05/04/2020
I have a dog. I don’t write much about her but she is the perfect example of why savers are losers... and how different we think about money here at Rich Dad.
Before you start sending me hate emails…
I love my dog. Her name is Cutie. I’m just using her as an example…
The other day I gave Cutie a treat. A dog bone.
She immediately ran to the back and started digging until she had enough of a hole to bury the bone.
It made me chuckle a little bit. She did it immediately. She did not even think about it. She was preprogrammed to save her bone.
I think people are the same way. We have been taught since birth to save our money. That saving money is the only way to retire someday.
Anyways, I took a closer look at the burial site of her new bone.
Nature had already begun attacking:
Ants were already there taking what they could off that bone.
As I backed up, I saw birds swooping down and start rummaging through the loose dirt.
As we learned in school, nature itself will start to eat the bone through bacteria, algae and other decomposing agents.
Cutie may have protected her bone from other dogs, but she did not realize that there were other forces stealing her bone from her. Forces she was either unaware of, never thought about or just could not see.
Cutie was slowly losing her bone and she did not even know it.
That same thing is happening to most people in this world. By saving their money, they are losing their money to economic forces.
Most people are like my poor dad.
My poor dad believed in saving money. "A dollar saved is a dollar earned," he often said.
All his life he saved, not realizing that after 1971 his dollar was no longer money.
You see, in 1971 President Richard Nixon changed the rules of money. Prior to 1971, the U.S. dollar was real money linked to gold and silver, which is why the U.S. dollar was known as a silver certificate. After 1971, the U.S. dollar became a Federal Reserve Note -- an IOU from the U.S. government.
An IOU is debt.
That same year, the U.S. dollar ceased being money and became a currency... it became a debt the U.S. taxpayers had to pay.
Now, almost 50 years later, inflation eats away at the value of our dollar. What one dollar used to be able to buy, now takes many. Since 1971, he U.S. dollar has lost 95% of its value when compared to gold. It’s like the ants eating Cutie’s bone.
Because the interest rates that banks pay you for saving money is lower than the inflation rate, your money is decomposing in the bank vaults. Every day your money is in the bank, it’s value is diminishing.
Taxes, now needed to pay off our debt, eat at your dollar, too. They are like the birds digging at the bone.
The idea of the 401(k)-retirement plan is the final straw.
It’s the bacteria and algae eating your savings. The majority of money earned in a 401(k)-retirement plan goes to the fund manager, not you. Generally, 80% of the money earned goes to the investment firms, and what makes it worse, they get paid even if the 401(k) loses money.
Who’s the loser now? It’s not the banks, the government, or the 401(k) managers…
It’s all designed to make savers, losers.
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