Work, get paid, pay the bills, repeat. If that loop sounds familiar, you have met the rat race. In this lesson of Mondosol’s Make Money course, Kofi explains where the idea comes from, why earning more does not always fix it, and the realistic steps that give you more breathing room.
Read the article, watch the videos, or press play and listen.
In this article
What is the rat race?
The rat race describes a life where you work mainly to pay this month’s bills, with little left over. You run hard, but you stay in the same place, like a hamster on a wheel.
Robert Kiyosaki made the phrase popular in Rich Dad Poor Dad and in his CASHFLOW game, where the small inner circle is literally called the Rat Race.
Why a raise often does not help
When income goes up, spending often goes up too: a nicer flat, a newer car, more takeaway. This is called lifestyle creep. Look at this made-up example:
| Before the raise | After the raise | |
|---|---|---|
| Monthly income after tax | 30,000 kr | 35,000 kr |
| Monthly spending | 29,000 kr | 34,500 kr |
| Left over | 1,000 kr | 500 kr |
The raise was 5,000 kr, but the money left over actually fell. The wheel just spins faster.
Signs you might be stuck
- You often run out of money before payday.
- An unexpected bill of a few thousand kroner would mean borrowing.
- Credit card or buy-now-pay-later balances keep growing.
- You do not know where a big part of your money goes each month.
None of this means you did something wrong. Rent, prices and family costs can squeeze anyone. The point is to notice it and start changing the numbers.
Five realistic steps to step off the wheel
- Track one month. See where the money really goes (how to track spending).
- Pay yourself first. Move a fixed amount to savings on payday, even 500 kr.
- Build an emergency fund. Aim for three months of needs, step by step.
- Pay off expensive debt. Start with the highest interest rate.
- Save part of every raise. For example, keep half of each raise for savings or investing before your lifestyle grows.
In the example above, saving half of the raise (2,500 kr) would mean 30,000 kr saved after one year.
A balanced view
Some writers present escaping the rat race as quitting your job and living from investments. For most people that takes many years and is never guaranteed. A more useful goal is more options: savings that cover surprises, little or no expensive debt, and a job you choose rather than one you cannot afford to leave.
Be careful with anyone who sells a fast way out. Courses, "systems" and schemes that promise passive income quickly are a common trap.
Watch: the rat race explained
Video: “Escaping the Rat Race: What School Failed to Teach You About Money.” by James Jani, on YouTube.
Video: “How to Escape the Rat Race (Even If You Did Everything Right) – Robert Kiyosaki” by The Rich Dad Channel, on YouTube.
FAQ
Is having a job the same as being in the rat race?
No. Many people enjoy their jobs and still have savings and choices. The rat race is about having no buffer and no options, not about having a job.
How much should I save from a raise?
There is no fixed rule. Saving half of every raise is a simple habit that lets you enjoy some of it while your savings grow.
Should I pay off debt or save first?
Most guides suggest a small emergency fund first, then paying off expensive debt, then saving more. That way a surprise bill does not create new debt.
Can investing get me out quickly?
Usually not. Investing works best over many years. Anything promising fast, guaranteed results is a warning sign.
Keep learning
- Practise it: open the interactive Make Money lessons in your learning journey.
- Previous lesson: Financial literacy.
- Next: Module review: Rich Dad lessons.
- Related: Emergency funds and the cash flow game.
This article is educational and is not financial advice. Mondosol is not connected to Robert Kiyosaki, the Rich Dad company or the publishers of the book or game. Kofi is a character from Mondosol’s story cast. Example numbers are made up to show how the idea works.
