How a Robert Kiyosaki Seminar led to a $318 Million IPO

[Stephen Keighery]

I watched my business partner ring the bell at the opening of the Australian Stock Exchange yesterday. The company I helped built listed on the stock exchange with a market capitalization of $318 Million dollars. This is big milestone for me and I can’t help but to reflect on the journey that lead up to this. When I boil it down I owe it all to one 3 hour seminar I attended in Sydney, Australia back in 2000.

At the time I was studying Marketing & Economics and wasn’t really to sure what I wanted to do “when I grew up”. A good friend of mine had some free tickets to a Robert Kiyosaki seminar and encouraged me to come. I wasn’t really a “Seminar person” and that wasn’t the way I liked to spend my Saturdays but for some reason I reluctantly agreed.

When the seminar started I didn’t really know what to expect, but by the end of it I remember being blow away. Robert didn’t share any specific strategies or “get rich quick” ideas. He just explained how rich people see the world and it was a complete paradigm shift. My mind was completely opened up and it was like I saw the world for the first time. Everyone that attended got a free cassette tape (yes a cassette, this was the year 2000). I played it in the car on the way home and then continued to play his other tape sets and read all his books.

When I reflect there were a 3 key lessons I got from Robert Kiyosaki that lead me to where I am today.

Lesson 1: Be on the right side of the cashflow quadrant

I think the vast majority of people on bigger pockets are familiar with the quadrant so I won't go into detail about it. 

Essentially Roberts message is that you want to be in the B and I quadrant. 

The B quadrant was where you create a real business. By a real business I mean that you create a system that makes you money whether you are working in it or not. If you can’t go on holidays for 12 months and come back to find that your business not only survived but thrived without you then you are actually Self Employed not a business owner. This quadrant gives you a lot of leverage as the system is not dependent on you which means it can scale to great heights. The tax benefits of having a business are also significant as there are lots of incentives in the tax code to encourage investment and the creation of jobs.

The I quadrant is made up of investors who use money to make money. Perhaps you invest in rental properties that produce an income stream, or invest in businesses that pay dividends. This quadrant obviously provides a lot of leverage. Even if you are primarily in the E, S or B Robert believed that everyone should be in the I quadrant to create financial freedom.

So how do this lesson shape me?

I didn’t graduate from University until 2002 so I had 2 years to let this lesson sink in. When I graduated I made the decision to not get a job but to start my own business. I knew that I would initially be in the S quadrant but had the vision of creating systems and processes to move me into the B quadrant. To this day I have never had a full time job working for somebody else. I was able to make that transition to the B quadrant and actually left operations of the company that is about to IPO 2 years ago. I am able to sit on the other side of the world and watch the business grow and now IPO and not have to be responsible for anything in the company.

Lesson 2: Use the cashflow from your business to buy property

Real Estate is a great way to accumulate assets that put you in the I quadrant. This cashflow creates financial freedom as you can make money while you sleep. The long term nature of the asset and the equity build up creates generational wealth. It is not a get rich quick strategy, cause lets face it, those things never work. It is a get rich slow strategy. But slow and steady wins the race. If you can have your business feed you and provide cash to buy property, over time you won’t be reliant on the business and your grandchildren will thank you.

So how do this lesson shape me?

When I was starting to make good money from my business (Disclaimer: this did take awhile) I started to acquire rental properties. I found properties that would cashflow so the tenants paid down the mortgage. I build a portfolio of 6 rental properties spread over 3 states in Australia. When I left operational capacity of the business I took 6 months off with my family in New Orleans, Louisiana. When I figured out how much better the property market was in the USA (And how much my family loved New Orleans) we made the decision to start a whole new business around buying houses in New Orleans. I am still in the Self Employed stage of that business but have my first staff member starting next week with a clear plan that turns this into a B quadrant business.

Lesson 3: You make money by selling shares, not buying them

This lesson always stuck out to me. Robert taught me that buying shares is not a great way to make money. He said that wealthy people just sold shares. It took me awhile to figure out what he was trying to say. He was saying that real wealth comes when you build a business that is so valuable that you can sell shares that you never you bought. He was talking about IPOing a company. The shares you create as an entrepreneur who builds a business are based on the system that you built. When you sell those shares the profits are amazing because there is no cost base.

So how do this lesson shape me?

This was always my ultimate goal of deciding not to get a job and start a business. In a few hours I will see that goal fulfilled with the IPO of the company that my partners and I built (Ticker of the ASX). This is a huge milestone for me and I almost need to pinch myself to make sure I’m not dreaming. I come from a middle class family so this isn’t something I grew up around. It was honestly that seminar in 2000 that shifted my whole life onto this trajectory. What I would like you to take from this is never pass up an opportunity to go out of your comfort zone and learn something new. I could have easily not accepted my friends invitation to attend Roberts Seminar and I would be in a completely different space. Say yes to opportunities and keep your mind open to learn something new. I think most people here would have read Rich Dad Poor Dad and probably the Cashflow Quadrant. But for heavens sake don't stop there. I encourage you to read every one of his books and listen to his podcast. He will bend your mind so far if you go on the full journey. 

Endnote

When I left operational capacity and my company 2 years I took a year off because that's what he did when he sold his first business. I had sold some shares when we took on investment and he talks about taking the year off when you exit a business in Retire Young, Retire Rich (I repeat, read ALL his books). While on that break I attended the New Orleans Investment Conference and got to meet him and tell him my story. It meant a lot for me to share it with him but what hit me the most was there was 100 other people clambering around him to tell him very similar stories. I thought I was special and to him I was a dime a dozen. That made me happy though as I can see how many people he has helped find financial freedom. You hear on the Bigger Pocket podcasts when the majority of guests mention his books. 

This is me thanking Robert in 2018