Understanding Financial Freedom: Robert Kiyosaki on Money for Millennials
In a recent episode of “Money for Millennials,” Robert Kiyosaki, the renowned author of “Rich Dad, Poor Dad,” shared invaluable insights on financial education and the mindset necessary for achieving financial freedom. Joined by Alexandra Gonzalez, the daughter of his close friends, Kiyosaki discussed the importance of understanding money beyond traditional education.
The Flaws of Traditional Education
Kiyosaki began the conversation by highlighting a significant gap in the education system: the lack of financial literacy. “Our schools teach us very little about money,” he stated, emphasizing that this oversight can lead to a lifetime of financial struggles. He recalled his own experience, noting that while he was a poor student academically, his rich dad, an entrepreneur, provided him with a different perspective on money.
“At the age of nine, I asked my teacher, ‘When do we learn about money?’” Kiyosaki recounted. The teacher’s response—that money was not part of the curriculum—left him perplexed. This moment sparked his lifelong quest for financial knowledge, leading him to the first lesson: the rich don’t work for money.
Challenging Conventional Beliefs
Alexandra, reflecting on Kiyosaki’s philosophy, acknowledged that it may seem counterintuitive to those who have been taught to work for a paycheck. “For someone watching this for the first time, it doesn’t make sense,” she admitted. Kiyosaki agreed, explaining that many people are conditioned to believe that securing a job and earning a salary is the ultimate goal.
He challenged this belief by encouraging viewers to reconsider their relationship with money. “When you think about working for money, what comes to your head?” he asked Alexandra. She shared her experience of working at a bank, living paycheck to paycheck, and feeling trapped in a cycle of paying bills without financial freedom.
The Changing Job Market
Kiyosaki pointed out the irony of the current job market compared to when he graduated in the late 1960s. “Back then, there were plenty of jobs,” he said, noting that graduates today often struggle to find employment despite their education. “The world has changed, but our schools haven’t,” he lamented.
He emphasized that the promise of a stable job is no longer a guarantee of financial security. “My goal was to never need a paycheck again,” he stated, highlighting the importance of financial independence.
The Importance of Financial Education
Kiyosaki introduced the concept of a financial statement, contrasting it with the traditional focus on FICO scores. “FICO is just a measure of how well you pay your bills,” he explained. Instead, he encouraged viewers to focus on understanding their financial position and the assets they own.
He outlined the key components of his financial strategy: entrepreneurship, real estate, and commodities. “I use debt to buy real estate and pay no taxes,” he explained, emphasizing the advantages of leveraging debt for investment purposes. Kiyosaki also criticized the conventional approach of saving money and investing in 401(k) plans, labeling it as a losing strategy for most people.
The Dangers of Student Loans
Kiyosaki addressed the burden of student loans, describing them as one of the worst types of debt because they cannot be discharged through bankruptcy. He warned that many young people find themselves trapped in a cycle of debt, trying to buy homes and cars while accumulating credit card debt.
“Your house is not an asset; it’s a liability,” he stated, explaining that the cash flow from a home often goes out in the form of mortgage payments, taxes, and maintenance costs. This perspective challenges the traditional belief that homeownership is a path to wealth.
Embracing a New Mindset
As the discussion progressed, Alexandra shared her insights on the importance of financial education for her generation. “To work for money is completely ridiculous,” she asserted, emphasizing that the rich make their money work for them. Kiyosaki agreed, noting that many people fear losing their jobs and pensions, which can lead to a life of anxiety and insecurity.
Kiyosaki encouraged millennials to adopt a mindset focused on financial independence and entrepreneurship. “You want to be a free human being,” he said, urging viewers to think differently about their careers and financial goals.
Conclusion: The Path to Financial Freedom
In closing, Kiyosaki reiterated the core lesson: “The rich don’t work for money.” He encouraged viewers to engage in discussions about financial education and to challenge their beliefs about money and work. “Find a friend and discuss this,” he suggested, emphasizing the importance of sharing knowledge and experiences.
As the episode wrapped up, Kiyosaki and Alexandra highlighted the value of learning from mistakes and embracing a culture of growth and innovation. For millennials and individuals of all generations, Kiyosaki’s insights serve as a powerful reminder that financial freedom is achievable through education, creativity, and a willingness to think outside the box.