Primary Cardholder DeceasedA reader writes that they are worried that the family members of the deceased primary cardholder will be angry she has made cash withdrawals on the account. Find out what Sally Herigstad recommends.
How Stealth Taxes Can Cost YouStealth taxes are not a line item you'll find on your income tax return. But millions of taxpayers end up paying them without even knowing they exist. Only by learning about stealth taxes can you take action to try to avoid them.
Capital Gains Tax HikeAre you thinking about selling a capital asset at a gain in 2013? A 5% increase occurred, which makes a huge difference in your after-tax rate of return on an investment.
This article by Sally was published on CreditCards.com. The original article is archived here: CreditCards.com
Robert Kiyosaki doesn't believe your kids' best route to success is to get straight "A's," go to college, get a job and work 40 years until retirement.
In fact, he's often observed an inverse relationship between advanced degrees and getting rich, and notes that 'A' students often end up working for "C" students. And that's often because '"C" students tend to be more educated on "life skills" best learned through experience rather than the classroom.
Kiyosaki, famous for his bestselling "Rich Dad, Poor Dad" personal finance book series, believes that America's financial crisis will continue to linger, and that the gap between rich and poor will widen as the middle class disappears. In order to succeed today, he believes parents should encourage creative thinkers, visionaries and dreamers -- in other words, entrepreneurs who will excel in today's information age.
Robert Kiyosaki, author of:
"Why 'A' Students"
"Work for 'C' Students"
"Why Robert Kiyosaki Thinks Our Education System is a Bust"
"Why A Students Work for C Students"
"Rich Dad, Poor Dad" series author, speaker and personal finance notable Robert Kiyosaki believes that our current education curriculum is stuck in the Industrial Age rather than Information Age, leaving our children wholly unprepared to get ahead and have prosperous lives and careers.
Kiyosaki's latest book, "Why 'A' Students Work for 'C' Students and Why 'B' Students Work for the Government: Rich Dad's Guide to Financial Education for Parents," released April 9, helps serve as a guide for parents to help teach their kids how to lead in an ever-changing future and become unashamedly rich. CreditCards.com talked with him about what why Kiyosaki believes this is his most important book yet.
Sally Herigstad: So, why do "C" students end up working for "A" students?
Robert Kiyosaki: Because "C" students study what "A" students do not study. My father was a valedictorian. He had six kids in his family, and three became valedictorians. They were all "A" students. That was my kind of way to realize really early on that most "A" students are poor!
When I was 9 years old, I started studying with my "rich dad" [his best friend's father and Kiyosaki's financial mentor] and he was rich. I went, Wow! I realized I was studying things my dad thought were stupid to study. The way I studied was by playing Monopoly. I would play Monopoly by the hours with my "rich dad" and as I was playing, he would be inputting supplemental information about how to make money work for you.
I probably had ADHD, but they didn't diagnosis kids with ADHD back then. I called it extreme boredom. A game at least held my interest.
Sally Herigstad: What was the impetus behind your new book?
Kiyosaki: The reason I wrote "'A' Students" is when I look at our current economic situation, I don't see it as an economic crisis because the rich are getting richer. What I'm seeing is that we have an educational crisis. An educational crisis caused by our leaders.
I'm not a Republican or a Democrat, I don't have any ax to grind, but you know President Obama doesn't really know much about money himself. Most of our senators and our congressmen don't either. You look at the richest guys today, they all dropped out of school. Let me name them: Steve Jobs, Bill Gates, Michael Dell, Zuckerberg. Even Disney dropped out. When you look at it, it doesn't say much for our education.
Sally Herigstad: What would you say to someone who thinks you're telling kids they can slough off in school?
Kiyosaki: If I were doing that, I wouldn't bother writing this book! No, I'm very pro-education. I've said many times this is the most important book I've ever written. I am pro-education. I'm just anti the system.
Sally Herigstad: Why can't parents just leave it to the schools to teach kids about money?
Kiyosaki: Because parents are a product of the current system. Parents have to ask themselves, are they struggling with credit card debt? How many millions of people lost homes? If parents are supposed to teach their kids about money, what are they going to teach them -- how to handle a foreclosure? How to get a job when everybody is getting laid off?
How can parents teach what they do not know? The reason they do not know is they were brought up in the same system.
Sally Herigstad: Why do schools mostly gear education to getting a job?
Kiyosaki: Because that's what they were taught to do. Giving the school system a break, what the school system is doing is preparing kids for the industrial age, and that age is over. The problem is the system hasn't caught up with what they should be teaching.
Sally Herigstad: So the educational system is just behind the times?
Kiyosaki: Exactly. This whole world has changed. This is the time in history that shifts from the industrial age to the informational age. Our school system is 50 years behind.
And I think that's why we have the dropout rate, the ADD, the boredom, the lack of interest, the "why am I doing this?" and wondering the relevance of what they are being taught. We have an educational problem, and the educational problem has led to an entitlement problem. When people ask me, is the crisis over, I say no, it's just beginning.
Sally Herigstad: What's it going to take to turn it around?
Kiyosaki: I don't think it's going to turn around. The reason I wrote this book is so people will take the initiative to teach their kids what they need to know now, knowing that their kids will have grandkids before the school system catches on.
Sally Herigstad: Are you averse to working as an employee?
Kiyosaki: No. The problem with being an employee or self-employed is you pay the highest taxes.
I make millions and pay nothing in taxes -- legally. This is the big difference for the "C" students who are capitalists. Debt and taxes make us richer.
Sally Herigstad: Can you explain that?
Kiyosaki: A true capitalist doesn't have a job, because other people and other people's money work for them. For me, because of my financial education, debt is part of the picture. People are bitching about the banks these days. I love my banks -- they're giving me millions of dollars. Interest rates are at 2 percent. I can't believe it. I'm borrowing as much as I can to get richer. On the financially uneducated side, unfortunately, debt and taxes make people poor. This is what my book's about.
We just bought a $46 million hotel with five golf courses, and it was all debt financed. We pay no tax on our income because we use depreciation. They don't teach you that in school.
Sally Herigstad: What's the most important thing a parent can teach children about money?
Kiyosaki: The most important thing is the vocabulary of money. Money has a language of its own. Instead, children learn the language and vocabulary of a schoolteacher. I, however, was learning words such as ordinary income, portfolio income, passive income. The best news is, words are free! You teach a kid some words, and they have a better chance of becoming a financially free person.
Sally Herigstad: Why do some people get rich and then go broke?
Kiyosaki: Because there's no financial education. If you're a sports star, you go broke because the moment you get rich, your same habits make you poor. A large percentage of lottery winners are broke within five years.
Sally Herigstad: Do you think some financial advice, like having no credit cards, is fear based?
Kiyosaki: It's stupid-based, to me. I mean, how do I rent a car? How do I check into a hotel? How do I go shopping without a credit card? I mean, it's part of society. That's like saying, don't wear shoes. Or don't have a car. OK, I'll walk! To me, it shows lack of education. I go on stage, and I kiss my American Express Titanium. I love that card!