Raising Money

Rags And Riches

How "rich dad" and "poor dad" entrepreneurs would view identical situations, according to Robert T. Kiyosaki, author of the bestselling Rich Dad Poor Dad (Warner Books):

Scenario #1: Your business faces a looming cash-flow problem at the same time annual raises are due. Do you hold off or give the raises?

Rich Dad: Depending on the source of the financial constraints (internal mismanagement requires other actions), he explains to the troops that he has to ensure the company survives. First, he leads by example and takes a salary cut. He would then ask the staff to hold off on their pay raises.

Poor Dad: He gives the raises anyway-his concern for workers is the deciding factor.

Scenario #2: A huge conglomerate wants to place a substantial order with your company. What do you do?

Rich Dad: He makes sure the client is no more than 20 percent of the business, because he never wants to be dependent on one client.

Poor Dad: He gets so excited, he takes the order, thereby making his company vulnerable to disaster down the road.

Scenario #3: You've been invited to a business function and want to present the image of success. How would you do this?

Rich Dad: He doesn't feel you have to present this image by over-dressing; most often, he'll show up wearing casual, good quality clothes and expensive shoes. The richer he gets, the less he wants to "look" rich and the more he wants to downplay his success by dressing in a low-key but high-quality fashion.

Poor Dad: He wants to look rich and prosperous by dressing more formally, but buys cheap, lesser quality clothes and shoes.

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This article was originally published in the August 2000 print edition of Entrepreneur with the headline: Raising Money.

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