Want to be rich? The answer is education, education, education. But probably not the kind you’re thinking of.
That’s according to personal finance author Robert Kiyosaki, who wrote the best-selling “Rich Dad Poor Dad” 20 years ago this month. He visited MarketWatch on Tuesday to talk about what has changed since its publication in 1997, plus his new book coming out in May, “Why the Rich Are Getting Richer.”
He said one of the biggest reasons for wealth inequality in the U.S. is that many Americans are uninformed about investing DJIA, +0.03% , their personal finances and how to become rich.
Research has shown pre-tax income for the bottom 50% of earners in the U.S. has dropped since the 1980’s. And a full 36% of income growth between 1980 and 2014 went to the top 1% of earners.
People are actually less informed than when he first wrote “Rich Dad,” he said.
“Most people don’t understand what caused the boom and bust,” he said.
“We’ve got to educate the young of this country. Otherwise we’re all going down together. And the gap between rich and poor is too high today. So education is more important, but what about financial education? Why don’t we have it? Why don’t they teach you about money in school?”
Kiyosaki said he is hopeful U.S. President Donald Trump’s pick for Secretary of Education, Betsy DeVos, who is a billionaire and a philanthropist, will change the education system and encourage financial education.
“The biggest challenge I have is our school system teaches you not to make mistakes. How silly is that? A baby can’t walk unless it falls down. I didn’t learn to ride a bicycle without falling down. But our school system punishes you for making mistakes,” he said. “I’ve made many mistakes, Trump has made many mistakes. ... That’s how we got smart.”
“Most teachers, like my ‘poor dad,’ they’re very good people, but they’re all union guys,” he said. “They can’t teach kids what Trump and I know.”
In the meantime, Kiyosaki said consumers should teach themselves about financial education through reading and financial education courses. In “Why the Rich Are Getting Richer,” he attempted to teach about debt and taxes, which he said are two of the biggest factors dividing the rich and poor today.
He also recommended reading his co-author Tom Wheelwright’s book, “Tax-Free Wealth: How to Build Massive Wealth by Permanently Lowering Your Taxes.”
He also likes the books “The ABCs of Real Estate Investing” by Ken McElroy and “How to Use Limited Liability Companies and Limited Partnerships” by Garrett Sutton.
Kiyosaki himself took a do-it-yourself approach to learning about real estate, he said.
In 1973, he returned from service as a Marine Corps pilot and enrolled in a $385 weekend course on real estate investing.
“It cost me $385, and I’ve made millions from it,” he said.
In our interview with Kiyosaki he discusses his friend President Trump, what he sees as the best ways to invest now, how to get in to real estate investing and more. Here are a few highlights:
On whether Trump can help to solve U.S. income inequality:
“I don’t want the government to take care of me,” Kiyosaki said. “You shouldn’t expect President Trump to take care of you. You should take care of yourself!”
On market crashes:
“Market crashes are the best times to buy,” he said. “When Walmart has a sale, everybody would run in to buy. But when the stock market has a sale, or the real estate market has a sale, everybody runs away. That’s why there’s a difference between rich and poor today because they don’t know a good thing when they see one.”
On the baby boomer generation:
“I graduated from school in 1969, and the economy took off. Anybody who wasn’t rich of the baby boomer generation was an idiot,” he said. “Your generation, I feel for you. You go to school, you have student loan debt, but where’s the high-paying job to amortize the debt?”
On alternatives to investing in real estate:
“I like gold, silver and oil,” he said. “For everybody out there, I say, buy some silver. SLV, -0.90% Right now it’s about $20. When you buy a silver coin, a regular U.S. Silver Eagle, it’s 20 bucks. You’re in the game. That’s for real. Silver and gold will be around another 1,000 years. The stock market may not be.”
Watch our full interview with Kiyosaki here:
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Maria LaMagna covers personal finance for MarketWatch in New York.