cc: file, Tony Hafen, Pauline Nelson via mail, Sara and Des Penny, and Maxine Shirts
"When I was in Austin last Saturday, Sara left me in her living room alone for a few minutes while she took a shower. I went to the bookshelf, and saw a book which looked interesting. There were two copies, one for her and one for her room mate Mary. The book is `Rich Dad, Poor Dad.' I borrowed it, and read it by Tuesday night. Each of you should read it. I had Andrea buy two copies, and I've distributed these copies to folks I think should read it. Sara, I'm keeping yours at the house until we see you next. Andrea is going to read it.
Maybe it is because I have spent so much time over the last 10
years building IDEF Models (see ../9803.html, ../9827.html,
../9839.html, ../9844.html, ../9850.html, ../9851.html,
../9945.html, ../9951.html, ../0036.html, ../0039.html,
../0102.html, ../0138.html, ../0139.html, and ../0149.html),
and whatever the reason, the simple boxes and lines that
Robert T. Kiyosaki illustrates his book with make a lot of
sense to me. Therefore, I have redrawn three of them in
black and white (note they are a negative image of those in
the book) and annotated them to illustrate why they make so
much sense to me. The drawings start with his representation
of the Income Statement - Balance Sheet, as shown to the right 
. I have
put together Family BS files for years, and considered them
of about as much value as the material left in the corrals
in back of Nelson Meat Packing Plant. Bankers like them,
and they use them to justify letting someone buy a house,
like 1307 Emerald Green, using an American Express credit
card to make the down payment and closing costs. Bankers
look at changes in the BS every year, and use that as a basis
for determining my worth as an individual. In case you can't
recognize the sarcasm reeking through these words, it's there.
Maybe the key fact is whether the material is put into a
manure spreader and distributed across the farm to provide
fertilizer to the hay fields, one of the farm assets.
The thing I never put together, not getting my MBA, not in starting and leaving Landmark Graphics, not in all of the headaches with HyperMedia Corporation's failure, not in all of my discussions with bankers, was what this first diagram shows so clearly. Namely, our house, 1307 Emerald Green, is not a financial asset because it does not generate cash flow. It is a financial liability because it takes immense amounts of cash, both in house payments, maintenance, and taxes. Does this mean the house is not an asset? Of course not. And the way it is an asset is emotional. I have always felt rooted, because the house I grew up in has always been there. And I wanted to provide that same kind of rooting for my family, and so I have made significant sacrifices over the years to pay Ken Turner to make paintings of our house, and to keep the house, when there have been good financial reasons to let it go and to move on. Note, these are my issues, and for the most part I don't see that it has been the same kind of a factor for you kids it was for me.
Heather, I think you were expressing feelings of being cut off from this type of spatial emotional roots as we drove through American Fork one time and you talked about your home there, and as you have talked about your Mom moving out of the house on 580 West in Cedar City. This is why I have in my mind my Ken Turner painting for you will be a 360 degree painting of 580 West showing the house you grew up in and Grandpa and Grandma's house. And we will hopefully talk about it before we start that project.
It is amazing how a simple concept can open my mind, and how I have missed what teachers and advisors have been saying for years, because it was clouded over in too many words and too much jargon. One of the things I realize after reading `Rich Dad, Poor Dad' is I have very few assets, and a lot more liabilities than I thought I had. My stock in Walden 3-D, Dynamic Resources, HyperMedia Corporation, vPatch, C.E.S., Dynamic Oil & Gas, and Heritage Galleries On-Line, really doesn't count as an asset, specifically because it doesn't provide cash. The cars and the house don't count as assets. Nor do the books, nor paintings, nor tapes, nor musical instruments, nor computers, nor cell phones, nor indian pots, etc. In fact, the only thing I have that has sometimes met this requirement of an asset is my lifetime Landmark Graphics licenses. Of course, the goal of Dynamic Resources is to get ORRI (Over Riding Royalty Interest) or Production Bonuses from oil and gas fields I help discover, and those certainly count as assets. So it will be interesting to see if I can put this new insight to work or not.
The second concept catching my attention was related to
cash flow, as shown to the right 
. As stated at the bottom of
the drawing, my cash flow has been typical middle class.
I don't actually put much in the asset column, although
I have thought I have been, with IP (Intellectual
Property), stock from companies I started or helped
start, and oil and gas deals or opportunities. You each
know I am very entrepreneurial. Maybe you don't realize
the key to entrepreneurship is cash flow. Cash is king,
and knowing when the cash is coming in, how fast you
can grow, and when you are going to be squeezed is key.
The issue the book points out is that cash has gone to
pay everyone else before paying me, and this is not the
way to create value. I found it interesting the guy
referred to his best friend, and the biological son of
his `Rich Dad' as someone who paid tithing. Tithing
teaches this principle.
I was talking to Riley the middle of this week, and brought up the book. He said, `I've heard of him, in fact I've listened to a couple of his tapes. You know, Roice, I think he's a Mormon.' I chuckled, thinking about the line in the movie `Single's Ward' where it says, `Did you know xyz and abc were members.' So even though I have always been 100% faithful in paying tithing, the key I obviously haven't learned, which hopefully each of you will learn before you get anywhere close to my age, is to use the cash flow to purchase assets. As it says in the book, the key is to pay yourself first. I've been so busy taking care of everyone else's financial needs, I haven't really focused on our savings account, and particularly I have not focused on the collection of assets.
All of this leads up to the cash flow pattern of those
who pay themselves first. This is the third attachment, image the left
, where PSF is Pay Self First). The
first thing to note about this pattern is the
difference between one's profession (mine is geophysics,
Ben's is accounting and business development, Roice's
is software development, Melanie's looks like it is
going to be scrap booking, etc.) and one's business.
A large portion of this short book is written around
the idea of coming to understand the difference between
your profession and your business. The example he uses
is the founder of McDonalds. His profession was
selling hamburger franchises. His business was real
estate. It points out McDonald's owns more real-estate
than the Catholic Church.
Notice on the drawing note I say that my business is 3-D cities. So my thought processes this week, since reading the book, have been, `How are 3-D cities an asset?' We did nice designs for Maudeen Mark's ranch, for the riverbend outside of Columbus, for Dad's farm, for Shirts' Canyon, for the Hurricane property, and none of these projects went beyond the conceptual stage. Why?' And after a discussion with Riley, I'm coming to the conclusion, I need to recognize I'm actually in the Real Estate business. Certainly the key to making Dynamic Resources work is to own a specific piece of property where there is an opportunity to drill a well. As long as I keep talking about 3-D cities as my business, it really isn't going to go anyplace until there is a specific piece of property and there are efforts to turn the conceptual (virtual) stuff we have been working on so long and so hard into reality.
And as I think about my struggles to recognize the difference between my profession (paycheck) and my business (what is referred to as essence in the book `Project Mind'), I think about how each of the 10 of you are going to go through that same struggle over the coming months, years, and decades. I love you guys and gals, and do not want to see you struggle, and hopefully some of these words will prove to be of some benefit in helping you to find an easier path than I have found. Life isn't for sissies! Sara, thanks for letting me borrow the book. And each of you, when you find something interesting, share it. Don't wait for me to rummage through your bookshelves.
As far as how my week went, it started as a real bummer and kind of floated up and down after that. It hurt a lot Rob canceled his birthday dinner with me because he didn't want to go anywhere alone with me. Melanie, Sara, or Ben, maybe when you are in town next he will go out with you and me. I had a nice lunch at River Oak's Country Club's Men's Grill on Tuesday. It was with two of the principals at Frontera Energy and John Dorrier of Gulfsands Petroleum. Matt, I think it is really neat this connection occurred because you were wearing your Texan's Football cap in the hotel in Beijing. I'm not sure where this conversation will lead, and it was interesting. Time will tell. Tuesday evening Sandi Brown came over to seek some advice on her career plans. I spent Wednesday putting together a business plan based on our conversation. If any of you are interested in looking at it, it is at http://www.walden3d.com/w3d/NBPandT. Sandi wasn't interested as it is too much risk for where she is.
Thursday I went took the business plan and met with Laura Hullman, Brad Macurda's assistant. At the GCAGS in Austin last week (0244.html), Brad told me he is cutting back, and I had asked him if Laura would be interested in helping Roger Anderson, myself and some others start teaching schools on a regular basis, in order to turn some of our IP (Intellectual Property) into an asset generating cash. She is thinking about it, and probably will not be interested. Oh well! Friday I met with David Archer, President of POSC (PetroTechnical Open Software Foundation) and Dennis McMullin and gave them the same spiel. They were more interested, and it will be interesting to see where all of this goes.
Matt had an LDS Camporee on Friday night, and he didn't want me to go with him, so I stayed home. David spent the night with Kyle, and it was one of the first times since we have been married where there were no kids home. We watched a western movie, and I carved on my piece of ebony we brought back from Nigeria. I'm making a landscape I call `The Black Sands of Taranaki.' Taranaki is the big volcano at the southern end of the north island in New Zealand, where I did a bunch of work for Fletcher Challenge Petroleum.
Also, I had collected a bunch of thermally altered sandstones when we were at Big Bend National Park on the High Adventure (0222.html). I was invited to sing for Michael Cahoon's Eagle Court of Honor on Sunday evening, and so I decided to make a plaque for each of the 6 adults and 12 youth that went with us. Andrea and I went to Hobby Lobby and bought the supplies. I ended up going back 4 times by the time I finished on Saturday night. They turned out very nice. Gary Jones is the Young Men's President these days, and he and the other leaders decided to save them to give out at a later date, which makes sense to me to not distract from Mike's evening. David Moore built a couple of powerpoint files on the Macintosh of digital photos from the mud fight and from Big Bend, which became part of my `MTV video performance at the court-of-honor on Sunday evening.
Saturday night Andrea and I watched the uncut version of `Saving Private Ryan' which was shown on ABC. I remain convinced R-Rated movies are not good to go to, and yet I must admit, I was not very phased by either the language nor the gory parts of this movie. The differences compared to Nelson Meat Packing Plant was the movie represented what happened to human bodies. However, the blood and guts and language were no different, and, in a movie kind of way, were much milder than what I grew up with on Mondays, Tuesdays, and Wednesday mornings of most weeks of the summer between my 12th and 19th birthdays. I'm sure this experience is a key reason I love life and attempt to live a full life. I'm glad you kids have not had to experience anything like this. Yet as I read about the nuclear and military preparedness of countries like North Korea, and read Old Testament writings about the last days and prophecies of dead bodies piled up and wild animals feeding on them for over a year, I fear some of my descendants will see and experience worse things than even I can imagine. Never take our freedoms for granted.
Sunday was busy, and this is why I didn't get around to making my calls until after 9:00, and thus talked mostly to message machines. Church was the best Sacrament Meeting of the year: the Primary Program. There were several Grandparents in attendance, and I'm looking forward to driving over to Vidor, or use this as an excuse to visit some of you in the future. After church we invited Ron and Debbie Thompson over for lunch. They are moving here from Bartlesville as part of the ConocoPhillips Merger, and I worked with Ron in the past. I left before lunch was over to go to my first Activities Committee Meeting with the Carons, new members of the Activities Committee. They are very excited to be on the committee, and the Ward Christmas Party on December 6th is going to be much better thanks to their contribution.
I left the Caron's house, picked up the guitar and Andrea, and went to Michael Cahoon's Eagle Court of Honor. Reynolds had asked me to do like I did for Adam Salt, and it was harder because Mike only went on one campout where I wrote a song, where as Adam went on five, and I sang four of those songs. So I sang `Digital Camera,' about a campout Mike was invited to attend and didn't while David showed photos of the mud wrestling (0218.html), which was only connected because he did not participate in it either. Then I sang `The First Prayer' to acknowledge the personal conversion experience Mike had earlier this year. Then I sang the song I wrote at Big Bend (0222.html). I closed with a song about Mike's future as a missionary. It was written by a missionary in my mission and is called `The Prophets,' which I wrote out in the Thoughtlet: GroceryWorks.com (../0020.html). I started out attempting to give a different perspective to scouting and the church. Michael's father's name is Reynolds Cahoon, exactly the same as one of his ancestors who played a prominent role in the early church and is referenced several times in the Doctrine & Covenants. In addition, we had scout descendants of Hyrum Smith (Matt) and Parley P. Pratt (John and Jordan Turner) in the audience. I believe Reynolds, Hyrum, and Parley (if I can be so bold as to use first names) each participated in Zion's Camp, which I labeled as the first scout campout of this dispensation. I also pointed out how missionaries from England brought the scouting program to Utah, and that the first scout troop in the United States was in Farmington, Utah. Of course, the highlight for most of those attending was not the Eagle Award, nor the program, rather it was the wonderful refreshments, the ultimate liability for both a Rich Dad and a Poor Dad.
We got back to the house just in time to change out of my scout uniform and to go back down for Stake Choir practice. Thus it was about 9:30 before Andrea and I started making any calls to you kids. Hopefully, even when we don't connect with a phone call, you each know how much you are loved and missed. Hopefully some of these words are useful, whether we talk or not, and hopefully they will pass on some of the lessons of a former and future Rich Dad, who thinks he knows what it means to be a Poor Dad."