BUSINESS OF 21ST CENTURY (why you need to have a business of your own and not a job)


Chapter 1
The rules have changed
We live in troubled times. The last few years have brought us a steady parade of fear and panic in the headlines, boardrooms, and kitchen tables across America. Globalization, outsourcing, downsizing, foreclosures, subprime mortgage and credit default swaps, ponzi schemes, Wall Street fiascoes, recession … its one piece of bad news after another.
During the first few months of 2009, U.S. company layoffs reached about a quarter-million per month. As I write this in late 2009, unemployment is at 10.2 percent and still rising, and underemployment (where your job stays in place but your hours and pay are drastically cut back) is even worse. The rampant decline in gainful employment is a ravaging epidemic to which few are immune. From executives and middle managers to administration employees and blue-collar workers, from bankers to retail clerks, all are at risk. Even the healthcare industry, until recently considered a job-safe zone, is trimming away significant chunks of its workforce.

IN A 2009 USA TODAY SURVEY, 60 PERCENT OF AMERICANS POLLED SAID THEY SEE TODAY’S ECONOMIC SITUATION AS THE BIGGEST CRISIS IN THEIR LIFETIME.

In the fall of 2008, a lot of people’s retirement portfolios suddenly lost half their value – or more. Real estate crashed. What people thought were their solid, reliable assets turned out to be about as solid as water vapor. Job security is gone, a thing of the past. In a 2009 USA Today survey, 60 percent of Americans polled said they see today’s economic situation as the biggest crisis in their lifetime. Or course, you already know all this. But here’s what you may not know: None of this is really news. Sure, it took a major economic crisis for people to start waking up to the fact that their livelihoods were at risk. But your income didn’t become at risk overnight – it was always at risk.
Most of the U.S. population has been living for years on the knife-edge precipice between solvence and ruin, relying on the next paycheck or two to meet each month’s expenses, typically with only a very thin cushion of cash savings – or more often, no cushion at all. That paycheck is called “trading your time for money,” and during a recession, it is the least reliable source of income there is. Why? Because when the number of employed people starts dropping, there is less disposable income in circulation to pay for your time.

I TOLD YOU SO
Not to be an I-told-you-so, but … I told you so. I’ve been saying this for years: there is no longer such a thing as a safe and secure job. Corporate America is a 20th-century dinosaur, trembling on the edge of extinction, and the only way for you to have a genuinely secure future is for you to take control of that future. Here’s what I wrote in 2001, in a book titled The Business School for People Who like Helping People.
In my opinion, the United States and many Western nations have a financial disaster coming, caused by our educational system’s failure to adequately provide a realistic financial education program for students.
That same year, in an interview for Nightingale-Conant, I said:
If you think mutual funds are going to be there for you, if you want to bet your life on the ups and downs of the stock market, that’s your retirement you’re betting on. What happens if the stock market goes up and then comes crashing down again when you’re 85 years old? You have no control. I’m not saying mutual funds are bad. I’m just saying they’re not safe and they’re not smart, and I wouldn’t bet my financial future on them. Never before in the history of the world have so many people bet their retirement on the stock market. That is insane. Do you think Social Security is going to be there to take care of you? Then you also believe in the Easter Bunny.
And in an interview I did in March 2005, I said this:
The No. 1 strength of a paper asset is its liquidity – and that is also in No. 1 weakness. We all know there’s going to be another market crash and we’re going to be wiped out again. Why would you do that?
So what just happened? There was another market crash and many people got wiped out again. Why? Because our habits and mindset caught up with us. In 1971, the American economy went off the gold standard. This happened without the approval of Congress, by the way, but the important thing is that it happened. Why is that significant? Because it cleared the way for us to start printing more and more money, as much as we likes, without it being tied to any actual, hard, real value.
This shift away from reality opened the gates for the biggest economic boom in history. Over the next three and a half decades, the American middle class exploded. As the dollar devalued and the on-the-books value of real estate and other assets inflated, ordinary people became millionaires. Suddenly credit was available to anyone, anytime, anywhere, and credit cards began popping up like mushrooms after a spring rain. To pay off those credit cards, Americans started using their homes as ATMs, refinancing and borrowing, borrowing and refinancing.
After all, real estate always keeps going up in value, right?
Wrong. By 2007 we had pumped as much hot air into this financial balloon as it could take – and the fantasy came crashing down to earth again. And it wasn’t just Lehman Brothers and Bear Stearns that collapsed. Millions lost their 401 (k)s, their pensions, and their jobs.

THE NUMBER OF PEOPLE LIVING OFFICIALLY BELOW THE POVERTY LINE IS RISING RAPIDLY. THE NUMBER OF PEOPLE WHO ARE WORKING BEYOND THE AGE OF 64 IS INCREASING.
In the 1950s, when General Motors was the most powerful corporation in America, the press picked up a statement by BM’s president and turned it into a slogan that carried for decades: “As GM goes, so goes the nation.” Well, folks, that may not be all good news, because where GM went in 2009 was into bankruptcy, and by that same summer, the state of California was paying its bills with IOUs instead of cash.
Right now, the percentage of Americans who own their homes is dropping. Mortgage foreclosures are at an all-time high. The number of middle-class families is dropping. Savings accounts are smaller, if they exist at all, and family debt is greater. The number of people living officially below the poverty line is rising rapidly. The number of people who are working beyond the age of 65 is increasing. The number of new bankruptcies is going through the roof. And many Americans do not have enough to retire – not even close. Has all this bad news got your attention? Sure it has, and you’re not alone. Americans everywhere have finally stopped rolling over and hitting the Snooze button. Great! Now you’re awake to what’s going on, and it isn’t pretty. So let’s take a deeper look and see what it really means – and what there are you can do about it.

IT’S A NEW CENTURY

When I was a kid, my parents taught me the same formula for success that probably learned: Go to school, study hard, and get good grades so you can get a secure, high-paying job with benefits – and your job will take care of you. But that’s Industrial – Age thinking, and we’re not in the Industrial Age anymore. Your job is not going to take care of you. The government will not take care of you. Nobody’s going to take care of you. It’s a new century, and the rules have changed.
My parents believed in job security, company pensions, Social Security, and Medicare. These are all worn-out, obsolete ideas left over from an age gone by. Today job security is a joke, and the very idea of lifetime employment with a single company – an ideal so proudly championed by IBM in its heyday – is a anachronistic as a manual typewriter.
Many thought their 401(k) retirement plans were safe. Hey, they were backed by blue-chip stocks and mutual funds, what could go wrong? As it turned out, everything could go wrong. The reason these once-sacred cows no longer give any milk is that they are all obsolete: pensions, job security, and retirement security – it’s all Industrial-age thinking. We’re in the Information Age now, and we need to use Information Age thinking.
Fortunately, people are starting to listen and learn. It’s a shame that it takes suffering and hardship to bring the lesson home, but at least the lessons are hitting home. Every time we experience a major crisis – the dot-com bust, the economic aftermath of 9/11, the financial panic of ’80, and recession of ’09 – more people realize that the old safety nets just won’t hold up anymore.
The corporate myth is over. If you’ve spent years climbing the corporate ladder, have you ever stopped to notice the view? What view, you ask? The rear end of the person in front of you. That’s what you get to look forward to. If that’s the way you want to view the rest of your life, then this book probably isn’t for you. But if you are sick and tired of looking at someone else’s behind, then read on.
Don’t be fooled again
As I write this, unemployment is still on the rise. By the time you read these words, who knows? The situation may have changed. Don’t be fooled. When employment and real estate values turn around and credit loosens up again, as they inevitably will, don’t be lulled into that same-old sense of false security that got you and the rest of the world into this mess in the first place.
In the summer of 2008, gas prices were soaring over $4 a gallon. SUV sales sank like a stone, and suddenly everyone was on the small-car-and-hybrid bandwagon. But look what happened next. By 2009, gas prices had fallen back down below $2 – and so help me, people started buying SUVs again!
What? Do we really think fuel prices are going to stay nice and low? The gas prices are down for good now, and therefore gas-guzzlers make perfect sense to buy? Can we really be that shortsighted? (I’m trying to be nice there. The word I was going to use was “stupid.”)
Unfortunately, the answer is yes. We aren’t just fooled once: we let ourselves be fooled over and over again. We all grew up hearing the fable of the ant and the grasshopper, but the overwhelming majority of us keep living with the foresight of a grasshopper anyway.
Don’t be distracted by the headlines. There is always some idiotic buzz going on that tries to pull your attention away from the serious business of building your life. It’s just noise. Whether it’s terrorism, recession, or the latest election-cycle scandals, it’s not nothing to do with what you need to be doing today to build your future.
During the Great Depression, there were people who made fortunes. And during the greatest boom times, like the real estate surge of the ‘80’s, there were millions and millions of people who neglected to take charge of their future –who ignored everything I’m going to share with you in this book – and ended up struggling or broke. Most of them, in fact, are still struggling or broke today.
The economy is not the issue. The issue is you.
Are you angry at the corruption in the corporate world? At Wall Street and the big banks that let this happen? At the government for not doing enough, or for doing too much, or for doing too much of the wrong things and not enough of the right things? Are you angry at yourself for not taking control sooner? Life is tough. The question is, what are you going to do about it? Moaning and groaning won’t secure your future. Neither will blaming Wall Street, the big bankers, corporate America, or the government. If you want a solid future, you need to create it. You can take charge of your future only when you take control of your income source. You need your own business!!!

                                                                                  

    Chapter 7
   IT’S TIME TO TAKE CONTROL!
It was 1985 and my wife, Kim, and I were homeless. We were unemployed and had little money left from savings; our credit cards were exhausted and we lived in an old brown Toyota with reclining seats that serve as beds. At the end of a week of sleeping in our car, the harsh reality of who we were, what we were doing, and where we were headed began to sink in.
After a friend realized our desperate situation, she offered us a room in her basement. When friends and family were informed of our plight, the first question was always, “why don’t you just get a job?” At first we attempted to explain, but we had a hard time clarifying our reasons to our well-meaning inquisitors. When you’re talking to someone who values having a job, it is difficult to explain why you might not want a job.
We occasionally earned a few dollars doing a few odd jobs here and there. But we did that only to keep food in our stomachs and gas in our house – I mean, our car.
I must admit that during moments of deep personal doubt, the idea of a sate, secure job with a paycheck was appealing. But because job security was not what we were looking for, we kept pushing on, living day to day on the brink of the financial abyss. We knew we could always find a safe, secure, high-paying job. Both of us were college graduates with good job skills and a solid work ethic. But we weren’t going for job security. We were going for financial freedom.
By 1989, we were millionaires.
I often hear people say, “it takes money to make money.” That’s B.S. – and I don’t mean a Bachelor of Science degree! Our journey from homelessness to being millionaires in four years, and then on to genuine financial freedom in another five years, did not take money. We had no money when we started – in fact, we were in debt – and nobody gave us anything along the way, either.
It also does not take a good formal education. A college education is important for traditional professions, but not for people looking to build wealth. If it doesn’t take money to make money and it doesn’t take money to make money, and it doesn’t take a formal education to learn how to become financially free, then what does it take? It takes a dream, a lot of determination, a willingness to learn quickly, and an understanding of which sector of the cash flow quadrant you’re operating in.

HARD WORK WILL NOT MAKE YOU RICH.
There is this strange idea in our culture that says, “If you work really hard, you’ll be okay.” What a pile of baloney! And what’s so tragic about it is that most people have been brainwashed to believe it, and they do believe it, even though we’re all surrounded by tons of evidence to the contrary.
What evidence? Just look around you. Do you know anyone who has worked really hard his entire life, only to end up living a life that hovers just above – or just below – the indignity and heartbreak called “subsistence level?”
Of course you do. We all do. The world is full of people who work hard and are most definitely not okay. And perhaps the worst part about it is that many of these unfortunates come to the conclusion that it was their fault, their personal failing. They did all the right things, right? But it still didn’t work. Maybe they just not cut out for success.
Nonsense. The problem is that the hard-work myth is just that: a myth. Now, don’t get me wrong. I’m not saying that building wealth and financial freedom doesn’t take hard work; it does, and lots of it. I hope you’re not naïve enough to believe the idiots who will tell you they can show a way to wealth that’s easy, that’s quick, or that’s painless. Because if you are, I know a bridge, you can buy real cheap – and an entire system of subprime mortgages and credit-default swaps that might be just right for you.
No, it takes hard work, all right. The question is, hard work doing what? I can already hear you thinking, “Doing what?! Making money, of course!” But not so fast, because here’s the cold, hard truth lurking behind that sad error of our culture’s thinking:
Working hard at making money will never create wealth.
People who work for income work harder and harder, only to be taxed more and more. Forget working hard at making money: all you will do is spend it, and then have to work hard all over again.
You might be asking, “Okay, so what do I do?” You take control. Take control of what? After all, most things in life you cannot control, no matter how hard you try. You can’t control the market. You can’t control employees. You can’t control the economy. What can you control? You can control the source of your income.

The Problem
Building a business is the way most of the very rich became rich. Bill Gates built Microsoft; Michael Dell created Dell Computers in his dormitory room. Still, historically, there have been very, very few people who have truly lived in the B quadrant. The B quadrant is the best place to begin generating genuine wealth, but at the same, there are some barriers to entry that have kept most people out.
For one thing, most people don’t have the cash it takes to start their own business. Today it cost an average of $5 million to start your own business. And for another thing, building your own business from scratch remains the riskiest of all ways to become rich. The failures rates for new business is about 90 percent in the first five years – and if your new venture fails, guess who just lost $5 million? In my early years of starting business, I failed twice, and while it never pushed me into bankruptcy, (and I never got any government bailouts!), it did cost me millions of dollars.
Typically when you start your own business, you have to make sure your rent, utilities, and the rest of your overhead are paid, your employees are paid, and your suppliers are paid, or you’re out of business. So guess who doesn’t get paid? You! In the course of starting a new business j- and I’m talking here about a successful business – you can easily go five to ten years without taking a pay check.
Remember Kim and me, sleeping in our beat-up Toyota? It wasn’t fun. We could have taken jobs that would have immediately put a roof over our heads, but as miserable as it was (and believe me, it was), we chose homelessness over employment because we believed in our dream of being business owners and living in the B quadrant.
Most people do not have the mental, emotional, physical, or financial stamina to handle these conditions. It can be brutal, and usually is.
……to be continued. The above post was taken from the book entitled  “The business of 21ST CENTURY” by Robert Kiyosaki. You can get your copy now. Contact us today on: 0208520993, 0268840773, 0273767823.
Thank you.

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