Teach to be Rich | Awaken Your Financial Genius

Summary of “Teach to be Rich”: The best way to learn is to teach what you want to learn and the way to get rich is to help others become rich.

By Robert Kiyosaki and Sharon Lechter, 317 pages

Note: this is a guest chronicle written by Gérald, author of the blog debuter-en-swing-trading. He teaches the basics of trading in order to obtain financial independence, using his own experience as a novice.

Chronicle and summary of “Teach to be Rich”:

Introduction

We have changed eras and the industrial age is over. The days of going to school, getting good grades, finding a well-paid job and retiring on a comfortable government pension until the end of your life are gone!
We are now in the information age. We have to find new rules. Our world is undergoing profound change. For example, there is a strong chance that you will change jobs a number of times in the years to come.

Teaching is more important than ever before.

Robert Kiyosaki’s book is for parents who want to take action.  It is a book for people who want to play a role in their children’s education!

To offer them the best possible chance, parents must teach their children what the school system is not yet capable of teaching them.

Teach to be Rich offers to initiate parents in how to educate their children about the basic concepts related to money.

“Find out what to teach your kids about money”.

Chapter 1: All children are born rich and smart

In every chapter, the author uses examples taken from the 2 fathers used in his previous book “Rich Dad, Poor Dad”.

Note: I should point out that I have not read Teach to be Rich. In fact, there is no problem reading “Teach to be rich” even if you have not read its big brother.

So, these two fathers are of the opinion that all children are born rich and intelligent. Each, in his own way, teaches this to his child. One was a champion in the field of education. He is “Poor Dad”. The other was a champion in the field of financial independence and entrepreneurship. He is “Rich Dad”. The game between these two fathers allows the child to understand using a pedagogical approach. It is also a way to pass on information to the readers.

There is no one way to respond when faced with a problem. There is no good way or bad way. We need to be smarter than that, to understand the strength and the weakness of each situation.

In the information age, we all need to learn from our elders, but we need to be capable of taking learning further, more intelligently.

Teach to be Rich is for parents who want to educate their children in a smarter way. It is for YOU.

Note: the author’s use of the adjectives “rich” and “poor” is not a judgement on your wealth. It is has a purely educational goal to help you understand the different attitudes you can adopt.

Chapter 2: Is your child a genius?

We all have great hopes as we watch our children grow. We picture them as champions, go-getters, superstars. Perhaps we see them succeeding where we did not succeed.

What is your financial IQ?

Your fifnancial IQ is not measured by how much you earn, the price of your car or your home… Astonishingly, the author draws a parallel between this financial definition and the concept of “freedom”.

I very much like this next sentence by Robert Kiyosaki:

“If you are not happy seeking to become rich, there is a strong chance that you will not be happy when you get rich. Consequently, whether you are rich or poor, be sure to be happy.”

In the end, you do not judge your financial IQ by traditional elements, but your ability to develop your intelligence about money to attain something even more precious – time and the ability to make use of it.

What is intelligence?

In a classic example, the author compares a child who is a good student in class, with a child who is a good student at sport. Does this make one more intelligent than the other? No. It means that each one is developing his or her own intelligence.

This fundamental explanation should be given to all parents who want to learn how to teach!

How many different kinds of intelligence are there?

1. Verbal and linguistic
   • This is the traditional form of intelligence, the one preferred by the national education system. It remains very important.
   • Who generally has it? Journalists, lawyers, teachers, writers…
2. Numerical
   • It processes data, measures in numbers.
   • Mathematicians, engineers…
3. Spatial
   • Creatives
   • Artists, designers…
4. Physical
   • Manual learning and physical performance (accomplishing things through actions)
   • Athletes, dancers, building professionals
5. Intrapersonal
   • Emotional intelligence. It is essential. It’s what makes you act, makes you afraid to fail. It is capital, but difficult to define. It is the little voice inside you…
6. Interpersonal
   • Communication, relational, charisma
   • Famous singers, actors, politicians, salespeople and conference hosts
7. Environmental
   • Attraction to nature around you, the genius of working with the natural elements.
   • Animal trainers, oceanographers…

As you can see, there are many more kinds of intelligence than the one on which the school system is based. Fundamentally, every individual and every child develops a composition of these different kinds of intelligence.

To my mind, this chapter is fundamental. It leads caring parents to discover the natural aptitudes of their child. Making your children rich and smart does not involve holding them back, but allowing them to develop their natural genius.

Chapter 3. Give your children power before giving them money.

There are 2 questions that people often ask Robert Kiyosaki:

• How can I invest when I don’t have any money?
• Does it take money to make money?

His answer is no. Power lies in ideas and therefore each one of us has the capacity to have as much money as we want.

In Rich Dad, Poor Dad, the first lesson from rich dad is that “The rich don’t work for money”. You need to learn how to make money work for you and not the opposite.

The important thing is the education you receive. Rich Dad also says: most poor people learn all their ideas about money and life from their parents. School and education do not teach us anything about this. That is what the book tries to tell us so that we can pass it on to our children, whatever our social status.

Taking the example of pocket money, the author explains to his child that he must not work for money. He must work hard and learn to never need money. Necessity is the thief of power.

“When you give a child pocket money, you teach him to work for money instead of learning how to create money.”

Now, the author is not saying that you should not give your child any money. He explains that money comes from ideas and if you want to give your child a good start in life, it is very important to give him a good financial education and ideas that you can pass on to him.

At what age should you teach what your child needs to know about money?

The answer is: “When your child starts to take an interest in money.”

Therefore, it depends on your child. It also depends on external factors. Personally, my child is 6 years old and is starting to ask questions. That is why I am introducing a few ideas/concepts just playing with her piggy bank and money that comes from the tooth fairy for example.

An unnamed expert quoted by the author says that children develop their “winning formula” between the ages of 9 and 15. It is the idea that the child forms about her best chances of survival and how to make money in life. Put this way, we are not talking about money as such, but winning formula for a successful and happy life. People are generally happy when they are satisfied with their winning formulas.

Winning formulas

It is up to each of us to find our own winning formulas. Luckily, there are many of them.

The most well-known one is to work hard at school and get a good diploma to make a good living. It is the most common because it is what our education system teaches. There are many examples of other formulas. A superstar footballer, a successful entrepreneur who gave up school at the age of 19 and many more. (Think Steve Jobs, Jack Ma, Olivier Roland…)

One of the most important things that parents can or should do is help their children to create and discover winning formulas that work for them. Help them to develop a solid perception of themselves and you will help them to become rich and smart kids. In the eyes of R.Kiyosaki, this is the fundamental part of your child’s education.

Chapter 4.  If you want to be rich, you have to do your homework

Once again, the author takes the example of homework for children and extends it to adults. He calls learning how to become rich “homework”.

When you have a job, you earn money. But at home, you decide what you want to do with your money.

“The biggest difference between the rich, the poor and the middle classes is what they do with their free time.”

What you do with the money you make is what will make you “rich or poor”.

Do your homework to win your freedom and no longer depend on money.

Chapter 5: How many winning formulas will your child need?

Your child needs three winning formulas:

• Learning
• Professional
• Financial

Finding your learning formula

We all have different aptitudes at school. Some people learn better with their teachers, some people learn better when they write down their lessons, and some people learn through practice. That makes an infinite number of possibilities. Each child has a unique and distinct learning winning formula.

It is up to each parent to discover it and apply what works for their child. Parents must observe their children and support them so that they can discover their best way to learn. If they don’t like school, the author asks us to encourage them to discover their own system of intelligence and learning.

Discovering this learning formula is just as important as any grades your child will get in school. As the author puts it “your real education begins when you finish school and go out into the real world”.

Chapter 6: Will your child be left behind by the age of thirty?

In the modern world and the information age, it is an illusion to imagine that you will have a job for life. This dates back to the industrial age and represents an old-fashioned professional winning formula.

The author bets that your child will probably fall behind by the age of 30. That is why he or she must acquire an efficient professional winning formula in order to bounce back and find a new professional formula when the time comes.
A child must learn to learn and this continues into the adult and professional world.

I think that the most telling example given by the author is about a worker who does not acquire new skills in the field of information. How long before he falls behind?

R.Kyosaki mentions an article that appeared in a local newspaper in Australia, the West Australian, on 8 April 2000. It asked readers about what professions people become too old for and at what age.

1. Graphic design, too old after 30
2. Gymnast, too old after 14
3. Lawyer, too old after 35
4. Model, too old after 25

The article and the author’s conclusion clearly demonstrate the need to find new professional winning formulas.

“It is important to let your children know that the capacity to change and learn is even more essential than what they are learning in school today.”

The author invites parents to look into their child’s crystal ball and share a vision of their future, without reproducing their own path.

You have to try to see this through the eyes of your child. This does not mean that you should let your child do anything she wants, far from it!

Chapter 7: Could your child retire before the age of 30?

School is important.

The author is not saying that you should not go to school. On the contrary, a good education is very important. Going to school teaches professional skills and improves the capacity to learn.

Despite this, school does not teach you to learn your financial winning formula. Our education system does not even provide basic financial techniques. Due to this, many students turn out to be well-educated, but they are not equipped to face the modern world of consumerism, credit cards and pay-day loans;

Develop your financial winning formula

In the information age and at the speed at which the system is evolving, the author tells us there is a good chance that your children will be left behind, technologically speaking, at around the age of 30. It is therefore essential to develop new financial skills. That way, they can retire before they turn 30.

This is an exaggeration of course, but the biggest problem is that in order to find your financial winning formula, you generally have to take a long, hard look at yourself. Change must take place on a mental, emotional, physical and spiritual level. Only then can the financial education begin.

In the end, it is not important to push your child to find a way to retire at the age of 30. The defining moment is what will allow him to set off in search of the new financial formula.

Parents must teach their children how to survive and prosper on a financial level.

Chapter 8: My banker never asked for my school grades

Grades are everything at school, but your banker will never ask you for them. Nor will he ask for your university diplomas, whether you studied for years in higher education, or whether you left school without a diploma.

The banker asks for a financial report card. This is the “real-life” equivalent of the school report card.

You need to understand and have your children understand the concept of assets and liabilities.

With a few diagrams and in a simple manner, the author explains that cash-flow represents what is an asset and what is a liability.

If we imagine that you stop making money off your salary tomorrow, then the plus side of your statement will be your assets and the minus side your liabilities.

In contrast to what many people think, a house or a car are not assets. They represent a negative expense.

In the end, Robert Kiyosaki tells us that your banker doesn’t care whether you were the brightest kid in your class at school. Your banker wants to know how smart you are financially

Chapter 9: Children learn through play

You should enjoy teaching your children and finding systems through which they can have fun while they learn.

The school system does not allow our teachers to use this teaching method. Our children are educated in a traditional way and the ones who do well are those who respond better to traditional intelligence – verbal and linguistic. If your child is not comfortable in this method, you need to find an alternative system. It is up to you, the parents, to teach him or her.

When we talk about financial education, the author proposes 3 learning steps:

• Understanding through simple diagrams
• Learning through play
• Real life

Robert Kiyosaki suggests that most parents should start with play. This method is by far the most efficient when it comes to learning about money concepts. You can start by playing Monopoly or a similar game.
Children have to enjoy learning. You can make them interested in money management while having fun.

Chapter 10: Why people with savings are losing out

In this chapter, the author explains that saving money is an out-dated winning formula. It’s the one that involved paying attention in school, getting good marks, having a profession, earning money, then buying a house and saving. This made sense in the industrial age, but not in the information age. You need to introduce your children to more financial concepts.

Putting €10,000 in a bank account and waiting for the interest (€200 if we’re generous at 2%) does not make you rich. The money will only come back to you much later.

The author uses an example to explain the speed at which money circulates.
If we take an over-simplified example, he suggests investing in a rental property costing €100,000 and using the €10,000 as a down payment.
After one year, the income from the building, after tax, fees and other overheads, will generate a net profit of €10,000. You can use this money to buy another property, which represents an asset for you.

As parents, you need to teach your children that their money must work for them and not the opposite.

The art of parenting is therefore to teach this to your children, using play!

Chapter 11: The difference between good and bad debts

In this chapter, the author explains how to develop your child’s financial genius. One fundamental lesson is to understand the difference between good and bad debts.

The same bank loan (for example a property loan) may in one case be the reflection of a debt that will lose you money (buying a house for yourself) and in another case it will be an asset that will save you money (buying a house to rent).

What parents need to teach their children is that debts are not necessarily a bad thing. If children understand how money works, they will be able to enter the professional world with the confidence that they will not fall into debt on today’s modern consumer society.

Chapter 12: Learn by using real money

A teaching example in which we can watch the progress of a young man who wants to acquire consumer goods – golf clubs. The author explains how this 14-year old boy will become a young entrepreneur capable of self-financing what he wants to buy.

By using real money, parents should encourage their children to take risks. That way, they can develop their natural creativity and learn the basics of a financial education.

Even if these are only the basics and they do not hold all the keys to respond to various challenges in life. Your children will grow up and discover for themselves the freedom to live their lives as they wish.

Robert Kiyosaki : “The biggest risk of all is to not take a risk and you need to learn from your mistakes when you are young.”

Chapter 13: Other ways to increase your child’s financial IQ

Nothing is complicated when you use simple words

To increase the level of your children’s financial education, you must teach them simple words and know how to use the right words in the right area.

Income from a salary, no matter how high, will not help you to become rich. You need to convert this salary into an income that has no active operation.
You need to find assets that offer you passive income. That is what rich people teach their children to do.

The power of communication

If your children can combine financial vocabulary with a good head for figures, then they will have an excellent financial start in life.

Chapter 14: What is the point of pocket money?

Money is a teaching tool.

Many children believe that they deserve money, that it is their right to have money. But this is not a good start.

Nor should your children get into habit of working to get money in return. In this case, they learn to exchange their time for money.

On the other hand, your children should learn the concept of exchanging. The concept is the more you give, the more you get. The author tells us:

“The more you serve people, the richer you become.”

This is fundamental, because with a salary as your income, you exchange your time for money and all you have left is 8 hours per day.

However, if you apply a system which is not time-based, you can help an infinite number of people and therefore end up with an infinite salary. Robert Kiyosaki switched from giving courses to a few people to writing a book that uses the same lessons. He used them to teach many more people.

Many readers ask the author:

• How much pocket money should I give my child?
• Should I pay my children if they do chores?
• Should I not tell my child to get a job at the shopping centre?

There is no one-size-fits-all answer. Every child and every family are unique. It is up to the parents to adapt depending on the situation.

Money is a teaching tool and parents should use it to educate their children.

Your child should not study or perform specific chores for money. What happens when you are no longer around to pay for their studies?

Chapter 15: How to discover your child’s natural abilities.

The last part of the book helps parents to discover their child’s natural genius.

To start, you have to find out the method that your children prefer to use in order to learn and what motivates them.

You will go on to discover what type of intelligence your children have and their natural abilities.

This is one of the keys to helping them lead a life of success.

Some people never discover their own skills. When they finish their studies, they do not have the keys to continue their personal growth process.
Parents must push their children into finding their own learning style and developing the genius inside them!

Chapter 16: Success is the freedom to be who you are

In the information age, we have many choices, sometimes too many, because there are many distractions.
Parents must therefore offer their children enough choices for the children to eventually find their own way to succeed.

A solid financial education allows children to understand their choices and their consequences on their financial situation to their life. They will then have the power to take control of their destiny and can guide their careers wherever they want.

“Money does not necessarily make you rich”

Book critique of “Teach to be Rich” by Robert Kiyosaki:

If there is one thing that is important when you are a parent, it is your child’s education. Every parent wants their child to have a good education, but what does that mean?

The book gives us the keys to answer that question.

I feel that Teach to be Rich is essential reading for any parents who want to give their child a good financial start in life. In reality, in addition to offering the basis of a good financial education to your children, Robert Kiyosaki is also sending a message to parents. In this new information age, professions and society are changing. We need to understand these concepts if we want to acquire financial independence.

My homework is the Stock Market and every evening I try to perform my swing trader routine. It has become a pillar of my future financial independence.

When it comes to educating my daughters, Teach to be Rich helped me enormously. I have come to understand that succeeding in developing both my children’s genius and adapting to their natural abilities is a long-term job. You are your children’s first and most important teacher. Don’t miss the opportunity to read Teach to be Rich and give them the best possible chance of success!

Gérald from the blog debuter-en-swing-trading.

Strong Points:

• Teach to be Rich is an educational book that teaches parents how to give their children a solid grounding in financial independence.
• Teach to be Rich is also for adults who need to develop their own skills and achieve financial independence.
• Keys for parents who do not know how to teach their child.

Weak Points:

• The link between examples from “Rich Dad, Poor Dad” and a more general education can be difficult to follow. Some chapters are lacking in clarity because of this.

My rating :   

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