I Guarantee You Are Investing In FAKE Assets Right Now

Dear Reader,

“The rich do not work for money.”

“Savers are losers.”

“Your house is not an asset.”

These are statements from Rich Dad Poor Dad, first published in 1997. These statements were so controversial back in 1997 that every book publisher we approached turned the book down. A few of them stated, “You do not know what you are talking about.”

That was more than two decades ago.

In 2018, many highly educated elites continue to say that I do not know what I am talking about.

Statements like “your house is not an asset” and “savers are losers” violate every cell in their highly educated elite brains. They want to believe their house is an asset and that saving money is the smart thing to do.

The problem is: a house is a fake asset. So are our savings—our money and our retirement savings. Most people are investing in fake assets or counting on fake assets to provide a paycheck for life once their working days are over.

First, we need to define and understand the difference between an asset and a liability: Assets put money in your pocket. Liabilities take money out of your pocket.

My poor dad always said, “Our house is our biggest asset.” My rich dad said, “Your house is not an asset—it’s a liability.” Millions of people believe their house is an asset.

The real estate crash was not a real estate crash.

It was caused by fake assets.

Fake Assets Are Real Liabilities

Billions of people invest in fake assets.

A 401(k) is a fake asset because cash keeps flowing out of your pocket… for years.

An Individual Retirement Account, or IRA, is a fake asset because takes money out of your pocket… for years.

A government pension is a fake asset because it is taking money out of your pocket… for years.

A mutual fund is a fake asset.

So are stocks, bonds, ETFs, and savings.

They are all derivatives.

Mutual funds are loaded with fees, fees that make the rich richer. And you poorer. If you have a retirement account or are investing in government-endorsed plans such as a 401(k) or IRA filled with mutual funds, ETFs, and money market accounts, first look into the fees, not the returns. If you are not good at math or reading the fine print, hire someone like an accountant or attorney to read and analyze the fine print for you. It may be worth millions over the long term—much, much more than the fee your accountant or attorney charges you.

The fees you pay your accountant or attorney to read the fine print may be worth more than a college education.

Insiders know, mutual fund investors put up 100 percent of the money, take 100 percent of the risk, yet gain less than 20 percent of the profits.

Again, mutual funds and ETFs, which are derivatives (and fake assets), are best for the average investor, passive investors without real financial education.

The problem is, if there is another crash, Mom and Pop’s money may disappear, just as it did in 2008. For Mom and Pop, their retirement years are their greatest liability if they live a long life. The ultra-rich know this. They sell fake assets to Mom and Pop, because fake assets are real assets for the ultra-rich. Just watch the cash flowing.

Rich dad often said, “When your banker tells you your house is an asset, he is not lying. He’s just not telling you the truth. What he does not tell you is that your house is the bank’s asset, not yours.” The same could be said for your savings, stocks, bonds, mutual funds, ETFs, and retirement plans. They are all fake assets because the cash flows to the ultra-rich via compounding fees and expenses.

All you have to do is follow the money, and you will see who the cash is flowing to. As legendary investor John Bogle, founder of Vanguard Funds, said, “[Investors] put up 100 percent of the cash, took 100 percent of the risk, and got 33 percent of the return.”

And if the mutual fund crashes, the investor loses 100 percent. If the mutual fund makes money, investors receive 20 percent of the reward, the owners of the mutual fund receive 80 percent.

Remember, the name of the game is not, “Take care of the investor’s money.” The name of the game is “assets under management.”

Even if Mom and Pop lose everything, and even if the fund crashes, burns, and dies, the owners of the fund always win, due to fees, fees, and more fees.

Real Assets Make the Rich Richer

Amazon founder Jeff Bezos is a billionaire. Do you think he became a billionaire because he receives a billion-dollar paycheck? No.

The median income of an Amazon employee is $28,446 in 2017.

Jeff Bezos earns more than $28,466 in 12 seconds. Jeff Bezos’ annual paycheck is only $1.7 million.

Although Bezos’ salary of $1.7 million a year may (technically) be low, there’s a reason he’s called the richest man in the world. His net worth is skyrocketing, mostly due to the fact that he owns about 80 million shares of Amazon stock.

Every month, a portion of the billions of dollars from millions of workers’ 401(k)s and retirement plans flow from their paychecks into shares of Amazon stock. Jeff gets richer although his salary may stay the same.

Your Greatest Liability

From the moment you are born, your retirement is your greatest liability … the day when you stop working or unable to work. If you are fortunate to live a long life, life grows more and more expensive.

That is why Social Security and Medicare are bankrupt today, just as Baby Boomers are retiring.

A friend of mine was no longer able to care for his mom at home. He found a nursing home that would provide the 24-hour medical attention she required. The home is costing him $9,000 a month. She has been there for six years and is expected to live longer. They did not expect her to live this long. His mother’s nursing home cost more per month than he earns. He and his wife are living on income and retirement savings.

Squirrels instinctively know to store nuts for the winter. Humans do not. If a human being is unable to store enough financial support to keep them alive after their working days are over, the winter of their lives and the lives of their families may be like the lives of squirrels who run out of nuts during winter.


Robert Kiyosaki

Robert Kiyosaki
Editor, Rich Dad Poor Dad Daily

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Robert Kiyosaki

Robert Kiyosaki, author of bestseller Rich Dad Poor Dad as well as 25 others financial guide books, has spent his career working as a financial educator, entrepreneur, successful investor, real estate mogul, and motivational speaker, all while running the Rich Dad Company.

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