Rich Dad’s New Rule of Money #1: Get Adequate Financial Education

Bestselling Author Robert Kiyosaki

If you haven’t already, I suggest you read a previous entry entitled Are You Abiding By the New Rules of Money? first before reading this post.

I’m running this series of posts here to share what I have learned from Robert Kiyosaki’s New Rules of Money because I think his message is very important, especially now more than ever.

In his books and the video below, Robert Kiyosaki is saying that the financially illiterate or the financially naive are playing by the ‘Old Rules of Money’. According to him, the Old Rules are:

1. Go to school and get a safe, secure JOB
2. Work hard to earn more money
3. Save money
4. Buy a house
5. Get out of debt
6. Invest for the long term (e.g., mutual funds)
7. Diversify

According to Kiyosaki, this advice has long become obsolete, because of what happened in 1971 and 1974.

Kiyosaki asserted that the rules of money changed in 1971 when President Nixon took U.S. off the gold standard and turned the dollar into a currency. This meant the government was allowed to print as much money as they wanted, even without really having the reserves to back up the value of the money. Kiyosaki likened it to writing a cheque without any money in the bank.  Thus the US dollar had been turned effectively into paper money, and had been depreciating since then. He’d been known to drill into his student’s minds that “Cash is Trash”.

Apparently prior to 1974, businesses shouldered an employee’s retirement for as long as the retiree lived. After 1974 however, a new type of pension plan called defined contribution plan, was created. Under this plan,the retiree only get back what they (and their employer) contributed, if they contributed any. The downside is that this plan guaranteed no paycheck for life, unlike the old set-up.

“It’s not money that’s making you rich, it’s your financial education that’s making you rich.” – Robert Kiyosaki

Therefore, Rich Dad’s New Rule of Money #1 states that in order to be financially secure, you need more than academic and professional education – you need adequate financial education as well. The challenge is that our current educational system doesn’t provide this because the people running the educational institutions also received inadequate financial education in the first place. Kiyosaki also suggests that there is a government conspiracy to keep the masses financially dumb so that we won’t know what the government is really doing with our money.

Simply put, most of us are financially ignorant because we didn’t receive adequate financial education, and now is the time to do something about it.

The world’s economic situation is already bad as it is, so we need to know how to play the game of money, and in order to do that we need to know what the rules are. The enormity of the situation may sound grim to you- nonetheless, enjoy the video, and please leave your thoughts on the comments section.

“Your greatest asset is what’s inside your head. Invest in your greatest asset – your financial IQ.” – Robert Kiyosaki

Recommended Resources:

Rich Dad’s Classics
Rich Dad’s Increase Your Financial IQ: Get Smarter with Your Money
The Perfect Business? (10 CD Pack)

www.conspiracyoftherich.com

www.richdadeducation.com

Provocative Thoughts? Violent Reactions? Wise Insights? Feel free to comment below!

Related posts:

1. Rich Dad’s New Rule of Money #7: Focus
2. Rich Dad’s New Rule of Money #6: Know the Difference Between Buy, Sell and Fool
3. Rich Dad’s New Rule of Money #4: Own More Assets Than Liabilities
4. Rich Dad’s New Rule of Money #5: Debtors Are Winners
5. Rich Dad’s New Rules of Money #2: Move To The Right Side of The Cashflow Quadrant