true. The failure of my surfer wallet business was a
valuable experience because I found out early in my career as an
entrepreneur that too much success can also kill a business. The point
I am making is that a poorly conceived business can fail whether it is
initially successful or not.

Hard Work Covers Up Poor Design

A poorly conceived business startup may be able to survive as long as

the entrepreneur works hard and holds the business together with
sheer determination. In other words, hard work can cover up a poorly
designed business and keep it from failing. The world is filled with
millions of small business entrepreneurs who are able to keep their
leaky business afloat with hard work, sheer willpower, duct tape, and
baling wire. The problem is, if they stop working, the business breaks

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Book Excerpt: Rich Dad's Before You Quit Your Job Page 4 of 6

apart and sinks.

All over the world, entrepreneurs kiss their families good-bye and head
off to their own businesses, their pieces of the rock. Many of them go
to work, thinking that working harder and longer will solve their
business problems- problems such as not enough sales, unhappy
employees, incompetent advisors, not enough free cash flow to grow
the business, suppliers' raising their prices, insurance premiums' going
up, landlords' raising the rent, changing government regulations,
government inspectors, increasing taxes, back taxes, unhappy
customers, nonpaying customers, and not enough time in the day, to
name a few of the daily challenges. Many entrepreneurs do not realize
that many of the problems their businesses face today began
yesterday, long before there was a business.

One of the primary reasons for the high failure rate of small businesses
is sheer exhaustion. It's tough to make money and to keep going when
so much of your time is tied up in activities that do not make you any
money or that cost you money without offsetting income. If you are
thinking about starting your own business, before you quit your job,
you might want to talk to an entrepreneur about how much time he or
she spends on non-income producing activities to run his or her
business. Also ask how he or she handles this challenge.

As a friend of mine once said, "I'm so busy taking care of my business

I don't have time to make any money."

Do Long Hours and Hard Work Guarantee Success?

A friend of mine quit his high-paying job with a large bank in Honolulu
and opened a tiny lunch shop in the industrial part of town. He had
always wanted to be his own boss and do his own thing. As a loan
officer for the bank, he saw that the richest customers of the bank were
entrepreneurs, and he wanted a piece of the action, so he quit his job
and went for his dreams.

Every morning, he and his mom would get up at four o'clock to begin
preparing for the lunch crowd. The two of them worked very hard,
scrimping, cutting corners, in order to serve great-tasting lunches with
generous portions at low prices.

For years I would stop by, have lunch, and find out how they were
doing. They seemed very happy, enjoying their customers and their
work. "Someday we'll expand," said my friend. "Someday we'll hire
people to do the hard work for us." The problem was that someday
never came. His mom passed away, the business closed, and my
friend took a job as a manager of a fast-food franchise restaurant. He
returned to being an employee. The last time I saw him he said, "The
pay isn't great but at least the hours are better." In his case, his
parachute did not open. He hit the ground before he built a business.

Now I can hear some of you saying, "At least he went for it." Or, "It was
just bad luck. If his mom had lived, they might have expanded and
gone on to make a lot of money." Or, "How can you criticize such good
hardworking people?" And I agree with these sentiments. My intent is
not to criticize them. Although not related to them, I loved the two of
them dearly. I knew they were happy yet it pained me to see them
work so hard and not get ahead, day after day. I only relate this story
to make the same point. The business began to fail before there was a

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Book Excerpt: Rich Dad's Before You Quit Your Job Page 5 of 6

business. It was poorly conceived before he quit his job.

Page 2: Is Being an Entrepreneur for You?

Copyright © 2005 by Robert T. Kiyosaki with Sharon L. Lechter.

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