(speaking in foreign language)

- Advanced Lessons in Millennial Money.

(speaking in foreign language)

Today, my favorite guest joins us, Kim Kiyosaki.

She is Robert Kiyosaki's better half,

and an internationally renowned speaker,

entrepreneur, real estate investor,

and the author of "Rich Woman" and "It's Rising Time!"

She wrote her book "Rich Woman"

for the woman who insists on being financially

independent, and not depending on a man,

company, government to take care of her.

I recently sat down with the queen of cash flow

to talk about the difference between investing

for cash flow and investing for capital gains.

And how we millennials can prepare for

our future and live our best lives.

My first question for Kim was about we millennials

should be thinking about when it comes to retirement?

Let's take a look.

- There's a lot to that question.

First of all, what is retirement?

'Cause back in my parents' days

dad would work at one or two jobs,

mom was a schoolteacher, and at 65, 66

they retired to a nice little resort,

and he played golf and she went to the beach,

and she did her thing and he did his thing.

But, that doesn't apply today,

and especially with millennials,

with all the changes happening in the world.

There probably will be no pensions, my dad had two pensions,

there probably will be no pensions.

There's no job loyalty.

Millennials aren't gonna be working at one or two jobs,

they're gonna have one or two jobs a year,

not throughout their lifetime.

So, I kinda question what retirement is,

or what I'm seeing more and more millennials do

is they're actually incorporating a lifestyle

that I think is really healthy, because for example,

my niece, she has a very successful business.

And she and her husband, every February

they take the month off.

They go to a new location they've never been before,

usually outside the U.S.

So, they're kind of incorporating,

not retirement but a lifestyle

that is more, has more leisure

and more education,

they get to see new cultures and explore.

- I agree with Kim here.

Millennials do incorporate more leisure

into their lifestyle, unlike some older generations.

We like to play hard, but also work hard.

Here, Kim gives her opinions on the boring advice

we've all heard about retirement and 401Ks.

I like her fresh and contrasting perspective on this.

- This is the key.

So I've actually been online looking at

putting together millennials and retirement,

and it drives me nuts.

I see the same freaking advice all the time.

Save money, and invest in a 401K.

They've been saying that for generations,

ever since the 401K came into being.

And just a little side note, the 401K was never meant as

a big retirement plan, a 401K was developed

because after the Depression,

people were not getting back into the stock market.

So they created a 401K to make it easy

for the average person to get into the stock market.

So you've really gotta do some, I mean everybody,

all of us, need to really do our research

when we're looking at

just blindly accepting advice from somebody.

So, I don't think today you can save yourself

to retirement, I mean, the interest rate's 2%, right?

It was almost negative because it was zero something,

and the fees you're paying brings you negative.

So, if you're saving money,

are you trying to build as big a nest egg as possible

to live off of?

And who knows what's going to happen with inflation,

deflation, there's so many factors.

So, I don't think saving and a 401K

is a good financial retirement plan at all.

I think it's probably some of the worst advice

you could get today.

And if they keep printing money,

your money is gonna be worth less

and less and less, so all this money you're saving

could be worth very little in years to come.

- Yeah, I agree, and I think most people

are relying on just their 401K to secure their future.

And like you mentioned before, I mean it was invented,

which is crazy, 'cause I hadn't even thought of like,

okay, what was the purpose behind the 401K?

It was invented for people to start getting back into it,

not to secure your future.

- No, so the stock brokers could make fees

off of your investments.

That's why it got invented.

- Yeah, if you think about it too,

I mean, the stock brokers make money

whether it goes up or down. - That's right.

- You're the one who suffers the consequences,

so I mean, for me it's crazy that people

would consider having that as securing their future.

- And you know, it's that most people,

and not just millennials, all generations,

don't know that there's other options,

because they've been inundated.

All the ads, all the magazines,

all the online, all the social media.

They talk about saving, get out of debt,

invest in a 401K, invest in the stock market,

that's all they're taught.

So they don't even know there's other options,

much more profitable, viable options

than turning your money over to somebody else to manage.

Which is the worst thing somebody could do.

I mean, you've gotta get smart with your money.

Nobody's going to look after your money better than you.

And if you don't take the time to get educated

and the next thing you know your money

that you've turned over to somebody is gone,

there's nobody to blame but yourself.

- [Alexandra] That's terrifying.

- You've got to get educated about money, you got to.

And it's not rocket science, it's not that difficult.

A lot of it is just vocabulary,

just start looking up some of the words,

start learning, start asking questions.

- There are dozens of forces working against us

when it comes to building wealth to live the life

we've dreamed of when we retire.

Things like rising taxes, inflation,

devaluation of the dollar, and so much more.

So I asked Kim if there's a way we can protect ourselves

from these factors.

- I think entrepreneurship is one of the best job securities

you can have.

Now, there's no guarantees and it's not easy,

but it's easier now with online, you can be

international within seconds.

When I started, no, it wasn't seconds.

It took a long time to get international,

it took a long time just to get yourself known

domestically, nationally, even just in your state.

But there's so much opportunity.

You can just start an online business.

I know somebody right now,

they're looking at starting an online business,

they've had some success, they're making two, 3,000 a month.

They're probably gonna start making five, 6,000 a month

with not a ton of

overhead, there's not the overhead,

not a ton of financial outlay.

So I think job security in entrepreneurship

is a big plus.

Then when you get into the investing world,

you need to look at what interests you.

And for me, what interests me is freedom.

I wanted to be financially free.

I got fired twice from my first job outta college.

Twice, not once, twice. - Oh, gosh.

- Twice, and when I looked at it,

after I stopped blaming everybody else

and started looking at it and saying, what?

How come I got fired twice?

I hated being told what to do.

So I wanted the freedom not to be told what to do.

And that's how I got into entrepreneurship.

And I started very small, tiny little, tiny little venture,

I started with a project, it started to grow and grow.

That's what was important to me, was the freedom

not to be told what to do.

So for everybody it's different,

some people thrive in a corporate environment.

Some people thrive as employees, and that's great.

So you've gotta find out

where you're gonna thrive, what kind of environment

you're gonna thrive in, number one.

Because too many people are working at jobs they hate.

- [Alex] Yeah, I know.

- And that's a crime.

- Yeah, it's where you spend the majority of your time.

So, it's kind of sad when you see people

who complain about their jobs

and what they're doing on a daily basis.

And I was listening to a podcast the other day,

and it says like, we're all self-made,

whether we're in a bad situation or a good situation.

But, the only people that are willing to recognize

that they're self-made are the people

that are in a good situation.

And I think as opposed to the people

that are in a bad situation,

where they're not willing to admit that they are

where they are because of themselves.

And I think it's awesome that when you got fired

you didn't take it like, okay, I'm fired,

this is what it is.

I'm not fit out for anything.

But you took it to reflect and it actually opened up

the doors to something incredible, like your freedom today.

- Yeah.

Well I go under the idea that if you're in that situation

that you're not happy with,

you either change it, or you leave it,

or you endure it, those are really the three choices.

And if you're enduring,

and you really don't want to be there,

you really need to leave that situation.

And trust that there's something out there better.

- And now to why we're here,

investing for cash flow or capital gains.

Here's how Kim describes the difference.

- There's four asset classes, and different things

that you can invest in.

So there's businesses, you can invest in businesses,

you can invest in real estate.

You can invest in paper assets, stocks bonds, mutual funds,

and you can invest in commodities, things like gold, silver,

oil, gas, corn, the soybeans, all that stuff.

Avocados. - Yeah, avocados, all that.

- So first of all you've gotta kinda find that niche,

that area that just kind of speaks to you,

that you're really interested in.

Because if you're not interested, you're not gonna study,

you're not gonna learn,

you're not gonna go seek new answers.

For me, I wanted to be financially free,

because as long as I was dependent upon somebody else,

whether it's a job and a boss,

or Robert, my husband, or my family,

from my financial life, I would never be fully free.

So there was always a goal to be financially free.

So if that's a goal for you to be financially free,

then you really gotta do what it takes and do your homework,

and study, and get some experience, and get in the game.

So, there's two things people can invest in.

One is capital gains, and one is cash flow.

So capital gains is, you buy a stock for $20,

it goes to $30, you sell it,

your profit is called capital gains, okay?