Learning / Teaching Finances
by Jean Mastin
After reading Robert Kiyosaki's "Rich Dad" series of books, I wanted to share his ideas with our group of homeschooling teens. Mr. Kiyosaki claims that rich parents teach their children different lessons and attitudes about money than do the poor and middle class, and I wanted our kids to learn as the rich kids do. By the end of class, however, the thinking of teens and parents alike had changed.
I used the Blue Stocking Press edition of Whatever Happened to Penny Candy?, an Uncle Eric Book, and Kiyosaki's Rich Dad, Poor Dad book and Cash Flow games, starting with his Cash Flow for Kids. Even though the game was recommended for ages 12 and under, I figured we'd be safe playing the kids' version first, to ease the learning of basic concepts and vocabulary. The game relies on icons to help visualize how a balance sheet balances, while keeping calculations down to a minimum. The teens mastered this game at the first playing, and they actually asked for the older version, Cash Flow 101, anxious to learn the more sophisticated concepts.We met weekly at a local library. I started the first class by borrowing an idea from Rosamund Stone's and Benjamin Zander's book The Art of Possibility. I told the teens they would each get an A for the class by completing just one assignment: They had to write a few sentences, pretending the class was over, telling me either what they had learned to deserve that A or imagining how they had applied their learning to become rich adults. The authors' idea is that this helps students visualize their success, helping to make it reality. The teens' sentences ran the gamut from serious plans to become rich to tales of sailing on yachts. Some of the teens chose to pick stocks in which to invest imaginary money and report back each week as to how they did.
I spoke for 15 to 30 minutes each class, summarizing what I felt were important points from each book. Then we played the board games and often ended up playing through lunch. We had more than the recommended six players, so the kids paired up. While waiting for delivery of Cash Flow 101, the teens suggested playing Monopoly. Most of them hadn't played it in years and had fun trying to apply their newly acquired financial knowledge, while still being able to fight over who got to be the boat, the car, or the hat playing pieces!I was through summarizing the two books by the time "101" arrived, so I showed a short video that came with the game. It was mostly an infomercial, but it also summarized much of what we had talked about.
According to Kiyosaki, our parents, teachers, and even financial advisors tell us to get good grades in order to get into a good college, and, after college, get a job at a good company with benefits. Then, while moving up the company ladder, we're advised to buy a bigger house for tax breaks to offset the increased income. Then at age 65, we retire with a pension and a gold watch. While this may have worked for our parents, there's a new world out there.Companies start up, make millions, and are gone in a short span of time. Downsizing is a household word. Social Security may not be available; the stock market is unpredictable. Most teens will have many different careers during their working lives, as jobs they once trained for become obsolete. Most Americans are living deeply in debt and can see no way out of the rat race.
Kiyosaki's message is to teach kids to manage their cash flow. The choice as to what career path to take to make money is not as important as the choices that are made with that money. Kids need solid financial education more importantly than career education. For example, our generation has been taught that our home is our biggest asset. But Kiyosaki defines an asset as something that makes money and a liability as something that takes money. If you were downsized tomorrow, would you have any assets to produce cash flow or just liabilities to feed?These kids need to learn to take charge of their finances, rather than to rely on the government or a company to do it for them. They need to learn to make their money work for them instead of learning to work for money.
The game starts with everyone in the rat race. Each player picks a card telling him his occupation, income, and expenses. Each occupation has its own expenses -- don't think picking the doctor card means you've got it made! School loans, insurance, and other debts can sometimes make winning more difficult. Players win when passive income from assets they've acquired is greater than their expenses. It is then that they graduate from the "rat race" into the "fast track."The game board has spaces for small and big investments, doodads -- which are anything from a new bowling ball to a boat, and paying for them either by cash, credit card, or personal loan. There are spaces for market ups and downs, spaces that downsize, as well as spaces that give players new babies. Although a board game, the game itself actually plays out on the individual player's balance sheet, as each financial transaction is ultimately reflected there.
It was funny to hear the teens' reactions whenever someone landed on the doodad or baby space. They would tease each and make jokes, but it made them question the financial intelligence of some real-life choices. Then they would have to figure out how each purchase or new baby affected their immediate cash flow and ultimate goal.The kids started talking about what they were learning outside of class, which then started the parents playing, discussing, and trading financial books and ideas. Kiyosaki says that, while money is a forbidden subject to the poor and middle class, who think it's tactless to discuss amounts of money one makes or spends, the rich talk money and investments at the dinner table, on the golf course, at business lunches, whenever and wherever.
Kiyosaki also says that schools teach us to be afraid of making mistakes, but mistakes can be our most valuable learning tool. At school, students learn to work alone on problems and are rewarded for being the smartest. In the business world, people work within a team to look for solutions. And, he says, if you should find you're the smartest one on your team, you need a better team!He asserts that the rich don't say "I can't afford it," but rather "HOW can I afford it?" It reminded me that, years ago, Barb Sommers, a co-founder of the Ohio Home Educators' Network and my first major homeschooling mentor, used to say she'd never say "no" to her daughters when they'd ask for things -- no matter how outrageous. She'd tell them to "research and find out about it." She also said that when she had a need or desire, she would speak of it often to as many people as possible, and it would usually result in someone, somewhere, eventually helping her find it. Saying "no" or "can't" only closes the mind off to the possibilities and the people around us who are able to help us achieve our goals.
Now, months after class, parents and teens still talk investment possibilities and discuss purchases as either doodads or assets to increase cash flow. The moms are starting an investment club, using Karin Housley's book Chicks Laying Nest Eggs. As our financial vocabulary increases, we decipher more of the information available around us -- we were even able to follow the plot of The Bank, an Australian thriller about the stock market, which just happened to come to the Cleveland International Film Festival a few weeks after class. Instead of seeing finances as something we could never understand or as a world we could never be part of because we don't make enough money, we're now seeing a world of possibilities. – J.M.