Second Chance (Four your money, your life and our world)

I recently finished up Robert Kiyosaki’s 2015 book Second Chance.  I always gobble up his books whenever I read them.  There is just such a wealth of knowledge behind his thinking.  For those who don’t know Mr. Kiyosaki, he is the publisher of the “Rich Dad, Poor Dad” series of books, videos, seminars, etc.  I read Rich Dad, Poor Dad back in 2000.  That book set me on the path to where I am today.  However, I must admit, had I implemented 100% of what I learned back then, I would be in an even better financial situation. I probably instituted less than 1/3 of what I read back then.

Focusing on cash flow and how you are taxed as an individual is a powerful narrative.  Understanding how your income flows through your personal income statement is imperative to your long-term financial success.  Unfortunately, I have found, many Americans either have no idea, no desire to learn or no desire to work with someone who can help them.  They continue to run on the treadmill.

As a country, we spend billions of dollars on education.

According to the U.S. Department of Education,  At the state and federal level, the United States spends more than $620 billion dollars on K-12 education each year.

How much is spent on financial education?  Why are there more people in financial distress than people who are financially successful?  Writers, bloggers and social media comments have all sorts of opinions.  It’s the government’s fault, it’s their parent’s fault, it’s the school’s fault, it’s the President’s fault….  Rather than focusing on fault, why don’t we focus on fixing the problem?

We have all heard that knowledge is power.  Maybe that is the key.  Having an open mind.  Not accepting conventional wisdom.  A willingness to think outside the box.  These are all qualities of many successful people.  Stop accepting your situation and think about how it can be improved.  A lack of financial education keeps many people around the world running on a treadmill and relying on someone else.

I recently spoke with faculty at a local University and asked why personal financial education was not part of the general academic curriculum?  As a country, we acknowledge that many are woefully undereducated on personal finance.  There are so many impediments at the University level to getting financial education into mainstream academia it is truly amazing.  I don’t know if it ever will and that is a shame.  Basics, such as what is a loan?  What does APR mean?  How is interest on a loan calculated?  What is your FICO score?  How is it calculated?  How can you improve it?  How can you make it worse?  What is the difference in taxation between a W-2 employee, a 1099 contractor, and LLC, a sole proprietorship, an S Corp?  All of these basic topics are financial education that could really help people.

In his book, Mr. Kyosaki says that your wealth is stealthfully taken from you over time by three factors.

  1. Taxes.
  2. Inflation.  (As prices rise, people work harder, only to pay more in taxes and inflation
  3. Savings.  (After saving your $1 in a bank, that bank is then able to lend that dollar and 9 more to other borrowers.  Over time this contributes to reducing the purchasing power of your dollars)

That is why “Rich Dad” says, “Savers are losers.”

If you are looking to improve your financial education, these are great books to improve your knowledge.   If you liked this article please feel free to share it.

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