Why “A” Students Work for “C” Students and Why “B” Students Work for the Government – Robert Kiyosaki

Here’s a video on how to become financially FREE:

Why do “A” students work for “C” students? Robert Kiyosaki, best selling author, investor, and business owner, states that “A” students, or what he calls academics, work for “C” students, or what he calls capitalists, because academics were only taught to go through the traditional method of creating income (go to school, get good grades to get in to a good university that will then lead to getting a good job that pays well) and end up working for profit-driven capitalists. Just as the times have changed, so have the methods of creating income for oneself as he breaks down and goes in-depth on the differences using his cashflow quadrant. Throughout his book, Robert Kiyosaki reiterates some of the points and refers to his CASHFLOW game on numerous occasions just as he has done in his other books which can get a bit tiresome. Overall though the book is a good read and has some great points to it, especially the opening where he asks why financial education/literacy isn’t taught in schools if the whole point of the education system is to teach students knowledge to then use at his/her job to then make money. Here are some of the points to the book:


1. It appears that the school system isn’t well equipped to prepare students the necessary skills/knowledge needed for the “real world.” According to Kiyosaki’s research, students in general don’t want to become academics but rather business owners. Having said that, it seems that schools are somewhat “force-feeding” students with useless (to some degree) knowledge that is not setting them up for success. Rather the education system is taking a one-size fits all approach. Now, I’m not saying that everyone should be business owners as that has its challenges as well. What I am saying though is that there should be a greater emphasis on aiding students to become/do what they want rather than getting students to go through the traditional method of creating income for oneself. In his 2009 book, What Americans Really Want…Really , Dr. Frank Luntz, a respected pollster who measures the heartbeat of America, asked this survey question: If you had to choose, would you prefer to be a business owner or CEO of a Fortune 500 Company? Those questioned responded with the following: 80% The owner of a business that employs 100 or more people. 14% The CEO of a Fortune 500 Company that employs more than 10,000 people. 6% Don’t know/refused to answer. In other words, Americans today want to be entrepreneurs . The problem is that our school system is training our kids to be employees . This is why schoolteachers and many parents continue to say, ‘Go to school to get a good, high-paying job.’ Few parents or teachers are saying, ‘Go to school to learn to create good, high-paying jobs.’ There is a tremendous difference between the skill sets of an employee and the skill sets of an entrepreneur. The skills required to be an entrepreneur are not taught in most schools. Dr. Luntz found that over 70% of full-time, corporate employees are considering or have considered starting their own businesses. Many people dream of becoming entrepreneurs, but few will take the leap of faith. The lack of financial education is the primary reason why most people will remain employees. Without a financial education, most employees are terrified of losing their job, not having a steady paycheck, or simply failing. Financial education and the transformation it delivers are essential for entrepreneurs. Americans have always wanted to be entrepreneurs. People immigrated to America—some enduring unimaginable hardships—attracted by the promise of the American Dream. Millions left the oppression of the kings and queens of Europe and the tyranny of communist dictators in other parts of the world, just for a shot at the American Dream. Their American Dream. The American Dream is just as Dr. Luntz describes: ‘Starting something from scratch and nurturing it as it grows is where our country has been at its strongest and most innovative.’ Our schools seem to have forgotten about the American Dream. The problem is that our educational system trains students to be ‘A’ students— academics —or ‘B’ students— bureaucrats . Our schools do not train our young people to be ‘C’ students: capitalists . Furthermore, it’s these ‘C’ students who so often follow an entrepreneurial path, carrying the torch of capitalism and creating new jobs. Ask entrepreneurs today and many will tell you that bureaucracies are actively destroying the entrepreneurial spirit of capitalism. They will also say many young graduates do not have the skills required for today’s work environment.


2. “The more you learn, the more you’ll earn.” This is one of my favorite quotes by Warren Buffett. Having said that, continual education on practical knowledge is important. As we’re now in the information era, keeping up with cutting-edge information is key to one’s success. If you want your financial situation to change, you can’t rely on others to help you change it, especially the government as you’re right where they want you, having a lack of financial education. That’s exactly why the rich get richer, and the poor get poorer. “I want to repeat an important point: I am very pro-education—just not the education taught in traditional schools. If you want your child to be an employee in the E quadrant, or a doctor or lawyer in the S quadrant, traditional education is fine. If you want your child to have every opportunity for success open to them, then they must have every opportunity for education. And in many cases that means a departure from the traditional, into less conventional, real-world learning environments and classrooms. The important lesson I’ve learned is: Each quadrant is a different classroom…requiring different teachers. Question: What if I cannot get a job with a company like Xerox or IBM? How do I get my own sales training and experience? Answer: Sales training and experience is vital for anyone wanting to be an entrepreneur, especially in the B and I quadrants. There are many ways to get sales training. The best thing about network marketing companies is that they will not fire you if you do not perform, as Xerox would have fired me if I had failed to sell its products and services. It did not matter how long I worked for Xerox. Every salesperson knew that they were only one or two months away from being fired, if they failed to sell. Question: What if I don’t have enough money? Answer: That is why I recommend taking real estate investment courses. If you truly understand the skill sets in the B and I quadrants, you’ll see that you’re not supposed to use your own money. Your job is to learn to raise capital using OPM, Other People’s Money (in this case: your bank’s), not using your money. Simply said, capitalists know how to use debt to make them rich. It is known as OPM, Other People’s Money. Becoming a capitalist is hard work and relatively few make it. That is why investing in your education—yours and your child’s—is crucial, especially today. People who are not actively studying and learning, regardless of which quadrant they live and work in, are falling behind rapidly. When you read the stories of entrepreneurs—great capitalists such as Steve Jobs, Bill Gates, and Mark Zuckerberg—they began their path to capitalism and educational process in the first and second windows of their lives. So did The Beatles and many professional athletes.


3. Get out of the traditional mindset of education and success. Test scores and grades don’t determine the fate of your future. If you think about it deeply, most of life’s important skills/knowledge aren’t taught in schools. These topics include but aren’t limited to finances, emotional intelligence, teamwork, conflict resolution, love, happiness and etc. You’re ultimately the one who makes or breaks your career in life, not your grades. “In another study, 95 Harvard students from the class of 1940 were followed into their middle age. The study found that the men with the highest test scores in college were not particularly successful in terms of salary, productivity, or status in their chosen fields when compared to their lower-scoring peers. The Harvard study also found that high test scores did not translate into greater happiness, better friendships, or superior family and romantic relationships. The Harvard Business Review published an article about academic success stating: ‘As it develops, academic-type success was not a good predictor of on-job productivity nor was IQ discovered to be a factor.’ The Harvard article also states: ‘Many people who get good grades have come to be quite smug about their intelligence even in the face of repeated failure outside the classroom.’ Millionaire Mind In his book, The Millionaire Mind , Thomas J. Stanley gives in-depth statistical research to identify which variables caused people to become successful in business and become super wealthy. Contrary to popular belief, there was no correlation between grades in school, class position, SAT scores, and success. In fact, 33% of those on Forbes 400 lists of wealthiest people did not start college or dropped out. And the dropouts’ average net worth was much greater than that of their college-graduate peers. The dropouts had an average net worth of $4.8 billion. The college graduates’ net worth averaged $1.5 billion. When the college dropouts’ net worth was compared to their peers who graduated from Ivy League schools such as Harvard, Yale, and Princeton, the dropouts’ net worth was 200 percent higher.


4. I believe that too many people have an “entitlement” mentality. They believe that they’re owned something for nothing. No one owes me, you, or anyone else anything for nothing. Having said that, I believe that’s why it’s stupid to give a fixed wage/income as there’s no incentive to perform or go above and beyond to deliver. People just get comfortable/lazy with their job and complain about why they’re not making enough money. I realize there are people who may deserve government programs. Some people are truly in need. The problem is, millions of ablebodied Americans are also on government welfare. This includes the leaders of our country—from the President on down. The President and Congress receive government ‘welfare’ checks that would make even Bernie Madoff blush. The government bread line includes our military retirees, government employees, public servants such as the police and fire fighters, and teachers. I do not criticize these people or their professions. I have tremendous respect for the work our military personnel, police, firefighters, teachers, and other government service workers perform. Their work is important. What I am fearful of is the growing ‘entitlement mentality,’ the attitude that ‘the government should take care of me,’ which has become so pervasive in our culture. Today, when a worker loses his or her job, the first thing they do is apply for unemployment benefits. How can it be called a ‘benefit?’ How does the growing sense of entitlement related to this book and to parents as they work to prepare their children for the future? It’s really pretty simple, when you think about it. I am critical of our school to fish—teaching kids the skills and attitudes that will make them strong and self-reliant and resourceful–our schools breed a culture of entitlement. It is this entitlement mentality that is eroding the foundations this country was built upon. The ‘entitlement mentality’ is bringing down the American empire and the world.


5. The harder you work, the more taxes you pay. Employment income will always be taxed at a higher rate than investment income. You will ultimately keep less from a $50,000/year job than investments that create $50,000/year. Again, this is why the rich get richer and the poor get poorer. Rich people understand this and have their money work for them rather than the poor person’s mentality of working for money.It is crucial that parents understand the distinctions among the different kinds of income and teach their children how to transform their lives by learning to transform their money. What are the key differences among the three types of income? Ordinary income is generally paycheck money. It is the most highly-taxed of all three incomes. Most people go to school to learn how to work for ordinary income. After graduation, most go on to become wage earners. If you work for money, you are working for ordinary income. Ironically, interest on savings is also taxed at ordinary-income rates. And when you retire, your 401(k) income will be taxed as ordinary income. In my opinion, there are better ways to save for retirement than a 401(k) plan. Portfolio income is also known as capital gains . Most investors invest for portfolio, income or capital gains. A capital gain occurs when you buy low and sell high. For example, if you buy a stock for $10 and sell it for $15, this is a capital-gains event with a profit of $5 and that profit is taxed as portfolio income. Taxes are one of the many reasons why I rarely invest in stocks. It makes no sense to me to take risks by investing in stocks only to pay taxes if I win. Capital gains on real estate and stocks are currently taxed at 20 percent. Dividends from stocks are also taxed at 20 percent. Passive income is also known as cash flow. In the game of Monopoly, the $10 a player receives for rent on one green house is an example of passive income or cash flow. Passive income is taxed at the lowest rates of all three incomes, sometimes zero. Investing for tax-free cash flow requires the highest level of financial education and experience.


By Ryan Timothy Lee


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