Page 137 - Midas Touch

The ring finger represents relationships essential to the Midas Touch. If
you have bad partners, whatever you touch will turn bad. And if you have
great partners, everything you touch turns to gold.

Clowns, Not Partners

In the late 1970s, my nylon-and-Velcro surfer-wallet business was taking
off. The problem was that success was costing us money. I began this story
earlier in the book. Since our company was always out of cash, I had to
keep raising money. We would buy a production run of wallets from
factories in Korea and Taiwan and then ship the wallets to the stores after

they arrived in our warehouse. Sounds pretty good, right? We were selling
product as fast as we could manufacture it. The problem was that we
needed to order and pay for more wallets before our customers, the stores,
paid us. That’s why we were always in cash-flow trouble. We estimated
that, on average, we would spend a dollar in April and not see any return
on that dollar until February, the next year. It was a ten-month cycle. Cash

was flowing out, not in. The more successful we got, the more cash that
flowed out and the slower it flowed in.

As the demand for Rippers products grew, our demand for cash also grew.
Soon, raising $5,000 to $10,000 was not enough. To keep products flowing
to the stores and to build the business, we needed to raise at least
$100,000. Since rich dad was the only person I knew who had that much in
cash, I called and asked for an appointment.

Rich dad listened patiently to my investment pitch for about ten minutes.
Once he heard about as much as he could stand, he politely asked my two
partners to leave the room. Once the door was closed, the shouting began.
It was one of the harshest tongue-lashings I have ever received.

Rather than refer to my two partners as partners, he called them “clowns.”
To make matters worse, he was certain one of my partners, my CFO, was
weak, dishonest, and potentially a crook. He did not even know the guy. He
just did not trust him from the moment he met him.

Although he liked me and my other partner, he did not feel we were good
enough to be his partners, and certainly not his money’s partners.

“Why should I be your partner?” rich dad asked. “You have no experience,
you have no success, and I don’t trust either one of you. If you partner