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One of the most frightening days of my life was the day I quit my job and officially became an entrepreneur. On that day, I knew there were no more steady paychecks, no more health insurance or retirement plan. No more days off for being sick or paid vacations.

One of the most frightening days of my life was the day I quit my job and officially became an entrepreneur. On that day, I knew there were no more steady paychecks, no more health insurance or retirement plan. No more days off for being sick or paid vacations.

On that day, my income went to zero. The terror of not having a steady paycheck was one of the most frightening experiences I had ever experienced. Worst of all, I did not know how long it would be before I would have another steady paycheck... it might be years. The moment I quit my job I knew the real reason why many employees do not become entrepreneurs. It is fear of not having any money... no guaranteed income... no steady paycheck. Very few people can operate for long periods of time without money. Entrepreneurs are different, and one of those differences is the ability to operate sanely and intelligently without money.

On that same day, my expenses went up. As an entrepreneur, I had to rent an office, a parking stall, a warehouse, buy a desk, a lamp, rent a phone, pay for travel, hotels, taxis, meals, copies, pens, paper, staples, stationery, legal tablets, postage, brochures, products, and even coffee for the office. I also had to hire a secretary, an accountant, an attorney, a bookkeeper, a business insurance agent, and even a janitorial service. These were all expenses my employer had once paid for me. I began to realize how expensive it had been to hire me as an employee. I realized that employees cost far more than the number of dollars reflected in their paychecks.

So another difference between employees and entrepreneurs is that entrepreneurs need to know how to spend money, even if they have no money.

The Start of a New Life

The day I officially left the company, I was in San Juan, Puerto Rico. It was June 1978. I was in Puerto Rico because I was attending the Xerox Corporation’s President’s Club celebration, an event recognizing the top achievers in the company. People had come from all over the world to be recognized.It was a great event, a gala I will always remember. I could not believe how much money Xerox was spending just to recognize the top salespeople in the company. But even though it was a celebration, I was having a miserable time.

Throughout the three-day event, all I could think about was leaving the job, the steady paycheck, and the security of the company. I realized that once the party in San Juan was over, I was going to go on my own. I was not going back to work at the Honolulu Branch Office or the Xerox Corporation.

When leaving San Juan, the plane I was on experienced some kind of emergency. In preparing to land at Miami, the pilot had us all brace, cradle our heads, and prepare for a possible crash. I was already feeling bad enough about this being my first day as an entrepreneur, but now I had to prepare to die on top of it? My first day as an entrepreneur was not off to a very good start.

Obviously, the plane did not crash, and I flew on to Chicago where I was going to do a sales presentation for my line of nylon surfer wallets. I arrived at the Chicago Mercantile Mart late because of the flight delays, and the client I was supposed to meet, a buyer from a large chain of department stores, was already gone. Once again, I thought to myself, “This is not a good way to start my new career as an entrepreneur. If I don’t make this sale there will be no income for the business, no paycheck for me, no food on the table.” Since I like to eat, having no food disturbed me the most.

Are Some People Born Entrepreneurs?

“Are people born entrepreneurs or are they trained to be entrepreneurs?”

When I asked my rich dad his opinion on this age-old question, he said, “Asking if people are born or trained to be entrepreneurs is a question that makes no sense. It would be like asking if people are born employees or trained to become employees?” He went on to say, “People are trainable. They can be trained to be either employees or entrepreneurs. The reason there are more employees than entrepreneurs is simply that our schools train young people to become employees. That is why so many parents say to their child, ‘Go to school so you can get a good job.’ I have yet to hear any parent say, ‘Go to school to become an entrepreneur.’ ”

Employees Are a New Phenomenon

The employee is a rather new phenomenon. During the agrarian age, most people were entrepreneurs. Many were farmers who worked the king’s lands. They did not receive a paycheck from the king. In fact, it was the other way around. The farmer paid the king a tax for the right to use the land. Those who were not farmers were tradespeople, aka small business entrepreneurs. They were butchers, bakers, and candlestick makers. Their last names often reflected their business. That is why today many people are named Smith, for the village blacksmith; Baker, for bakery owners; and Farmer, because their family’s business was farming. They were entrepreneurs, not employees. Most children who were raised in entrepreneurial families followed in their parents’ footsteps, also becoming entrepreneurs. Again, it is just a matter of training.

It was during the Industrial Age that the demand for employees grew. In response, the government took over the task of mass education and adopted the Prussian system, upon which most Western school systems in the world are today modeled. When you research the philosophy behind Prussian education, you will find that the stated purpose was to produce soldiers and employees... people who would follow orders and do as they were told. The Prussian system of education is a great system for mass-producing employees. It is a matter of training.

The Most Famous Entrepreneurs

You may also have noticed that many of our most famous entrepreneurs did not finish school. Some of those entrepreneurs are Thomas Edison, founder of General Electric; Henry Ford, founder of Ford Motor Company; Bill Gates, founder of Microsoft; Richard Branson, founder of Virgin; Michael Dell, founder of Dell Computers; Steven Jobs, founder of Apple Computers and Pixar; and Ted Turner, founder of CNN. Obviously, there are other entrepreneurs who did well in school... but few are as famous as these.

The Transition from Employee to Entrepreneur

I know I was not born a natural entrepreneur. I had to be trained. My rich dad guided me through a process of starting as an employee to eventually becoming an entrepreneur. For me, it was not an easy process. There was a lot I had to unlearn before I could begin to understand the lessons he was trying to teach me.

It was difficult hearing what my rich dad had to say because what he said was exactly opposite from the lessons my poor dad was trying to teach me. Every time my rich dad talked about entrepreneurship, he was talking about freedom. Every time my poor dad talked to me about going to school to get a job, he was talking about security. There was the clash of these two philosophies going on in my head and it was confusing me.

Finally I asked rich dad about the difference in philosophies. I asked, “Aren’t security and freedom the same thing?”

Smiling, he replied, “Security and freedom are not the same... in fact they are opposites. The more security you seek, the less freedom you have. The people with the most security are in jail. That is why it is called maximum security.” He went on to say, “If you want freedom you need to let go of security. Employees desire security and entrepreneurs seek freedom.”

So the question is, can anyone become an entrepreneur? My answer is, “Yes. It begins with a change in philosophy. It begins with a desire for more freedom than security.”