Top 4 Reasons The Middle Class Is SCREWED

Dear reader,

First off I hope you are staying safe and healthy. 

It’s crazy out there!

In a country where the rich are getting richer and the poor are getting poorer, the straw is finally breaking the camel’s back. That is why candidates like Donald Trump and Bernie Sanders have gained so much traction against traditional party politicians. It is why we are seeing so much polarizing discussion and violence. The American middle class is the spark that is lighting a powder keg of dissatisfaction.

Over the last four decades, there have been forces at work that have stolen wealth from the middle class and given it to the rich. Much of the anger in our country is coming from the fact that people are being financially ripped apart by these forces. Yet, they are not truly aware of what those forces are exactly or what to do about them. All they know is that they want something to change.

One of the reasons why so many people are struggling financially is because they continue to operate according to the old rules of money, old rules such as work hard, save money, get out of debt, invest for the long term in a well-diversified portfolio of stocks, bonds, and mutual funds. 

Yet, if they understood those forces and what to do about them, they would be able to take matters into their own hands rather than hope a politician would fix their problems for them.

Some of today’s financial problems, such as excessive debt and low wages, are caused by circumstances beyond an individual’s ability to solve, problems that have more to do with our government and a smoke-and-mirrors economy.

For example, one of the causes of low wages is high-paying manufacturing jobs moving overseas. Today there are plenty of jobs, but they are in the service sector, not manufacturing. When I was a kid, General Motors was the nation’s largest employer. Today Walmart is the nation’s biggest employer. We all know that Walmart isn’t known for its high-paying jobs—or its generous pensions.

Fifty years ago, it was possible for a person without much education to do well financially. Even if you had only a high school degree, a young person could get a relatively high-paying job manufacturing cars or steel. Today, it’s manufacturing burgers.

Fifty years ago, the manufacturing companies provided health care and retirement benefits. Today, millions of workers are earning less, while at the same time needing more money to cover their own medical expenses and save for retirement. Every day that these financial problems are not solved, they grow bigger. And they stem from a larger national problem that is beyond the power of the individual to change or solve. They stem from poor economic policies and cronyism.

Four Financial Forces Stealing Your Wealth

It may seem unfair that the rules of money changed, that those changes make you poorer, and that they are out of your control… And it is. The key to becoming rich is to recognize that the system is unfair, learn the rules, and use them to your advantage. This takes financial intelligence, and financial intelligence can only be achieved by solving financial problems.

Here are the four financial forces that cause most people to work hard and yet struggle financially.

  • Taxes
  • Debt
  • Inflation
  • Retirement


America was relatively tax-free in its early days. In 1862, the first income tax was levied to pay for the Civil War. In 1895, the US Supreme Court ruled that an income tax was unconstitutional. In 1913, however, the same year the Federal Reserve System was created, the Sixteenth Amendment was passed, making an income tax permanent. The reason for the reinstatement of the income tax was to capitalize on the US Treasury and Federal Reserve. Now row rich could put their hands in our pockets via taxes permanently.


The Federal Reserve System gave politicians the power to borrow money, rather than raise taxes. Debt, however, is a double-edged sword that results in either higher taxes or inflation. The US government creates money rather than raising taxes by selling bonds, IOUs from the taxpayers of the country that eventually have to be paid for with higher taxes-or by printing more money, which creates inflation.


This is caused by the Federal Reserve and the US Treasury borrowing money or printing money to pay the government’s bills. That’s why inflation is often called the “silent tax”. Inflation makes the rich richer, but it makes the cost of living more expensive for the poor and the middle class. This is because those who print money receive the most benefit. They can purchase the goods and services they desire with the new money before it dilutes the existing money pool. They reap all the benefits and none of the consequences. All the while, the poor and the middle-class watch as their buck gets stretched thinner and thinner.


In 1974, the US Congress passed the Employee Retirement Income Security Act (ERISA). This act forced Americans to invest in the stock market for their retirement through vehicles like the 401(k), which generally have high fees, high risk, and low returns. Before this, most Americans had a pension that their work provided. They could focus on their jobs and know they would be taken care of. After ERISA, Wall Street had control over the country’s retirement money, and most people had to blindly trust Wall Street because they simply didn’t have the education and knowledge to understand how to invest properly.

How the Rich Get Richer

Here’s the kicker. The rich know how to use these forces to make more money rather than have them steal their wealth. Why is this? The rich play by a different set of rules when it comes to money. 

  1. The rich know how to make investments and run businesses that allow them to pay little-to-no taxes.
  2. The rich know how to use debt and other people’s money to make investments that provide constant cash flow while paying that debt off.
  3. The rich know how to make investments that hedge against inflation and make them money while others are falling behind.
  4. The rich know how to utilize all these forces to have a secure retirement provided by cash-flowing assets.

For those of you who have been struggling financially and wondering why perhaps it is time to do a refresher course on these new rules of money. 


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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