One of my favorite authors is Robert Kiyosaki. He is a business author and educator who originally made his fortune in building a business system, real estate and several other industries. He now invests his time trying to educate the world about how he created success and his perspective on money. This is part 1 of a 4 part series and the excerpt comes from his latest e-book, Rich Dad Scams.
Throughout history, cultures have tightly grasped their dearly held beliefs so commonly accepted, so religiously observed, that to question them is sacrilege. They are so sacred that to call these beliefs scams is to doom oneself to isolation and abuse. When it comes to money, these scams have toppled every past fiat government in history.
Our culture is no different. Our beliefs are no less sacred. The beliefs and scams are so sacred and hold so much power that when they are wrong their damage is immense. These scams assisted in the crisis of 2007.
When the global financial crisis began in 2007, many people clung even more tightly to their sacred beliefs and their jobs in the hope of not being one of those who were laid off. Millions held on tightly to their homes, even though they could not pay the mortgage. Most cut back on their spending and saved more, even though the federal government was printing trillions of dollars, destroying the purchasing power of their savings. Workers stuffed even more money into their retirement plans, even though the stock market had crashed, wiping out their prior gains. And school enrollments boomed, as more people headed back to school, even though unemployment was soaring. The faith in the scams held strong. What else could people do?
The crisis did not have the effect of causing people to question the causes and the beliefs that created the crisis. Instead people clung to the lies, their job and the system-wide scams that created the problem. Rather than let go, most people clenched their fists tighter and waited for the crisis to pass, praying that their political leaders could solve the global crisis and that happy days would return.
The problem is that this decade (2010 –2020) will prove to be the most volatile, world-changing in history.
Unfortunately, the people clinging to the relics of the past—relics such as job security, savings, a home, and a retirement plan—will be those who are most ravaged by the coming global financial storm. A few know they must make changes. Yet without a strong financial education, they do not know what to do or how to change.
Scam #1: Higher Education
The “School = Success” Scam
When I was young, my poor dad always told me the best path to success was to go to school. He felt that was the best way to get a good job. The problem was that my poor dad was one of the most educated people I knew, but he was always complaining about money and how unhappy he was with his work.
My rich dad, on the other hand, didn’t have a college degree. Yet he was very successful and very wealthy. Rich dad said, “School teaches you to be an employee. If you want to be rich, don’t count on school.”
From a very young age, I learned that higher education did not translate into success and it was one of the biggest scams around. This scam is the foundation upon which the other scams are built. So, I decided to begin this eBook by challenging one of the pillars of most people’s beliefs.
Going to School Doesn’t Make You Financially Smart
I’m outspoken against the school system and it often brings accusations that I am anti-education. Nothing could be further from the truth. Unfortunately, “go to college” is one of those things people point at as a way of being successful without ever stopping to think if it’s true.
The scam that school is essential to achieving success is perpetrated everywhere and all the time.
What will make you successful is not going to school but rather financial education—learning how money works and how to make it work for you—is what will make you successful. Unfortunately, you can’t get that in school. When it comes to money, going to school won’t make you smart.
This doesn’t mean that education isn’t important. The basic education you get in your K-12 years is important to everything that comes after. If you want to be a teacher, a lawyer, or a doctor, then obviously you’re going to need to go to college.
In spite of all those years of school, it’s unfortunate that you won’t learn how money works. Education, particularly in America, doesn’t teach students how to live or be self-sufficient. Instead, it teaches us to be employees instead of our own bosses. It makes us workers instead of innovators. That’s a big reason why we call school a scam. In fact, the ultra-rich use school to keep poor people poor.
Different Types of Intelligence
One of the worst things about school is that it recognizes only one type of intelligence—book smarts. If you aren’t book smart, you are very quickly labeled stupid. As a child, I was not book smart, and I was labeled stupid. I wasn’t stupid; I was just interested in different things and I was bored. For instance, no one could tell me when I’d ever use calculus in my real life! Yet, I was told to comply and learn. I was being trained to be an employee.
My rich dad wasn’t book smart either. Yet, he was very smart. He had street smarts, which he used to become very wealthy. School doesn’t teach you to be street smart. I had to learn that from my rich dad. My poor dad thought school was incredibly important, and he was very book smart. But what did it get him? He struggled financially most of his life.
That’s another reason why we label higher education a scam. The so-called experts tell you that you need it. They tell you it’s important. The unfortunate fact is it doesn’t actually do anything for you except make you a good employee.
“But I studied money in college!”
Tom Wheelwright, my Rich Dad Advisor on taxes, went to school to be an accountant and got straight A’s. He will also gladly tell you that he got no practical financial education. He learned what was needed to do a job but not how to successfully manage his own finances. This is absolutely laughable since he went to school to learn about money!
People often say they learned about money in school. You may learn how to balance a checkbook or what a P/E ratio is in school, but you won’t learn how money really works. That’s not an accident; it’s a scam.
The ultra-rich use school to train us to be good employees. We start out being told what to do and we are rewarded for compliance. It’s very easy to transition from a school to a company where you’re told what to do. That leads us to trust and hand things off to the government and the ultra-rich bankers who handle our 401(k). The ultra-rich use education to make themselves richer and keep you poor. When you realize that, it’s not hard to see why it’s listed as one of our scams.
Think for Yourself
The people who fall for scams are typically those who are conditioned not to think for themselves. Unfortunately, the first scam on our list, Higher Education, robs us of the independence to think for ourselves, to think like an entrepreneur, an innovator, and an investor. It instead teaches us to be dependent.
You need to learn to speak the language of money to be successful. That takes financial education, which opens up a whole new world, a world where you can succeed on your own terms. Unfortunately, our schools don’t teach that language. They teach you the basics, and then they either teach you a specific trade or skill, or they simply train you to be an employee.
Today, it’s time to start thinking for yourself. Don’t fall for the scam of higher education. Instead, start your financial education today, and begin your journey to financial freedom.