Thinking is the hardest work there is, which is probably the reason why so few engage in it.

Henry Ford 

It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.

Henry Ford 

It is not the employer who pays the wages. Employers only handle the money. It is the customer who pays the wages.

Henry Ford 

It has been my observation that most people get ahead during the time that others waste.

Henry Ford 

An idealist is a person who helps other people to be prosperous.

Henry Ford 

Discontent is the first necessity of progress.

Thomas A. Edison 

Why the Rich are in a Recovery…and you’re not

Why The Rich Are in a Recovery…and you’re not

Posted on: Tuesday, March 27, 2012 |Written by: Robert Kiyosaki

Spring is in the air. Here in Phoenix, the temperatures are rising into the 80’s and we’re heading into the summertime, which everyone dreads. No one likes 100+ temperatures for three months in a row. But for most of the country, springtime is a hopeful time. After months of grey, rain and snow, the trees are blooming and warmer weather and sunshine are on the way.

In many ways, that seems to be the general feeling regarding the U.S. economy — if you’re to believe the news reports.

What economic recovery?

As I’ve written before, much is being made of the job market gains. But it may be much ado about nothing. Even Bernanke admits the market is “far from normal.”

Chances are most people in this country hear the news of this so-called recovery and just laugh as they fill up their car with gas at over $4 per gallon and make a payment on a mortgage that’s more than their home’s value. Positive numbers don’t mean anything if the reality of people’s everyday life doesn’t change for the better.

The overwhelming majority of people in America don’t feel the effects of this “recovery” — and the numbers prove it.

The rich are in an economic recovery

As the Huffington Post writes, “Technically, the economy has been in recovery for two years. But it turns out the rich have been doing most of the recovering.”

According to Emmanuel Saezan, an economist from the University of California, Berkley, “The top 1 percent of earners took in a full 93 percent of all the income gains that year, leaving the other 7 percent of gains to be sprinkled among the vast majority of society…Income for most workers has barely risen in the last 30 years, but the top 1 percent of earners have seen their income almost triple in the same amount of time.”

A smart person reading this news will want to ask, “Why?”

Why the rich are getting richer?

Not surprisingly, the article on Huffington Post spins this news in a negative way, pointing out the Occupy Movement and President Obama’s policy speeches on economic fairness.

While I can certainly understand why this would be discouraging news for many people, there is another direction from which to view it — financial intelligence.

For years, I’ve been saying that the biggest opportunity for wealth transfer was in front of us with the financial crisis but that only those with financial intelligence and a financial education would profit from it.

Playing your cards right

Does the richest one percent get richer while everyone else gets poorer because the cards are stacked in their favor? Yes.

But it’s not that the stack of cards that makes the rich wealthier — it’s their ability to play the hand dealt to them.

This was the point of my books, Conspiracy of the Rich and Unfair Advantage. Many want to fight the system rather than learn it. Fighting the system will get you nowhere. Understanding how the game of money is played and playing by the rules of the rich will; that requires increasing your financial intelligence throughfinancial education.

The rich have a high financial intelligence, and they’ve used it to get richer during the last decade while the poor and middle-class have struggled playing by the old rules of money.

Sick of sitting stagnant financially? What are you going to do about it?

From: http://www.richdad.com/Resources/Rich-Dad-Financial-Education-Blog/March-2012/Why-The-Rich-Are-in-a-Recovery—and-you’re-not.aspx

Why the Cheap Will Never Get Rich

Why the Cheap Will Never Get Rich

By: Robert Kiyosaki
The other day a friend of mine approached me excitedly, saying, “I found the house of my dreams. It’s in foreclosure and the bank will sell it to me for a great price.””How good is the price?” I asked.”Just before the real estate market crashed, the seller was asking $780,000 for the property. Today, I can buy it from the bank for $215,000. What do you think?” she asked.

“How would I know?” I replied. “All you’ve given me is the price.”

“Yes!” she squealed. “Now my husband and I can afford it.”

“Only cheap people buy on price,” I replied. “Just because something is cheap doesn’t mean it’s worth the cost.”

I then explained to her one of my most basic money principles: I buy value. I will pay more for value. If I don’t like the price, I simply pass. If the seller wants to sell, he will come back with a better price. I let him tell me what he will accept. I know some people love to haggle; personally, I don’t. If a person wants to sell, they will sell. If I feel what I am buying is of value, I’ll pay the price. Value rather than price has made me rich.

Against my advice, my friend sought financing for her “dream” home.

Fortunately, the bank turned her down. The house was on a busy street in a deteriorating neighborhood. The high school four blocks away was one of the most dangerous schools in the city. Her son and daughter would either have to go to private school or take karate lessons. She is now looking for a cheaper house to buy and has asked her father, who is retired, for help with the down payment. If her past is a crystal ball to her future, she will likely always be cheap and poor, even though she is a good, kind, educated, hard-working person.

My Point of View

What follows are some thoughts on why my friend will probably never get ahead financially — especially in this market.

1. She and her husband have college degrees but zero financial education. Even worse, neither plans to attend any investment classes. Choosing to remain financially uneducated has caused them to miss out on the greatest bull and bear markets in history. As my rich dad often said, “What you don’t know keeps you poor.”

2. She is too emotional. In the world of money and investing, you must learn to control your emotions. When you think about it, three of our biggest financial decisions in life are made at times of peak emotional excitement: deciding to get married, buying a home, and having kids.

My dad often said, “High emotions, low intelligence.” To be rich, you need to see the good and the bad, the short- and long-term consequences of your decisions. Obviously, this is easier said than done, but it’s key to building wealth.

3. She doesn’t know the difference between advice from rich people and advice from sales people. Most people get their financial advice from the latter — people who profit even if you lose. One reason why financial education is so important is because it helps you know the difference between good and bad advice.

As the current crisis demonstrates, our schools teach very little about money management. Millions of people are living in fear because they followed conventional wisdom: Go to school, get a job, work hard, save money, buy a house, get out of debt, and invest for the long term in a well-diversified portfolio of mutual funds. Many people who followed this financial prescription are not sleeping at night. They need a new plan. Had they sought out a little financial education, they might not be entangled in this mess.

A Thank You to Jon Stewart

Speaking of finance experts, I personally want to thank Jon Stewart of ‘The Daily Show’ for taking on Jim Cramer and CNBC. Jon Stewart did an incredible job of representing the millions of people all over the world who have lost their savings in the market. He was right in saying he thought it “disingenuous” to advise people to invest for the long term through their retirement plans while knowing full well that traders could steal Americans’ retirement money by trading in and out of the market. Most traders like Cramer realize that investing in mutual funds for the long term is financial suicide. Cramer should have spoken up, but we all know why CNBC won’t let him tell the truth. If he did, the station’s advertisers would leave.

While I applaud Cramer for going on ‘The Daily Show’ and facing the music, I’m afraid he was marginalized by Stewart — certainly outgunned — and he has lost his credibility. He may pay an even bigger price if the SEC decides to dig deeper.

Jim Cramer is a very smart man. I watch his show. I just do not follow his advice.

In closing, I will say what I have said for years: We need financial education in our schools. Without it, we cannot tell the good advice from the bad.


I know this world is ruled by infinite intelligence. Everything that surrounds us- everything that exists – proves that there are infinite laws behind it. There can be no denying this fact. It is mathematical in its precision.

Thomas A. Edison 

I have not failed. I’ve just found 10,000 ways that won’t work.

Thomas A. Edison 

You can’t learn in school what the world is going to do next year.

Henry Ford 

Whatever you have, you must either use or lose.

Henry Ford 

Great Quotes

Common sense is the collection of prejudices acquired by age eighteen.

Albert Einstein 

I do not believe that civilization will be wiped out in a war fought with the atomic bomb. Perhaps two-thirds of the people of the earth will be killed.

Albert Einstein 

I know not with what weapons World War III will be fought, but World War IV will be fought with sticks and stones.

Albert Einstein 

Just because something doesn’t do what you planned it to do doesn’t mean it’s useless.

Thomas A. Edison 

Any intelligent fool can make things bigger and more complex… It takes a touch of genius – and a lot of courage to move in the opposite direction.

Albert Einstein 


Public Enemy

Public Enemy

Posted on: Tuesday, December 14, 2010|Written by: Robert Kiyosaki

When I was a young man, my rich dad taught me one of life’s most valuable financial lessons—the difference between good debt and bad debt. Like most things, debt in and of itself is not bad. It’s how you use debt.

My rich dad explained it this way: “Many things can be both good and bad depending on how you use them. For instance, drugs can be good if they’re prescribed by a doctor and taken according to direction. They can be bad if you overdose on them. Guns can be good if you understand gun safety and use them for sport or to protect your family. They can be bad if a bad person uses them to commit crimes. And debt can be good if you are financially intelligent and use debt to create cash flow. It can be bad if you’re financially unintelligent and use it to acquire liabilities. All things can be good or bad depending on how you use them.”

When people say one thing is always bad, they do so either out of fear and ignorance or to take advantage of someone else’s fear and ignorance. So, when so-called financial experts tell you that debt is bad, they’re appealing to their reader’s fear and ignorance—and possibly exposing their own.

Many of these experts know the difference between good debt and bad debt. In fact, they probably use good debt to further their businesses. But they withhold that information from their readers because it’s easier—and more profitable—to preach the conventional wisdom of go to school, get a good job, save money, buy a house, and invest in a diversified portfolio of stocks, bonds, and mutual funds.

There is a perceived risk with using debt, and so, rather than educate, many choose to placate—and collect a buck in return. The problem is that the old financial wisdom, the old rules of money, is riskier than ever. Savers are losers and the middle-class is shrinking.

Today, public enemy #1 is fear and ignorance. And that fear and ignorance is manifesting itself in the form of a massive, bad debt crisis. And this massive debt crisis is quickly eroding our position as the global economic superpower.

In an article written for The Wall Street Journal entitled “In China’s Orbit,” Niall Ferguson writes, “Nothing is more certain to accelerate the shift of global economic power from West to East than the looming U.S. fiscal crisis. With a debt-to-revenue ratio of 312%, Greece is in dire straits already. But the debt-to-revenue ratio of the U.S. is 358%, according to Morgan Stanley. The Congressional Budget Office estimates that interest payments on the federal debt will rise from 9% of federal tax revenues to 20% in 2020, 36% in 2030 and 58% in 2040. Only America’s ‘exorbitant privilege’ of being able to print the world’s premier reserve currency gives it breathing space. Yet this very privilege is under mounting attack from the Chinese government.”

In plain English, this means life is about to get more expensive. Despite some rose-colored economic news on holiday spending, the US economy is in long-term trouble. As I wrote about in Conspiracy of the Rich: The 8 New Rules of Money, there are four wealth-stealing forces: taxes, debt, inflation, and retirement. All of them are interrelated.

For instance, one of the reasons the US has such a massive debt problem is due to a broken public pension system. In my home state of Arizona, the cost of our public pension system has grown 448 percent over the last ten years to $1.39 billion annually—this despite the fact that the state is facing a $2.25 billion dollar budget deficit. And that’s not taking into account the wave of baby boomers that are getting ready to retire. That cost of retirement in Arizona will only grow.

Given the reality of Arizona’s budget crisis and its growing retirement burden, the state is faced with two choices: cut benefits or raise taxes. Constitutionally, they can’t cut benefits. So, they’ll be forced at some point to either change the constitution or to raise taxes. Either move will hurt the middle-class.

As deficits climb in Arizona, there will be cuts in other areas where it is constitutionally allowed such as education, police enforcement, and fire departments. This may cause the state to seek Federal funds to shore up their municipal needs. But the Federal government is facing its own debt crisis. As the Congressional Budget Offices predicts, by 2040, 58 percent of the Federal revenues will go towards simply paying the interest on our debt. How will the Federal government pay its bills and still support a system of states that cannot? They’ll raise taxes, of course, but they’ll also use the only power they have that the states do not: the printing press. They’ll magically print more and more money.

Printing more money will result in inflation, the hidden tax. This means that the American taxpayers will not only pay more in taxes but also see the dollars they’ve saved lose value, which will weaken their retirement plans, which will cause them to have to take on credit card debt or refinance their homes just to survive, which is private bad debt caused by paying for the government’s public bad debt. It’s a downward spiral, all stemming from financial ignorance and fear.

The good news is that the wealth stealing forces of taxes, debt, inflation, and retirement can also be valuable tools if you know how to play by the new rules of money. To use these tools effectively, you need to have the antidote to ignorance and fear—knowledge and courage. Successful investors and businesspersons have both in spades.

For instance, through my financial intelligence I know the kinds of investments and businesses I can own to reduce my tax burden to zero, how to use debt to increase my return on investment to infinity, how to invest to hedge against inflation, and to use all of them to produce cash flow that will give me a comfortable retirement. Through my courage, I’m not afraid to make those investments because I trust my financial knowledge and education.

Today, you have a choice. Live in ignorance and fear and suffer the pain that will come from that decision as the debt crisis wipes out the middle-class, or gain financial knowledge and courage and learn to play by the new rules of money. I encourage you to choose the latter.