Unfair Advantage -The Power of Financial Education (24 page)

In 1997,
Rich Dad Poor Dad
was published. This was a monumental effort because I do not like to write. I flunked out of high school twice because I did not like to write. Yet I wrote that book because I was following the Laws of Compensation with my focus on serving more people, rather than simply making money.

In the year 2000,
Rich Dad Poor Dad
made the
New York Times
best-seller list. It was the only self-published book on the list.

Also in 2000, Oprah Winfrey called and, after one hour on
Oprah
with a woman who is trusted and respected around the world, I went from being a virtual unknown to a player on the world stage.

All Kim and I were doing was following the Laws of Compensation and focusing on serving more people. Today, although we have more than enough money, we keep working and our income from our assets continues to grow. We know it’s because we’re leveraging our unfair advantage in obeying the Laws of Compensation.

In Closing

I write this book because there is simply too much greed in the world. For this financial crisis to end, we need more generous people.

I write to encourage good people like you to be students of financial education, take care of yourself financially, and focus on being generous with your God-given gifts.

As Dr. Fuller reminded me in 1981, it is by being generous that we find our God-given gifts and our God-given genius.

Conclusion - A CASE FOR CAPITALISM

Capitalism has come under severe attack during this financial crisis. Many people believe capitalists are greedy, corrupt, and evil. Granted, many are.

Yet, if you look at what
true
capitalists do,
true
capitalists only profit if and when they make life better, often saving us time and money. For example, the Wright Brothers were the first to fly, but it took capitalists to build an airline industry, making flying safe and affordable for the masses. Today, I am happy to pay for an airline ticket because flying is easier, faster, and a lot less painful than walking, which we all would be doing if not for capitalists.

The same is true for using my cell phone. I am able to do business anywhere in the world, even while on vacation. I am happy to pay for the use of my cell phone because it makes my life easier and makes me richer.

General Electric, founded by Thomas Edison, not only makes life better through electricity, but also extends life through medical technology. I gladly pay for the benefits that GE medical products bring to my life.

And what would I do without my Apple computer? I might never have written
Rich Dad Poor Dad
if not for Steve Jobs making the computer simple enough for a non-techie like me to use. The few dollars I spend on my computer make me millions of dollars each year.

And my Ferrari, Bentley, Ford, or Porsche would be useless if the government did not tax car owners to build and repair our roads.

I believe you get my point. While it is true that there are greedy, crooked, lazy people who exploit the capitalist system, they are not true capitalists. They are simply greedy, crooked, and lazy people.

This financial crisis was caused by corruption at the highest levels of government and business. Like a cancer, legalized corruption eats away at the moral fiber of the world. Men and women of power, craving more power, sell their souls to glorify their egos, destroying lives and bleeding the wealth from people they are supposed to serve.

In world governments, we have too many professional politicians. Many “public servants” serve without any real-world business experience, running the biggest business in the world—the business of government. No wonder government is corrupt.

While corrupt and incompetent business and political leaders have damaged the economy, I believe one of the biggest reasons for this financial crisis is an obsolete educational system. In the United States, the more we spend on education, the worse the system gets.

One problem with the school system is the failure to focus on true capitalism. Hence, we have corrupted capitalism and corrupted governments running the world. In schools, there is a subtle socialist agenda, a subtle undercurrent implying “the rich are greedy.”

In Marxist theory, the proletariat is a class of capitalist society that does not have ownership of the means of production. All they have to sell is their labor for a wage or salary. Proletarians are wage-workers, trained—like Pavlov trained his dogs—to work for money.

Our school system produces this class of capitalism, the proletariat class, a wage earner, a person who leaves school looking for a job. Many will never own anything of value, and many will die with nothing, simply because our schools, while resenting the rich, produce the workers they claim the rich exploit.

A job is not an asset. You cannot own a job. You cannot pass your job on to your kids.

Money is not an asset. Today, money is debt and is rapidly being devalued with more national debt.

Your home is not an asset. You are the asset. Every month, homeowners send checks to the bank, tax department, insurance, and utility companies.

Your retirement plan is not an asset. It is an unfunded liability. Your retirement savings go to the rich who use your money to acquire their assets—real assets.

Students who leave school, looking for a high-paying job, soon fly into the web of capitalism, not because capitalism is necessarily evil, but because the educational system fails to prepare students for the real world. Without financial education, students are trained to be the victims of capitalism. The school system’s belief that “the rich are greedy” becomes a self-fulfilling prophecy.

As I’ve often stated, true capitalists are generous. They produce a lot and receive a lot. Could it be the school system that is really the greedy party?

Marx envisioned a war between the proletariat and the bourgeoisie, the capitalist class, since workers naturally wish their wages to be as high as possible, while the bourgeoisie, the capitalists, wish for wages to be as low as possible.

In the brave new world of the new economy, in the ongoing war for high wages versus low wages, the capitalist class is winning. The capitalists win because it is easy to move production to lower-wage nations. Technology also reduces the number of workers needed to run a business. Production goes up, labor costs go down, and capitalists win.

The world is changing rapidly. The school systems are not. Schools continue to teach people to be proletarians, to leave school in search of a high-paying job. This is financial suicide.

Always remember: A job is not an asset, nor is money an asset, nor is a home an asset. The worker’s savings in their retirement plan is only a source of cash for true capitalists. When markets crash, as they always do, the workers lose, and the capitalists win.

Remember, in Marxist theory, the proletariat is a class of capitalist society that does not have ownership of the means of production. In the new economy, where money is no longer real money, the working class works for nothing. They have no assets.

As an employer, I occasionally interview potential employees looking for a job. Sadly, most are focused on only wages and benefits: “How much will you pay me?” “What are my benefits?” “What are the hours?” “How much time off can I have?” “How fast can I get promoted?”

No one has ever asked: “What is the mission of this company?” “What problem is the company solving?” “What can I learn from working here?”

Rather than ask socially responsible questions, they ask questions about money and working conditions. They ask questions from a proletariat’s frame of mind.

This working-class programming begins when parents say to their child: “Go to school to get a high-paying job,” or “Go to school and become a lawyer, doctor, or web designer. If you have a profession, you will always have something to fall back on.”

Remember rich dad’s #1 rule: The rich don’t work for money.

Home is where proletariat programming begins. Working-class parents want their kids to become higher-educated working-class people, people who ultimately work for the ultra rich.

When a child enters school, the teachers (who are also from the proletariat class of capitalism, a class that does not own production) continue the programming by saying, “If you do as I tell you and get good grades, you will beat your classmates to that high-paying job.”

Once the child enters college, beating out many of their lesser classmates, the teachers continue with their working-class dogma, saying, “If you have a master’s degree or a PhD, your resume will look better. The higher your degree, the better your chances of getting that high-paying job.”

Pavlov caused his dogs to salivate by ringing a bell. Our education system rings the school bell, chiming the promise of a high-paying job. All someone has to say is “high-paying job,” and people start lining up.

If a person “wins” by getting that job and beating out the lesser job candidates, they are only too happy to agree to have their taxes deducted from their paycheck—so the government gets paid before they do.

Once the government is assured of being paid, the new employee agrees to send a portion of their paycheck to a mutual-fund company, investing in their retirement, which means the rich get paid next.

In the United States, if a worker refuses to invest in a company-sponsored retirement plan made up of mutual funds, the employee loses their matching contribution from their employer. In other words, “If you do not pay the Wall Street bankers, we do not have to pay you.”

Many employees naïvely believe the matching contribution comes from their employer. The naïve employee does not realize that the matching contribution was his or her money in the first place. If the employee refuses to invest via a payroll-investment plan, the employer saves money.

This is how much power Wall Street has over our government and labor laws, laws that labor unions endorse. Talk about corruption.

As soon as their new job is secure, the new worker begins to save a little money to buy their dream home because they know, “Your home is an asset and your largest investment.”

Few people realize that the mortgage, and the homeowner who pays the mortgage, are the real assets.

The new member of the working class is now transferring his or her money into the pockets of the bourgeoisie through the agents of the capitalist class: the bankers, real estate agents, stockbrokers, financial planners, and politicians.

The bourgeoisie isolate their world from the world of the working class via the education system. In other words, the educational system is being used as the primary agent of the so-called “greedy rich” whom educators despise.

This is why there is no true financial education in schools.

Get Off the Plantation

My poor dad became a teacher because he was a product of the plantation system of Hawaii. His father, my grandfather, came over on a boat from Japan to work in the sugar and pineapple fields of Hawaii.

My grandfather married my grandmother, whose family had made the crossing a generation earlier in the 1800s. My grandmother’s parents still worked on the plantation when she married my grandfather.

My grandfather wanted nothing to do with life on the plantation. As soon as he was off the boat, he started a photography business. He was an entrepreneur.

My grandfather was very successful. While most fellow immigrants were working for $1 a day, living in housing owned by the plantation, my grandfather owned a house and a car. It was not long before my grandfather was investing in the stock market and buying beachfront property on Maui, the island where my dad’s family lived.

In 1929, the stock market crashed, and the Great Depression began. My grandfather’s business dried up, and he soon lost his house, car, and his beachfront property.

My dad was ten years old when the Depression began. That era affected his outlook on life.

He saw Japanese and other immigrants as paid slaves working on the plantations of the rich. He saw his dad, a man who got off the plantation, wiped out by the market crash and economic depression.

In my dad’s mind, the only safe way off the plantation was through education. Rather than go to medical school, he chose to become a teacher, with the hope that a good education would provide a way off the plantation for the children of the immigrants. He saw education as an escape from the enslavement by the rich, a passage out of bondage.

My dad dedicated his life to education. He graduated from the University of Hawaii and was soon promoted to principal of a school, the youngest principal at the time. He held a full-time day job and remained in school to obtain higher academic degrees. He was selected for advanced programs at Stanford University, Northwestern University, and the University of Chicago. He worked hard and studied hard as he worked his way up the ladder of public education, eventually becoming the superintendent of education for the State of Hawaii.

My dad would often tell us kids, “The rich brought immigrants to Hawaii to work on their plantations. As soon as the workers arrived, they were put up in plantation housing and were given a charge account at the company store.

“When payday came, the immigrants found the rent for the house and the charges from the company store deducted from their paycheck. At the end of the month, most workers had nothing left. A few owed more money because they charged too much at the company store. Many immigrants never received any money. They worked for free.”

He would end his talk by saying, “This is why you have to study hard—so you can get a job off the plantation.”

In my father’s immediate family, education was cherished. Most of my relatives have advanced degrees. Many relatives have master’s degrees and a few have their doctorate degrees. I am one of the few with only a Bachelor of Science degree.

The problem is that many of my relatives work for the biggest plantation of all, the government. A few of their highly educated children work for modern plantations with names such as Coca-Cola, United Airlines, Bank of America, and IBM.

Most of my family, although highly educated, never made it off the plantation.

Producing Proletariat

Karl Marx defined the proletariat as a class of capitalist society that does not have ownership of the means of production. All they have to sell is their labor for a wage.

This is what our school systems do. Schools produce the proletariat class of a capitalist society. Schools do not teach people to be capitalists.

Today, the working class wants high-paying jobs, but true capitalists are moving the production, hence the jobs, to low-wage countries. This is the real crisis. How can an economy come back if jobs are scarce and wages are low?