Student loans is just the worse type of debt of all because you cannot declare bankruptcy on it then you get out you try and buy a house and you call it an asset one’s really a liability why because the cash is flowing that way your house cost you money you rent a house still costs you money when i left school in the 60s there were plenty of jobs but the world has changed and our schools haven’t and so they’re still making this innate promise of a job and I was very fortunate when I graduated in 69 We were the highest-paid graduates in the world my classmates were making about 120,000-150,000 a year that’s not much money today but 1969 that was a lot of money I had my rich dad’s lesson the rich don’t work for money in my head i said okay I’m making all this money I have a secure job but what’s beyond that and
that’s where education comes in so if I could explain this to you for the for
the rest of the Millennial lessons it’s really gonna be on this theme here
because financial education is about not working for money like one of the first
questions when I finally realize what my rich dad was saying I said well when do
I never need a paycheck again because as long as you need a paycheck be it from
an employer or like my poor he was so afraid of losing his government pension And I’m going Jesus what a way to run your life your pension so my old man kind of got fired he lost his pension it was the most
frightening thing in the world to him he had no pension then it was social
security which is even worse so that’s why my goal when I was about your age a
little older my goal is to never need a paycheck again from anybody even the
government I don’t want any Medicare Social Security I never wanted to work
for money to need a paycheck so the next few lessons and millennial money you’ll
find out what I do work for So this comes from Rich Dad Poor Dad and these are some other distinctions and with the advantage I had at age nine
because I knew what I wanted to work for and this here in simple terms is called
a financial statement In school they teach you get a FICO score FICO is BS All that it means is how good are you paying your bills that’s all FICO means okay So this is what your banker wants to see so when I was nine years old playing Monopoly with my rich dad
this is the lesson that’s not included in monopoly but rich dad taught me and fundamentally the problem that most people make they go to school to get a job and they work here so this is the poor middle class are these guys and we’re going to talk about later Your first line of expenses is taxes you know just recently President Trump said he gave a tax cut he didn’t have a tax cut for these guys as you know the rules are always written for the rich okay I didn’t make the rules you can get angry at me but these are the rules the rich make the rules this is what I work for so what I work for number one is I’m an entrepreneur I own businesses I have multiple businesses Next is real estate and real estate is good for many things which we’ll go into but number one is debt I use a lot of debt to buy real estate and I pay no taxes that’s the relationship there the next is paper and that’s savings, stock, bonds, mutual funds ETFs and that stuff I don’t have any of that stuff I don’t save money I don’t have any of that but this is what most people have Go to school get a job get a 401k and save money loser I’m doing that just to upset you guys because maybe you’ll start to think because I didn’t make the rules I’m just telling you these are the rules these people pay the highest taxes and they work the hardest and the last are commodities 4 different asset classes so commodities are number 1, is gold, silver, oil, land, water, food so this is what I work for when I left school rather than working
for a paycheck and working for money my education had to go beyond getting a job which I had a good job but I now had to start when I left school about your age the thing i focused on first actually was commodities so back in 1972 I started buying gold it was illegal for Americans to own gold can you imagine that back in 72 so I started with gold but actually the next thing was actually oil because I
went to school to be a tanker officer driving ships for Standard Oil so I understand oil my wife and I don’t own Standard Oil or Chevron or Exxon we own oil wells again taxes you get no tax breaks for owning paper oil
huge debt tax breaks for owning real oil and then I went into real estate why because I can use debt to buy real estate and because I use debt I pay no taxes and then third I started my business my first real real business and
many many businesses as a kid but my first real business was a nylon and
velcro wallet business and I went worldwide right away the trouble is I
was an idiot and the business went up and the business came down what kept me
alive was this and this so you may say why aren’t you working
for money but we’ll go under that next I don’t want what’s called a paycheck I want cash flow so that’s what I mean by the rich don’t work for money you want cash flow that pays very little taxes and I can use lots of debt over here the average person that went to school their biggest liability they have is student loan Student loan is just the worse type of debt of all because you cannot declare bankruptcy on it then you get out you try and buy a house you call it an asset when it’s really a liability why because the cash is flowing that way your house costs you money you rent a house it will cost you money then you have to have a nice car I had one of those so the problem with most young people is they go to school they get that job then a lot of them have Student loan debt and they try and get married and buy a house they have a car and then they have credit card debt but they never have the chance to come over here if they do any investing in America it’s
a 401k which I wouldn’t touch with a ten-foot pole this is a 401k, IRA, ETFs and that stuff paper, savings I don’t touch that stuff So when I say The rich don’t work for money I never wanted to be dependent on a paycheck either from an employer or the government I want to be a free human being