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Rich Dad's Guide to Becoming Rich Without Cutting Up Your Credit Cards

Rich Dad's Guide to Becoming Rich Without Cutting Up Your Credit Cards

2.9 7
by Robert T. Kiyosaki, Sharon L. Lechter

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Why cutting up your credit cards won't make you rich A popular TV personality often says, "Take out your credit cards and cut them into pieces." While that is sound advice for people who are not financially responsible, it is inadequate advice for anyone who wants to become rich or financially free. In other words, just cutting up your credit cards will not make


Why cutting up your credit cards won't make you rich A popular TV personality often says, "Take out your credit cards and cut them into pieces." While that is sound advice for people who are not financially responsible, it is inadequate advice for anyone who wants to become rich or financially free. In other words, just cutting up your credit cards will not make you rich. What does make you rich is financial education...unfortunately a type of education we do not receive in school. If a person has a solid financial education, they would know that there are two kinds of debt...good debt and bad debt. A person with a sound financial education would know how to use good debt to make them richer faster...much faster than a person who only saves money and has no debt. Rich Dad's Guide to Becoming Rich
• Are you in credit card debt?
• Is job security dead?
• Is your financial security threatened?
• Is a high-paying job the answer?
• Is your money working for you?
• Do you have good debt or bad debt? We all need more financial education. We need to know how to have our money work hard for us so we don't have to spend our lives working for money. That is why we need more sophisticated financial education...not oversimplified and childish financial tips such as cut up your credit cards or save more money. If you are ready to increase your financial education and enjoy your credit cards, then this book is for you.

Product Details

Grand Central Publishing
Publication date:
Rich Dad Series
Product dimensions:
6.00(w) x 9.00(h) x 0.37(d)

Read an Excerpt


Without Cutting Up Your Credit Cards

By Robert T. Kiyosaki with Sharon L. Lechter

Warner Books

Copyright © 2003

Robert T. Kiyosaki and Sharon L. Lechter
All right reserved.

ISBN: 0-446-69752-4

Chapter One

What Is the Price of
Being Cheap?

"The price of something is not always measured in money."

There are many books that popularize the idea of frugality and living below your
means. Many so-called money experts write, speak, or broadcast on radio and TV
the virtues of cutting up your credit cards, saving money, putting the maximum
amount into your retirement plan, driving a used car, living in a smaller house,
clipping coupons, shopping at sales, eating at home, passing used clothes from
older kids down to the younger kids, taking cheaper vacations, and other such

While these are excellent ideas for most people, and while there is a time and
place for frugality, most people do not like these ideas. The truth for most
people is that they love to enjoy the finer things of life that money can buy.
For most people, a big home, a new car, fun toys, and expensive vacations are
much more fun and desirable than putting money away in a bank. Most of us tend
to agree with the wise sages professing frugality and economic abstinence. Yet,
deep down, many of us would rather have a platinum credit card without a
spending limit ... that is paid for by your rich uncle who has more money than
all the Arab oil sheiks, private Swiss banks, and Bill Gates combined.

While most of us enjoy the wonderful things money can buy, we realize that it is
the unbridled desire for the fun, fine, and fancy things of life that gets many
of us in financial trouble. And it is the financial trouble that these desires
spawn that causes the money gurus to say, "Cut up your credit cards. Live below
your means. Buy a used car."

On the other hand, my rich dad never said to me, "Cut up your credit cards." He
never said, "Live below your means." Why would he advise me to do things he
personally did not believe in? When it came to the idea of frugality, he did
say, "You can become rich by being cheap. But the problem is, even though you're
rich, you're still cheap." He would further say, "It makes no sense to me to
live cheap and die rich. Why would anyone want to live cheap, die rich, and then
have the kids spend your life's savings after the funeral?" Rich dad noticed
that people who scrimped and saved all their lives often had children who acted
like starving hyenas once the parents were gone. Instead of enjoying their
parents' inheritance, they often fought over the money and spent it all soon
after they got their hands on what they called their "fair share."

Instead of telling me to live cheaply, rich dad often said, "If you want
something, find out the price, then pay the price." He also went on to say, "But
always remember, everything has a price. And the price for becoming rich by
being cheap is that you're still cheap."

The Different Ways You Can Become Rich

Rich dad went on to explain, "You can become rich by marrying someone for his or
her money. But we all know the price of that. I had a classmate in New York who
often said, 'It is just as easy to marry a rich girl as a poor girl.' When he
graduated, he married into a very rich family just as he said he would. I
personally think he was a slimeball, but that was his way of becoming rich."

You can become rich by becoming a crook, and we all know the price of that
choice. When I was a kid, I thought a crook wore a mask and robbed banks. Today,
I realize that there are many crooks that wear blue suits, white shirts, red
ties, and who are often respected members of their community.

There are others who become rich by betting at the casino or racetrack, on the
lottery, or blindly throwing their money into the stock market. We know the
price of that. During the dot-com mania, I knew many people who were ready to
write a check if all you said was, "I'm starting an Internet company."

You can become rich by being a bully and we all know what happens to a bully.
Eventually, an even bigger bully comes along, or the bully finds that the only
people willing to do business with him or her are people who enjoy being pushed

And as described earlier, you can become rich by being cheap and we all know
that the world tends to despise rich people who are cheap ... people like
Scrooge in Charles Dickens's classic A Christmas Carol. Most of us have met
people who always want a larger discount, complain about the bill, or even
worse, refuse to pay the bill for one frivolous reason or another. A friend who
owns a dress shop often complains about the type of customer who buys a dress,
wears it to a party, and then returns it a few days later, asking for her money
back. And of course, there are those who drive old cars, wear clothes too long,
buy cheap shoes, and look poor and yet have millions of dollars in the bank.
While these individuals can become rich with such cheapness, there is a price
far beyond money for such behavior. I personally struggle with being too cheap
at times, and yet I notice that people tend to smile more or like me more when I
am generous. For example, when I tip a little extra for good service, it comes
back to me in other ways. In other words, people tend to like generous people
more than cheap people.

Can Everyone Be Rich?

Rich dad and I talked further about the price of being rich. He told me, "The
price is different for different people."

Rich dad also said, "The only people who think life should be easy are lazy

Not being satisfied, I pressed on with my questioning. What did he mean by the
price is different for different people. His reply was, "I would like to think
that we all come into this world with unique gifts and talents ... gifts and
talents such as singing, painting, athletics, writing, parenting, preaching,
teaching, and so on. But just because God gave us these talents, it is still up
to each of us to develop those talents ... and developing those talents is
often the price. The world is filled with smart, talented, and gifted people who
are not what we would call successful financially, professionally, or in their
personal relationships. While each of us has gifts, each of us has personal
challenges to overcome. No one is perfect. Each of us has gifts and challenges,
strengths and weaknesses. That is why I say, the price is different for
different people because each of us has different challenges. The only people
who think life should be easy are lazy people."

I do not know if rich dad's statement about lazy people is true or not. I do
know that his statement has been useful for me, whenever I found myself
complaining about things not being easy, or things not going my way. When I find
myself saying, "I wish things were easier," I know I am getting lazy. So
whenever I find myself wishing things would be easier, I take a break, check my
attitude, and ask myself about the long-term price of having that attitude. It's
not that I don't look for an easier way to do things. I am simply aware of when
I tend to be lazy, cheap, or when I act like a spoiled brat, and then I ask
myself what the price might be for that behavior.

Money Is the Reward for Paying the Price

Rich dad would also say, "Ask anyone who is rich, famous, or successful, and I
am sure they will tell you that they had and have personal challenges and demons
to face every day along the way. Son, there is no free lunch. My challenge was
that I had no education and no money when I started out. I also had a family to
feed when my father died. I was thirteen years old when I was given that
challenge ... and there were even greater challenges to come. Yet, I managed to
pay the price, and in the end, I achieved great wealth. In hindsight, money was
my reward for paying the price."

The Price of Security

Over the years, rich dad made sure his son, Mike, and I were always aware of the
price of something. When my dad, the man I call my poor dad, advised me to "Find
a safe secure job," rich dad's reply was, "Remember, there is a price for
security." When I asked him what the price was, he answered, "For most people,
the price of security is personal freedom. And without freedom, many people
spend their lives working for money, rather than living out their dreams. To me,
to live life without achieving my dreams is much too high a price to pay for
security." He also made his usual comment on taxes, by saying, "People who seek
security over freedom pay more in taxes.

That is why people who have safe, secure jobs pay more in taxes than people who
own the business that provides the jobs."

I spent a few days thinking about that comment, letting the magnitude of the
idea sink in. The next time I saw rich dad, I asked him, "Do I have to choose
between security or freedom? In other words, does that mean I can have one but
not the other?"

Rich dad laughed after he realized how much thought I had given to his remark.
"No," he replied, still chuckling. "You don't have to have one or the other. You
can have both."

"You mean I can have both security and freedom?" I asked. "Sure," he said. "I
have both."

"So why did you say that for most people, the price of security is personal
freedom?" I asked. "How can you have both when you say most people can have only
one. What's the difference?"

"The price," said rich dad. "I've always said to you that everything has a
price. Most people are willing to pay the price for security, but they are not
willing to pay the price for freedom. That is why most people have only one of
the two. They only have one or the other."

"And why do you have both security and freedom?" Mike asked. He had just entered
the room and had heard only part of the conversation.

"Because I paid twice the price," said rich dad. "I was willing to pay the price
for both security and freedom. It's no different than having two cars. Let's say
I need a truck but I also want a sports car. If I want both, I pay twice the
price. Most people go through life paying for one or the other, but not both."
"We pay a price even if we don't pay the price," rich dad continued. "So there
is a price for security and there is a price for freedom. And you paid the price
for both." I repeated what rich dad had just said, so I could let the idea sink
into my head.

Rich dad nodded his head. "Yes, but let me add one more point of clarity about
my being willing to pay the price to have both. You see we all pay a price
anyway. We pay a price even if we don't pay the price."

"What?" I replied, frowning and shaking my head. Rich dad now seemed to be
speaking in circles.

"Let me explain," said rich dad, gesturing with his hands that we should calm
down. "Do you remember when I helped the two of you with your science homework a
few weeks ago? You were studying Newton's laws?"

Mike and I nodded.

"Do you remember the law of for every action there is an equal and opposite

Again we nodded. "That is how a jet flies through the air," said Mike. "The
engine propels hot air backward and the jet moves forward."

"That's right," said rich dad. "Since Newton's laws are universal laws, they
apply to everything, not only jet engines." Rich dad looked at the two of us to
see if we were following what he had just said. "Everything." He again repeated
just to make sure we understood.

"Okay, everything," said Mike, a little frustrated at the repetition. Suspecting
that we were not really getting his point about everything, rich dad continued,
"By everything I mean everything," he continued on. "Do you recall my lessons
about financial statements? Do you remember my explaining that for there to be
an expense, there must be income somewhere else?"

Now I was beginning to understand what he meant by "everything." Newton's
universal laws also applied to financial statements. "So for every asset, there
has to be a liability." I added just to let him know that I was beginning to
follow his thinking: "A universal law applies to everything."

"And for something to be up, something else must be down," added Mike. "And for
something to be old, something else has to be new. As Einstein said, 'It's all

"Correct," rich dad said with a smile. "So how does this apply to security and
freedom and your being willing to pay twice the price?" asked Mike.

"Good question," said rich dad. "It's important because if you don't pay twice
the price, you never get what you want anyway. In other words, if you don't pay
twice the price, you do not get what you paid for in the first place."

"What?" I replied. "If you don't pay twice you don't get what you paid for?"
Rich dad nodded his head and began to explain. "People who pay the price only
for security may never really feel secure ... like in job security," he stated
boldly. "A person may have a false sense of security, but they never really feel

"So even though my dad has what he thinks is a safe, secure job, deep down he
never really feels secure?" I asked.

"That's correct," said rich dad. "Because he is paying only for the action but
not his internal reaction. The harder he works for security, or pays the price
for security, the more his insecurity grows inside him."

"Does it have to be insecurity as the reaction?" Mike asked. "Good question,"
rich dad commented. "No, it could be something else that is reacting. A person
could have so much security that the reaction is boredom and then restlessness.
They want to move on, but they don't move on because then they would give up
their security. So that is why I say each of us has different challenges, each
of us is unique. We're unique because we don't react to things in the same ways
that others do."

"Like some people see a snake and panic, and others see a snake and get happy,"
I added.

"That's correct. We are all different because we are all wired differently,"
rich dad added.

"So what is the point of all this mental gymnastics?" I asked. "The gymnastics
are to make you think," said rich dad. "I always want you to remember that
everything has a price ... and that the price is often twice as much as it
seems. If you pay for only one side of Newton's law, you may think you have paid
the price but you may not get what you want." "Can you give us some examples?" I

"I can give you general ones because, as I said, each of us is unique," said
rich dad. "But as a general rule, always remember there are two sides to each

"For instance, the best employer has usually started his or her career as an
employee. He or she uses that prior experience as an employee to develop a
management style that empowers the employees he or she manages."

"So a good employer will be honest and treat his or her employees how he or she
would like to be treated?" I asked.

"Exactly." Rich dad nodded. "Now let's look at an extreme example.

by Robert T. Kiyosaki with Sharon L. Lechter
Copyright © 2003 by Robert T. Kiyosaki and Sharon L. Lechter.
Excerpted by permission.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

Meet the Author

Brief Biography

Phoenix, Arizona
Date of Birth:
April 8, 1947
Place of Birth:
Honolulu, Hawaii
B.S., U.S. Merchant Marine Academy

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Rich Dad's Guide to Becoming Rich Without Cutting Up Your Credit Cards 2.9 out of 5 based on 0 ratings. 7 reviews.
Guest More than 1 year ago
I agree with the above review...to a point. As far as material from other Rich Dad books, it's true there is no new material here. That said, for those who have read the other books, it is a fast review and fast 'read' to bring back to remembrance what you have read. But Hark!! There IS new material here...material that should send you on a quest for additional research, should you require it. That new material...and the roadmap to implement it...is found in Chapter 5. Kiyosaki gives an abbreviated and cogent method to be free of 'bad' debt. It works, too! For those of you who wish to do the research for better understanding, I would suggest reading what I've recommended below.
Guest More than 1 year ago
The problem that most 'educated' people will have with any kiyosaki book is simple, they're not how to books, they're life lesson books. Most of the people that don't like his books are searching for someone to potty train them. Business is about learning from your mistakes, over and over again. I have seen many intellectuals study his books for the answers, and then bash the book when they don't find the answers. bottom line, get over your ego, then start making mistakes. If you want to work for someone else, continue getting A's. climb the latter, and do as your told. I have talked to too many 'babies' that pout when they fail, grow up america...if a drop out can be a millionaire, then the honors student has no excuse.
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Guest More than 1 year ago
This book was a waste of my time and money. Please do not buy this book. Here is what I took away from this book: invest in Real Estate and get rid of unsecured debt. The rest of the book is about how great it is to make mistakes and a whole bunch of stories from 'rich dad.'
Guest More than 1 year ago
I found this ebook not to contain any new material, not already discussed in Robert's other books - Rich Dad, Poor Dad, etc. For Robert's next book (I'm sure he will write another), I would like to see more specific case studies of how he attained his wealth.