Most people know they should invest, just as most people know they should watch their diet and exercise. Nonetheless, millions of people -- I estimate that 80 percent to 85 percent of Americans -- don't invest at all. What I mean by this is that these people aren't active investors.

An active investor is someone is someone who actually lives off their investments as opposed to wages from a job. My investments deliver a stream of cash flow every month, and I, like other professional investors, don't need a job.

It's similar to the difference between amateur and professional golfers: Amateurs may be very good players, but can they live off their golf game? A professional can withstand the heat of competition and has the mental toughness and the physical skills to create a stream of income.

At age 65, many amateur investors "turn pro" -- whether they like it or not. And that's a frightening thought.

In this article, I take a humorous as well as a more serious look at why people don't invest. A thank you to John S. Baen, Professor of Real Estate at the University of North Texas, for creating this list of why people don't invest -- even though they know they should.

Why People Don't Invest: 12 Humorous Reasons

They're already paying into Social Security.

Their budget includes $20 per week for lottery tickets, which is bound to pay off soon.

They believe that inflation means their money will grow.

Old people don't eat much anyway.

They sit at home waiting for the Publishers Clearing House van to pull up in their driveway and deliver their check.

Their money is safely buried in the backyard.

Their rich Aunt Melba will die soon.

Little Matilda is sure to make it big in Hollywood.

They can cash in their Dallas Cowboy collector glasses when it's time to retire.

Their dot-com stocks will come back to life.

They'll write a book and live off the royalties.

They plan on marrying a young wife/husband when they're 60 and depend on their financial support.

Sometimes we need a break from the seriousness of why we invest and take a moment to laugh a little...or maybe cry. Unfortunately, even though funny, this list contains many truths.

Investing for Cash Flow

The sad thing is: Many people think they're investors when they're not. Lots of people think their 401(k)s and IRAs, which have stock, bond, or mutual fund holdings, are investments, but I consider them savings plans. People with such retirement plans are what I call passive investors. They're simply "saving" for retirement.

Similarly, if you own your home and live in it, I don't consider it an investment. Without cash inflow monthly (and with money going out each month for mortgage payments, utilities, property taxes, insurance, and maintenance), your house is a liability, not an asset. It might become as asset -- if you rent it out for income each month that exceeds your expenses on it, or when you sell it and realize a capital gain.

Most professional investors invest for cash flow first and capital gains second, and, ideally, you want both (see "Investments That Pay Today -- and Tomorrow"). Rich dad told me many times: Investing for capital gains is gambling, not investing.

And remember: You don't need money to make money. Many of those people who don't invest cite that reason -- "I don't have the money to invest."

But there's OPM (Other People's Money) everywhere -- if you've trained yourself to see opportunities around you. How do you do that? Invest in your financial education. Learn how to spot good opportunities and how to turn a seller's problems into your profits.

Perhaps the best example of OPM is a bank as your real estate investment partner. They will loan you the lion's share of the money and allow you to take 100% of the tax advantages, depreciation, and capital gains.

Apart from a light-hearted look at why people don't invest, there are serious reasons for their inaction:

1. They have an entitlement mentality.

When the word entitlement is used, many people point an accusing finger to the poor and those on welfare. Yet, the sad truth is many people have an entitlement mentality. Starting with the President of the United States and working down, millions of people expect the government (or a business) to take care of them once their working days are over. This despite the shaky financial footing of Social Security and Medicare.

My rich dad believed we should all learn to take care of ourselves. I agree and believe it's about time our schools teach people to take care of themselves, rather than believe they're entitled to government support.

2. They lack vision.

Millions of people cannot see past tomorrow. It was Tolstoy who said: "The most unexpected thing that happens to people is old age." This year, the first Baby Boomers turn 60.

As an older Boomer, I hear many peers say, "I don't have to worry. I'll just keep working." They don't see that the day will come when their body cannot work anymore -- if they're lucky to live that long.

The cost of long-term care exceeds what most people earn today. For example, a friend pays over $6,000 a month to keep his mom in a modest facility -- that's more than most families earn monthly. What's going to happen when 75 million Baby Boomers start needing long-term care?

Today, I also hear young people blithely saying, "I'm still young." Whenever I have the opportunity, I remind young people that the Baby Boom problem is really theirs to finance.

3. Our school system doesn't teach us much about money.

"Go to school to get a job" is common advice. But that idea echoes the entitlement mentality, the idea that once you have a job, the company and the government will take care of you. It also reflects a lack of long-range vision. Today, we need to be educated about money beyond just "getting a job." We need to be educated for life after a job, after our working days are over.

The entitlement mentality and myopic vision stem from one place -- our schools and the lack of financial education in our educational system. It's time for our educational system to enter the 21st century and prepare people for the real world.

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