The poor own few real assets.
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My poor dad, a schoolteacher, was truly a public servant.He dedicated his life to education.He even took two years off from work and a cut in pay to serve in the Peace Corps.He signed up the moment President Kennedy announced the creation of that service organization.The years my mom and dad spent in the Peace Corps were some of the happiest years in my family’s life, although the sacrifices were high.But as the years went on, my dad’s bitterness grew.He grew angrier and angrier with his classmates who chose to go into business while he chose government service.My dad resented the fact that he was successful professionally, but not financially, while some of his classmates enjoyed both professional and financial success.As his classmates grew richer, my dad began calling them ’fat cats’ rather than ’friends.’At first, he was not an active member of the teachers union.If not for my rich dad’s lessons on money, I might have grown up siding with my poor dad.I, too, might have grown up thinking that the rich are greedy.Why Bankers Want to See Your Financial StatementBy the age of 12, I understood financial statements.Because I understood financial statements, I could tell who was greedy and who was not.It hurt to realize that it was my poor dad who was greedy, not my rich dad.The following is a comparison of their balance sheets.My dad did not own a house until he was in his 40s.Our family rented the home we lived in.Although he hired people, he never created any jobs.Taxpayers paid the salaries and benefits of the workers he hired.If my poor dad hired a bad employee, the taxpayers paid for his hiring mistakes.And in many instances, my dad could hire, but he could not fire.That is one reason why many of our government institutions are so inefficient.In contrast, my rich dad created hundreds of jobs and paid tens of thousands of dollars in salaries every month.My poor dad could not see my rich dad’s actions as generous.From his point of view, my rich dad was a greedy person who exploited workers and took advantage of people like him, people who could not afford to purchase their own home.My two dads were on opposite sides of the same coin.Each one thought he was right and the other one was wrong.This is the same battle as America’s new civil war, a battle between government workers and taxpayers, between the rich and everyone else.Which side a person is on depends upon the person’s definitions of the words greed and generosity.Beyond EmotionsHaving two dads got me past the emotions and down to the facts.The real battle between capitalists and everyone else is the asset column.Capitalists make the asset column a personal priority.They tend to see the asset column of capitalists as public property.As is often the doctor may be rich.A professional athlete may be rich.A lawyer who lives in a mansion may be rich.Young people should know those differences.It will help them see both sides of the coin and give them more choices in life.What Is a Millionaire?Many people dream of becoming a millionaire.The question is, what kind of millionaire?The following are examples of different types of millionaires.Net Worth MillionairesThis is the largest group of millionaires.Many people in the middle class are in this category.An example would be a baby boomer who bought their home in 1975, for $100,000, just as inflation took off.This person is a net worth millionaire.Rich dad’s accounting does not follow traditional accounting methods.Rich dad based his accounting on ’cash flow.’ If something ’put money in his pocket’ it was an asset.If it ’took money from his pocket,’ it was a liability.In this example, the $2.5 million home is not an asset, since it is taking money from his pocket for expenses such as repairs, upkeep, insurance, utilities, and taxes.If the homeowner sells his house, the house would then be an asset, putting money in his pocket, as capital gains rather than cash flow.The $500,000 in stocks may or may not produce cash flow from dividends.Very little cash is flowing into their pockets.Although they are millionaires in income, many of these millionaires still worry about losing their job or running out of money if they stop working for any reason.They are the truly rich.They do not need a job.This is why Steve Jobs did not need a paycheck and took a salary of only $1 each year.What Are Your Teaching Your Children?Kids learn by example and mirror what they see and hear.Which path will your child travel?Many people focus on buying their dream home rather than investing to provide homes for others.Challenge yourself, and your children, to see another side of the coin on greed.I started with nothing.If we stop working, the money continues to come in.When we pass on, these assets will continue to provide cash flow for the charities that are the beneficiaries of our estate.In our minds, we had to be generous if we were to produce cash flow that would be sustainable, to continue for generations to come.Yet, in the minds some people, we are greedy capitalist pigs.In ConclusionThe real issue between the rich and the poor and the middle class is one of focus.The rich focus on acquiring assets in the asset column.The poor and middle class focus on their income, how much money they earn, in the income column.The poor and middle classes then tend to save money, even as their own government bureaucrats devalue the purchasing power of their savings.The gap between capitalists and everyone else begins when a parent says to their child, ’Go to school to get a job,’ rather than, ’Go to school and learn to acquire assets.’The poor own few real assets.This is also true for the majority of the middle class.Most only have jobs or professions.Most people have only one job, their own.Most people have only one house, their own.Most people have one retirement plan, their own.The true principle of capitalism is, ’The more people I serve, the more effective I become.’ That is why those in the B and I quadrants must be generous.You must be generous if you want to serve as many people as possible.’Give, and you will receive.Doesn’t this violate the principle of generosity?So who has to be the most generous?Action Step for Parents

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