“Besides the left side being risky, people on that side pay to take that risk,” said rich dad.
“What do you mean?” I asked. “Doesn’t everyone pay to take risks?”
“No,” said rich dad. “Not on the right side.”
“Are you trying to say that people on the left side pay to take risks, and people on the right side get paid to take risks?”
“That’s exactly what I mean,” said rich dad, smiling. “That is the biggest difference between the left side and the right side. That is why the left side is riskier than the right.”
“Can you give me an example?” I asked.
“Sure,” said rich dad. “If you buy shares of stock in a company, who takes the financial risk? You, or the company?”
“I guess I do,” I said, still puzzled.
“And if I’m a medical insurance company and I insure your health and take on your health risk, do I pay you?”
“No,” I said. “If they insure my health and they take that risk, I pay for it.”
“That’s right,” said rich dad. “I have yet to find an insurance company that will insure your health or accident risk and pay you for that privilege. But that’s what people on the left side do.”
I understand the concept here, however what about when someone starts a small business and invests their own money? They are taking a risk and also paying for it. So is the rich dad recommending that one starts a business using someone else's money?
“What do you mean?” I asked. “Doesn’t everyone pay to take risks?”
“No,” said rich dad. “Not on the right side.”
“Are you trying to say that people on the left side pay to take risks, and people on the right side get paid to take risks?”
“That’s exactly what I mean,” said rich dad, smiling. “That is the biggest difference between the left side and the right side. That is why the left side is riskier than the right.”
“Can you give me an example?” I asked.
“Sure,” said rich dad. “If you buy shares of stock in a company, who takes the financial risk? You, or the company?”
“I guess I do,” I said, still puzzled.
“And if I’m a medical insurance company and I insure your health and take on your health risk, do I pay you?”
“No,” I said. “If they insure my health and they take that risk, I pay for it.”
“That’s right,” said rich dad. “I have yet to find an insurance company that will insure your health or accident risk and pay you for that privilege. But that’s what people on the left side do.”
I understand the concept here, however what about when someone starts a small business and invests their own money? They are taking a risk and also paying for it. So is the rich dad recommending that one starts a business using someone else's money?
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