the best mother's day gift you could ever give kim kiyosaki

The Best Mother’s Day Gift You Could Ever Give

A financial education, not a 401(k) plan, is the key to helping mom enjoy her retirement

“Setting up a retirement plan, and sticking to it, is a Mother’s Day gift that will last a lifetime.” So says Penelope Wang, in an article written for Money magazine.

In this story, Wang makes the case for skipping the classic Mother’s Day gifts — flowers and brunch — this year to instead take a look at her retirement plan. “Granted, 401(k)s are nobody’s first-choice topic on Mother’s Day,” she writes. “But it’s a discussion you don’t want to put off too long.”

Why? Because as Wang points out:

  • Moms earn less

  • Consequently, they save less for retirement

  • And they get less social security because they work less

  • But they live longer than men

  • End result: they have higher rates of poverty in retirement

All of these things are true. And they’re all scary realities for the financial fate of women in the US. But is a 401(k) plan really the answer to this problem? Especially when you have to check in to make sure your mom even has one?

Odds are that if you’re at the point where you have to spend Mother’s Day helping your mom think through her retirement, the concept of a 401(k) plan is too little too late. Assuming the average adult in their 30s is finally mature enough to start thinking about his or her mom’s retirement, that would put the woman in question at around 50 to 60 years old. At that point, if your mother hasn’t been saving and investing for some time in a 401(k), starting now isn’t going to help much come retirement time. Between the fees and inflation, she’d have to be socking a lot of money away each month to make a dent. It’s hard enough to be ready for retirement when you invest in a 401(k) plan most of your life, let alone in your later years.

The financial myth that, “Even if you have only small amounts to put away right now, those dollars will grow over time,” is generic advice that sounds great on paper but is a disaster in practice. So no, mom doesn’t need you to start a 401(k) as part of her Mother’s Day gifts. What she needs is to understand that the old way of thinking about money won’t work for her — or her retirement.

Saving vs. investing: Savers are losers

One of the phrases you’ll often hear Robert say is, “Savers are losers.” This statement can come as a surprise to people who have always been told that saving vs investing is the smart thing to do.

This brings up an important distinction between two different concepts: 1) saving money in the short term and then moving that money into a sound investment 2) saving for the long term and investing in supposedly “safe” investments — such as stocks, bonds and mutual funds (like 401(k) plans).

I say “supposedly safe” because the types of long-term investments listed above are not really safer than any other investment, they are just easier. They require less financial education but carry the risk that comes from having almost no control over your investment. They also don’t give very good returns compared to more hands-on investments like real estate or owning a business.

When mom saves her money in a 401(k) plan, she’s at a huge investing disadvantage—low returns and no control. There’s got to be a better way for mom, right?

Saving vs. investing: Investors are winners

Wise investors save for the short term, then use that money to buy investments that bring in regular cash flow — and mom should be doing this, too. The beauty of cash flow is:

  1. it keeps coming in continually (assuming the asset is managed well) so you don’t have to worry about it running out, and

  2. you can raise prices (like the rent on your real estate properties or the price of your business’s products), which means your cash flow income keeps pace with inflation.

Once you have cash flowing in each month, mom will no longer be reliant on paychecks, raises and all those aforementioned savings accounts that yield negligible results. She’ll quickly see how saving vs investing make so much more financial sense.

Gifts for mom that provide a financial education

To invest in ways that bring you good returns and reliable cash flow, the first step is to become financially educated enough to find, buy, and manage good investments. If you neglect your financial education, your options are limited to investments where you have little control and could be left in the cold in your retirement years.

Since I believe in living abundantly, I’ll say that not only should you get flowers and brunch as Mother’s Day gifts, but you should also give her the gift of financial education so she can grow her money and have it work for her!

As such, here are my top gifts for mom, which all tie back to giving the gift of a financial education:

  1. Books. Reading is obviously one of the best ways to learn new material, which is why I penned It’s Rising Time. Think of this book as a battle cry for all women around the world to rise above their obstacles, rise beyond where they think they can go, and rise up to their financial genius. I use a straightforward approach to help women like your mom find courage, overcome the confusion, and build the confidence they need to realize their financial dreams. I also share my own personal business and investing experiences, along with other women’s real-life stories. This book serves as a call for women everywhere to take an inside look into the personal challenges, the setbacks, the comedy, and the triumphs that will lead to the rich life they deserve. It’s empowering, actionable and easy to read.

  2. Games. After your mom is finished reading It’s Rising Time and understands the basics of saving vs investing, she’ll be ready for a rousing game of CASHFLOW® Classic. Robert and I strongly believe that the best learning is accomplished by doing the real thing, and that’s exactly what this game delivers — it teaches the basics of investing through real-world scenarios that allow you to test your financial knowledge and learn from your mistakes. The best part? You’ll do this in a safe environment, with no real money on the line. Plus, playing CASHFLOW can show you how to see opportunities where you previously couldn’t see them. Free, online games are played 24 hours a day, 7 days a week — your mom just needs a desktop, tablet or smartphone device, plus an Internet connection. Might I suggest you play a few games with her? It’s a great bonding experience and you may even learn a few things yourself.

  3. Online classes. Whether mom is barely able to cover her bills and monthly expenses (let alone worry about saving for retirement) or hates her current job and feels trapped because she can’t find a more enjoyable and/or higher-paying job, then real estate investing classes will give her the hope and knowledge she needs to make a change. For more than 30 years, Rich Dad has helped millions of people just like your mom take control of their finances through a variety of investing and personal development workshops. Some titles for beginners that might interest her include “Credit Reset,” “Choose to Be Rich,” and “Start Building Your Financial Fortune.”

As Robert always says, “All of us have the power of choice. I choose to be rich, and I make that choice every day.” Help your mom find her path toward financial freedom by setting her up with the financial education she never received — these three Mother’s Day gifts could change the entire trajectory of her life.

Original publish date: May 12, 2016