Robert Kiyosaki, the best selling author of Rich Dad books series advocates increasing ones' financial IQ through financial education. According to his teaching, the rules of money have changed. Go to school so that you can get safe and secured job, save money and invest for a long term, are the old rules of money, they don't make much sense today when there exists new rules of money.
The old rules of money are obsolete today if people don't acquire financial education. Today people are still clinging to 'the old rules of money of go to school, get a job, buy a house, save, and invest in a diversified portfolio of stocks, bonds, and mutual funds.'
In this world, the only way to get education is to go to schools because schools are the recognized institutes to inculcate academic education. Many parents were brought up in the same understanding or idea and they in turn want to pass on to their children. However many children dread going to schools because their passion or desire is something else but parents don't encourage their children to pursue their unique interests.
In my opinion, children should be allowed to develop their natural appetite for learning and on going education in areas of their deep love or flair for something. The academic qualification should not be the only criteria for certifying students eligible to work or do businesses. The respective job skills could be provided for on the job training and doesn't necessarily require one to have academic certificates because the banks don't really recognize the marks cards as proofs of availing loans. I am a gold medal student, and when I approached the bank for loan, they didn't consider my high marks card. I felt pathetic about it. Anyway I learned a valuable lesson for my life.
Here I want to reflect some of the points which will enlighten a bit about the education we should have to live a better life.
1. Go to school to cultivate the appetite for continuous learning and development.
Many students go to school to get academic qualification. They only want the certificates to ascertain their academic education level. They study hard to get high grades. The main purpose of cultivating appetite for continuous learning and development gets bypassed and the focus of children is shifted in acquiring only academic or professional qualification.
The appetite for learning is not cultivated and later the children don't take upon themselves the continuous learning and development of skills. They rely only on their academic and professional qualification to succeed and they don't bother about the change of trends or rules.
Children must go to school but they must cultivate the appetite or love for learning and innovation. If they learn this skill, they will be able to reline, rewrite, renovate and re-invent themselves to meet the new economic challenges of job loss, recession or financial crisis.
2. Get a job to acquire necessary life skills.
After graduating from the university, the students straight way look for jobs to earn a living. They get jobs based on their academic and professional qualification and work hard to climb the corporate ladder of success waiting for promotion. However as the days, weeks, months and years pass by, they dread getting up and going to office every morning. The excitement of working at jobs fades away slowly and there is hardly any drive or enthusiasm to excel. They resign to laziness and just get by attitude.
The graduate students should get jobs to acquire necessary life skills of business skills, money skills, communication skills, sales skills and many more. The students' focus on earning a big money shouldn't be the only incentive to get jobs. There should be more than working for money. The students should get jobs in order to become qualified individuals not academically or professionally but by becoming attractive individuals with necessary skills.
3. Work harder on yourself than you do on your job.
Many students after getting the jobs, they busily work hard on their jobs and they have hardly time to acquire new skills or develop new areas of interests. They work hard for their employers making them richer and richer and irony is that they don't get richer or stronger or healthier. The harder they work for their employers, their health condition deteriorates further and further.
The schools and colleges don't really educate the students about building oneself. People feel they are absolutely skilful enough to excel in life but the reality is different altogether. It is advisable for all students that they must work hard on themselves meaning they should develop their communication skills, leadership skills, selling skills and other skills. If they take care of these skills, their employers can be happy enough to provide great opportunities of success and remuneration.
4. Find a job to learn skills and experiences.
When students look for jobs, they must do the jobs where they have chance of learning skills and increasing one's abilities. Jobs should be the platform for the students to get initiated into the real life circumstances. Selling skills and communication skills can be learned from direct marketing. So find a job which is suitable to learn skills and acquire experiences.
Many people look for jobs only to earn money, and when they don't get enough their desire to work for the jobs decrease along with their productivity and performance. Do the jobs that are suitable to develop your skills.
5. Pay yourself first and allocate your money for investment, saving, living, giving.
Many people after landing on jobs, they earn decent incomes to make a living. However they don't have good habits of paying themselves first, saving, investing, giving and so on. They have the habits of spending money for living only. They spend their earnings in acquiring liabilities. They invest in bad debts, which keep them indebted to the banks for life time.
The financial crisis that has hit the world today is because of poor habits. The good habit of paying oneself first a portion of one's income, can easily bail out a person from being broke. The proportionate allocation of income for living, investment, giving and saving is necessary today to fight unprecedented situations.
The schools and colleges don't teach students to pay themselves first the income that they earn from their jobs. The schools and colleges teach them to hand over the hard earned money to banks, mutual funds and other investment vehicles who steal away the greater percentage of money in commission. People pay for every one, the supermarkets, the governments, the banks, the restaurants, the airlines except themselves. They pay themselves what is left over and you know there is nothing much is left.
6. The house you live in is a liability, not asset.
People work for others and in exchange of their time, talents, energy and intelligence, they receive payments for the service rendered. The employers determine the pay scale and the employees have no much say. If they want the job with a bargain, they get the job and if they don't want the job, they get nothing for the family.
After working for some years, the graduate students settle down and buy a house to start a family, which they think is an asset. If they borrow money from the mortgage banks, for banks the house is an asset but for the borrowers, the house is a liability. For banks, there is a constant cash flow of money in their accounts and for the borrowers, the money is flowing out of their bank account every month. That means their bank balance is depleting day by day while paying the mortgage.
However, if people buy the house purely for investment purpose, they can turn their house into asset by renting the house for the tenants. The tenants pay for the mortgage and the owner pockets the remaining cash flow as his asset to be invested in other assets that would bring more money in than out.
7. Choose to be in good debts not bad debts.
Today's financial crisis occurred because of inflated bad debts by individual borrowers who could not repay the loan amounts. People tend to be in bad debts rather than good debts. They buy cars, luxury items or things that don't appreciate in value rather the things whose values go down as the time passes. People use their easily accessible credit cards to make unnecessary purchases and for which they default the payment, as a result they have to pay more for the interest.
Good debts are those which help you to acquire assets that would bring cash flow in your pockets rather than take money out of your pockets. Investing in assets, is a wise way to enjoy financial abundance and prosperity.
8. Don't live below your means instead raise your standard of living.
Many financial gurus advise their investors to live below their means to save money so that they can hand over the money to the experts in mutual fund or stock markets who would siphon off the money little by little in the form of commissions. They tell others to live below the means so that they can afford a high standard of life by getting paid more commissions.
Why should you not live a high standard of life when you work hard and earn so much money? What many people lack is the financial education, which they didn't learn in the schools and colleges. They were after the academic certificates and professional qualification and acquiring financial education didn't matter much at the time. But now, when they are no longer in the schools and colleges, the financial education or financial IQ is required very much to make the lifestyle possible.
These students didn't develop the appetite for continuous learning, and they don't want to learn to increase the financial IQ because they think it is too late. More than that, they don't have the appetite and habit to learn new skills, which they could easily do if they are willing.
Many people who graduate from the schools don't have written goals to achieve later in life. When they don't have goals and plans, they end up living below the means like all other people who are in the rat race.
9. Invest in businesses you know well.
People lack financial education and they don't know what is asset and liability, what is good debt and bad debt, and they don't have a desire or appetite for learning to acquire information regarding the investment portfolios.
Learn to invest in businesses you understand and know well after studying the facts and figures of balance sheet of a company. Unlike schools and colleges, investment has no ready made answers. There are no right or wrong answers until the final result. There are books and seminars where people who have developed the appetite for learning can get access to them and reap the highest benefits possible.
Study, learn, acquire information and associate with people who are engaged in businesses and investments to learn from their experiences and insights before investing in any portfolios.
10. Create a new prosperous future living your dreams.
Before you go to schools or colleges, ask yourself questions, why do you want to join the school or colleges? What would you get from the schools and colleges? Who do you want to become and what do you want to pursue? Make yourself clear and definite about your goals and then go ahead and join the schools or colleges to make your dreams come true.
When you move ahead with your goals in mind, you will develop the appetite for continuous learning and development, which in turn will make your dreams achievable for you. Once you achieve your dreams, you can create a financially prosperous future for yourself. You can live the dreams.
Finally increase your financial IQ so that you can play with the new rules of economy today and obtain the maximum benefits. Schools and colleges are necessary, but the academic education alone will not work miracles for you. You need to become attractive in skills and talents to enjoy the best things of life.
Set goals, think big, think about what you want most of the time, visualize, imagine and affirm the very things that you desire to accomplish. Be selfish first to develop your skills through ongoing learnings.
Alwed Ekka
Guide Coach Mentor
