The first smartphone invented was the iPhone, released in mid-2007. It’s essentially a tiny supercomputer that you can fit inside your pocket.
More than 700 million iPhones have been sold – but among these users, only a very small handful are wealthy.
And according to US-based Rich Dad, Poor Dad author and personal finance expert Robert Kiyosaki, it’s a lesson on why some people are rich and others aren’t.
‘World has changed’: Buffett’s $6 billion investment dump
As Australians grapple with the economic downturn triggered by the Covid-19 crisis, Kiyosaki shared his no-holds-barred advice for those wanting help navigating the recession.
It’s not what you have, it’s how you use it
While 700 million have owned or own an iPhone, what sets highly successful people apart is how they use it, he said in this morning’s episode of Yahoo Finance Breakfast Club: Live Online.
“The iPhone is only as powerful as the person,” he said. “This is the most powerful tool for entrepreneurs.”
But this lesson can be applied to all assets.
People looking to build wealth, or simply to bounce back from the coronavirus pandemic, need to be as resourceful as their abilities allow them to be, the entrepreneur said.
“So if you don't have it between your left ear and your right ear and then your heart, this thing is worthless.”
Yahoo Finance Breakfast Club: Live Online Episode 1: Experts’ 9 top tips for starting to invest
Yahoo Finance Breakfast Club: Live Online Episode 2: Coronavirus could force property prices 40% lower
Yahoo Finance Breakfast Club: Live Online Episode 3: 7 secrets to job-hunting during the coronavirus pandemic
Jump ship if you have to
If your business has been hit hard by the coronavirus pandemic, he has a blunt message: you might need to think of a plan B.
“If you got caught with your pants down and your business is damaged, it might be the end of the game for your business as you know it,” he said.
“Right now, I wouldn’t want to be in commercial real estate – office buildings, retail shops.
“It might be time to change the business model.”
It’s on you
Those looking to turn around their fortunes will have to be proactive about getting informed.
“You better know what real financial education [is] and what fake is,” he said, labelling conventional financial wisdom as “horrible advice”.
“You know, this idea of go to school, get a job, save money and get out of debt, and pass on a house to house as an asset and invest for the long term your superannuation – that’s horrible advice I would never follow.”
Instead, savvy people should understand two things: debt and taxes – and how to use your debt to create wealth.
After all, it’s what “real estate guys” like himself and US President Donald Trump do, Kiyosaki said. The best-selling author has known Trump for nearly two decades, and the pair have co-authored books on personal finance and wealth creation and are both advocates for real estate investment.
Education doesn’t guarantee wealth
Kiyosaki’s best-selling book Rich Dad, Poor Dad details the lessons he learnt from two ‘fathers’ that he had: the father of his best friend, and his own.
His father was a highly educated academic and a great parent figure, but was not a businessman, Kiyosaki said.
“My poor dad hid behind this diploma. He had multiple degrees … he was really proud of his piece of paper. In America, they're called your sheepskin,” he said.
But his rich dad had no college degree – but he did have a financial statement, he said.
“When you go to a bank, the bank never asks me for my report card … my bank wants to see my financial statement.”
Mistakes make money
There’s also a distinct quality that people who don’t fear failure have, Kiyosaki said.
“The average person, because they went to school and got good grades, are afraid of making mistakes,” he said.
Using himself as an example, he said: “I’m the biggest flop you ever met. I’ve made mistakes, I lost businesses, I’ve been homeless, but I just keep going, because that’s what entrepreneurs do.”
At school, mistakes are punished – but this isn’t how it works in the real world, Kiyosaki said.
“People who make the most mistakes are rich,” he said, pointing to Thomas Edison, who saw 1,014 failed attempts before his electric light bulb worked.
“Look at Walt Disney, he failed so many times. Look at Steve Jobs. He didn't finish school, he got kicked out of Apple, but he kept coming back, but the average person, they want that stupid job security, and they’ll never be rich, wanting to be job-secure and paycheque-secure.”
Kiyosaki will be speaking at the free Secure The Future online seminar, which will be live-streamed on Sunday 24 May.