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This article was first posted December 1, 1999. Working hard and getting a good education has been part of the American forklore for quite some time. Most parents stress this theme. Unfortunately, economic rewards don't always flow to the "brightest" or "hardest working." The problem is financial literacy. It's only rarely taught in school and many parents don't know enough about the subject to discuss it with their children at the dinner table. (Surprisingly, there are even graduates of well know business schools that are clueless on the subject.) Author Robert Kiyosaki address the problem in depth in Rich Dad, Poor Dad: What the Rich Teach Their Kids About Money That the Poor & Middle Class Don't. It's among the most entertaining books available on the subject.
The book describes what young Robert Kiyosaki learned as a child from his two "Dads." His real father, a Ph.D school administrator with degrees from several elite universities (the Poor Dad), and the father of his childhood friend Mike who owned several small businesses and never finished the eighth grade (the Rich Dad.) Kiyosaki's "Poor Dad" spent his life worrying about the next pay raise at work and spent his money "keeping up with the Jones'." His "Rich Dad" thought working in "a job" was stupid and spent his money acquiring income producing assets. Kiyosaki provides a few insights on how to join the latter group. As the author observes: "The poor and the middle class work for money. The rich have money work for them." Expanding on this theme, Kiyosaki explains his "6 lessons" for turning the tide in your favor.
The final chapter in the book "How to Pay for a Child's College Education for Only $7,000." is an interesting description of how one of Kiyosaki's friends educated his four children by withdrawing $7,000 from their $12,000 college fund and investing it in real estate. In five years, he'd run the $7,000 up to $330,000 in a series of real estate transactions and was well on the way to paying for college and retiring early. Kiyosaki can't guarantee that this strategy will work for everyone, but then it doesn't have to. An earlier book he authored seems to argue you may not need to go to college at all.
Robert Kiyosaki's ideas are contrarian and controversial, but well worth your consideration. He seems to emphasize real estate, Retire Early favors the stock market. We agree on the wisdom of buying assets, avoiding liabilities, and developing the ability to tell the difference between the two. It's not taught in school. |