Why What You Earn Doesn’t MatterMindthriller
The importance of learning over earning
When I was a young man, the one thing my poor dad wanted for me was to get a high-paying job. To him, the path to success was to go to a good university, get your degree, find a high-paying job, and work your way up the corporate ladder.
I determined at a young age that wasn’t going to be my path. I wanted to be rich, and I knew that working as an employee, even with a high paying job, wouldn’t be the way to get rich. In fact, this is something most rich people already know (which is partly why they are rich).
Take, for instance, self-made real estate mogul Sidney Torres, who owns over $250 million in real estate. As he told CNBC when it comes to following your dreams, “Intern in the industry you want to be in. Don’t worry about what you’re getting paid.”
Two mindsets about work
My poor dad said, “Job security is the most important thing.”
My rich dad said, “Learning is the most important thing.”
These two statements represent two fundamentally different mindsets about work. Most people will hear Torres advice about not worrying what you will earn, and discount it a privileged advice. “You should be paid fairly for your work!” they will say while stomping their feet. When you look at work as simply a way to make money so you can then do other things, it is impossible to think of it as a means to any other end.
But there are also those who will have a light turn on, realizing that work can be a path to something greater, even if you aren’t paid or are paid very little. Torres is sharing a fundamental lesson that we’ve taught at Rich Dad for years and years: in order to be successful, you have to work to learn, not to earn.
The learning mindset
In the movie Jerry Maguire, there are many great one-liners. But there is one that I found particularly truthful. Tom Cruise’s character is leaving his high-paying job to start his own agency after being fired, and he says, “Who wants to come with me?” The whole place is frozen and silent, looking down at him. Finally, one woman pipes up and says, “I’d like to, but I’m due for a promotion in three months.”
Sadly, as mentioned above, this is the mindset of most people when it comes to work. Rather than look at work as an opportunity to grow and learn, they look at work as a necessary evil and try to get as much money from their job as possible.
As a young man, I faced the same decision as the woman in Jerry Maguire. After graduation from the Merchant Marine Academy, I had a good career ahead of me. My first job was on a Standard Oil of California oil-tanker fleet as third-mate. I made $42,000 a year, including overtime, and only had to work seven months of the year. My poor dad was very happy.
After six months, however, I resigned my position with Standard Oil and joined the Marine Corps. My poor dad was devastated, but my rich dad congratulated me.
The reason I joined the Marine Corps was to learn new skills. I wanted to learn how to be a pilot and to learn how to lead others into difficult situations. I knew that the leadership skills I learned in the Corps would benefit me greatly in life and business.
After my tour of duty, I had the opportunity to get a steady paying job as a commercial airline pilot. Instead, however, I took a job with Xerox as a salesman. Again, my poor dad was devastated and my rich dad was happy. Though I could have had a comfortable life as a pilot, I wanted to learn the skill of sales. I knew that skill, coupled with the leadership skills I learned in the Marine Corps, would make me rich.
Specialist vs. generalist
The fundamental difference between my poor dad’s philosophy and my rich dad’s philosophy about work was one of specialization versus generalization.
My poor dad believed that the best thing to do was to become increasingly specialized in your work. He admitted that people were paid more for knowing more and more about less and less. This is why he was so proud to get his doctorate. Yet, he always struggled financially.
My rich dad believed that the best thing to do was to become a generalist and to know a little about a lot. He said the best thing to do was to work in many areas of a company and pick up skills rather than a profession. He knew the best way to get rich was to be able to lead specialists across a wide spectrum of departments in a company.
Sidney Torres did something similar when he worked a low-paying construction job to learn what it took to buy and develop his own real estate deals.
Can you cook better than McDonald’s?
Sometimes when I’m teaching a class, I’ll ask, “How many of you can cook a better hamburger than McDonald’s?” Nearly everyone in the room will raise their hand. I’ll then ask, “If you can cook a better hamburger, how come you’re not richer than McDonald’s?”
The obvious answer is that McDonald’s is better at business than they are at making hamburgers. They have developed sophisticated sales and business systems and skills that equal success. The reason why most people are poor is because they’re so focused on making the better hamburger but not developing the best business systems and skills.
What does this look like in the real world? Going to school to get your MBA in accounting so that you can be a manager at a big accounting firm while someone like Rich Dad Advisor Tom Wheelwright builds a multi-million dollar accounting practice from the lessons he learned working at a Big 4 accounting firm.
Work to learn not to earn
Today, you’re faced with these same choices. Will you work to earn, holding onto security over opportunity? Or, will you work to learn (and get a financial education), giving up some security to embrace greater opportunity?
Most people will follow the conventional wisdom and choose to work to earn. But if you want to be rich, I recommend that you work for what you want to learn rather than what you want to earn. Figure out what skills you want to acquire before choosing a specific profession and before getting trapped in the rat race.
What skills do you need to acquire to live a rich life?