Rich Dad, Poor DadA very recent letter received from Robert Kiyosaki
A friend I flew with in Vietnam called me the other day. He said, "I've been laid off again. What do I do now?"
Jim and I went through flight school and Vietnam together. When we returned to the states, he got a job as a pilot with the airlines and I began building my business. Jim was absolutely in love with his work. He loved flying and the company he worked for. Unfortunately, the company was Pan American, which for those of you who are old enough to know, Pan Am went out of business, even though it was once the number one airline in America. After five years of taking odd jobs, he finally was rehired by an airline whose name I will not mention, because it is still in business today, but just barely. This is the airline he was laid off from.
"I'm 53 years old," said Jim. "I still have two kids in school. I have nothing saved for retirement. And worst of all, how am I going to find a job that pays me $85,000 a year, especially when all I know is to be a pilot?"
For those of you who have read my books or attended my seminars, you may know what I think about the idea of job security. I have said it for years, "Job security is an obsolete idea." The reason I say this is because the issue of job security was the issue for my parents, the World War II generation. My parents grew up in the Depression and to them, just finding a job was a challenge, so when they found one, they clung to it for dear life. Once they retired, they did not have to worry because the government pension, Social Security, and Medicare were there to take care of them. We do not have that luxury.
For those born after the WWII generation, job security is not an issue. The reason I say that job security is not an issue is because there are plenty of jobs. Always remember that McDonald's is always hiring. I still see help wanted signs everywhere. So the problem is not finding a job. It is long-term financial security that is the issue. The problem is long-term financial survival. For my friend Jim, a well-educated, highly skilled, hard working man, the question is, where is he going to find another pilot's job that pays him what he needs when the airlines today, are downsizing? How will he continue to pay his mortgage, pay for his kid's college education, and put enough aside to retire on?
When Jim asked me for my advice, I said, "After you find a job, this time, why not start a part-time business?" "What kind of business?" he asked.
"Why not build a network marketing business in your spare time? Why not build something you control and you own?" "No, no way," he said. "I just want a high paying job. I want to fly again. I'm not interested in network marketing. But thanks for the advice. I'll call you back when I find a new job with another airline. I love flying and that is all I want to do."
Jim has not called back. It has been almost three weeks. Obviously, he did not like my advice. But for you, I would like to give you the reason I offered him that advice. As I write, President Bush is in China and our military is in Afghanistan. If you cannot see the writing on the wall, let me open your eyes. The days of lifetime job security and your mutual funds going up by 20% per year are over. If you think your mutual funds will carry you after you retire, I think you had best make other plans. Why? Because what has just happened to my pilot friend Jim, will be happening to millions of people. The idea of high paying jobs and pension funds that increase by 20% per year is an obsolete idea. America is at war, battling an invisible enemy, an enemy without a country. On top of that, China is expected to pass the U.S. as a world financial power in less than ten years. It does not take a crystal ball to see that there will be plenty of jobs in America, but fewer and fewer will be high paying. Why? Because the Chinese are smart, hard working, and willing to be paid less, much less.
Jack Welch, the retired CEO of General Electric said recently, "20% to 30% of what is produced in America will soon be produced in China." In other words, in order to compete with China in the world economy, we must produce for less or lose. Highly skilled pilots like my friend Jim need to work for less, if they want to work. Not only pilots, but many other professions will need to work for less and produce more in order to survive. If you have been watching the news, between the stories of Anthrax and President Bush in China, you may have caught a glimpse of Bill Gates and other American business leaders shaking hands with the Chinese. Let me say this, these leaders of American business are not there because they like Chinese food.
The reason I suggested that my friend Jim start a network marketing business on the side is because becoming a business owner is a very wise strategy, especially at this time in history. Starting your own business gives back some control over your life. If you think your boss or company can protect you from the geopolitical forces that are at play today, I think you need to rethink that thought. There is an old song that said, "For you better start swimming or you'll sink like a stone, for the times they are a changing." Our leaders are in China, not in the war zone. That should tell you how much things are going to change and change soon.
The reason I recommend network marketing is because network marketing is the business of the future. Back in the late 1990's, it was often difficult to talk to people about network marketing when their mutual funds were going up by 20% per year. But those days are over. If you ever wanted to get ahead of the curve, now is the time to open your mind and look at this business of the future. Now is the time to talk to people when they too are looking for new answers and new ways to find true long-term financial security. A network marketing business is one of the asset classes. It is a business. If you work hard and build the business, that business will give you the excess cash to acquire the real estate and stocks that will give you true long term financial security; security you can pass on to your loved ones. You can't do that with your job, no matter how secure it is.
My friend Jim the airline pilot is also a casualty of the September 11th event. The problem is, he is not willing to make changes. My prediction is that for employees who are well educated, well trained and ambitious, the next few years will be tough ones. Why? Because well-educated, ambitious, high paid employees are often the first to be downsized. Once down sized, they often find it harder to find a job at the pay scale they were use to. In the Industrial Age, if you were well educated, hard working, and experienced, you were desirable. In the Information Age, experience and age are liabilities, not assets. So with each passing year, it gets harder to re-enter the job force and find a high paying job in the new economy. As my rich dad often said, "The rules have changed. If you want to do well, change with the rules." Unfortunately, we are in time of crisis. Nonetheless, for the brave at heart, now is the time to make changes, changes that will give you lifetime financial security which is far better than job security.
Robert T. Kiyosaki