Robert Kiyosaki’s Criticism of the American Education System
In Why “A” Students Work for “C” Students and Why “B” Students Work for the Government, Robert Kiyosaki challenges one of the most deeply rooted assumptions in American society: that academic success is the primary road to success in life. Kiyosaki does not argue that education itself is unimportant. In fact, his argument is almost the opposite. He believes education is extremely important, but that the American educational system provides an incomplete education because it concentrates heavily on academic and professional skills while failing to adequately teach students about money, entrepreneurship, investing, and financial independence.
Kiyosaki’s provocative title summarizes his argument. “A students” represent people who perform well within the traditional educational system. They read well, memorize information, follow instructions, pass examinations, and earn degrees. These students frequently become highly skilled professionals such as doctors, attorneys, accountants, engineers, executives, and other specialists.
“B students,” in Kiyosaki’s framework, tend to seek security and stability and may gravitate toward government or large institutions. “C students,” meanwhile, represent the entrepreneurs, innovators, dreamers, salespeople, business owners, and unconventional thinkers who may not excel within traditional academic environments but sometimes become the people who create businesses and employ the A students.
These categories should not be interpreted literally. Obviously, not every C student becomes an entrepreneur, and millions of A students become successful business owners and investors. Kiyosaki uses the categories as metaphors to make a larger point: academic intelligence and financial intelligence are not the same thing.
The publisher’s description of the book captures this distinction. Kiyosaki argues that schools are especially effective at producing “Employees”—students who can read, memorize, test well, and perform within established systems—but are less focused on developing creative thinkers, visionaries, and entrepreneurs. (Google Books)
The Missing Subject: Money
Perhaps Kiyosaki’s greatest criticism of American education is remarkably simple: Why don’t schools teach children about money?
Students spend years studying mathematics, science, literature, history, and other important subjects. Yet they can graduate without understanding a financial statement, cash flow, assets and liabilities, investing, taxes, entrepreneurship, or how businesses raise and deploy capital.
This contradiction troubles Kiyosaki because virtually every adult participates in the financial system.
Whether someone becomes a teacher, construction worker, physician, police officer, attorney, entrepreneur, or engineer, that person will eventually make decisions about wages, taxes, credit, mortgages, retirement accounts, investments, insurance, and debt.
Yet students can receive diplomas without developing substantial financial literacy.
Kiyosaki once summarized his criticism by saying the education system was “training the kids for a time that no longer exists.” (CBS News)
His concern is not simply that schools are bad. He acknowledges that schools perform the essential function of training doctors, lawyers, engineers, teachers, mechanics, construction workers, police officers, and countless other professionals society needs. His question is whether job preparation alone constitutes a complete education.
Schools Teach Students to Seek Employment
Kiyosaki believes American education reinforces a particular formula for success:
Go to school. Get good grades. Go to college. Find a secure job. Work hard. Save money. Retire.
For generations, this formula represented the conventional American pathway toward middle-class prosperity.
Kiyosaki believes the modern economy requires something more.
Instead of teaching children only how to obtain employment, he wants them to understand how businesses are created, how investments work, how capital is raised, and how assets can produce income.
This distinction is represented by Kiyosaki’s famous Cashflow Quadrant:
E — Employee S — Self-employed B — Business owner I — Investor
Traditional education, in his view, primarily prepares people for the Employee and Self-employed sides. Financial education can help people understand the Business-owner and Investor sides.
The important difference is ownership.
An employee primarily exchanges labor and time for income. A business owner attempts to build a system that produces income. An investor attempts to make capital produce additional capital.
Kiyosaki therefore wants education to teach children not merely how to work for money, but how money can work for them.
Schools Reward Correct Answers; Entrepreneurs Learn From Mistakes
Kiyosaki also challenges the educational system’s attitude toward failure.
Traditional schooling generally rewards students for producing correct answers. A student who answers 100 percent of the questions correctly receives an A. Someone who makes numerous mistakes may receive a C or F.
That makes sense academically.
But entrepreneurship often operates differently.
An entrepreneur might introduce a product that fails, start an unsuccessful company, make a poor investment, lose a customer, or miscalculate a market. Those failures can become sources of knowledge.
The entrepreneur asks:
What went wrong? What did I learn? What should I change? How can I try again?
Kiyosaki believes fear of failure can therefore become dangerous when transferred from the classroom into adult economic life. His educational philosophy emphasizes developing financial intelligence and learning through experience rather than allowing fear of mistakes to prevent action. His later Rich Dad educational material continues emphasizing overcoming fear of failure through financial education and entrepreneurial environments. (YouTube)
A Degree Does Not Guarantee Financial Intelligence
One of Kiyosaki’s most important distinctions is between academic intelligence and financial intelligence.
Imagine two people.
The first graduates from an elite university, earns $200,000 annually, but spends $220,000. The second never finishes college but builds businesses and acquires income-producing assets.
Who is better educated financially?
Kiyosaki would argue that income or academic credentials alone cannot answer that question.
A person can have tremendous professional expertise while knowing relatively little about cash flow, investing, taxation, business ownership, or asset acquisition.
Conversely, someone without impressive academic credentials might become exceptionally skilled at recognizing opportunities, selling, negotiating, leading people, building businesses, and allocating capital.
That is the deeper meaning of the book’s title.
The C student may eventually create a company and hire the A student because the two people developed different forms of intelligence.
Stop Defining Children by Their Grades
Kiyosaki’s message is especially directed toward parents.
Parents naturally want children to perform well academically, but Kiyosaki warns against treating grades as the definitive measurement of intelligence or future potential.
The book urges parents to look beyond letter grades and help children discover their individual talents and what Kiyosaki calls their particular “genius.” (Google Books)
A child who struggles with standardized tests may possess tremendous abilities in sales, leadership, creativity, mechanics, communication, technology, entrepreneurship, or interpersonal relationships.
Education should therefore develop the whole individual rather than force every student through precisely the same definition of success.
Education Should Produce Creators, Not Just Workers
This is ultimately Kiyosaki’s challenge to America.
He isn’t arguing that America doesn’t need employees. Every functioning economy needs teachers, engineers, doctors, construction workers, accountants, police officers, scientists, technicians, and countless other professionals.
His argument is about balance.
Who teaches the student who will create the company employing 10,000 workers?
Who teaches children how to raise capital?
Who teaches them how to understand a balance sheet?
Who teaches them about cash flow?
Who teaches them the difference between productive and destructive debt?
Who teaches them how investments are evaluated?
Who teaches them how to transform an idea into a business?
If those subjects are absent from education, Kiyosaki believes America risks producing generations of people who know how to participate in the economy as workers and consumers but do not understand how to participate as owners and investors.
That is why Why “A” Students Work for “C” Students is ultimately not an attack on education. It is an argument for expanding our definition of education.
Reading matters. Mathematics matters. Science matters. History matters. College can matter enormously.
But financial literacy matters too.
A truly modern American education, viewed through Kiyosaki’s philosophy, would teach students both sides of economic life: how to earn a living and how to build wealth; how to become an employee and how to become an employer; how to work for money and how to make money work for them.
Perhaps the most important question Kiyosaki leaves America with is therefore not whether our children are receiving an education.
The question is:
Are we educating them for the economic world they will actually inherit?