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Rich Dad Education Scam #1: A College Education Ensures Your Financial Success

Rich Dad Education Scam

Rich Dad Education Scam #1

A College Education Ensures Your Financial Success

“For the times they are a-changin” – Bob Dylan

Times indeed are a-changin for one of the most sacred beliefs Americans have held dear – the value of higher education. According to a poll by Country Financial, the number of Americans who see college as a good investment fell from 81 percent in 2008 to 57 percent in 2012. This is a dramatic decline in a very short time period and points to the increasing skepticism people have regarding the value of an institution that has largely gone unquestioned for its entire existence.

This is not to say that education is unimportant… far from it. For those seeking personal betterment, or to pursue their vocational dreams of becoming a doctor, lawyer, or other profession, higher education can play a critical and necessary role. However, it appears that the vast majority of Americans simply see today’s college in investment terms. In a Gallup poll, Americans were asked, “What was the main reason students get an education beyond high school?” 86 percent of respondents said the reason students pursue higher education was to earn more money or to get a new job. Only nine percent said that it was to learn more about the world, to learn to think critically, or to become a better-rounded person. Americans overwhelmingly see the motivation behind the pursuit of a college degree as a means to obtaining security and prosperity. Increasingly, they are starting to see this pursuit as a bad investment.

Recent stats might help explain the sources behind this pessimism:

  • In the past 30 years, college tuition and fees have risen a staggering 1,120 percent. This has far outpaced inflation – to put it in comparison, food has only risen 244 percent during this same time period.
  • Between 2008 and 2010, the average tuition cost climbed 15% at four-year public universities. In 2012, it was estimated that overall tuition costs would rise another 4.8%, once again more than doubling inflation.
  • A Hamilton Place Strategies study claims that by 2023 the average amount of school loan debt that a student owes will equal the median that the average graduate makes in a year. Currently the average a student owes in school loans is approximately $28,270.
  • According to a 2012 report from the non-partisan think tank Economic Policy Institute, between 2000 and 2011 wages of college graduates actually dropped by 5.4%.

Despite an overwhelming trend of negativity and increased skepticism, most Americans still believe that college helps ensure some level of financial success. However, anyone who claims that a college guarantees financial success is spreading a fraudulent myth. It is unlikely that they are attempting to overtly scam someone, just perpetuating an antiquated belief just like people did hundreds of years ago when they claimed the earth was the center of the universe or that the earth was flat.

Freedom Versus Security

When people tout the value of education in relation to a person’s prosperity, what they likely are referring to is the value of education in relation to security. While even these statistics are shrinking, there is statistical evidence that those with a college degree have a higher employment rate than those without a college degree. So when people claim that a college degree ensures your financial degree, what they really mean is that a college degree helps (not ensures) you find a job.

On the most basic level, those that adhere to these values put little value of financial freedom and a tremendous value on the security a job provides. They essentially are equating financial success with security.  Robert Kiyosaki has weighed in passionately on the security vs. freedom debate. He argues that individuals who choose security are making a conscious philosophical choice and pay a heavy price for this security.

“My rich dad said, ‘Somewhere along the way, people become more desirous of security and have paid the price by selling their freedom. You may have noticed that schools today focus primarily on job security rather than financial freedom. The problem is most people do not know that the cost of that security is their freedom.’ He continued to say, ‘If you choose security, someone is always telling you what hours to work, how much you make, and even when you can eat your lunch. That is the price of security.'” –Robert Kiyosaki

Even those that have made the philosophical choice of security and willingly accepted the costs associated with accepting this tradeoff are increasingly facing an uncertain future. Robert Kiyosaki has talked about the uncertain future many now face, “Today, many employees are learning their jobs are not secure and neither are their retirement plans. In the coming years, 75 million baby-boomers may discover that their stocks and mutual funds were not as secure as they thought, forcing them to retire to a lower standard of living than their parents enjoyed.”

Importance of Financial Education

Financial education is simply not part of the core value system in today’s education system. While college provides professional degrees and value for those precious few who actually go to school to think critically, it falls short in any attempt to assist its students in understanding money.  Courses teaching students who to make money outside of working for others are nearly non-existent. In your local college course catalog, there are unlikely any How to be an Entrepreneur 1010 courses.

Those who want to learn how to become an entrepreneur, understand money, and increase their financial literacy must look elsewhere for such guidance. Robert and Kim Kiyosaki have spent years imparting knowledge on these topics. Rich Dad Education is proud to help fill the critical gap that traditional college fails to address through Rich Dad Education elite trainings, Rich Dad Education mentoring programs, and various other education offerings.

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One response to “Rich Dad Education Scam #1: A College Education Ensures Your Financial Success

  1. Nadine August 21, 2013 at 3:16 pm

    Actually, there are colleges which teach how to be an entrepreneur. In fact, Canada College over in Redwood City, CA have both business and real estate classes that teach the fundamentals of starting up your own company and how to find seed money from venture capitalists.

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