TM

THE CASHFLOW
®

CURRICULUM
ELEVATE YOUR FINANCIAL IQ

By Robert T. Kiyosaki
 Our Job Is to Make Financial Education Fun

In 1994, my wife Kim and I retired. Kim was 37 and I was

47. We had enough cash flow from our investments to be
nancially free. What made our retirement a little unique
was that we did not have traditional jobs, a government
pension, a retirement plan, savings, or mutual funds. All
we did was follow the lessons my rich dad had taught me
about life, money, business, and investing.

Kim was not ready for retirement so she started her own
real estate investment company. She was a rich woman at
37 and has continued to become richer. Her commitment
to support women to become nancially independent led
her to write her own book, Rich Woman.

I bought a large tract of land on top of a mountain and built

a cabin nestled in a canyon surrounded by oak trees. I was
celebrating retirement. I swore I would never work again.

Unnished Work 
However, there was one problem. I felt I had unnished work to do. The difference was, it
was not about working for money. I had enough money. My soul felt unsettled. It was about
my life’s work…a life’s purpose. My work was not yet done. That’s when I talked to Kim about
creating an educational board game. The Rich Dad Company was born.

Lessons from Great Teachers

As I sat quietly in my valley, I began to recall the lessons I had learned from my real dad
(a great teacher), my rich dad (a great business person), and Dr. R. Buckminster Fuller
(considered to be one of our planet’s greatest geniuses.) The isolation gave me invaluable
time to reflect on the lessons I learned from each of them, all three of them great teachers,
each with different lessons.

From my dad, who became the Superintendent of Education and Republican candidate for Lt.
Governor of the state of Hawaii, I learned the importance of service to people. Not only did he
dedicate his life to public education, he and my mom took two years out of their lives to serve
in President John F. Kennedy’s Peace Corps. Both my mom and dad put being of service
ahead of money. Maybe that’s why our family struggled nancially.

From my rich dad (my best friend’s father), I learned the fundamentals of business, money,
and investing. He began teaching me at the age of nine and was a mentor to me into my 30’s.
Dr. Fuller, often referred to as a futurist, once said that each of us is here with a special
2 The CASHFLOW CURRICULUM | Elevate Your Financial IQ
 purpose with a special gift that is essential for the well-being of our planet and humanity.
Since I did not do well in school, I found it hard to accept that I had any kind of gift, much
less a special one. I had no idea which of humanity’s problems I was here to solve.

Then one night, I realized that the problems I could help solve were the problems
caused by money and the lack of nancial education. Memories of my family struggling
nancially pained me. My dad earned more than most of my friends’ parents, but we were
always short of money.

Financial Storm Ahead 

Sitting in my cabin, I realized that the lack of nancial education in our schools was going
to cause one of the biggest economic tragedies in the near future. Today, most of us are
aware of the nancial shock waves (and their ramications) that lie ahead. Some of them
are:

America, once the richest nation in the world, is now the biggest debtor nation in the world.
wor ld.
1. Millions of aging baby-boomers in industrialized nations are retiring and will be in need
of government nancial support. In America, Medicare is a huge nancial time bomb.
2. Millions of people have no savings and are deeply in debt.
3. Big corporations, which once took care of employees for life, are now requiring
employees to invest for themselves.

I realized I could assist in solving this looming nancial problem. For the next few weeks,
I worked steadily at designing the CASHFLOW ® board game and began writing my book
Rich Dad Poor Dad which has been on The New York Times  bestseller list for over six
years.

CASHFLOW® board game has been sold all throughout the world to like-minded people
who want to learn what school will never teach about money. The game is fullling its
purpose. It is simply people helping people solve their own nancial problems.

The lessons from my poor dad, my rich dad, and Dr. Fuller have proven to be valuable
lessons. Each of us can make a difference in our world, in big and small ways, if we
choose to do so.

www.richdad.com 3
 Financial IQ Is the Ability to Solve Financial Problems
Problems

When I was little, I thought if I were a millionaire, I wouldn’t have any more problems. Now
that I am a multi-millionaire, I still have money problems. Rich or poor, we all have money
problems. Let me give you some examples of different money problems.

Not enough money – obviously, this is a problem.

Deeply in debt – millions of people are earning money, but sliding deeper into debt.

Not knowing what to do with their money – if you do not know what to do with your money,
there are many people who think they do. Their solution is for you to turn your money over to
them.

Paying too much in taxes – taxes are our single largest expense. Knowing how to make more
money and pay less in taxes legally requires a lot of nancial intelligence.

Too much money – being rich creates some big problems: how to hang onto the money, how
to prevent friends and family from wasting your money, how to pass the wealth on to the next
generation, and how not to spoil your kids.

Knowing good from bad – many people do not know good investments from bad
investments or good advice from bad advice.

Young versus old –

old – the older you are, the more important nancial intelligence becomes.

Why the CASHFLOW® Curriculum Is

Important
The CASHFLOW® Curriculum is designed to elevate your nancial IQ. With a higher nancial
IQ, you will be better able to tell good investments from bad investments, good advisors from
bad advisors, and which investments are right for you. By increasing your nancial IQ, you will
be better able to solve your own personal nancial problems and challenges.

I encourage you to play this game, investing your time before you invest your money. You
may also want to play this game with friends and family. Teaching others is one of the great
ways to learn and elevate your own nancial IQ. As my rich dad often said, “Money does not
solve money problems. Financial intelligence does.”

Your nancial intelligence is more important today than ever before. In a world of nancial
turbulence, your best asset is your nancial IQ. It’s time to get smarter with your money!
4 The CASHFLOW CURRICULUM | Elevate Your Financial IQ
 At What Age Will You Win the Game of Money?*

The purpose of CASHFLOW® Curriculum:

To assist you in winning your game of money as early as possible.

Pre-Game Show (Born Rich)

1st Quarter. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Ages 25-35

2nd Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Ages 36-45

Halftime Show (Mid-Life Crisis)

3rd Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Ages 46-55

4th Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Ages 56-65

Overtime
“I can’t afford to retire. I’ll just keep working.”

Out of Time
“Now what do I do?”

*Winning the game of money means you are actually out of the Rat Race and nancially free.
www.richdad.com 5
 GAMES ARE A REFLECTION OF BEHAVIOR

An important educational aspect of the CASHFLOW ® game is observing participant’s

behavior.

When I was playing Monopoly® with my rich dad, he would often correct my behavior, saying,
“Games are a reflection of behavior.”

As you are playing the CASHFLOW ® game, make it a point to observe player behavior. It will
tell
you a lot about the person. For example:

1. If a player’s nancial statement is sloppy and messy, they are probably sloppy and
messy in real life. If a person is sloppy in real life, the accuracy of their real numbers is
compromised.

2. If a player cheats in the game, they probably cheat in real life. If you nd a person who
cheats, don’t let them play banker in the game. If they are a banker in real life, nd another
bank.

3. If a player omits things during the game, they probably omit things in real life. For
example, if the player fails to put the name of their auditor on their nancial statement
game sheet, they probably do not think an auditor is important and may not have an
auditor in real life. If you are going to be rich, audits and auditors are important. If you are
going to be poor or middle class, auditors can be omitted.

4. If a person is pessimistic and fearful in the game, they are probably the same in real life.
A fearful pessimist in real life will always nd out what is wrong with an investment or a
deal.

In real life, all deals have pros and cons, strengths and weaknesses. No deal or
investment is perfect. The problem with a fearful pessimist is that they will only see what
is wrong and make the whole deal wrong. In reality, a good investor wants to know the
good and the bad and will gure out how to turn the bad into good. That is what real
investors and entrepreneurs do.

5. If a person is too optimistic in the game and takes excessive risks, they are probably
that way in real life. The problem with optimists is that they actually believe there is a
perfect investment.

6 The CASHFLOW CURRICULUM | Elevate Your Financial IQ

 BONUS
BONUS INFO

Do You Obey the Rules or Break the

Rules?
Many people hate rules… yet without rules, there is no asset. For example, when the
leaders of Enron broke the rules, the asset—the business—was virtually wiped out. One
of the reasons the SEC, the Securities and Exchange Commission, is so important is
because it creates and enforces the rules. Again, we may not like the rules, but
without rules and the enforcement of the rules, the asset value declines or disappears.

In real estate, if the tenant refuses to pay and the rules do not support the landlord,
the value of the asset greatly diminishes. For example, in Johannesburg, South Africa,
property values plunged in the central business district when buildings were occupied
with tenants who refused to pay the rent. Since there were so many people refusing to
pay, the government was unable to enforce the rules, the good tenants moved out, and
property values plummeted.

One of the reasons I would rather own apartment houses in Arizona than in California is
because Arizona is tougher on tenants who do not pay. This may sound cruel, yet tougher
eviction rules actually keep rents lower.

In many countries it is very difcult to re bad employees. While the government or
unions may think it is protecting employees, employers would rather move their
businesses to countries where the rules favor the business owners. Hence, jobs
move overseas.

Taxes are a set of rules. If the government does not enforce the tax rules, people stop
paying taxes. Without taxes, government services, such as police, re, hospitals, and
schools, shut down.

The importance of rules affects everything of value. For example, if government leaders
break the rules, the country suffers. If you break the rules of your body and consume
excessive junk food, alcohol, tobacco, or drugs, your health is threatened. If a spouse
cheats, a family is often ruined. Imagine driving a car without police enforcing the
rules. For any organization to survive and thrive, the leader needs to create rules, get
agreements, follow the rules, and, if necessary, enforce the rules.

Personally, I dislike most rules. Yet I know rules are important and need to be followed
and enforced. I do my best to avoid doing business with people who do not obey the
rules. Without rules, there is chaos.
www.richdad.com 7
   CASHFLOW® CURRICULUM

 Assets Put Money in Your Pocket

Most people invest in paper assets such as savings, stocks, bonds, mutual funds,
index funds, ETFs, REITS, and insurance annuities. These assets are popular simply
because they are the most advertised and aggressively marketed. Yet, anything can
be an asset, just as anything can be a liability. For example, a gumball machine can be
someone’s asset and it is also someone’s liability. In reality, all assets are also liabilities.
That means, most retirement plans are really liabilities… taking money from workers’
pockets for years, hoping there is enough of an asset there when the person retires.

Simply stated, assets put money in your pocket and liabilities take money from your
pocket. An asset cannot exist without a liability. Assets can be as simple as gumball
machines. Writing a book, building a network marketing business or a franchise are other
forms of assets. Assets can also be intangible, such as trademarks, patents, hedge funds,
or derivatives. As long as it ultimately puts money in your pocket with minimal effort once
established, it may be an asset. This is why most jobs or ‘S’-quadrant businesses are
generally not assets.

One of the best movies I have ever seen on nancial success is The Pursuit of Happyness
starring Will Smith. It is a great story with many great lessons. Kim and I lived a similar
story. So have many other people who started with nothing and turned nothing into
fortunes. Even Donald Trump started by rehabbing small homes. Today, he builds
skyscrapers. So when you are ready to start, remember to K.I.S.S.

www.richdad.com 15
 “I LEARNED TO GET RICH PLAYING MONOPOLY®.”

When I was nine years old, my rich dad began my nancial education by playing the game of
Monopoly®. We played it over and over again. When I asked him why we played the game so
much, he simply said, “The formula for great wealth is found on this game board.”

Most of us know the formula.

It’s four green houses, one red hotel.
“The numbers on a deed from the Monopoly ® game are similar to the numbers shown
in the CASHFLOW ® nancial statement… but that’s where the similarity ends.

CASHFLOW is the rst educational game to take the boring subject of

accounting and combine it with the often frightening subject of investing.
Putting them together into a game makes it fun to learn.”
– Robert Kiyosaki

FINANCIAL IQ : There Is Good Debt and Bad Debt

People with high nancial IQs use debt to make themselves rich. People with low
nancial IQs use debt to make themselves poor.

One reason real estate is such a great investment is because your banker will lend you
money to invest. Ask your banker if they will lend you money to invest in mutual funds.

16 The CASHFLOW CURRICULUM | Elevate Your Financial IQ

 CONTROL YOUR MONEY... CONTROL YOUR LIFE

The Crystal Ball

When They Look at a Financial Statement, Many
People Focus on Income.
Rich Dad believed the most important part of the nancial statement was expenses.
He said, “The expense column is the crystal ball to a person’s nancial future.” He also
said, “When I look at a person’s expenses, I can clearly see what is important to them.
If expenses are going to liabilities, such as a big house and nice cars, this person will
probably struggle nancially all their lives. If the person is investing in assets and their
education, they will probably become richer and richer, regardless of how much money
they earn from their job.”

In other words, a janitor could become richer than a doctor if the janitor were more
careful about his expenses… about how he spends his time and money.

Many people believe that if they get a higher-paying job, they will become richer. In most
cases, more money will not make a person with poor spending habits rich.

STRUGGLES FINANCIALLY

www.richdad.com 17
   CASHFLOW® CURRICULUM

“The expense column

is the crystal ball to
a person’s fnancial
future.” 

BECOME RICHER AND RICHER

18 The CASHFLOW CURRICULUM | Elevate Your Financial IQ

BONUS
GOALS VS. PROCESS

When I was a kid, I wanted to be rich…I wanted to be a millionaire. So I set my goal to become
a millionaire. My problem was, I became a millionaire in my twenties and then lost all my
money. I did not realize that losing millions was part of my process to becoming a real
millionaire.

After losing my money, I was upset and depressed. Thank goodness I had my rich dad
who reminded me that many rich people have lost once or twice along the way. He then
recommended that I go through the wreckage of my business and learn from my mistakes.
That was some of the best advice I ever received.

Many people recommend you set goals. Goals are important… but not as important as the
process. Today I realize that it was not the goal that made me rich… it was the process. One
of the things that kept my going through years of failure, doubt, despair, and criticism was this
saying from a Buddhist monk:

“If you must begin, then go all the way because, if you begin and quit,
the unnished business you left behind will haunt you for all time.”

Personally, the bad luck, the losing,

The Most Expensive Words in the World
and misfortune were essential
“I can’t do it.”
elements in my process to
“What if I fail?”
becoming a rich person. I had to
“It’s not my fault.”
learn to turn bad luck into good luck,
“The government should do something.”
turn losing into winning, and turn
“God will provide.”
misfortune into fortune. If you can
“I don’t have to worry… I’m still young.”
learn to do that, you will be rich for
“I’m too old.”
the rest of your life… regardless of
“I don’t have any money.”
what life throws at you.

FINANCIAL IQ | By the time you complete the CASHFLOW board game, you
will have a good foundation about the world of money. Now it is up to you to
decide what you are most interested in and where your greatest chance for success lies.
By FOCUSing on what you are interested in, you have a better chance of awakening your
Financial Genius. The Rich Dad Company offers advanced courses in all three asset classes:
paper assets, real estate, and entrepreneurship.

44 The CASHFLOW CURRICULUM | Elevate Your Financial IQ

 CHANGE YOUR ENVIROMNENT...CHANGE YOUR LIFE

I Have Learned More from My Mistakes

Than My Successes
One of the more stupid things many schools do is punish kids for making mistakes.
When those kids grow up, many are terried of making mistakes… clinging to job security,
trusting their money to strangers, and living in fear of failing.

Mistakes are how we learn. Mistakes are really learning experiences. Most of us have
learned to ride a bicycle by falling off a number of times. Each time we fall off, we get
smarter, better able to balance and ride. Once we learn to ride a bicycle, a whole new
world opens to us. The same is true with money.

The best way to remember what we learn is “Doing The Real Thing.” The reason many
do not do the real thing is because they are afraid of making mistakes. Ironically, the
students who do well in school are often students who read and listen well, the worst way
of learning.

Active students are often classied as problem learners, with problems such as Attention
Decit Disorder (ADD). I am certain I have ADD, also known as a strong dislike of
boredom. I could never sit still and quietly for very long. I did not like being labeled stupid.
I was just bored.

Rather than punish people for making mistakes, I believe it is more intelligent to teach
people to learn from their mistakes. Personally I am rich because I have made lots of
mistakes and learned from them.

One of the reasons I recommend people start small and make as many mistakes as
possible and then learn from those mistakes is because it is better to learn from small
mistakes than big ones. If you avoid failing… you also avoid success.

FINANCIAL IQ
By FOCUSing on what you are interested in, you have a better chance of
awakening your Financial Genius. Now it is up to you to decide what you are most
interested in and where your greatest chance for success lies.

www.richdad.com 45
   CASHFLOW® CURRICULUM

Why We Need to Be Both Pessimists and Optimists

In the real world of money, we need to be both pessimists and optimists, which makes us
realists.
In the real world, you know you are being sold a bill of goods when the sales person only tells
you about the good and downplays the bad. A good sales person should inform you of the
good and the bad, the risks and the rewards of the investment. If the sales person says “You
can’t lose,” or “The market goes up every year,” or “The price will be higher in ve years,” don’t
walk… run!

Two Points on Sales Pitches

1 Most great investments are never advertised . The best investments go quietly. If a
person has glossy brochures and fancy sales presentations or advertises extensively,
the deal is probably overpriced or a bad deal.

2 Many times people lie with numbers. Whenever I receive what is known as a
pro-forma statement that looks like a nancial statement, I know I am looking at a
sales document, not a real nancial statement. In other words the numbers are made
to look ofcial. The numbers will paint a rosy picture to get you excited about investing
in the asset. Whenever you receive a pro-forma nancial statement, the next question
is, “When can I see the real numbers?”

Let me give you an example of the difference between a pro-forma nancial statement and
a real nancial statement. One day a golng buddy was asking me to invest in his business.
He handed me a pro-forma nancial statement, showing me a bright and optimistic future for
the company. After going over the numbers, I put down the pro-forma and asked him, “What
if I told you I was going to make ten birdies and eight pars playing golf tomorrow. What would
you say?” His reply was, “I know how you play golf. I would say you can’t do it.” Handing back
his pro-forma, I said, “And that is what I say to you about your business pro-forma.”

An Important Point on Learning Environments

You may want to ask permission of your study group to give people feedback on their
behavior. The reason for this is, if they are behaving a certain way in the game, they are
probably behaving that way in life. Only give feedback if you have permission to give it rst.

46 The CASHFLOW CURRICULUM | Elevate Your Financial IQ

 ELEVATE YOUR FINANCIAL IQ

Elevate Your Financial IQ

We all have money problems. Kids, students, adults, families, churches, businesses and
governments have money problems. Even the rich have money problems.

How well we do in life depends upon how well we handle our money problems, and that
depends directly upon our nancial IQ. The higher our nancial IQ, the better able we are
to handle our nancial problems. The good news is that we grow richer by solving our
money problems.

So many people come up to me and say, “Tell me what to do,” or “Give me the answer.”
My rich dad said, “The only place where there are right answers is in school.” What he
meant by this is that many people come out of school looking for the right answers to life.
Many people come out of school waiting for someone to tell them what to do. It is these
people who subscribe to “You should get a safe secure job, work hard, save money, get
out of debt, and invest for the long term in a well-diversied portfolio of mutual funds.”
Like sheep, these people blindly follow the shepherd believing the shepherd has the right
answers.

Henry Ford once said, “Thinking is the hardest work there is. That is why so few people
engage in it.” If you are going to be an entrepreneur or an active investor, you will need to
think… not follow. Thinking and solving money problems requires nancial IQ. The good
news is, the more problems you solve, the higher your nancial IQ. And the higher your
nancial IQ, the richer you become.

The purpose of this game is not to give you answers. It is not to tell you what to invest in.
Money is a gigantic subject with so many ways to become wealthy. The purpose of this
game is to rst, inspire you to learn more and think more clearly about money. Secondly,
this game is to empower you to nd the right answers for you, knowing that what is right
today may not be right tomorrow. As you know, things change as you change.

Thank you,

Robert Kiyosaki
www.richdad.com 47