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