The 90/10 Riddle
In February of the year 2000, I was working with a group of very bright
graduate students at Thunderbird University, The American School of
International Management. During the three hour session I asked one of the young
students, “What is your investment plan?”

Without hesitation he replied, “When I graduate I will find a job that pays me
at least $150,000 a year and begin putting aside at least $20,000 a year to buy
investments.”

I thanked him for his willingness to share his plan with me. Then I said, “Do
you remember me discussing my rich dad’s 90/10 principle of money?”

“Yes,” said the young man with a smile, knowing that I was about to challenge
the way he was thinking. He was enrolled in the entrepreneurship program of this
very prestigious school where I was a guest instructor. By now, he knew my style
of teaching was not to give students answers. My style was to challenge core
beliefs and ask students to evaluate old thought patterns. “What does the 90/10
principle of money have to do with my investment plan?” he asked cautiously.

“Everything,” I replied. “Do you think your plan of finding a job and investing
at least $20,000 a year will put you in the category of the 10% of investors that
make 90% of the money?”

“I don’t know,” he replied. “I never really thought about my plan with that
benchmark inmind.”

“Most people don’t,” I replied. “Most people find an investment plan and
think it is the only investment plan or the best investment plan, but few compare
their plans to other plans. And the problem is, most people will not find out if their
plan was the right plan until it’s too late.”

“You mean the average investor is investing for retirement and will not find
out if their plan worked or not until they retire?” asked another student in the
class. “They’ll find out when it is too late.”

“For many people my age that will be true,” I replied. “Sad but true.”

“But isn’t the idea of finding a high paying job and putting $20,000 a year
away a pretty good plan?” asked the student. “After all, I’m only 26 years old.”

“A very good plan,” I replied. “Definitely putting away more money than the
average person and starting young with that much money will probably make you
a very rich man. But my question is, ‘Will your plan put you in the 90/10 league of
investors?’”
“I don’t know,” said the young man. “What would you advise?”

“Do you remember me telling you the story of walking along the beach with
my rich dad at the age of 12?” I asked.

“You mean the story of you wondering how he could afford such an expensive
piece of real estate,” another student replied. “Your rich dad’s first big investment
and his first move into the world of bigger investments?”

I nodded my head and replied, “That’s the story.”

“And that story has to do with the 90/10 rule of money?” asked the student.

“Yes it does. It applies because I always wondered how my rich dad could
acquire an asset so big even though he had very little. So after asking him how he
did it, he gave me what he called the 90/10 riddle.”

“The 90/10 riddle?” replied one of the students. “What is the 90/10 riddle and
what does it have to do with my investment plan?”

With that question, I turned, walked to the chalk board, and drew the
following diagram. “This is the 90/10 riddle.” I said.



“That’s the 90/10 riddle?” asked the student. “All it looks like is a financial
statement without any assets in it.”

“And it is. So this is the question that completes the riddle,” I said with a grin,
watching the students’ faces to see if they were still with me.
After a long pause on my part, one of the students finally demanded, “So give
us the question.”

“The question is,” I said slowly, “How do you fill your asset column without
buying any assets?”

“Without buying any assets,” replied the student. “You mean without any
money?”

“More or less,” I replied. “Your investment plan for putting $20,000 a year
aside to invest with is a good idea. But my challenge to you is: Is the idea of
buying assets with money a 90/10 idea, or is it an average investor idea?”

“So you’re saying to create assets in the asset column instead of buying the
assets with money, which is what most people do.”

I nodded my head. “You see, this diagram, the diagram I call the 90/10 riddle
is the riddle that my rich dad would challenge me with on a regular basis. He
would ask me for my ideas on how I could create assets in the asset column
without buying them with money.”

The students were silent looking at the riddle on the chalk board. Finally one
turned and said, “Is that why you often say, ‘It doesn’t take money to make
money?’”

I nodded my head and replied, “You’re catching on. Most people in the 90%
who own the 10% often say, ‘It takes money to make money.’ Many often give up
on investing if they do not have any money.”

“So your rich dad’s 90/10 riddle was to give you a blank asset column and ask
you how you would fill it with assets without having to buy the assets.”

“Constantly. After I came back from Vietnam, he would routinely have a
lunch or dinner with me and ask me for new ideas on how to fill the asset column
by creating assets instead of buying assets. He knew that is how many of the
ultra-rich got rich in the first place. That is how Bill Gates, Michael Dell, Richard
Branson all became billionaires. They did not become billionaires by looking for a
job and putting a few dollars aside.”

“So you’re saying the way to become rich is by being an entrepreneur?”

“No, I am not saying that. I just use those examples because you are all in the
entrepreneurship program at Thunderbird University. The Beatles became
ultra-rich by creating a different kind of asset, none-the-less they created assets
that still pay them money today. All I am saying is that rich dad put this financial
statement with a blank asset column in front of me on a regular basis and asked me
how I would create assets inside the asset column without having to spend money
to acquire them. He began giving me this 90/10 quiz when I asked him how he
found the power to acquire a piece of the most expensive beach front land without
any money.”

“So he said his business bought the land,” another student chimed in.

“As I said, that is one way but there are many ways you can create assets
inside an asset column without buying them. Inventors do it by inventing
something of great value. Artists paint paintings that are priceless. Authors write
books that pay them royalties for years. Creating a business is the way an
entrepreneur does it, but you don’t have to be an entrepreneur to create an asset
inside the asset column. I’ve done it with real estate without using any money. All
you have to do is be creative and you can be rich for life.”

“You mean I can invent something with new technology and become rich?”
asked one of the students.

“You could, but it does not have to be an invention or new technology,” I said,
pausing for awhile. “It is a way of thinking that creates assets and once you have
that way of thinking you will be richer than you ever dreamed possible.”

“What do you mean it doesn’t have to be a new invention or technology?
What else could it be?”

I said, doing my best to make my point, “Do you remember the story in my
book, Rich Dad Poor Dad, the story of the comic books?”

“Yes,” said one of the students. “The story of your rich dad taking away your
10 cents an hour and asking you to work for free after you asked for a raise? He
took away the 10 cents because he did not want you to spend your life working for
money.”

“Yes, that story.” I replied. “That is a story about filling the asset column with
an asset without buying the asset.”

The students stood quietly for awhile thinking about what I had just said.
Finally one spoke up and said, “So you took old comic books and turned them into
assets.”

I nodded my head. “But were the comic books the asset?” I asked.
“Not until you turned them into an asset,” replied another student. “You took
something that was being thrown out as trash and turned it into an asset.”

“Yes but were the comic books the asset or were the comic books merely the
part of the asset you could see?”

“Oh,” another one of the students jumped in. “It was the invisible thought
process that created the comic book into the asset that was the real asset.”

“That is how my rich dad saw it. He later told me that the power he had was
his thinking process. It was a thinking process that he often jokingly called,
‘Turning trash into cash.’ He also said, ‘Most people do exactly the opposite and
turn cash into trash. That is why the 90/10 rule holds true.’”

“He was like the ancient alchemists,” said one of the students. “The alchemists
who searched for the formula to turn lead into gold.”

“Exactly,” I said. “The people who are in the 90/10 grouping of money are
modern day alchemists. The only difference is that they are able to turn nothing
into assets. Their power is the ability to take ideas and turn them into assets.”

“But as you say, many people have great ideas. They are just not able to turn
them into assets,” said a student.

I nodded my head. “And that was my rich dad’s secret power I saw that day on
the beach. It was that mental power or financial intelligence that allowed him to
acquire such an expensive piece of real estate, while the average investor would
walk away from it, saying ‘I can’t afford it,’ or ‘It takes money to make money.’”

“How often did he give you the 90/10 quiz?” asked a student.

“Very often,” I replied. “It was his way of exercising my brain. Rich dad often
said that our brains are our most powerful asset and, if used improperly, they can
be our most powerful liability.”

The students were silent, I assume contemplating and questioning their own
thoughts. Finally the original student, the student whose plan it was to put the
$20,000 dollars a year away, said, “So that is why in your book Rich Dad Poor
Dad, one of rich dad’s lessons was that the rich invent their own money.”

I nodded my head and said, “And lesson number one of the six lessons was
‘the rich don’t work for money.’”

Again there was silence from the young students before one then said, “So
while we are planning on getting a job and saving money to buy assets, you were
taught that your job was to create assets.”

“Well said,” I replied. “You see the idea of a ‘job’ was created in the
Industrial Age and ever since 1989, we have been in the Information Age.”

“What do you mean the idea of a job is an Industrial Age idea?” one student
asked with a start. “Humans have always had jobs, haven’t they?”

“No, at least not in the way we know of a job today. You see, in the
Hunter-Gatherer period of humanity, humans lived in tribes and each person’s job
was to contribute to the communal survival of the tribe. In other words, it was all
for one and one for all. Then came the Agrarian Age, the era when there were
kings and queens. A person’s job during that period was to be a serf or a peasant
who paid the king to work the land the king owned. Then came the Industrial Age
and serfdom or slavery was abolished and human beings began selling their labor
on the open market. Most people became employees or self-employed, doing their
best to sell their labor to the highest bidder. That is the modern concept of the
word ‘job.’”

“So the moment I said I’m going to get a job and put $20,000 away a year, you
see that kind of thinking as Industrial Age thinking.”

I nodded my head. “Just as today there are still Agrarian Age workers that are
known as farmers and ranchers. Today there are still hunter gatherers, commercial
fishermen for example. Most people are working with Industrial Age ideas and
that is why so many people have jobs.”

“So what would an Information Age idea of work be?” asked a student.

“People who do not work because their ideas are at work. Today, there are
students who are much like my rich dad who are going from school to becoming
rich without a job. Look at many of the Internet billionaires. Some of them
dropped out of college to become billionaires without ever having a formal job.”

“In other words, they started with an empty asset column and filled it with a
very big asset, an Information Age asset,” added one of the students.

“Many built multi-billion dollar assets,” I said. “They went from students to
billionaires and soon there will be high school students who will go from high
school students to billionaires without ever applying for a job. I already know of
one that is a millionaire without ever having a job. After reading my book and
playing my games, he bought a large piece of real estate, sold off a section of
vacant land, kept the apartment house, and paid off his loan with the money from
the land. He now owns the apartment house which is worth a little over a million
dollars and has cash flow of $4,000 a month income without working. He will
graduate from high school in about a year.”

The students stood silently again thinking about what I just said. Some had a
hard time believing my story about the high school student, yet they knew the
story of college drop outs becoming billionaires was true. Finally one spoke up,
“So in the Information Age people are getting rich with information.”

“Not just in the Information Age,” I replied. “It has been this way throughout
the ages. It is the people who do not have assets who work for, or are controlled
by, those people who create, acquire, or control the assets.”

“So you’re saying a high school kid could beat me financially even though he
does not have a great education from a prestigious school, or a high paying job,”
said the first student.

“That is exactly what I am saying. It’s a matter of the way you think more than
your education. Best selling author of The Millionaire Next Door Thomas Stanley
in his latest book The Millionaire Mind states that his research found no
correlation between high SAT scores, good grades and money.”

The student with the $20,000 a year investment plan then said, “So if I want to
join the 90/10 club I am better off to practice creating assets instead of buying
assets. I should be creative rather than do what everyone else does, when it comes
to acquiring assets.”

“That is why billionaire Henry Ford said, ‘Thinking is the hardest work there
is. That is why so few people engage in it.’” I replied. “It also explains why if you
do what the 90% of investors do you will join them in sharing only 10% of the
wealth.”

“Or why Einstein said, ‘Imagination is more important than knowledge,’”
added another student.

“Or why my rich dad gave me this tip when hiring an accountant. He said,
when you’re interviewing an accountant ask him or her, ‘What is 1+1?’ If the
accountant answers ‘3’ don’t hire the person. They’re not smart. If the accountant
answers ‘2’ you also don’t hire them because they are not smart enough. But if the
accountant answers, ‘What do you want 1+1 to be?’ You hire them immediately.”

The students laughed as we began packing up our materials. “So you create
assets that buy other assets and liabilities. Is that correct?” asked a student.
I nodded my head.

“Do you ever use money to buy other assets?” asked the same student.
“Yes, but I like to use money generated by the asset I create, to buy other
assets,” I replied, picking up my briefcase. “Remember that I don’t like working
for money. I’d rather create assets that buy other assets and liabilities.”

A young student from China gave me a hand with my bags and said, “And is
that why you recommend network marketing so much? For very little money and
risk, a person can build an asset in their spare time.”

I nodded my head, “A worldwide asset they can pass on to their kids if their
kids want it. I don’t know of too many companies that will let you pass on your
job to your kids. That is one test of an asset, the test if you can hand it on down to
the people you love. My dad, the man I call my poor dad, worked very hard to
climb the government ladder. Even if he had not been fired, he would not have
been able to pass on his years of hard work to his kids, not that any of us wanted
the job or were qualified to take the job anyway.”

The students gave me a hand out to my car. “So think about creating assets
rather than working hard and buying assets,” said the $20,000 dollar student.
“If you want to get into the 90/10 club,” I replied. “That is why my rich dad
constantly challenged my creativity to create different types of assets in the asset
column without buying them. He said it was better to work years at creating an
asset rather than to spend your life working hard for money to create someone
else’s asset.”

The $20,000 dollar student then said as I climbed into my car, “So all I have to
do is take an idea and create an asset, a big asset, that makes me rich. If I do that I
will solve the 90/10 riddle and join the 10% of all investors that control 90% of
the wealth.”

Laughing, I pulled my door shut and replied to his last comment, “If you solve
the 90/10 riddle in real life, you will have a good chance of joining the 10% that
control 90% of the money. If you don’t solve the 90/10 riddle in real life, you will
probably join the 90% that control just 10% of the money.” I thanked the students
and drove away.