Mind Your Own Business
Build your asset column while keeping your day job.
Kiyosaki draws a critical distinction between your profession and your business. Your profession is what you do for a paycheck. Your business is what you do to build your asset column. Most people spend their lives minding someone else's business, making their employer rich, making the government rich through taxes, and making the bank rich through mortgage and loan payments. They never mind their own business.
Minding your own business means focusing on building and maintaining your asset column. This does not necessarily mean quitting your day job. It means keeping your day job for income while spending your spare time and money acquiring assets. The assets Kiyosaki recommends include businesses that do not require your physical presence, stocks, bonds, income-generating real estate, notes and IOUs, royalties from intellectual property, and anything that has value and produces income or appreciates.
The key insight is that your profession earns income, but your business builds wealth. The wealthy focus on their asset columns, not their income statements. They let their day jobs fund asset acquisition rather than lifestyle inflation.
- Your profession is not your business; your business is your asset column.
- Keep your day job, but start minding your own business on the side.
- Do not spend extra income on liabilities; use it to acquire assets.
- Real assets include businesses that do not require your presence, stocks, bonds, income-generating real estate, royalties, and notes.
- The wealthy focus on their asset columns, not their income statements.
- Once a dollar goes into your asset column, never let it come out.
- Let your assets buy your luxuries, not your labor.
- Separate Your Profession from Your BusinessRecognize that your job is your profession but not your business. Your business is your asset column. Keep your day job for steady income but shift your mental focus to building assets on the side.
- Identify Asset Categories to PursueReview the categories of real assets: businesses you do not have to manage daily, stocks, bonds, mutual funds, income-producing real estate, notes, royalties, and intellectual property. Choose one or two categories that match your interests, skills, and available capital.
- Channel Surplus Income into AssetsRather than spending surplus income on lifestyle upgrades, direct it systematically into your chosen asset categories. Treat asset acquisition like a mandatory expense rather than an optional investment.
- Reinvest Asset IncomeWhen your assets begin generating income, reinvest that income into acquiring more assets. This creates a compounding cycle where your asset column grows faster over time. Only use asset income for luxuries after your passive income exceeds your expenses.
Ray Kroc understood that McDonald's real business was not hamburgers but real estate. While the franchise system sold hamburgers to fund operations, the corporation acquired prime real estate at major intersections globally. Kroc minded his own business, building the asset column, while the profession of selling hamburgers generated the cash flow to do so.
Kiyosaki presents this lesson through the example of Ray Kroc, founder of McDonald's. When Kroc spoke to an MBA class and asked what business he was in, students laughed and said hamburgers. Kroc replied that his real business was real estate. McDonald's owns some of the most valuable real estate in the world at the intersections of major streets in cities globally. The hamburger franchise was the profession; real estate was the business.