Chapter Three
Lesson 3: Mind Your Own Business
Study Session
Chapter Four
Lesson 4: The History of Taxes and the Power of Corporations
Study Session
Chapter Five
Lesson 5: The Rich Invent Money
Study Session
Chapter Six
Lesson 6: Work to Learn—Don’t Work for Money
Study Session
Chapter Seven
Overcoming Obstacles
Study Session
Chapter Eight
Getting Started
Study Session
Chapter Nine
Still Want More? Here Are Some To Do’s
Study Session
Final Thoughts
Study Session
BONUS Excerpt from
Rich Dad’s CASHFLOW Quadrant
The Beatles released the Sgt. Pepper’s Lonely Hearts Club Band album on June 1, 1967. It was an immediate commercial and critical success, spending 27 weeks at the top of the albums chart in the UK and 15 weeks at number one in the United States. Time magazine declared Sgt. Pepper’s “a historic departure in the progress of music.” It won four Grammy Awards in 1968 as well as Album of the Year—the first rock album ever to receive that honor.
Rich Dad Poor Dad was released 20 years ago, on my 50th birthday, on April 8, 1997. Unlike The Beatles’ story, the book was not an immediate commercial success. It was not a critical success. In fact, the book’s release and the firestorm of criticism that followed was quite the opposite.
Rich Dad Poor Dad was originally self-published because every book publisher we approached turned my book down. A few rejection slips offered comments like “You do not know what you are talking about.” I learned that most publishers are more like my highly-educated poor dad, than my rich dad. Most publishers disagreed with my rich dad’s lessons on money… as did my poor dad.
Twenty Years Today
In 1997, Rich Dad Poor Dad was a warning, a book of lessons about the future.
Twenty years later, millions of people around the world are more aware of my rich dad’s warnings and his lessons about the future. With 20/20 hindsight, many have said that his lessons were prophetic… predictions come true. A few of those lessons are:
Rich Dad’s Lesson #1: “The rich don’t work for money.”
Twenty years ago, a few publishers turned my book down because they did not agree with rich dad’s number one lesson.
Today, people are more aware of the growing divide between the rich and everyone else. Between 1993 and 2010, over 50 percent of the increase in the national income in the United States went to the wealthiest one percent. Since then, things have only gotten worse. Economists at the University of California found that 95 percent of the income gains between the years 2009 and 2012 also went to that wealthiest one percent.
The lesson: The increases in income are going to entrepreneurs and investors, not to employees—not to the people who work for money.
Rich Dad Lesson: “Savers are losers.”
Twenty years ago, most publishers vehemently disagreed with this lesson from rich dad. For the poor and middle class, “saving money” is a religion, financial salvation from poverty and protection from the cruel world. For many people, calling savers “losers” is like taking god’s name in vain.
The lesson: A picture is worth a 1,000 words. Take a look at the chart of 120 years of the Dow Jones Industrial Average and you will see why and how savers became losers.
The chart shows there are have been three massive stock market crashes in the first 10 years of this new century. The chart on the next page illustrates these three crashes.
120 Years of the Dow
The first crash was the dotcom crash around the year 2000. The second and third crashes were the real estate crash of 2007, followed by the banking crash of 2008.
The Giant Crash of 1929
When you compare the first three crashes of the 21st century to the giant crash of 1929, you gain a perspective of how truly “giant” the first three crashes of this century were.
Printing Money
The chart below shows that after each crash, the U.S. government and the Federal Reserve Bank began “printing money.”
Saving the Rich
Between the years 2000 to 2016, in the name of saving the economy, the banks of the world kept cutting interest rates and printing money. While our leaders want us to believe they were saving the world, in reality, the rich were saving themselves and threw the poor and middle class under the bus.
Today, interest rates in many countries are below zero, which is why savers are losers. Today the biggest losers are the poor and middle class, the people who work for money and save money.
Rich Dad Lesson: “Your house is not an asset.”
Twenty years ago, in 1997, every publisher who sent me a rejection slip criticized rich dad’s lesson that “your house is not an asset.”
Ten years later, in 2007 when subprime borrowers began to default on their subprime mortgages, the world’s real estate bubble burst and millions of homeowners found out the truth in that lesson the hard way. Their house was not “an asset.”
The Real Problem
Most people do not know that the real estate crash was not really a real estate crash.
Poor people did not cause the real estate crash. The rich caused the real estate crash. The rich created financially-engineered products known as derivatives—products Warren Buffett has called “weapons of mass financial destruction.” When the financial weapons of mass destruction started to explode, the real estate market crashed… and poor, subprime borrowers were blamed.
In 2007 there were an estimated $700 trillion in financial derivatives.
Today, it is estimated there are $1.2 quadrillion in financial derivatives. In other words, the real problem has gotten bigger, not better.
Rich Dad Lesson: “Why the rich pay less in taxes.”
Twenty years ago, a few publishers criticized Rich Dad Poor Dad for disclosing how and why the rich pay less in taxes. One stated that that lesson was illegal.
Ten years later, in 2007, President Barack Obama was running for re-election against former Governor Mitt Romney. When it was disclosed that President Obama paid approximately 30% of his income in taxes and Governor Romney paid less than 13% in taxes, Mitt Romney began the downhill slide that would cost him the election. Taxes, again, were a focal point in the 2016 U.S. Presidential election.
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