Introduction

The world is changing at an amazing pace. As new generations come and go, there is a common formula of success that is taught widely through schools and at home. This formula says that you should 1) go to school 2) get good grades and 3) get a good job. Though there is some merit to this formula, it also happens to be over simplified in a very dangerous way. The problem with this formula is that it does not account for the changes that have and inevitably will continue to reshape our economy and personal lives. Truthfully, the ideas in this formula are outdated and ineffective when used by themselves. The real answer is that now, more so than the prior formula, financial success depends on both financial and communication skills.

A low financial IQ is what leads people into what is called the "Rat Race". Many people do not know what they are getting themselves into until it is almost too late. Even highly educated individuals such as accountants, bankers, doctors, etc... are rarely in tune with what is really happening in their financial lives. The "Rat Race" pattern, as defined by Robert Kiyosaki, is a situation where people follow the aforementioned formula as instructed by their parents and the educational system. Without further education on the subject of money, they eventually become slaves to money. It might go something like this:

Upon graduation, students go out into the world with their new found money and credit. Whether they remain single or get married, they experience for the first time what it's like to have real income! They feel successful and start to buy new cars, a house, and other luxuries. On top of that, they may decide to have children. With all of their new expenses comes a greater demand for cash. To meet this greater demand for cash, they start putting money on credit cards and work harder to get job promotions and raises. Along with their raise comes a higher tax bracket, higher real estate taxes (on a larger home), and the other expenses that have increased with their income. Before they realize it, it's past time to start saving for college funds or retirement, and they still have no money! The end result is that they're stuck working hard for their company, the government, and the banks that hold their mortgage and credit lines.

As you can see, this "Rat Race" is a trap that you'll want to avoid. Or, if you're already trapped, you'll want to escape. New times call for a different set of rules. Playing solely by the original set of rules is just "too risky."

So, that leaves the question, what are the different set of rules? According to Robert Kiyosaki, "The only way to get out of the Rat Race is to prove your proficiency at both accounting and investing, arguably two of the most difficult subjects to master. " The main idea is that you educate yourself to gain "financial intelligence". It doesn't have to take a long time, but it is a process. You'll learn through both study and experience. Reading this summary of Rich Dad Poor Dad (or the book) will provide you with eye-opening financial knowledge that 90% of the population lacks.