Who Wants to Be an Entrepreneur?


May 19, 2006 — -- How easy is it to make money? If someone handed you $1,000 and gave you 20 days to turn a profit, would you have any idea where to start? "20/20" challenged three would-be entrepreneurs to find out. To give them guidance we brought in famous get-rich guru Robert Kiyosaki to offer them his secrets for money-making success.

Kiyosaki is one of the hottest financial advisers today. His 18 books have sold some 26 million copies. The first title in the "Rich Dad, Poor Dad" series has been on The New York Times Best Seller List for five years, and has sold more than 11 million copies.

Kyosaki says his books can put ordinary people on the fast track to a life like his -- working for themselves, not someone else. He says there are four basic types of people: workers, small-business owners, investors and entrepreneurs. If you want to make money, Kyosaki says, invest in real estate or start a business. "I don't like being told what to do and kissing you know what to get up the corporate ladder," he said.

But does Kiyosaki's method -- short on specifics but long on pep talks and salesmanship -- work? We decided to put the guru to the test with our would-be entrepreneurs: Cheryl, an ad sales rep and amateur theater stage manager from Queens, N.Y.; Julie, a store construction coordinator and new mother from Minneapolis, Minn.; and James, a father of four and school counselor from Tulsa, Okla.

The three came to New York for a crash course from the master.

Kiyosaki personally challenged the contestants: "I want to find out who among you has the most potential of becoming a great entrepreneur," he told them.

The objective was simple: Take $1,000 in cash and see who could make the most money in 20 days.

Here were the ground rules: Choose any venture, as long it's legal and ethical, and don't tell anyone it's being done for a TV program. Any profits they make, they could keep.

Kiyosaki was careful to lower expectations. He told "20/20" he wouldn't be surprised if all three of the contestants failed to make a profit or even lost all their money.

"I hate to say it, but nine out of 10 do fail. The thing I always say to people is this: If you avoid failure, you also avoid success."

With the clock ticking, all three went to work. Cheryl decided on party planning, throwing a fundraiser for a nonprofit theater company. She used its mailing list, in return, for a split in the profits.

Halfway across the country, James had a direct, simple plan. "What I'm going to do is buy boxes of candy, put it into jars and sell it for a profit," he said.

He, too, chooses charity as a selling tool, promising customers he'll split any profits with the Tulsa public schools.

Julie from Minneapolis is off to a much slower start. The entire first week ticks by as she struggles for an idea. Finally, she begins the second week with a decision.

"I'm going to go into over-the-counter medical vending," she said.

She spends our $1,000, and then adds another $1,000 of her own money to buy 10 vending machines that sell small packets of aspirin and other drugs. The machines are only in a brochure; she has to start making sales calls without a product to show. She is in trouble.

Before the contestants know it, the 20 days are half over, and "20/20" asks Kyosaki to give each a midterm checkup. None of the contestants have any real cash in their hands yet.

Julie's up first, and Kiyosaki is not sympathetic.

"When do you expect these vending machines to come in? Because you have a deadline," he says.

Her answer is not good. "I think they will come next week."

Kiyosaki says Julie is out of time already, and will not recover before the contest is up.

"You're going to lose this whole thing," he tells her.

It's then that Julie points out the most frustrating part of the exercise: Kiyosaki never gives the contestants any detailed help.

"I still wish I had more information on how to sell better," she says.

It's not much better for James, the recipient of the next checkup phone call. He is making money, but he is giving it away to charities almost as fast as he collects it.

Kiyosaki is flabbergasted. "You're giving the money away," he asks, adding, "Now why are you doing that? You can't take care of charity unless you take care of yourself first."

Back in New York City, party planner Cheryl also gets a stern warning from Kiyosaki. "I would say right now you have an emergency on your hands. And I would start promoting heavily because this is the last shot you got," he says.

Cheryl takes the pep talk to heart and steps it up, inviting friends and imploring them to bring others.

While she is stressed when her party starts out dangerously slow, by night's end Cheryl brings in a profit.

So how did they do? Julie's reckoning comes first. The vending machine business never got off the ground. She lost our $1,000 and $1,000 of her own and didn't sell any machines before the deadline.

Kiyosaki criticized Julie for being unrealistic.

"You have to deliver on time and you have to come within budget," he tells her.

Then came James. He actually made a $540 profit. Again, however, he gave it all away. Kiyosaki was unimpressed. "You gave away 100 percent of it? Pay yourself first. If the business is weak, everything else loses," he says.

And that brings us to the winner of our little contest: Cheryl.

Her party turned out to be a moderate success and left her with a profit of $243.

Two out of the three contestants actually made a profit. So how did Kiyosaki do? Was he much help?

Julie was not convinced. "All he does is, I guess, open your mind to the possibility. He doesn't tell you how to do it," she says.

So we asked Kiyosaki straight up: In your books and in your speeches, the seminars, you're not really giving a road to follow these things and you'll become rich?

His answer was straight too. "No," he says.

He's a motivational speaker, hoping to educate novices in the world of business -- not a strict how-to-get-rich guy.

And what did he teach our contestants? Kiyosaki says they learned to fail. He says they also learned that desire is 99 percent of the process.

But doesn't everyone want to get rich? Aren't there specific instructions in his books?

"I try and tell them that there is no answer, there's only a mistake. When I lost my first company at the age of about 29, it was painful. But, in retrospect, it was the best thing that ever happened to me because that's when I really learned what I needed to learn."

Which led to my final question for the biggest self-help book salesman in the United States today.

If I read your books, what am I going to come away with that's going to help me get rich?

His answer: "Start a part-time business and make as many mistakes as you possibly can while you still have your daytime job."

Which begs the question: Does anyone really need 18 books to learn to fail?

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