How Financial Oppression Killed the Middle Class

During Senator Bernie Sanders’ 2016 bid for President, he said, “The issue of wealth and income inequality is the great moral issue of our time.” 

The truth is, I actually agree with him on that point.

And when it comes to what caused it and how to fix it? That’s where our agreement ends.

I believe that the moral crisis he’s speaking of begins in our schools. 

Our K-12 schools teach little to nothing about money. Most people still believe in saving money, not realizing that after 1971 debt is money. Without financial education, most people do not realize that the rules of money have changed.

In his book “The Creature from Jekyll Island,” author G. Edward Griffin said:

“The purpose of the foundation [the General Education Board] was to use the power of money, not to raise the level of education in America, as was widely believed at the time, but to influence the direction of that education… 

The object was to use the classroom to teach attitudes that encourage people to be passive and submissive to their rulers. The goal was — and is — to create citizens who were educated enough for productive work under supervision but not enough to question authority or seek to rise above their class. 

True education was to be restricted to the sons and daughters of the elite. For the rest, it would be better to produce skilled workers with no particular aspirations other than to enjoy life.”

One of the greatest sins of our current educational system is that it does not teach you about money. Rather, it teaches you how to be a good employee and to know your station in life. As Griffin would say, this is by design.

Now, you may or may not believe that there was an intentional conspiracy against teaching about money in the school system… 

But what you cannot deny is that our schools should receive a failing grade when it comes to financial education. Whether purposefully or not, our system’s lack of teaching and instruction on money is a driving force behind the financial oppression many people in our country face today.

Public Enemy No. 1: Tax

For much of our history — from 1773 to 1943 really — America was pretty much a no-tax or low-tax country, with a few exceptions such as during the Civil War. 

Not paying taxes was patriotic. And America boomed.

In 1943, The Current Tax Payment Act was passed as a “temporary tax.” The significance of this Act was that it was the first time the government was allowed to remove taxes directly from paychecks before workers got paid.

After 1943, the government kept taking more and more from employees’ paychecks. In the early 1960s, I remember opening my first paycheck and wondering where my money went. The problem is that the 1943 Current Tax Payment Act was not temporary. It is now permanent. The government now has a legal vacuum cleaner sucking money out of your wallet.

Without financial education, most people are financially ignorant about taxes. People have been trained since a young age to send their money to the government. Many of these people vote for politicians who promise to “tax the rich.” 

Then they wonder why their taxes keep going up. The problem is not taxes; the problem is education.

Three Types of Income Taxes

There are three basic types of taxable income in the United States: earned, portfolio, and passive. 

Earned income is derived from labor and is taxed highest of all incomes. Portfolio income is generally income from capital gains earned by buying an asset low and selling it high. It is the second-highest taxed income. 

Passive income is generally income from cash flow and is the lowest taxed of the three incomes.

If you physically work for money, you will pay taxes. The harder you work, the more you make, and the more you pay in taxes. The rich do know how to make more money and pay less in taxes than the poor and middle class — legally.

Learn by Playing Games and Simulation

For many years, my rich dad taught me about money through the board game Monopoly. The formula was simple: four green houses, one red hotel.

I was terrible at the game at first. I failed a lot. But the key to learning was doing and failing. Without failure, I would never have learned the lessons I needed to become rich in the real world. 

Simulation and playing games create an environment where it is safe to fail.

Later, when Kim and I founded The Rich Dad Company, we also created a board game called CASHFLOW that taught people about the foundations of financial literacy. Today, tens of thousands of people play that game in CASHFLOW clubs across the globe daily.

Understanding a Financial Statement

The rich have created their own vocabulary related to money. They make it more complicated than it needs to be. 


Because language creates barriers and the rich don’t want to have more people become rich.

The number lesson in the CASHFLOW game is learning how to read a financial statement. In the real world, a financial statement is your report card. If you don’t have a financial statement or don’t know how to read one, you will find it extremely difficult to get rich.

My poor dad, my natural dad, who was highly educated but didn’t know much about money, focused on the income column of the financial statement. 

My rich dad focused on the asset column. That was the difference between my rich dad growing his wealth and eventually owning a hotel on a beach in Hawaii, and my poor dad begging our forgiveness for having nothing left to leave his kids. We of course assured him that we didn’t care about that, but it tore him up nonetheless.

Words Can Eradicate Income Inequality

My poor dad would say, “I can’t afford it.”

My rich dad would say, “How can I afford it?”

The difference in those words was the difference between being rich and poor. Here is a fundamental principle of Rich Dad: change your words, change your life.

As I was taught in Sunday school, the word became flesh. Our words become our reality. If you change your words, you can change your mindset, which will change your situation. Ask yourself enough times how you can afford something (versus saying you can’t afford something), and you’ll figure out a way to afford it.

The best part? Words are free.

Stop playing by the old rules of money and grow rich

In 2002, I wrote Rich Dad’s Prophecy. I wrote about the coming stock market crash and retirement crisis as baby boomers began pulling money out of their paper-asset-stocked retirement plans to live. One reason why the gap between the poor and the rich is growing at such a fast pace is that so many people are still playing by the old rules of money.

To know, understand, and play by the new rules of money you first have to have a financial education. The rich are getting richer because they understand the rules of money and how to use them to their advantage. 

Going forward, the middle class will continue to shrink and the divide between the rich and the poor will only grow. I want you to grow richer. I want you to continue your financial education; I want you to learn how to profit from taxes, debt, and inflation rather than allow them to make you poorer. I believe that there is a way for everyone to become rich. It’s up to you to take action.

Now, more than ever, it’s imperative to stop playing by the old rules of money. The middle class is dying, and the government won’t save it. The rules have changed and the cards are stacked.

Play it smart,


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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