Most of Your Assets Are Fake by Robert Kiyosaki

Most of Your Assets Are Fake

Why most people don’t invest in real assets and how the rich use fake assets to rob the poor and the middle class

In a post introducing the ideas behind my newest book, “FAKE: Fake Money, Fake Teachers, Fake Assets: How Lies Are Making the Poor and Middle Class Poorer,” I shared this image.

The GAP, Changes in Share of Income vs 1979, after Taxes and Inflation

This chart shows that over the last nearly four decades, the rich have gotten massively richer while the poor and the middle class have gotten much poorer.

How could this happen?

The answer lies in fake assets.

What are fake assets?

When I was young, the conventional financial advice given by people like my poor dad was, “Go to a good school, get a good job, save money, buy a house, and invest in a balanced portfolio of stocks, bonds, and mutual funds.” Most likely this is the type of advice you were given as well.

My rich dad didn’t buy into this advice because he knew something had changed. Nixon took the dollar off the gold standard in 1971. After that our money was toxic. It became debt.

After realizing what the government was up to, rich dad came up with his lesson #1, which is: “The rich do not work for money.” Rich dad realized money was toxic, designed to steal the wealth of anyone who worked for money, saved money, or invested money in government sponsored investments such as 401(k)s, IRAs, stocks, mutual funds, and ETFs.

In 1997, I shared my rich dad’s advice with the world in my book, “Rich Dad Poor Dad.” In that book I shared truths like the following:

Your house is not an asset.

Savers are losers.

The rich do not work for money.

The so-called financial experts howled. To them, this was heresy. The publishers would not publish my book. “You don’t know what you’re talking about,” they said. Unfortunately, I did. And many recessions that have wiped out the wealth of millions proves so. Also, unfortunately, even though “Rich Dad Poor Dad” is the best-selling personal finance book of all time with over 32 million copies sold, millions upon millions more have never read the book and are suffering financially today.

In that book, I shared my rich dad’s simple formula for assets versus liabilities.

“An asset puts money in your pocket,” said rich dad.

“A liability takes money out of your pocket,” rich dad continued.

The simple definition of a fake asset is one that promises to make you richer but in actuality robs you blind.

Types of fake assets

A 401(k) is a fake asset because cash keeps flowing out of your pocket... for years. An Individual Retirement Account, or IRA, is a fake asset because takes money out of your pocket... for years.

A government pension is a fake asset because it is taking money out of your pocket... for years.

A house that is a primary residence is a fake asset because it is taking money out of your pocket in the form of a mortgage for 30 or more years. You also have to pay for all the repairs and taxes, out of pocket.

A mutual fund is a fake asset. So are stocks, bonds, ETFs, and savings. They are all derivatives. Mutual funds are loaded with fees, fees that make the rich richer. And you poorer. Insiders know, mutual fund investors put up 100 percent of the money, take 100 percent of the risk, yet gain less than 20 percent of the profits.

Remember: Assets put money in your pocket. Liabilities take money from your pocket. By following this simple formula, you can always tell the difference between a fake and a real asset.

What’s the problem with fake assets?

As I mentioned at the beginning of this post, the rich have gotten massively richer while the poor and the middle class have suffered over the last nearly four decades.

The way in which the rich are getting so incredibly rich is by using fake assets to steal the wealth of the poor and the middle class.

That is the problem with fake assets. And it’s a growing one. But first a quick history lesson.

1974, the year I left the Marine Corps, was also the year the Employee Retirement Income Security Act, which protected employees’ company pensions, went into effect. Four years later, 401(k), another financially engineered retirement program, got its beginnings.

There was a problem with this. Suddenly non-investors, men and women without any financial education, were expected to become investors. That was the start of a massive financial rip-off by “too big to fail” banks, the U.S. government, and Wall Street.

The institution of the 401K gave birth to an entire industry of so-called financial planners who are really professional salespeople trained to sell paper assets like stocks, bonds, and mutual funds for commission. To be clear, these are not investments. They are products that banks, the U.S. government, and Wall Street want to sell to become rich. They do so through fees, and they prop up growth by selling more products. If that sounds like a Ponzi scheme to you, you’re on to something.

Yet, despite a massive industry of financial planners, rising stock markets, and millions of people investing in instruments like 401K’s and IRA’s, as we see, the rich are getting richer and the poor and the middle class are getting poorer.

That is the problem with fake assets.

In my new book, “FAKE: Fake Money, Fake Teachers, Fake Assets: How Lies Are Making the Poor and Middle Class Poorer,” I go into much greater detail on this. If you’re intrigued, I encourage you to read it and learn more. Knowledge is your power.

What you can do

The rich do not invest in fake assets and they do not work for money. Rather they know the rules of the game now that money is debt. Their financial knowledge and intelligence allow them to invest in real assets that put money in their pockets each month and make them richer.

If you want to get off the hamster wheel of giving your money away to the rich through fake assets, you must first start with financial education. You must increase your financial intelligence to invest in real assets that provide cash flow and understand the following:

  1. How to use taxes to acquire assets.
  2. How to use debt to acquire assets.
  3. How to reinvest gains without paying taxes.
  4. Why it makes sense to save gold and silver, not fake money.

By increasing your financial education and knowledge, you too will be able to invest like the rich and easily spot fake assets when you see then…and invest in real assets like a pro.

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