(upbeat guitar music) – Hey guys, welcome to Advanced Lessons in Millennial Money,
featuring Robert Kiyosaki. I’m your host, Alexandra Gonzalez. You know Robert as the best-selling author of the number one personal finance book of all time, Rich Dad Poor Dad. But I’m so excited to let you guys know that Robert just released
his brand new book, Fake. Fake Money, Fake Teachers, Fake Assets. You can get your copy by clicking the link in the description. Hurry before we sell out again. Today we’re in for a really good episode. It’s all about the
differences between what you learn about money in school, and what we teach you here at Rich Dad. Instead of learning about taxes and money, in school we learned
about the mitochondria is the powerhouse of the cell. Very useful. But don’t worry, we’re here to teach you what you really need to know. We start by discussing
the cash flow quadrant. The quadrant describes
how different people earn different kinds of income. Let’s watch Robert
describe this in detail. – So anyway, I’ll point
out really really quickly, the differences between what
they’re teaching in school, and what we at Rich Dad teach. So this is the very big
difference, like I said, most school teachers are like my poor dad. And this was actually Rich Dad, Poor Dad, what you’re seeing here
is a financial statement. You know, Rich Dad, Poor
Dad is a book on accounting. Most boring subject on planet earth. But book number two of
Rich Dad was this one here. And this was called
the cash flow quadrant. You have E, S, B, and I. Test for you. What does E stand for? – The employee. – And what do employees always say? – That they work for money. – But they want job security,
pay cheque, and pension. – Yes, exactly. – What does S stand for? – Self-employed. – Small business owners. – Yes. – Doctors, lawyers… – They work for tips. – They work for tips. So they’re self-employed. And B stands for what? – Big business owners. – So 500 employees or more. And I stands for? – The investor. – The investor. It’s more than just
investor, it’s insider. You see, this is like Shark
Tank, on the TV shows. These guys here have done
this, and they’ve done this. So this was my Poor Dad. This side. This was Rich Dad here. So the difference what
schools are not teaching you, is what’s the difference
between these people and these people? That’s the big difference. And that shows up so,
when I was about your age, I had to make a decision. Did I want to, I was a pilot, most of my friends went
to fly for the airlines. But I’d be here. Or, I could have been in Alaska, flying fisherman around the place. A private, a pilot with a small plane, flying around the place. Or, I could own an airlines, or I could invest in airlines. And that’s the difference. In the mindsets and skillsets. You don’t just make crossings. The education’s extremely
different on this side, than on this side here. – We discussed the financial statement, and the differences between
how the rich and poor make their money. – But this is the big difference here. E’s, in essence, focus here. The rich focus here. And you see, that’s why I
don’t want a job or anything. These guys want jobs, they
have salary interests. Their big problem is
they pay the most taxes. E’s and S’s pay the most taxes. The B’s and I’s focus
here, they don’t pay taxes. Legally. And that makes a lot of people angry, especially the millennials. They want to tax the rich. – Yeah. – But you can’t tax the rich, because they don’t have any income. You see, if you have a
job, and you have income, you’re taxed. If you’re a small business
person, an entrepreneur, a pizza shop or something,
you pay the highest taxes. But because the rich, my Rich
Dad taught me to focus here, my Poor Dad taught me to focus here. And that’s what they’re
not teaching in school. Because to understand this, they would have to teach you this here. And most school teachers
are here and here, they know nothing about this and this. Does that make sense to you? – Yeah, it makes sense. I mean, when you tie it
into school teachers, I think, okay, if I want to lose weight, I go to a personal trainer
who has the body I want. So why do we go to these teachers, when they aren’t accomplishing
what we want to accomplish? – Right. Most of the young people your age today, you know, a lot of them want
to become entrepreneurs. The problem with this, you
have to understand tax. You see, this is all over the world, very little difference, these guys pay 40% of
their money in taxes. So they make $1000, they’re going to spend $40 in taxes. These guys that make $1000, they’re going to pay 60% in tax. So our schools are
teaching entrepreneurship, but they’re not teaching tax. Okay? Because they’re focusing on income. Over here, it’s 20% in tax. So they make $1000, only $200 goes to tax. And these guys, 0%. So the reason financial
education isn’t working in our school systems, is they’re teaching financial education for these people and these people. But to really become rich, you have to focus on this side here. And the difference between a Rich Dad, and the financial, and what they’re teaching in school right now. I’d rather be on this side. This side is a lot harder. But in the long run, it’s more fun for me. On this side here, it’s harder, but you’re
paying tax constantly. So these guys here saying tax the rich, well these guys don’t pay taxes. And as strange as that may seem, I’m talking about legally, this is all over our world. So that’s the big difference here. One last thing, which I think most millennials will understand, is in Rich Dad, Poor Dad I wrote about Ray Crock, founder of McDonald’s. And he was teaching at
the University of Texas, the Mba program, and Ray asked, and mostly MBA’s are
going to come out of here. So Ray Crock asked, and said, “What business is McDonald’s in?” and everybody yelled and said, “No, no, no, we know,
you’re in hamburgers.” And Ray says, “No, McDonald’s
is not in hamburgers. McDonald’s is in the
business of real estate.” Over here. So we have McDonald’s here, and the money McDonald’s
makes for real estate. And that is my formula. This is Rich Dad, I own real estate. I don’t hang out here. I’m glad you guys are here, right? And we do our best to
make sure your educated, and you have your own businesses
and things like this here, but really, the formula I
follow personally is McDonald’s. We have education company, that buys real estate, which means we make a lot of money, and pay zero taxes. Legally. But they’ll never teach
you that in school, which is what Fake is about here. Fake talks about fake money, fake teachers, fake assets. They’re all the same thing. Fake money, fake teachers, fake assets. It’s not an accident. It’s the way the system is set up. There’s why there’s no
financial education in school, because if you guys know this, you wouldn’t stay here. Am I correct? – Yeah, no, you’re correct. – So when I say to go
to school and get a job, you go, “No, no, I think I’ll go here.” – Yeah. And then that’s what I love. Because here at Rich
Dad, you’ve opened doors to other people who have the opportunity to learn about the other side. And to educate themselves
so they have an opportunity and the chance as opposed
to just following the path that we’re supposed to. And we’re led to. – Right. Almost every employee
has their own company, and we encourage you to
have your own business, to invest and things like this, so while you’re still young, you’re making all the mistakes now. – Trump says he paid zero in taxes. That statement got tons
of people in our community wondering how can I do that? I mean, who wouldn’t want
to pay zero in taxes? Robert explains in the next clip. – Do you ever wonder how
the rich don’t pay taxes? – Of course! I mean it went viral
when Trump said he’s paid zero in taxes. And so it got me wondering, too. Well one, how can I do that? Because I need that. I mean, it would be great if
I could pay zero in taxes. And two, how exactly can they structure it to get zero in taxes? – It goes over here to fake money, fake teachers, fake assets. It’s all the same. And all of these guys that are screaming for the rich not to pay taxes, I cover it in Fake. I actually have an article from the New York Times, where they interview Jared Kushner, who is Trump’s son in law, Ivanka’s husband, they’re
richer than the Trumps. Jared Kushner’s family is
richer than the Trumps. But the reason that Jared explains it, why these guys pay no taxes, is because they’re in real estate. And that then stops us in
mutual funds and ETF’s. And so he explains it, the reason the rich don’t pay taxes, is because there’s three types of income. They’ll never teach you this in school. The fake teachers know that. Number one type of, there’s
three types of income. Number one type of
income is earned income. That’s earned income. It’s when you work for money. It’s earned. So that earned income, shows up here. So these are the guys that pay tax, and when all the guys that are screaming tax the rich, well you can’t tax them
because they don’t have jobs. (laughs) it’s kind of funny, isn’t it? You go, tax the rich, well, good luck. And the second type of
income is portfolio income. And portfolio income is
from flipping houses, or you buy a stock for $10, but you sell it for $20. That’s portfolio income. I don’t do that. Trump doesn’t do that. So most guys who are
flipping houses and all that, buying stuff and flipping them, are getting this kind of income. So this income is about 20%. Something like that. But the income that the rich work for is called passive income. Passive income is also known as cash flow. That’s the name on the game. Cash flow. And that income is income that’s flowing from here to here. It bypasses taxes. So I know this doesn’t sound fair, and it isn’t fair. I don’t disagree with you. What’s not fair is our schools, which are part of the problem, never explained that. – And so because it’s passive income, is it not taxed because I guess you guys are creating jobs, and providing houses? – You’re getting smarter then. It’s not illegal because the tax laws are incentives to do what the
government wants done. So the reason the Trump’s,
Kiyosawki’s and Kushner’s pay no taxes, is we provide housing. Number two in the B column. We provide job, but pay no taxes. And three, and it’s a bad word, is oil. You drill for oil, you pay no taxes. But if you buy at Chevron, you pay taxes, stocks. If you provide food, you pay no taxes. So if real financial education, which will never be taught in school, because they’re fake teachers. There was a 1903, the rich got together and they took control
of the education system. That was the Rockefeller’s,
the Melon’s, and the Carnegie’s. And they determined
what school would teach. And that’s why we have fake teachers. They’ll never teach you this in school. So all those schools right
now are saying we’re having financial education, it’s
fake financial education. – A pretty popular topic we’re hearing a lot about is tax the rich. And the rich should pay their fair share. Let’s hear what Robert’s
opinion is on this. – Well, from your generation,
are saying tax the rich. As they say, never happen, Joe. Because the tax laws made the rich do what the government wants done. There are incentives. I provide housing, jobs,
and food, and energy. So that’s what they should be teaching, but the schools will never teach that because they’re fake teachers. So that’s kind of a review
of Rich Dad, Poor Dad. – Yeah, and thank god you gave that. I mean, even when you
were talking about jobs, it’s like, well yeah,
none of us would be here if it wasn’t for you
creating this company. And so, it’s kind of curious as to why the government wouldn’t
want us to be creating more housing, more companies. Why aren’t they making
us learn this in school? – Well because it’s fake education. It’s fake teachers. It’s been going on for hundreds of years. And like I said, when the rich took over, that was Rockefeller’s,
Carnegie, and Melon, and they said, “We don’t
need more entrepreneurs. “We need more employees.” So the purpose of American education is to create soldiers. And employees. People that just do as they’re told, but know nothing about money. – And that’s a wrap for this episode! I hope you learned something new. If you’ve gotten to the end of this video then you should clearly subscribe and hit the notification
bell to stay updated on your financial education. Check out our other videos and thanks for being
part of our community. See you later! (upbeat guitar music)