Let go of old ideas

Knowledge, taxes, debt, risk, and compensation are the five aspects about money that Robert T. Kiyosaki elaborately discusses in ‘Unfair Advantage: The power of financial education' (www.landmarkonthenet.com). Before you jump into these, however, you would need to know how to catch a monkey, as explained in the introduction.

The native trick is to find a tree with a small hole in the tree trunk and place fruits or nuts inside it. What happens then? A monkey comes along, puts its fist in the hole and grabs onto the fruit or nuts, narrates the author. “The monkey's fist, now clenched and filled with the fruit or nuts, cannot be withdrawn from the hole, trapping the monkey. Rather than let go of the fruits or nuts, the monkey twists and turns, pulls and tugs, but refuses to let go…” The sobering lesson from this tale is that humans are similar to monkeys, clinging to job security, possessions and money, as Kiyosaki frets. He notes that, due to a lack of financial education, like the trapped monkey, most people will spend their lives as wage slaves of their employers and tax slaves of the government.

Knowledge advantage

Therefore, if you are ready to let go of the nuts and fruits in the form of old and obsolete ideas, the first advantage you must gain is knowledge, because your level of financial education determines what you do with your money and how you invest it, the author advises. He begins by cautioning that financial training often masquerades as financial education. “Just as Pavlov trained his dogs to salivate even if there was nothing to salivate about, millions of highly educated people are trained rather than educated when it comes to the subject of money.” Mindlessly sending your money to complete strangers for managing the portfolio is not the end result of good financial education; it is the end result of dog training, chides Kiyosaki.

In the world of money and financial education, ‘cash flow' is the single most important word, he emphasises. “Cash is always flowing. It is either flowing in, or it is flowing out. For most people, they work hard and the cash flows out. True financial education trains you to have cash flowing in.” The author reminds that the people who lost money during the financial crisis were people who invested primarily for capital gains. Because such people bet on the price of something going up; and when the market crashed, their wealth crashed, and for many, their net worth went negative, he recounts.

First present

An instructive section in the book is ‘Kim' commentary,' where the author's wife Kim shares her insights with the readers. “My very first gift from Robert when we were first dating was not a nice piece of jewellery or my favourite perfume,” she reminisces. Incredible it may sound, but her first present was a seminar on accounting, through a game played for two days.

“My mind-set shifted when I realised that, in order to become financially independent and free, I needed to focus on acquiring assets, not income,” Kim writes. If you wonder ‘why,' her answer is that focusing on income means you have to keep working harder and harder to make more and more money and may be one day you will have enough money so that you no longer have to work. “Shifting my focus to acquiring assets takes the attention off me working forever for money and puts it on my money working forever to make money. This made all the difference.” A book that can make a definitive contribution to the millions around the world who have been taught only ‘to go to school, work hard, pay taxes, live below your means, buy a house, get out of debt, and die poor.'

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