‘Rich Dad’ Robert Kiyosaki: You Need 3 Types of Education To Become Rich
Robert Kiyosaki, the famous author of the seminal “Rich Dad, Poor Dad,” has always had a lot to say about the importance of financial education. Considering his “poor dad” was a highly educated teacher and his “rich dad” never finished college, Kiyosaki has always maintained that educating yourself about finances is the more important priority.
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He still says that you need more than just a traditional academic education, but he may be softening his stance on the relative unimportance of conventional schooling. He also suggests a second important type of education: training in a lucrative profession or career, which he says is “education to earn money by being a productive member of society.” But he still believes the most important education is a financial education.
Keep reading for a look at the three distinct styles of education Kiyosaki recommends, their downsides and how you can pursue each to have the best chance of acquiring the ultimate goal — a stress-free, financially secure life.
Hitting the Books: Diving Into Academic Education
Academic education is the type of standard schooling we’re all familiar with: crunching numbers in math classes, dissecting frogs in science and picking up a basic understanding of the events that have shaped our world through history and more. These classes teach us skills like reasoning and critical thinking and the core information we need to know to move on to the next phase of life, whether we pursue higher education or not.
But Kiyosaki has always said that traditional schooling has one major failing. It doesn’t teach students about money or give them any kind of financial education. Traditional schooling only teaches you “how to be a good employee,” in Kiyosaki’s words.
While academic education can lay a solid foundation for general knowledge and skills, it comes up short in giving us what we need to spend and save money wisely, invest it in the right opportunities and grow our personal wealth. As Kiyosaki says, “It doesn’t prepare you for the real world if you want to be rich.”
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The Impact (and Pitfalls) of Professional Education
What Kiyosaki calls “professional” education encompasses things like higher education and academic pursuits leading to degrees and high-end careers or more “hands-on” pragmatic job training like going to flight school to become a pilot or culinary school to become a chef.
Kiyosaki readily admits that professional education can set us up for a comfortable middle-class life. He himself attended the Merchant Marine Academy and later learned to be a pilot after enlisting in the Navy during the Vietnam War.
The skills he learned during this period of his life could have led to lucrative careers that would have enabled him to earn a decent income. But Kiyosaki knew he didn’t want to work for a paycheck year after year. What he was after was more elusive but infinitely more attractive. He didn’t want to be a high-paid employee working for someone else; he wanted to be rich.
For Kiyosaki, depending too much on professional education as a path to building wealth can be a trap. “People who become lawyers, doctors and pilots do make a lot of money, right?” he begins, but he then explains the dangers inherent in these traditional lifestyles.
“The problem is though they make a lot of money, they are not rich. They pay a lot of money in taxes and do not really know how money works. So, they spend their money on liabilities rather than investing in assets or building businesses.” In other words, “Professional education teaches you how to own a job but not how to own a business or invest your money.”
The Secret To Getting Rich: Financial Education
While you may need — and benefit — from traditional and professional career education, they won’t help you accumulate real wealth and can end up being a kind of trap that’s hard to break out of. “At best, you’ll learn how to budget, open a savings account and balance a checkbook.” If your goal, like Kiyosaki, is to get rich, you need the third and most important kind of knowledge, which is financial education.
“If you want to be rich in today’s world, you need financial education in addition to academic and professional education. You need financial intelligence for success,” Kiyosaki said.
Learning about investing, understanding the difference between assets and liabilities and figuring out tax benefits you can use to shield and increase your wealth is, according to Kiyosaki, the real key to freeing yourself from depending on someone else to sign your paychecks. It gives you the knowledge and tools to make your money work for you instead of the other way around.
Even the Rich Can’t Go It Alone
Kiyosaki admits that you do need the benefit of all three types of education and that you can’t be successful without the help of great lawyers, accountants, brokers and more. “Even with a sound financial education, you need to depend on the skills you or other professionals have learned to manage your wealth and get the most out of it.”
From Kiyosaki’s perspective, the real path to wealth isn’t a matter of choosing one type of education over another but understanding the strengths and weaknesses of each. Academic education may provide a well-rounded knowledge of the basics and refined critical thinking abilities. Professional education can give you the means to secure a stable income and a comfortable lifestyle.
But for real wealth? Financial education is the ultimate requirement to getting — and staying — rich. “It teaches you about debt and how to leverage it, the history of money, what a financial statement is and how to read it, the difference between an asset and liability and so much more,” he explained. Though all three are important, financial education is what ultimately provides you with the key to unlocking significant personal wealth.
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This article originally appeared on GOBankingRates.com: ‘Rich Dad’ Robert Kiyosaki: You Need 3 Types of Education To Become Rich
