href="#ulink_099bfebe-c460-5f47-b30b-ee2bbec7e377">INTRODUCTION
I was in a Starbucks the other day and ran into a friend I had not seen in years. Although happy to see him, I was surprised to find him working behind the counter.
“How long have you worked here?” I asked.
“About five months,” he replied as he took my order.
“What happened?” I asked.
“Well, after the market crashed in 2007, I lost my job. I found another one, but that job soon disappeared, too. Finally, after burning through our retirement and savings, we lost our house. We just couldn’t hang on.” He continued: “Don’t worry. We’ve been working. We’re not unemployed. We both have jobs, but we’re not making much money. So I work here, at Starbucks, to make a few bucks. Get it, I work for bucks at Starbucks?” He said, laughing out loud.
Stepping aside so the customers behind me could place their orders, I asked, “So what are you doing for your future?”
“I’m back in school. I’m getting another Masters degree. It’s kind of fun being in school again. I even take a few classes with my son. He’s earning his first Masters degree.”
“Paid for with student loans?” I asked.
“Yeah. What else can we do? I know they’re terrible loans. I know I’ll be working for the rest of my life, just to pay off my loan. My son has more time to pay off his. But we all need more education if we want high-paying jobs. We have to make money. We need to earn a living. So we’re in school.”
I paid for my coffee and was handed a steaming cup. When I offered him a tip, he refused… and I know why he refused. So I wished him luck, and walked out the door.
Part One of this book is about the past. More specifically, how we got into this global financial crisis.
As George Orwell wrote in his book 1984,
“In a time of universal deceit, telling the truth is a revolutionary act.”
WHY THE RICH DON’T WORK FOR MONEY
“They’re playing games with money… Our wealth is stolen via the money we work for.”
– R. Buckminster Fuller
Rich Dad Poor Dad was self-published in 1997. It had to be a self-published book because every major publisher we pitched it to turned it down. A few publishers commented, “You don’t know what you are talking about.”
Some of the points they objected to were my rich dad’s statements such as:
1. Your house is not an asset.
2. Savers are losers.
3. The rich don’t work for money.
Ten years later, in 2007, the subprime mortgage crisis hit and millions of homeowners found out—first hand—that their house is not an asset.
In 2008, the U.S. government and Federal Reserve Bank began printing trillions of dollars, causing millions of savers to be losers via the loss of purchasing power due to inflation, higher taxes, and low interest rates on their savings.
Rich Dad’s Lesson One in Rich Dad Poor Dad is The Rich Don’t Work for Money… and it was the least criticized of rich dad’s three teachings on money. In this chapter, you will learn why this comment is the most important of my rich dad’s lessons, and why it is important to understand before you consider your opportunities for a second chance, a fresh start for both your money and your life.
What You Need to Know About Money
The subject of money can be complicated and intimidating. But if you start with the basics and use them as building blocks you can gain the knowledge you need to understand money and investing and how to make your money work for you.
The most basic thing you need to know about money is that it is a subject that you can become smarter about, a subject that can give you the confidence to make informed and educated decisions.
Q: Who needs a second chance?
A: We all do.
Q: Why?
A: Because money—as we know it—has changed and continues to change.
Q: Why is that important?
A: Because the poor will become poorer, the middle class will shrink, and the rich will get richer.
Q: I think we all know that. What is different about the rich getting richer and everyone else becoming poorer?
A: Many people who are rich today will be among the new poor.
Q: Why will the rich become the new poor?
A: There are many reasons. One reason is because many rich people measure their wealth in money.
Q: What’s wrong with that?
A: The fact that money is no longer money.
Q: If money is no longer money, then what is money?
A: Knowledge is the new money.
Q: So if money is knowledge, you’re saying that many who are poor and middle class today, have the opportunity to become the new rich of tomorrow?
A: Exactly. In the past, the rich were those who controlled land and resources such as oil, weapons, or giant corporations. Today things are different. Today we live in the Information Age—and information is abundant and often free.
Oil was the life-blood of the Industrial Age, but the Industrial Age is dying. While that may be good news for many, it spells disaster for many countries.
Q: So why isn’t everyone rich?
A: It takes education to process information into knowledge. Without financial education, people cannot process information into personal wealth.
Q: But America spends billions on education. Why are there more poor people than rich people?
A: Hundreds of billions of dollars are spent on education, but almost nothing is spent on financial education.
Q: Why isn’t financial education taught in schools?
A: I have been asking that question for years, ever since I was nine years old.
Q: And what did you find out?
