Why We Want You To Be Rich
I must say, this chapter felt like it was mostly replaying the same message in a different tune. But as usual thus far, the examples they used were new and interesting for myself. The theme again revolved around improving your financial IQ and this time a bit about also learning from history.
Kiyosaki used General Motors as an example and how the company suffered financially due to mind boggling financial decisions. He stated that back at around 1985 to 1994 the companyâ€™s earnings was $17.92 a share and at the same time it was paying $20.62 a share in dividends to its investors. Basically, it makes no sense on why one would give out more than they receive to keep the business running as it is simple math that even an elementary student can figure out. Itâ€™s one of those examples where you can have highly educated people with all the degrees in the world running a business, but for some reason when it comes to money they fail in managing it properly. He then went on and discussed again about how a lot of people still have that entitlement mentality and how the value of the dollar is falling.
For the value of the dollar dropping, this time he mentioned how money used to be measured in gold and how it was changed to dollars and coins which is like an â€œIOUâ€ paper as a solution to solve a trade deficit as too much gold was leaving the country. Because of this, once again he talks about how inflation has affected Americans as money is simply being printed when needed which is a form of liability as the real problem isnâ€™t being solved. To demonstrate the harsh drop in value of the US dollar, he states how in 1996 an ounce of gold was worth about $250. Today, one ounce of gold would sell for over $600. If back in 1996 you were to put $1000 in cash in a bank, today it would be valued under $500 in gold. Now if in 1996 you were to buy $1000 worth of gold (four ounces), today that would be worth $2400. Basically, he is demonstrating that if you were simply a saver living life on a fixed income, you end up losing due to inflation.
Donald Trump then talks about knowledge and education. If you fully understand the rules of anything in life, that places you in a position to come up with ideas and solutions to take advantage of an opportunity/venture. He then re-emphasizes how you must have passion for what you do and to do this you must find out what motivates you to do what you do. Having a natural instinct or what some people refer to as a 6th sense is something he believes that everyone has and should fully utilize to their advantage. In the end, he talks about the importance of learning from history to avoid repeating it.
As I mentioned in the beginning, the whole chapter felt like a repeat with some new stories and examples to read. Overall, though the chapter title is â€œWhy We Want You to Be Richâ€ the context felt more like it should be â€œWhy You Donâ€™t Want to Be Poorâ€.