If Books Could Kill - Rich Dad Poor Dad

00:00:00.080 Peter. Michael. What do you know about a book called Rich Dad, Poor Dad?

00:00:04.360 So I haven't read the book, but I do know that the only difference between a rich dad

00:00:07.720 and a poor dad is that one of them invested in GameStop.

00:00:10.400 so rich dad poor dad is a book by robert kiyosaki which was self-published in 1997 and then

00:00:31.380 published published in the year 2000 this book is on numerous lists as the best selling personal

00:00:39.140 finance book of all time oh so this is not ancient history i looked at the personal finance best

00:00:45.260 sellers on amazon today of the top 10 four of them are rich dad poor dad wow paperback hardback

00:00:53.700 audiobook whatever he has 3 million subscribers on youtube okay he has 6 million subscribers on

00:00:59.120 facebook that's that that's that rich dad mentality i know almost nothing about this book

00:01:04.680 other than it's like a sort of weirdly conservative personal finance book, which is

00:01:11.180 that's almost redundant because yes, the I don't I almost I almost said the field of personal

00:01:17.260 finance, but that's not that's not really what it is. It's more of a convention center parking lot

00:01:22.160 where people are selling pizzas out of the trunk of their car. They have to go into sort of weird

00:01:29.520 to bootstrap energy places very quickly because actually good personal finance advice is super

00:01:36.520 boring right it's like yes make a budget invest in mutual funds and etfs like diversify yeah you

00:01:43.620 can't write a best-selling book based on that you need to bring a truly dark demonic energy into it

00:01:50.500 to get people going yeah it's very similar to health advice where it's like eat fruits and

00:01:55.480 vegetables try to exercise every day right it's like the actual retirement advice you've heard

00:02:00.440 a million times like try to save some percentage of your money put it in early get compound interest

00:02:05.800 like the books that like actually make a ton of valid points never sell 30 million copies

00:02:12.980 yeah no shit invest in low-cost mutual funds the book that's zero airports that's the foundation

00:02:19.580 of our podcast so i want to get into the book as fast as possible because i feel like i really have 0.96

00:02:25.100 to like give you a portrait of what it is like to spend 200 pages with this man the worst thing

00:02:31.240 that i can say about this book and i mean this in the most derogatory way possible is that it makes

00:02:36.260 men are from mars women are from venus look good there was a period with mars and venus there's

00:02:42.180 like a chapter or two where i was like maybe this isn't so bad this book was like a sentence or two

00:02:47.200 right he starts out with just like the basic premise of the book he says i had two fathers

00:02:52.920 a rich one and a poor one. One was highly educated and intelligent. He had a PhD and

00:02:57.880 completed four years of undergraduate work in less than two years. The other father never

00:03:02.680 finished the eighth grade. Both men were successful in their careers, working hard all their lives.

00:03:08.360 Both earned substantial incomes. Yet one struggled financially all his life. The other would become

00:03:13.680 one of the richest men in Hawaii. One died leaving tens of millions of dollars to his family,

00:03:18.580 charities, and his church. The other left bills to be paid.

00:03:22.920 This was the part of the book where I thought he was, like, an ally and he, like, literally had two dads.

00:03:27.700 Oh.

00:03:27.800 He doesn't make it clear.

00:03:30.700 I was like, cool.

00:03:31.420 This is kind of cool.

00:03:32.620 He's got –

00:03:33.400 Yeah.

00:03:34.000 It's 1997.

00:03:35.240 He's writing about his gay fathers. 0.55

00:03:37.200 So poor dad is Robert's actual birth father. 0.87

00:03:40.900 Rich dad is his neighbor's dad.

00:03:43.140 He says, my two dads had opposing attitudes and thought.

00:03:46.280 One dad thought that the rich should pay more in taxes to take care of those less fortunate.

00:03:51.400 The other said taxes punish those who produce and reward those who don't produce.

00:03:56.820 For one dad, the idea of job protection for life and job benefits seemed more important at times than the job.

00:04:03.580 He would often say, I've worked hard for the government and I'm entitled to these benefits.

00:04:08.000 The other believed in total financial self-reliance.

00:04:11.120 He spoke out against the entitlement mentality and how it was creating weak and financially needy people.

00:04:17.300 So already you're like, oh, we're not going to have to read between the lines for the like. 0.89

00:04:20.220 right makers and takers shit okay it's just straight up in the text i'm also immediately

00:04:26.020 quite convinced that um these two people are not meaningfully real he also throughout the book has 0.98

00:04:33.040 a huge amount of just open contempt for his father his real father shocker honestly seems

00:04:39.300 like a really cool guy just like a normal human being yeah yeah he's he's a school teacher for 0.99

00:04:44.480 basically the entire time that robert is growing up oh poor dad job fuck this guy and then he 0.86

00:04:50.520 eventually becomes the head of the department of education for the state of hawaii right he 0.99

00:04:55.200 basically just like positions his father as just a total chump for working a full-time job his

00:05:01.160 entire life whereas this rich dad who he's very vague on the details of is just like he's independent 0.95

00:05:07.420 like he's not a slave to his wage and all this like weird philosophical shit like you know when 0.65

00:05:12.160 you're growing up you kind of always think that other people's parents are better you know you're 0.89

00:05:15.920 like well you can watch tv after 9 p.m or like whatever rule that your parents gave you that

00:05:21.420 that your friend's parents didn't you you're just like wow this guy just carries that forward into

00:05:26.240 a best-selling book we're we're like two pages into this book and i'm gonna send you the paragraph

00:05:30.920 that like turned me against the book hell yeah hell yeah i remember in school being told the

00:05:36.140 story of robin hood and his merry men my school teacher thought it was a wonderful story of a

00:05:40.840 romantic hero a kevin costner type who robbed from the rich and gave to the poor my rich dad

00:05:46.820 did not see robin hood as a hero he called robin hood a crook this war between the haves and

00:05:52.840 have-nots has been going on for hundreds of years it is the take from the rich crowd versus the rich 1.00

00:05:59.840 fuck this guy fuck this guy hot take robin hood sucks the early reveal that rich dad is just his 0.99

00:06:08.620 like neighbor's dad is the makes this all so good because like i don't know you're just at your 1.00

00:06:14.480 friend's house and his and his dad is like your robin hood is a piece of shit all right don't 0.92

00:06:21.120 let anyone tell you that robin hood's a good guy also i got two editions of this book so from the 0.97

00:06:29.400 library they had like the original self-published text and then i also from amazon got the like the

00:06:35.200 sort of republished like once a major publisher got involved post oprah and they updated the text

00:06:41.120 as you can imagine they cut from the later text a real kevin costner type why do you think he's 0.94

00:06:48.640 a kevin costner type robert is it because he was played by kevin costner in a fucking movie 0.71

00:06:52.920 what do you mean a kevin costner type he's literally the movie just came out right a 0.96

00:06:58.220 kevin costner type it's literally it's literally just his like neurons firing off basic associations

00:07:03.880 right a paleobotanist a real laura dern type yeah that's what we associate with that robert

00:07:10.300 this is like such a classic american capitalist sort of thing where poor people have the wrong

00:07:18.020 mindset right yeah then you zoom out like you could look at a map and see that poor people

00:07:22.560 live here and rich people live there are those maps reflecting like geographic mindset differences 0.99

00:07:30.000 like that's what you have to believe to believe that this shit is meaningful right also uh danish 0.97

00:07:35.620 people are just like on a grind set mentality has nothing to do with like unemployment benefits or 0.98

00:07:40.240 pensions and anyone who's ever met a dane knows that that's not true all that hygge has made them 0.98

00:07:47.120 soft so okay now once we learn that robin hood is bad we then get to like the sort of the origin

00:07:55.300 story, like the mythos of the rich dad throughout this book. So Robert says that he's growing up in

00:08:01.580 this middle-class household where his dad is a humble school teacher and he's going to school

00:08:06.440 with a bunch of the rich kids. This is in Honolulu in the 1950s. He's born in 1947.

00:08:11.720 Okay. So he's nine years old. He comes home and he tells his father that he bumped into his friend

00:08:18.560 Jimmy from school driving a Cadillac and he's like, Hey Jimmy, where are you going? And Jimmy

00:08:24.860 he told him i'm going to the beach but you can't come because you're too poor hell yeah get his 0.99

00:08:29.980 ass jimmy yeah one of the first of many just flagrantly fake anecdotes that we're gonna get 0.98

00:08:37.900 in this book he then goes home and he asks his dad dad how can i be rich and his dad of course 0.93

00:08:44.380 doesn't know how to be rich because he's like a wage slave yeah so he says well son he began

00:08:49.480 slowly if you want to be rich you have to learn to make money how do i make money i asked well

00:08:55.480 use your head son he said smiling which really meant that's all i'm going to tell you or i don't

00:09:01.180 know the answer so don't embarrass me so then we get a long sequence where robert and his friend

00:09:08.080 mike go around the neighborhood asking for everybody's toothpaste tubes so they knock

00:09:15.400 into the door hey do you have any used toothpaste tubes and they're gathering them up and this is

00:09:18.960 like a long sequence of them going around they go to grocery stores and go through the dumpsters

00:09:22.900 and get the used toothpaste tubes okay they go in the backyard these children are nine by the way

00:09:29.460 they go in the backyard they build a furnace and they start melting down the toothpaste tubes

00:09:36.400 because in the 1950s toothpaste tubes were made of lead okay and so when his poor dad comes out

00:09:44.180 into the backyard, he finds his son and Mike melting down the toothpaste tubes and pouring

00:09:51.620 them into molds. And he says, I put the steel pot down and smiled at my dad. What are you boys

00:09:58.460 doing? He asked with a cautious smile. Watch, I said. With a small hammer, I tapped at the seal

00:10:04.200 that divided the cube in half. Cautiously, I pulled up the top half of the plaster mold

00:10:09.180 and a lead nickel fell out oh my god my dad said you're casting nickels out of lead 0.99

00:10:15.060 that's right mike said we're doing as you told us we're making money what the fuck is that 0.98

00:10:21.080 what how is that the story you make up like it's obviously made up but it's also so bizarre like 0.94

00:10:29.260 i know the basic dad joke i get making money lol lol got it gotta be illegal by the way to have a

00:10:36.400 mold for a coin yeah 100 wouldn't that nickel be half toothpaste i read this and i was like 0.97

00:10:41.600 deep sigh i'm gonna have to fucking look this up aren't i like what the fuck so it turns out that 0.91

00:10:47.040 it's true that toothpaste tubes were made out of lead before world war ii and then in world war ii 0.97

00:10:53.220 because factories needed lead for the war effort yeah the toothpaste companies had to start making

00:10:57.460 it out of like different metals and plastics and they started mixing it with other things

00:11:01.380 and eventually after the war they started making them out of lead again all of this is roughly

00:11:08.160 true however this thing of melting down lead toothpaste tubes to get like smelted metal out

00:11:14.760 of them this is essentially a urban legend like the kind of thing that like your grandpa would say

00:11:20.420 like things were so scarce we had to melt down our toothpaste tubes i read various like academic

00:11:25.140 articles about this first of all by the 1950s they they put lead back in the toothpaste tubes

00:11:29.980 but they were like one to five percent lead got it like it was nowhere near enough lead to actually

00:11:35.240 get fucking lead out and also they had toothpaste in them yeah so you'd have to be separating the 0.69

00:11:40.240 lead from the like burnt toothpaste go ahead and try to get toothpaste like all of the toothpaste 0.99

00:11:46.340 out of your tooth and you can't fucking you can't like separate them chemically in this way so 0.91

00:11:54.200 clearly this is just like an urban legend that he heard growing up and repeated as if it was true 0.96

00:12:00.660 and nobody throughout the like publishing of this book or 42 million copies ever bothered to google

00:12:06.440 and be like hey dude you're just very obviously making up this anecdote two nine-year-olds

00:12:11.500 smelting lead is guaranteed to end in the death of at least one nine-year-old exactly

00:12:18.120 so then we learn that mike he says his dad understands money they sort of vaguely intimate

00:12:26.960 that like he owns a construction company he runs a chain of convenience stores he's just like

00:12:31.600 doing deals and like running stuff and so he agrees to talk to them about money it's like

00:12:38.640 9 a.m saturday morning like come over and i'll like tell you about money mike and robert go over

00:12:44.060 to the house. And when they get there at nine, he's like on the phone, like doing deals or

00:12:49.640 whatever. Yeah. And he makes them wait for an hour. Finally, he like comes into the living room.

00:12:56.180 So we're going to run through a script here. You're going to play rich dad. Hell yeah. I feel

00:13:00.540 like you have rich dad energy. Yeah, absolutely. People say that about you. Mike says you want to

00:13:04.800 learn to make money. Is that correct, Robert? I nodded my head quickly, but with a little

00:13:09.180 intimidation. Okay, here's my offer. I'll teach you, but I won't do a classroom style. You work

00:13:14.600 for me, I'll teach you. You don't work for me, I won't teach you. I can teach you faster if you

00:13:20.000 work, and I'm wasting my time if you just want to sit and listen like you do in school. That's my

00:13:24.000 offer. Take it or leave it. May I ask a question first? No. Take it or leave it. I've got too much

00:13:29.960 work to do to waste my time. If you can't make up your mind decisively, then you'll never learn to

00:13:33.960 make money anyway. Opportunities come and go. Being able to know when to make quick decisions

00:13:37.980 is an important skill. You have an opportunity that you asked for. School is beginning or it's

00:13:42.560 over in 10 seconds. Take it. Good. Mrs. Martin will be by in 10 minutes. After I'm through with

00:13:47.460 her, you ride with her to my superette and you can begin working. I'll pay you 10 cents an hour 0.99

00:13:51.240 and you will work for three hours every Saturday. But I have a softball game today. Mike's dad

00:13:55.340 lowered his voice in a stern tone. Take it or leave it. Wow. You could have done that with

00:13:59.680 your voice, Peter. You didn't have to read it. Okay. Fair enough. I think I did do it with my

00:14:04.040 voice fyi and this is my favorite stage direction he says i'll take it i replied choosing to work

00:14:11.280 and learn instead of playing softball oh thank you for that illustration that's what happened

00:14:17.040 in the scene that we just read ah okay i i love i love the way he's talking oh you want to learn

00:14:22.740 how to make money well i gotta i gotta plan for you it's called work at my store uh in exchange

00:14:29.640 for wages wow rich dad how do you do it i know i he's doing this this kind of glengarry glenn ross

00:14:37.880 vision of like what rich people are like and like the kind of person you have to be to be wealthy

00:14:43.700 where it's like this weird alpha bullshit where it's like take it or leave it right most dads are 0.65

00:14:48.700 just like nicer than this and just like calmly walk you through also i feel like if a nine-year-old 0.95

00:14:53.960 was like how do i get rich it's like go play outside yeah exactly i have a real life so

00:14:58.920 robert stresses that even in 1956 10 cents an hour is like a very paltry wage that's a great

00:15:06.040 lesson here's how you get rich slave wages to children at your stores there is a section where 1.00

00:15:13.460 his dad is like that's child labor and he's like my dad just didn't get it my dad's such a fucking 0.99

00:15:19.460 loser he doesn't realize you get rich off of child labor okay so then robert works for a couple 0.99

00:15:28.700 weeks three hours every saturday he does this for a while he's not earning enough money and so he 0.83

00:15:33.940 sort of storms into rich dad's house to confront him and we have another scene this one starts with

00:15:42.300 me you said you would teach me if i worked for you well i have worked for you i've worked hard

00:15:48.240 I've given up baseball games, and you haven't taught me anything. 1.00

00:15:51.340 You're a crook like everyone in town thinks you are. 0.99

00:15:54.040 I'm glad you got angry about working for 10 cents an hour. 1.00

00:15:56.340 If you had not gotten angry and had gladly accepted it,

00:15:58.900 I would have to tell you that I could not teach you.

00:16:00.980 You see, true learning takes energy, passion, a burning desire.

00:16:05.600 When it comes to money, most people want to play it safe and feel secure.

00:16:09.040 Passion does not direct them.

00:16:10.620 Fear does.

00:16:11.540 So is that why they'll take a job with low pay?

00:16:13.860 Yes.

00:16:14.880 Some people say I exploit people because I don't pay as much as the sugar plantation

00:16:18.180 or the government. The sugar plantation. I paid less than the sugar plantation. Great sign. I say

00:16:23.900 the people exploit themselves. It's their fear, not mine. But don't you feel you should pay them

00:16:28.840 more? I don't have to. And besides, more money will not solve the problem. Just look at your dad.

00:16:34.560 He makes a lot of money and he still can't pay his bills. Most people given more money only get

00:16:39.200 into more debt. So that's why the 10 cents an hour. It's part of the lesson. So do you still

00:16:44.160 have the passion to learn? Of course. Good. Now get back to work. This time, I will pay you

00:16:49.960 nothing. What? You heard me. You will work the same three hours every Saturday, but this time

00:16:55.320 you will not be paid 10 cents per hour. That's not fair. You've got to pay something. You said

00:17:00.080 you wanted to learn. If you don't learn this now, you'll grow up to be like your dad, earning lots

00:17:04.140 of money only to be in debt up to his eyeballs, hoping more money will solve the problem. Boom.

00:17:09.420 Lessons. What the fuck is the lesson here? What the fuck is going on? He just said, 0.99

00:17:14.160 That it was good that he complained because most people exploit themselves.

00:17:17.800 And then he's like, I want you to work for less.

00:17:20.560 And the kid agrees and he says, that's good too.

00:17:23.420 He just told him not to do that.

00:17:24.860 It's like, wow, wisdom.

00:17:26.020 Wow, you're going to be even shittier to a child.

00:17:28.060 Lesson number three, you pay me and do three hours of work every Saturday. 1.00

00:17:34.780 What the fuck is going on here? 0.98

00:17:37.340 It's also very funny to me that throughout the book, he keeps presenting Rich Dad as 1.00

00:17:42.000 this like Gandalf figure who's full of all this wisdom and he just comes off as such a prick such 0.99

00:17:47.200 a piece of shit talk like this to a child imagine being imagine talking to a kid and being like 1.00

00:17:51.640 look at your stupid fucking dad yeah look at your fucking chump of a dad your dad makes money but 1.00

00:17:56.720 he's in debt which I know because I know your father's finances anyway now I'm enslaving his 1.00

00:18:03.620 child uh so that's rich dad energy kid either have it or you don't so i i want to pause here

00:18:12.500 like we're sort of going to debunk this as we go along so one of the things that rich dad says here

00:18:18.120 which is kind of a rich text robert says don't you feel you should pay them more and rich dad

00:18:23.680 says i don't have to and besides more money will not solve the problem yeah this is like actually

00:18:28.980 fairly common messaging among conservatives. Poor people think that money will get them

00:18:34.760 out of their problem, but all it does is exacerbate the poverty if they don't have

00:18:38.540 the right mindset. Yeah. I mean, he says most people, given more money, only get into more

00:18:43.920 debt. Later in the book, he says more money will often not solve the problem. In fact,

00:18:48.460 it may actually accelerate the problem. Money only worsens the cash flow pattern running

00:18:53.380 in your head. If your pattern is to spend everything you get, most likely an increase

00:18:57.740 in cash will just result in increase in spending thus the saying a fool and his money is one big 1.00

00:19:04.220 party what just not the saying that's not the same what what the fuck is that saying what does that 0.99

00:19:10.460 saying even mean he clearly misheard a fool and his money are soon parted which actually makes 0.88

00:19:15.580 sense in this context exactly and then my favorite thing about this is they didn't update this for 0.99

00:19:21.400 later editions of the book it still says a fool and his money is one big party a fool and his 0.99

00:19:25.980 money is one big party which doesn't make any fucking sense the same we all know and love that 1.00

00:19:30.820 makes it sound like it's that makes it sound like it rocks to be dumb with money 0.97

00:19:35.460 so another thing that i mean because this this book is thuddingly repetitive he basically just 0.81

00:19:43.020 says the same thing like in 50 different ways the the only evidence that he points to about this

00:19:48.200 is that a lot of lottery winners end up bankrupt yeah they win the lottery or they get this big

00:19:53.900 You know, a relative dies and they get this big financial windfall.

00:19:56.840 And then like five years later, they're broke again.

00:19:59.420 Right.

00:19:59.800 So it doesn't work. 0.98

00:20:00.920 Anyway, that's why I pay super low wages to my convenience store workers. 0.88

00:20:05.460 That's why I don't pay children enough. 1.00

00:20:07.500 Less than my main competition, the sugar plantation. 0.97

00:20:13.320 So, you know, to the extent that there are any fucking statistics in this book, this 0.96

00:20:17.580 appears to be a misreading of a weird zombie statistic. 0.97

00:20:22.360 Have you heard this, that 70% of lottery winners end up bankrupt?

00:20:26.380 I don't know that I've heard the 70% number, but I've heard some variation on this, you

00:20:30.260 know, lottery winners go bankrupt at exceedingly high rates.

00:20:32.880 You see it packaged different ways, but this narrative is actually quite common.

00:20:35.680 This 70% statistic is typically traced back to something called the National Endowment

00:20:40.700 for Financial Education.

00:20:42.920 This zombie statistic is so common that the actual, this think tank had to put out a statement

00:20:47.360 being like, uh, we've never said this. And it appears to originate with somebody who was like

00:20:52.320 on a panel that we hosted, but it's basically just some random guy who said this thing that

00:20:58.140 is not true. I looked into this. It's actually really interesting. This myth reflects, I think

00:21:04.220 Americans like deep ambivalence about people who quote unquote don't work for their money.

00:21:08.420 Yeah. If people are getting money unjustly, it's, it's much more comforting to be like,

00:21:12.840 ah, well, you know, they end up really sad and poor. And it reinforces this idea that there

00:21:18.020 are people who deserve the money they earn and there are people who don't. There's also a really

00:21:23.480 interesting journalistic thing happening here where anecdotes where somebody wins a million

00:21:28.880 dollars and they just like are happy for the rest of their lives and are fine. That's not really

00:21:33.060 news. That doesn't get into the paper. Right. Whereas every once in a while you have these

00:21:38.160 weird outlier cases where somebody wins the lottery. Apparently it actually happened once

00:21:43.100 where somebody won the lottery and had a heart attack when they heard the news. And so that

00:21:46.780 ends up in the paper. There's a guy whose kids kill him almost immediately. That's the downside

00:21:53.040 to being a rich dad, by the way. These are outlier rare cases. And the reason they end up in the

00:21:58.100 newspaper is that they are rare. Right. But the fact that these are the only stories of lottery

00:22:02.720 winners that end up in the newspaper makes people think that like, oh, well, most lottery winners

00:22:08.080 must have some sort of disaster befall them.

00:22:10.180 And it does make some sense that like a lottery winner

00:22:14.160 would have a heightened risk of like bankruptcy, for example,

00:22:18.560 relative to other people with the same amount of money

00:22:20.560 because like they probably don't have experience

00:22:22.260 managing that much money.

00:22:23.280 There's actually a really interesting study of this

00:22:25.480 where they tracked lottery winners for five years.

00:22:28.360 And for the first two years,

00:22:30.040 obviously they were much less likely to declare bankruptcy.

00:22:32.400 But then in years three and four,

00:22:34.200 they were much more likely than the average

00:22:35.980 to declare bankruptcy.

00:22:36.780 some people end up blowing all of their winnings really quickly and then by years three and four

00:22:41.100 like maybe they own a boat right or they bought a house that they can't maintain but then by year

00:22:45.200 five it basically just goes back to the baseline kind of average rates of bankruptcy and then you

00:22:50.640 know bankruptcy among lottery winners is really rare and like the overwhelming finding from studies

00:22:56.740 of lottery winners is that they're just happier yeah like you look 10 years out and they're just

00:23:01.980 like yeah they're wealthier and happier right only around three percent of people like kind of

00:23:07.920 retire you know quit their jobs and just like do nothing for the rest of their lives most people

00:23:11.760 two-thirds of lottery winners keep working the same job and this thing of like people blow their 0.87

00:23:15.980 winnings really quickly or yeah they give money to relatives or they buy a too fancy car or

00:23:20.820 something like that it seems people tend to blow like some portion of their winnings but most people

00:23:26.780 are really prudent about it and just like invest in retirement right so he's playing on this like

00:23:32.840 really widespread myth that it's like getting more money won't help you but all of the data

00:23:38.580 seems to be that like no the the solution to poverty is just very straightforwardly money

00:23:44.740 yeah there's really not like a grind set angle to this he's like trying to make it more complicated

00:23:50.260 than it is this is also very funny as a justification for paying your workers very 0.93

00:23:56.380 little money your child workers they're they're just gonna they're just gonna fucking get into 0.97

00:24:02.900 debt or something i'm actually helping them like the fuck i'm just gonna assume that if they're 0.98

00:24:07.900 making not enough money they must have a bad mindset because if they had a good mindset they 0.98

00:24:11.680 wouldn't be working for me that honestly seems to be it it's like just a total lack of respect for

00:24:17.460 the common worker so then we get a really weird scene where it's it's now like three months later

00:24:27.260 he's still working at the convenience store as a slave a child slave he's working there and the

00:24:32.900 rich dad shows up on like a random afternoon and the rich dad is like okay i'm gonna start paying

00:24:38.360 you again how how's 15 cents an hour and he's like that sounds great what about 25 cents an hour

00:24:45.100 and he's like uh even better great it's like what about a dollar an hour what about 25 dollars an 0.95

00:24:51.040 hour is the lesson don't don't take the first offer uh it's significantly dumber than that

00:24:55.940 peter okay don't worry this book is not going to take a turn into like actual useful advice

00:25:01.340 okay and then that leads to another scene how did you feel when i tempted you with a pay raise

00:25:11.120 Did you notice your desire is rising?

00:25:12.880 We nodded our heads.

00:25:13.760 Most people use fear and greed against themselves.

00:25:16.700 That's the start of ignorance.

00:25:18.540 Most people live their lives chasing paychecks, pay raises, and job security

00:25:22.220 because of the emotions of desire and fear,

00:25:25.000 not really questioning where those emotion-driven thoughts are leading them.

00:25:28.620 So what's the answer?

00:25:29.760 What intensifies fear and desire is ignorance.

00:25:33.080 That is why rich people with lots of money often have more fear the richer they get.

00:25:36.960 Money is the carrot, the illusion.

00:25:39.480 I've seen how money runs people's lives.

00:25:41.800 Don't let that happen to you.

00:25:43.220 So what does ignorance have to do with greed and fear?

00:25:45.940 Because it is ignorance about money that causes so much greed and so much fear.

00:25:50.340 As we headed back to the store, Rich Dad explained that the rich really did, quote, make money.

00:25:56.180 They did not work for it.

00:25:57.840 He went on to explain that when Mike and I were casting five-cent pieces out of lead,

00:26:01.980 thinking we were making money, we were very close to thinking the way the rich think.

00:26:06.420 The problem was that it was illegal for us to do it.

00:26:10.800 It was legal for the government and banks to do it, but not us.

00:26:14.200 He explained that there are legal ways to make money and illegal ways.

00:26:17.980 He talked about the gold standard that America was on

00:26:20.660 and that each dollar bill was actually a silver certificate.

00:26:24.380 What concerned him was the rumor that we would someday go off the gold standard

00:26:28.560 and our dollars would no longer be silver certificates.

00:26:32.180 When that happens, boys, all hell is going to break loose.

00:26:35.840 The poor, the middle class and the ignorant will have their lives ruined simply because they will continue to believe that money is real and that the company they work for or the government will look after them.

00:26:47.280 We really did not understand what he was saying that day.

00:26:49.700 But over the years, it made more and more sense.

00:26:54.060 Oh, my God.

00:26:55.540 So I feel like our our listeners might not understand what is happening here.

00:27:01.340 I know.

00:27:02.120 But there is a widespread crank libertarian theory that our departure in the 70s, was it?

00:27:11.540 Yeah, it was Nixon.

00:27:12.160 From the gold standard was the beginning of the decline of the American economy.

00:27:18.620 Because when the dollar was pegged to gold, it was pegged to something quote unquote real.

00:27:24.080 And we are now in a place where money is a fiction.

00:27:27.320 you could do a thousand podcasts uh diving into this topic in and of itself but yeah i think the

00:27:33.960 only thing i will say about the validity of that theory is that the value of gold is also a fiction

00:27:38.780 it's all fake yes and so what this is is this guy in the 90s pretending that the rich dad in the 50s

00:27:46.200 i know was doing the gold standard conspiracy theorizing 20 years before we were off the gold

00:27:53.380 standard he predicted it all and also that he would hear this as a nine-year-old and remember

00:27:58.020 it also what was the point of being like what about a dollar what about 25 like what if i paid

00:28:04.940 you more what what are you talking about yes i want i want the larger amount of money why did

00:28:09.480 you just make me work for three months for no money at all what what is going on what is there's

00:28:16.280 a big there was a big section in the middle that i cut where he's lecturing them about greed but

00:28:21.980 It's like, you're also going to lecture me about greed in a book?

00:28:26.380 Right.

00:28:27.360 Scamming me into get rich quick schemes?

00:28:30.220 Oh, you want more money?

00:28:31.780 I just gave you 15 cents the last hour you worked, and you want another 15 cents this hour?

00:28:39.500 Greed.

00:28:40.220 One of the main threads throughout this book is this idea of, like, ignorance.

00:28:45.200 The reason why people are poor is because they don't know anything about money.

00:28:49.440 I think one of the things that explains the bizarre popularity of this book is this overall narrative that kids aren't learning about financial literacy in schools.

00:29:00.620 And it's kind of up to these gurus to teach people about money as they get older.

00:29:05.620 You can argue that like schools should teach that.

00:29:07.980 But the main reason that schools should teach that is so people like this don't become the ones who are in charge of teaching it to our children.

00:29:15.620 What's really frustrating about this is that as soon as you start Googling around about like financial literacy, you find out that financial literacy programs in schools are like nearly universal.

00:29:26.760 Yeah.

00:29:26.880 I mean, first of all, as a general rule, whenever anybody says they don't teach that in school, that's never being said by somebody who knows what they teach in school and what they teach in school varies widely state to state.

00:29:37.860 But I found a report on this by the Council for Economic Education that found all 51 states, 50 states plus D.C., they all have requirements for kids to learn financial literacy.

00:29:52.200 In 1998, when he's writing this book, it was 39 states.

00:29:55.620 The idea that kids are not learning personal finance in school is just false.

00:30:00.920 This is like as close to a universal lesson in American schools as like the three branches of government. 0.98

00:30:07.480 I think the reason that people are always saying like you need to be taught taxes and shit like that, people say that because you hit like your first tax season and you're like, I don't know what to fucking do. Right. Yeah. Oh, yeah. But here's the thing. You can't just teach that to a 16 year old and then have it stick with them for the next several years. Right. A lot of people are probably learning this and then forgetting that they did. 0.98

00:30:31.180 It is true that American adults do not have super great financial literacy. It's not that bad either. It depends on how you measure it. But it's like we're kind of middle of the pack compared to other rich countries. But like that does not mean we're not learning it in school. American adults also do not know what mitochondria are. And we all fucking learn that in school.

00:30:47.920 So for this episode, I read a really interesting book called Pound Foolish, Exposing the Dark Side of the Personal Finance Industry by Helene Olin, who talks about this like drive for financial literacy as basically like a 40 year propaganda campaign, mostly funded by credit card companies, banks, other financial institutions who have a stake in this as proposing as an explanation for America's higher rates of poverty that people here lack financial. 0.97

00:31:17.920 literacy right it's not our uh it's not the fucking 20 uh interest rates that credit card

00:31:23.480 companies are charging it's the fact that poor people don't understand how to manage their 0.90

00:31:29.220 credit helene olin in this book traces all of this back basically to like the 1980s when the

00:31:35.000 credit card companies and other financial institutions started pushing this idea and

00:31:39.180 actually started supplying financial literacy curricula to schools jesus some of it has you

00:31:45.360 know some of it has like basic stuff in there about like compound interest and like don't fall

00:31:48.560 behind like some of it is kind of fine right but these are companies that are basically pushing the

00:31:53.620 idea that like doing spending on your credit card is totally fine and like student debt is something

00:31:58.220 that's really important and normal but please uh please step onto that um onto the floor that is

00:32:04.280 made of uh leaves and sticks please right over there and this this paragraph drove me nuts she's

00:32:11.020 talking about the 1990s. She says, others were jumping into the fray, including the National

00:32:15.460 Association of Securities Dealers, which released a survey in 1997 demonstrating that 78% of us

00:32:22.720 could name at least one character in a TV sitcom, but only 12% knew the difference between a load

00:32:29.600 and no load mutual fund. Wow, really? That says a lot about society. People watch TV. But they

00:32:36.220 don't know about whether a mutual fund has a load or not when i dump a load in my mutual fund it

00:32:41.640 doesn't follow me around for a week oh god but also 22 percent of americans can't even name one

00:32:52.980 sitcom character i know that seems low to me like the the juxtaposition of the two numbers is just

00:32:58.520 so disingenuous but also like yeah people watch tv and don't know the technical details of

00:33:05.280 retirement funds right that's not like a some sort of societal catastrophe that's just like

00:33:11.100 yeah people like things that are fun and they don't like things that are technical and horrible

00:33:15.220 to think about i mean to even imply that the average person should have to understand like 0.60

00:33:22.080 every minute detail of different types of fucking mutual funds yeah is obscene and in fact sort of 0.70

00:33:30.240 signals that maybe something is wrong with the financial system more broadly if people 0.96

00:33:34.960 need to understand these sorts of minute details in order to control their financial future.

00:33:41.040 What she points out in this book is that the credit card companies, as they are entrenching

00:33:45.040 this idea of like the importance of financial literacy, they're also lobbying against any

00:33:50.020 effort to make their own products simpler and easier to understand, right?

00:33:54.380 There was this initiative a couple of years ago where they were going to be forced to 0.85

00:33:57.140 provide like plain vanilla products of just like here's a here's a normie ass bank account and you

00:34:02.300 must provide people with super basic information in plain words what what they are signing up for

00:34:08.660 and what the risks are and they push back against it successfully so we don't have that right she

00:34:12.680 also points out that this is the beginning of this myth of like you know if you didn't drink

00:34:17.620 so many lattes you'd be able to afford a house right this is a big part of this propaganda push

00:34:22.800 that if you restricted your personal spending, right, if you didn't eat out so much, if you

00:34:28.180 didn't take so many weekend trips, then you would be financially healthy. But people in the 1970s

00:34:34.000 spent significantly more of their disposable income on like personal stuff like food,

00:34:39.640 restaurants, all this like quote unquote frivolous spending was actually higher in the 1970s. But

00:34:44.740 people had higher savings rates because housing, healthcare, childcare, and education had not

00:34:50.880 exploded in price. That's all because we left the gold standard. Let me go get my nickel mold,

00:34:57.500 my illegal black market nickel mold that I have. But then what is also really interesting about

00:35:03.520 this financial literacy stuff is that there's no evidence that having more financial literacy

00:35:08.440 makes you better at spending or like more financially well off, right? Your financial

00:35:13.600 fortune is much more closely related to like how much money you earn and stuff. It's really not

00:35:19.500 about knowledge. And then financial literacy is also associated with being more susceptible to

00:35:26.460 scams. I went to Robert Kiyosaki's Facebook page, which is all like crypto grifters and like various

00:35:32.700 other like buy gold grifters. And one of the most common messages is like, you're a savvy investor.

00:35:38.500 You're above the crowd. You're not one of these sheep. They're pumping you up as somebody who's

00:35:44.060 smarter than everybody else and isn't just going to follow the crowd and put your money in a mutual

00:35:47.820 fund. This is key to the messaging. Yeah. And I don't like that's not really an argument that

00:35:52.160 like no one should understand retirement savings at all. But it's like it's it's not clear that

00:35:58.020 the lack of financial literacy in school is a problem. And it's also not clear that financial

00:36:05.420 literacy is like the solution to this stuff. I love the idea that his friend's father took him

00:36:10.680 under his wing at like nine years old because he he could tell he's like this kid is a real 1.00

00:36:16.440 piece of shit just a real fucking sociopath this kid fucking sucks so i am going to i'm going to 1.00

00:36:22.880 mentor him well do you want to talk about rich dad let's talk let's talk about rich dad we're 1.00

00:36:26.340 like a third of the way into the book this is where he totally abandons the chronological

00:36:31.460 narrative the rest of the book is just like grifty like lists and advice and it basically

00:36:37.340 just becomes like a a long facebook post i like i like that we never learned the the true lesson 0.94

00:36:43.480 of the child slavery he was like i'm working you for 10 cents an hour and the kid's like damn that's

00:36:48.920 almost nothing and he's like that's a good point now you're working for nothing and then he starts

00:36:52.820 talking about the gold standard and that's it there's no lesson he does mention he's like the

00:36:57.320 lessons continued until we both went to college which rich dad did not pay for like oh dude you

00:37:05.680 know throw that in there oh my god that's so good it's so good so i want to take a little

00:37:13.080 detour and talk about what we know about rich dad and what we know about robert kiyosaki okay after

00:37:19.340 this book comes out the the very obvious question is like well who's this rich dad and he mentions

00:37:24.700 various little clues he says he's one of the biggest landowners in hawaii at one point he

00:37:31.240 refers to a quote billion dollar empire the honolulu advertiser looks around and is like well

00:37:39.360 you know there's a finite number of billionaires in hawaii sure they look around and like they

00:37:44.020 can't find anything and over the years robert will say that like rich dad is dead but then he'll also

00:37:52.200 say that he's like still alive but he's a recluse okay in later editions of the book they add a

00:37:57.460 disclaimer that says although based on a true story certain events in this book have been

00:38:02.800 fictionalized for educational content and impact. And in 2002, when he's pressed, he says,

00:38:10.920 why don't you treat Rich Dad like Harry Potter? Rich Dad is an idea. He's a concept, an ethereal

00:38:18.500 entity that hates the fact that we left the gold standard. We should also mention there's no

00:38:23.420 evidence that Robert Kiyosaki had money before he wrote this book. He grows up in Hawaii. As he says,

00:38:29.900 he goes to school to become a boat driver, boat captain, and works for Standard Oil.

00:38:36.540 Grindset, grindset, grindset.

00:38:38.320 Yeah.

00:38:39.820 He ends up leaving to become a helicopter pilot in Vietnam, which sounds fake, but is 0.97

00:38:46.200 actually true.

00:38:46.960 People have found his military record.

00:38:48.840 Okay.

00:38:49.000 The only business that we know he had is in 1977, he starts a company importing Velcro

00:38:56.200 wallets.

00:38:56.940 like in the surfer craze velcro wallets were cool i guess or something like endless summer

00:39:04.220 beach boys whatever yeah yeah and so he starts importing these wallets he has an extremely fake

00:39:11.280 story not in this book but in his previous book which i looked for more biographical details in

00:39:16.980 he talks about how he's like walking the factory floor and he's like the workers weren't having fun

00:39:23.120 and i told them that they should be having fun at work and a month later i came back and

00:39:27.780 productivity increased by 350 percent like robert you're just gilding the lily dude like no one

00:39:35.940 say 10 man it's still fake but like it's not as insultingly fake if i were on a factory floor

00:39:43.060 making velcro wallets and the boss was like you guys aren't having fun i would just kill him on 0.99

00:39:49.180 the spot. But also there, there was no factory. This is in his previous book. He pretends there 0.66

00:39:53.180 was a factory, but then in rich dad, poor dad, he admits that he just importing the wallets from

00:39:57.380 South Korea. He's not like, it doesn't make any sense to manufacture wallets in Hawaii at this

00:40:03.440 time when they're selling for like a buck or two. Right. The wallet one is like the only kind of

00:40:08.700 specific one that we know about, but it goes bankrupt. It appears very quickly, like within

00:40:13.260 a year. And then there's this period where like in various interviews and books, he sort of

00:40:17.320 intimates that like i was selling merchandise i was selling t-shirts i was he's never really

00:40:23.120 specific but it's very clear that none of these ideas worked i love this because he's getting

00:40:28.620 he gets the the various speeches about like greed and fear yeah the implication is like you want to

00:40:35.560 be like a different kind of person so that you can get rich you're not one of the sheep and then

00:40:40.740 he's racking his brain for three decades the only idea he can come up with is like all right i'm

00:40:47.860 gonna buy cheap merchandise and then i'm gonna sell it for a little bit more but he like can't

00:40:54.760 get the shipping cost to work but then after like 10 years of various failed ventures he then kind

00:41:01.380 of pops back up on the grid in 1984 basically delivering get rich quick seminars are you

00:41:09.560 familiar with this business model where it's like there's a free seminar yes you hand out flyers for

00:41:14.380 a get rich seminar a guy who you are told is rich yes stands up and gives you a motivational speech

00:41:23.060 and then you subscribe to some sort of service to get the next level of knowledge right i will

00:41:32.420 teach you my system it's exactly the same business model as trump you where there's a free seminar

00:41:37.680 seminar you then pay 500 bucks for the weekend seminar there's a good expose of this that the

00:41:44.060 cbc ran in 2010 where they went in robert's seminars for this cbc expose and literally like

00:41:50.560 905 like the first thing that they say on the 500 seminar day is like you didn't think you were

00:41:56.620 going to learn everything in three days did you yeah yeah yeah there's always a next step exactly

00:42:00.900 And so then they get you into like the elite model, whatever.

00:42:04.860 So this makes me so mad.

00:42:07.320 They tell you you're going to be buying real estate, right?

00:42:09.760 And it's all this mindset stuff.

00:42:11.120 And so I need to know that you're serious.

00:42:13.380 So I need you to call your credit card company right now and get them to up your limit.

00:42:18.600 Hell yeah.

00:42:18.840 You call your bank and you get them up your limit.

00:42:20.880 And then it's all this mindset stuff and blah, blah, blah.

00:42:23.000 And then, you know, they're trying to sell you on the next stage, like the elite gold

00:42:26.820 plan, whatever.

00:42:27.560 And then when you ask, well, how much is the elite gold plan?

00:42:31.580 They say, well, how much did you increase your credit card limit to?

00:42:34.720 Yeah.

00:42:35.580 And there's reviews and complaints and stuff on like Better Business Bureau by people who spent like $40,000.

00:42:42.500 Jesus Christ. 1.00

00:42:43.700 There's this poor woman. 1.00

00:42:45.080 I mean, it's just an internet comment.

00:42:46.520 I don't know if this is real. 0.99

00:42:47.800 But there's this poor woman who talks about like the years long effort to get her money back that she goes to like the municipal authorities. 0.99

00:42:54.800 And they're like, oh, we don't really do white collar crime. 0.86

00:42:57.060 she goes to the state ag he's like well technically you signed up for it she tries her bank that

00:43:02.380 doesn't work and she's like i spent eighteen thousand dollars and i got nothing just a

00:43:06.300 full-on scam i guess technically there's like lessons and you get like a mentor like they do

00:43:11.120 provide something if you get to the top level they teach you that xenu is i can't remember it

00:43:19.800 exactly in the cbc expose they talk to somebody who falls for this and it's like they don't say

00:43:26.520 where she's from, but she's an immigrant in Canada. She seems to be from somewhere in Eastern

00:43:31.720 Europe. She's been doing these like low level, poorly paid service jobs for years. And she's 0.59

00:43:37.680 in her 50s and she starts looking at her bank account and she's like, I don't have anything

00:43:42.060 saved for retirement. And so she gets a flyer or whatever for this, you know, how to invest in

00:43:48.420 real estate sort of seminar. And she goes thinking like, hey, maybe this is a solution. And I don't

00:43:55.020 think she ended up getting scammed out of too much money luckily i don't think she had enough

00:43:59.080 honestly to to get scammed out of too much but it's like these are the people that they're going

00:44:04.980 after with this business model right it's people who have a real need right and people who believe

00:44:10.140 you when you tell them like hey you can you can get rich you know nights and weekends you can see

00:44:15.600 something real right like they're like investing in real estate that is something that normal people

00:44:20.240 do and get wealthy right yeah if you're a millennial and your parents are comfortable 0.90

00:44:25.620 it's probably because they bought a house in like 1985 yeah no shit yeah so like this sounds real 0.92

00:44:31.140 it sounds like a way that normal people get rich because it kind of is yeah i i also think this 0.80

00:44:36.280 this whole thing that there's kind of there's something rich people know that you don't yeah

00:44:41.020 i think that's also a very tempting message because like yeah you look around america at

00:44:45.380 how unequal things are and you're like there must be some secret to this yeah i just like i i struggle 0.84

00:44:51.360 to convey like how much contempt i have for the people that do this oh yeah they're disgusting

00:44:56.840 this is what really frustrates me about the rise of this book into popular culture so

00:45:00.860 this guy's a total nobody the only thing he's ever made money on is these seminars so this is a

00:45:08.000 scammy seminar as a book right it's it's a natural extension this is basically how like oprah plucks

00:45:14.400 him from obscurity without oprah god he's still a c-list motivational speaker she's doing the same 0.97

00:45:21.340 thing at scale right she's she's selling bullshit to her audience in the same exact way yeah right 0.96

00:45:29.340 i oprah am a billionaire and how did i do it vibes mindset right that's that's her pitch so 0.67

00:45:38.080 to get back to the book, we're, we're now on page roughly 80 of a 200 page book. We finally get to

00:45:46.620 something resembling actionable advice. So he starts by giving you some of the worst

00:45:53.440 fucking advice I've ever seen. He lists a bunch of like myths. He's like, these are like, these 0.99

00:46:00.420 are common misconceptions that a lot of Americans have. Right? So this is the list of them. Your

00:46:06.940 home is an asset get a bill consolidation loan and get out of debt work harder save money when

00:46:14.680 i get a raise i'll buy a bigger house mutual funds are safe and tickle me elmo dolls are out of stock

00:46:21.400 but i just happen to have one in back and another customer has not come by for it yet what

00:46:25.900 okay so so let's put the tickle me elmo one aside for a moment aside every other thing in there

00:46:36.600 is a solid piece of financial advice

00:46:38.900 that he is saying is, in fact, a misconception.

00:46:41.900 Save money.

00:46:42.600 Saying that save money is bad advice?

00:46:45.660 Your home is not an asset.

00:46:47.160 Your home is, what?

00:46:49.620 What does he think it is?

00:46:50.580 A liability, Peter.

00:46:51.980 He has a whole tedious section

00:46:53.760 about how you think your home is an asset,

00:46:55.860 but it's actually a liability.

00:46:57.620 Because you have to pay interest on your mortgage?

00:46:59.640 Like, I don't get it.

00:47:00.260 He has this weird thing where he says

00:47:02.380 friends of his had to pay a thousand dollars a month in property taxes and it like wiped out 0.98

00:47:09.780 the value of their house or something i'm like how much is their fucking house worth 0.91

00:47:14.780 he talks about living in phoenix in the 1990s and watching good morning america 0.96

00:47:22.380 and some like financial guru comes on and he says his advice was to save money put a hundred dollars

00:47:28.800 away every month, he said. And in 40 years, you'll be a millionaire. Well, putting money away every

00:47:34.040 month is a sound idea. It is one option. The option most people subscribe to. The problem is

00:47:40.220 this. It blinds the person from what is really going on. They miss major opportunities for much

00:47:45.980 more significant growth of their money. The world is passing them by. Oh, God. What is it blinds them

00:47:51.860 from what's really going on? What the fuck does that mean? Let me show you the secret knowledge 0.98

00:47:56.600 of running scam seminars this is the like genuinely dangerous in a sort of obvious way

00:48:03.820 but like the best way to illustrate it i think is imagine a society where everyone follows this

00:48:10.380 advice a society as we know it would collapse he also you knew you knew he was going to get

00:48:16.180 to this place there's a section on like retirement savings where he says like don't don't invest in

00:48:20.740 mutual funds because like they're all scammers and they're trying to like the fund managers are 0.69

00:48:24.460 trying to fuck you over what and then he says when i speak to adults who want to earn more money 0.96

00:48:28.740 i suggest taking a long view of their life instead of simply working for the money and security which 1.00

00:48:34.400 i admit are important i suggest they take a second job that will teach them a second skill

00:48:38.620 often i recommend joining a network marketing company also known as multi-level marketing

00:48:44.260 yes like okay i did this is where i did a control f for timeshare

00:48:48.440 where where where is he taking me next what i would suggest is actually being scammed

00:48:54.880 it's not just running scams it's also being scammed the yin and the yang yeah of being a

00:49:00.560 rich dad so after he gives you all of this atrocious advice we finally get to the first

00:49:05.020 piece of actual financial advice in the book this is when when you find like subreddits and stuff

00:49:10.600 where people talk about this book a lot of people like defend this book by saying that like this is

00:49:15.980 an actual genuine piece of wisdom so his number one rule for financial security in your life is

00:49:24.680 buy assets not liabilities okay he says rich people acquire assets the poor and middle class

00:49:31.480 acquire liabilities but they think they're assets okay so then i'm not fucking kidding there's 40 0.94

00:49:37.860 pages go by before he tells you what a fucking asset is he gives it to you in like these like 0.94

00:49:44.620 vague terms he's like an asset puts money into your pocket but a liability takes it away 0.97

00:49:49.480 and there's all these fucking charts and you're like right what specifically do you mean robert 0.72

00:49:54.740 it seems to me like there's a very good shot that he doesn't actually have a coherent definition of 0.96

00:49:59.720 what an asset is and what a liability is do you want to get to it it's eight parts peter

00:50:03.400 oh finally he finally gives it to us ultimately an asset is something that earns passive income

00:50:08.860 for you. Okay. He finally gives us a list. He says, one, businesses that do not require my

00:50:15.540 presence. Two, stocks. Three, bonds. Four, mutual funds. Five, income generating real estate. Six,

00:50:25.920 notes, parentheses IOUs. Seven, royalties from intellectual property such as music,

00:50:33.140 scripts patents eight this is the best one and anything else that has value produces income or

00:50:40.520 appreciates and has a ready market yeah okay sure that's the catch-all so it's like stocks bonds

00:50:48.360 real estate and everything tickle me almost great robert he then literally goes into a whole thing

00:50:57.420 about tickle me almost i was i was gonna say should we circle back to tickle me almost so

00:51:02.700 I'm glad we got there. 0.75

00:51:03.620 So he basically says that like, you know, talks about like the run on Tickle Me Elmo's and, you know, scalpers were selling these stupid toys for like, I don't know, $10,000 or something. 0.89

00:51:11.720 It was like a big deal for one, whatever Christmas it was. 0.58

00:51:14.300 Yeah.

00:51:14.620 You're again just inviting people to get scammed, basically.

00:51:17.620 Right.

00:51:17.940 He mentions baseball cards.

00:51:19.840 Like, I don't know if that's an investment, Robert.

00:51:21.900 Well, the baseball card market notoriously collapsed in the 80s and like through the 80s and 90s and is now a tiny fraction of what it was.

00:51:31.220 So, oh, I didn't know this.

00:51:32.760 So great, great tip.

00:51:34.800 Don't buy houses, buy baseball cards.

00:51:36.580 So his second money making tip is avoid paying taxes.

00:51:41.260 Hell yeah. 0.99

00:51:41.780 That's what I'm fucking talking about. 0.98

00:51:43.040 It's not really like a money making strategy. 0.98

00:51:47.440 It's more like this is like advice to already rich people.

00:51:50.340 Right.

00:51:50.520 Like there's no there's no like hot tip on how to avoid paying like your W-2 taxes.

00:51:56.660 You know?

00:51:56.800 Yeah, exactly.

00:51:57.440 If you're an employee, like your boss reports your income and you report your income.

00:52:02.980 Ha ha.

00:52:03.760 Mr. IRS, I actually don't owe you any taxes because I was working for free for my friend's dad.

00:52:10.800 OK.

00:52:12.980 So this one starts with another little piece of dialogue.

00:52:17.660 When does your dad pay his bills?

00:52:19.520 The first of the month.

00:52:20.800 Does he have anything left over?

00:52:22.180 Very little.

00:52:23.060 That's the main reason he struggles.

00:52:24.980 He has bad habits.

00:52:26.520 Your dad pays everyone else first.

00:52:28.420 He pays himself last, but only if he has anything left over.

00:52:31.400 But he has to pay his bills, doesn't he?

00:52:33.180 You're saying he shouldn't pay his bills?

00:52:34.880 Of course not.

00:52:35.920 I firmly believe in paying my bills on time.

00:52:38.380 I just pay myself first, before I pay even the government.

00:52:41.760 But what happens if you don't have enough money?

00:52:43.640 The same.

00:52:44.320 I still pay myself first, even if I'm short of money.

00:52:47.240 My asset column is far more important to me than the government.

00:52:49.720 But don't they come after you?

00:52:51.620 Yes, if you don't pay.

00:52:53.300 Look, I did not say not to pay.

00:52:55.980 I just said I pay myself first, even if I'm short of money.

00:53:00.500 What is he saying? 1.00

00:53:02.040 What the fuck is going on here? 1.00

00:53:03.760 What the fuck? 1.00

00:53:04.700 He keeps doing this weird thing where he's like, pay yourself first. 1.00

00:53:09.180 But he doesn't say what the fuck that means. 0.86

00:53:12.000 What that means is like you are from time to time stiffing your employees or the government. 0.97

00:53:17.680 Right.

00:53:17.900 But then when this child is like, isn't this illegal?

00:53:21.420 He's like, whoa, whoa, whoa, whoa.

00:53:22.320 I never said I don't pay them.

00:53:25.100 Wink, wink, wink, wink, wink.

00:53:25.980 i am like going easy on him and i'm cutting a lot of the stuff where he like talks about how 0.94

00:53:31.020 much he fucking hate hates taxes huge portions of this book shocker just like straight up lies 0.75

00:53:38.220 he says over and over again he's like the more money you earn the more the government takes 0.99

00:53:42.700 right but we have marginal tax rates in the united states he also says that when his dad died

00:53:47.620 like i didn't even get any money because the government took it all america has an estate

00:53:52.880 tax that kicks in at 12 million dollars. Hawaii has an estate tax that kicks in at six million

00:53:58.500 dollars. Right. I thought, yeah, I thought his dad was broke as hell. And now he's complaining

00:54:02.100 that the government took it. All of the actual advice in this is it just sort of like scammy

00:54:08.300 advice for rich people. So he says you should like set up a corporation for like legal liability

00:54:12.900 stuff and then you can write off your expenses. So he says, by owning your own corporation,

00:54:19.760 Vacations are board meetings in Hawaii.

00:54:22.360 Car payments, insurance, repairs are company expenses.

00:54:25.640 This is tax fraud.

00:54:26.340 Health club membership is a company expense.

00:54:28.500 Tax fraud.

00:54:28.960 Most restaurant meals are partial expenses.

00:54:31.320 Yeah.

00:54:31.480 But do it legally with pre-tax dollars.

00:54:34.340 Transparently tax fraud.

00:54:35.480 I love, this is like the third time that he has described something that's patently illegal

00:54:39.580 and then just put a line at the end of it that's like, but not in an illegal way.

00:54:44.020 He also, he's got these like little tips.

00:54:45.940 one of his little tips is, I always make offers with escape clauses. In real estate, I make an

00:54:51.460 offer with the words subject to approval of business partner. I never specify who the

00:54:56.420 business partner is. Most people don't know my business partner is my cat. Also fraud. If they

00:55:02.280 accept the offer and I don't want the deal, I call my home and speak to my cat. This is just also

00:55:07.720 fraud. And numerous like people who actually like make money investing in real estate and like

00:55:12.800 flipping houses have been like no one would accept a weird clause in a contract that's just

00:55:19.300 like i need approval from my partner and i'm not going to specify who the partner is you know look

00:55:23.580 i'm a lawyer i could uh i could write a book on how to try to sneak weird deceptive language into

00:55:30.480 contracts uh i don't it's not uh i wouldn't say it's a way to get rich i would say it's a way to

00:55:37.460 be an awful person so his third piece of advice is flipping real estate which like invest in real 0.82

00:55:44.200 estate i'm not whatever really gonna go into this he has a whole probably fucking fake story 0.98

00:55:49.820 about how he's like jogging through a neighborhood in oregon and he sees a house for sale by owner 0.90

00:55:55.760 and the owner wants 65 000 for it and he's like i'll give you 45 000 and the guy's like i'm

00:56:01.760 desperate to sell i'm moving to california you can have it he sells the house for profit because

00:56:07.260 you know, Portland is undergoing a housing boom and then he buys an apartment complex 0.59

00:56:13.140 in Phoenix that's like owned by some Germans and they're not even there and they were desperate 0.51

00:56:18.120 to sell. And like they wanted 450,000 and I only paid 300,000. Huge part of this book is just

00:56:24.080 finding desperate people and taking advantage of them and then blaming them. And also fundamentally

00:56:28.540 it's like, well, buy undervalued real estate. Yeah. Yeah. You should all be jogging all the

00:56:35.120 time sure and just be on the lookout for a house that's on sale and just kind of vibe out the

00:56:42.200 desperation of the owner right that's business mindset we're now going to watch a clip fuck

00:56:47.100 yeah this is from the oprah episode okay during the commercial break you said what stand up say 0.71

00:56:55.140 it again you say that uh you can you can pay yourself first how am i going to get somebody

00:57:02.280 loan me the money to buy a house when i can't pay my and when i can't fully pay my bills as i'm

00:57:07.080 paying them now one thing that paul said right there he starts a home-based business the tax

00:57:11.340 laws are written against tax laws are not equal and if you want what i'm saying is got to get

00:57:16.840 educated here so the tax laws are not equal so if you're an employee and you work harder and harder

00:57:21.740 the government's going to take 50 no matter what so by being a business owner that's which which

00:57:26.660 as Paul did. He has tax advantages that the middle class and poor do not have. Just saving

00:57:32.980 money and investing is not enough. There is a complete mindset that goes on. I think that's

00:57:37.200 what these people came... Paul was saying, because we all have the mentality in this

00:57:40.540 country, you work harder, you work harder, it will pay off in the end. It does not, because

00:57:45.440 the government always gets theirs. Right. And then real estate is the least taxed income

00:57:50.400 you can get. So when my wife and I were struggling, we saved $6,000, we bought that house.

00:57:56.660 The thing went from $46,000 to $105,000.

00:57:59.600 We had $50,000.

00:58:01.160 But I think when people think of real estate,

00:58:02.580 they think about the house that they would want to live in.

00:58:04.520 So you start out buying something that you wouldn't necessarily want,

00:58:07.560 and you use that to build more income.

00:58:09.440 That's what she did. She bought seven.

00:58:10.780 Build more income. 1.00

00:58:11.640 That's my idea. I want to buy a three-platt, live in the basement,

00:58:14.320 ran off the top two apartments, and haven't paid my mortgage for me.

00:58:17.820 But I still need to come up with the original capital to buy the place.

00:58:20.580 That starts with paying yourself first. 0.62

00:58:24.440 Hey, Oprah.

00:58:25.000 this interaction is like one of the bleakest things i've ever seen yes oprah who's at this

00:58:35.420 point probably a billionaire i don't know what her status has been but she talks earlier in the

00:58:40.500 interview she's like well not having enough money used to be my problem but now my problem is too

00:58:43.940 much money kiyosaki is just like a straight-up grifter yeah and then this poor guy who asked

00:58:48.340 this super basic question right how do i come up with the money to buy a house and then robert's

00:58:55.380 like right that's why you pay yourself first and they all just move on it was very clear that they

00:59:02.400 then flashed the applause sign and the entire audience erupts into applause

00:59:07.120 also this poor salesman who's like asking the questions is like in a full suit you could tell

00:59:16.500 He was like, I'm going to put on my finest business wear to impress the rich dad, poor

00:59:21.740 dad guy.

00:59:22.520 Yeah.

00:59:22.740 This guy took a day off to go to a taping of Oprah.

00:59:26.260 Oh, God.

00:59:26.640 He clearly has the mindset, but Robert, confronted with somebody who clearly has it, has nothing

00:59:33.660 to offer.

00:59:35.000 All of personal finance, self-help grifting, eventually just becomes buy real estate and

00:59:42.420 flip it.

00:59:43.120 Yeah.

00:59:43.300 because like yeah you know historically it's a relatively safe way to make money if you have

00:59:49.260 money already right you never get the step of how do i get enough money to buy like a 0.95

00:59:57.640 fucking apartment complex or whatever they're doing right it's so fucking frustrating and 0.88

01:00:03.920 and telling because a lot of what these guys are doing is being like if you get your mindset 0.99

01:00:09.360 set right, you can achieve anything. Get your mind right. And yet the quote unquote anything

01:00:15.140 that they all achieve is just buying an apartment complex, renting it out for a few years and

01:00:20.140 flipping it. Buy a house in a city that's about to experience a housing boom. Right. Wow. Thanks,

01:00:25.020 man. Cool. So his last piece of financial advice is to buy stocks. Very innovative stuff. I'm

01:00:34.860 going to send you some text. Poor people have poor habits. A common bad habit is innocently called

01:00:42.360 dipping into savings. The rich know that savings are only used to create more money, not to pay

01:00:48.420 bills. I know that sounds tough, but as I said, if you're not tough inside, the world will always

01:00:54.720 push you around anyway. Focus on keeping liabilities and expenses down. This will make

01:01:00.320 more money available to continue pouring into the asset column. Soon, the asset base will be so deep

01:01:07.580 that you can afford to look at more speculative investments. Investments that may have returns

01:01:12.080 of 100% to infinity. Investments that the middle class calls too risky. The investment is not risky.

01:01:21.560 It's the lack of simple financial intelligence, beginning with financial literacy, that causes

01:01:26.420 of the individual to be too risky. You're too risky, Peter, because of your low financial

01:01:30.840 literacy. He was a person. A lot going on here. He specifically said that having savings was bad

01:01:37.120 advice. Yep. And now dipping into savings is bad? I think between the lines, he thinks every dollar

01:01:43.780 you earn, you should pour into quote unquote assets. Oh, look, I'm not a math genius,

01:01:50.700 but investment returns of infinity if i'm doing the math correctly are not possible he follows 0.96

01:01:58.120 this with a fucking probably fake anecdote about how he notices that gas prices are going up 0.87

01:02:04.180 so he invests in a company right before it strikes oil and then he gets like 5 000 return or some 0.99

01:02:12.480 shit what the fuck right invest in a company right before its value goes up that's very good 0.92

01:02:19.220 advice, Robert. I agree. This is literally an episode of Always Sunny in Philadelphia where 0.99

01:02:23.980 they buy gasoline and then try to resell it. But then, okay, this is the part of the book

01:02:30.260 that like totally changed how I saw the rest of the book. So he has a section where he talks about

01:02:37.540 his stockbroker. He says, the really hot deals are not offered to people who are novices.

01:02:43.480 The best deals that make the rich even richer are reserved for those who understand the game.

01:02:49.800 I don't think that's how stockbroking works.

01:02:52.320 Then he says, frequently, my broker will call me and recommend I move a sizable amount of money into the stock of a company that he feels is just about to make a move that will add value, like announcing a new product.

01:03:05.580 again dancing around the edges of outright saying it here but it does appear that he is now

01:03:12.140 advocating for insider trading this was my thought too i was like i don't think that's like real

01:03:16.820 advice and so i put out a call on twitter i was like do i have any followers who are like

01:03:22.640 stockbrokers or do securities law yeah yeah and so three different people got in touch with me

01:03:28.440 i sent them all this like entire kind of section like paragraph all three of them said it's

01:03:34.520 something that could be insider trading potentially but insider trading is extremely hard to prove

01:03:39.000 people who have like i have a hunch about this stock like right that doesn't mean that you have

01:03:43.040 any like private information necessarily so it's it's it's hard to say if this is really insider

01:03:48.220 trading i once did securities law did you as a baby lawyer yeah you haven't given me any stock

01:03:53.220 tips if you want to lose as much money as i have in the last four years and uh you let me know

01:03:57.660 You basically have one of two situations happening.

01:04:01.740 One, your investment advisor is doing some basic analysis that anyone can do.

01:04:09.880 Any information that he has, the market would also have.

01:04:13.520 Two, he has information that the market does not have.

01:04:16.980 That would be material, non-public information.

01:04:20.460 And him telling you to trade based on it is illegal. 0.99

01:04:23.540 The other scenario that the stockbroker securities law people told me is that either your stockbroker is like some weird dude who just thinks that he's smarter than the market, in which case, like, you should probably get a different stockbroker or he thinks that you're a huge fucking mark. 0.98

01:04:39.760 Right. He's fucking Jordan Belforting you. 0.99

01:04:41.980 Yes. 0.99

01:04:42.460 And you're like, oh, I have a cool, smart investment advisor.

01:04:46.300 So at one point, Robert says, I invest in companies whose products are like about to

01:04:52.180 get FDA approval and I get the stocks cheap and they explode.

01:04:56.500 And it's like, that is the scam from the movie Boiler Room.

01:05:01.160 The reason this like made everything click into my brain was one thing that he comes

01:05:08.100 back to a lot in this book is like he tells you to get educated, right?

01:05:13.360 Financial literacy is like his big thing.

01:05:15.420 but what he describes as learning is like reading other get rich quick books and attending seminars

01:05:23.940 so he says what do i do i go to seminars i like it when they're at least two days long because i

01:05:30.380 like to immerse myself in a subject in 1973 i was watching tv and this guy came on advertising a

01:05:36.540 three-day seminar on how to buy real estate for nothing down i spent 385 and that course has made

01:05:42.700 me at least $2 million, if not more. I don't have to work for the rest of my life because of that

01:05:47.320 one course. I go to at least two such courses every year. So this is a guy who basically like

01:05:55.400 didn't do well in school and had a huge amount of resentment about the fact that like teachers were

01:06:01.180 telling him to do better. He had to repeat a grade. It seems like his dad was pretty disappointed in

01:06:06.880 him yeah his previous book is called if you want to be rich don't go to school which is originally

01:06:12.920 published with a question mark if you want to be rich don't go to school but then when it's

01:06:18.160 reprinted they get the question mark because that's deranged but so then he he gets very he

01:06:24.020 kind of bounces around to jobs he goes to vietnam and comes back nothing is really clicking and then 0.97

01:06:29.660 he finds these grifty fucking seminars and it seems like he was like believing them right like 0.91

01:06:36.400 He seems like someone who thinks that he found this like secret knowledge, but he's never 0.99

01:06:42.940 actually done anything. 0.97

01:06:45.740 All he's doing is repackaging the bullshit that he's been getting in these seminars and 0.98

01:06:52.760 pretending that he did it when actually all that really happened was he absorbed all this 0.99

01:06:59.500 grind set bullshit from these seminars. 0.78

01:07:01.480 He tried to implement it in companies. 0.99

01:07:04.500 All of his companies fail because this isn't real advice.

01:07:07.480 And then he just became one of these seminar get rich quick grifters.

01:07:12.640 This is interesting for two reasons.

01:07:13.700 One is like, again, like Rhonda Byrne and The Secret. 0.99

01:07:16.580 The bullshit is what makes them rich, right? 1.00

01:07:19.180 Yeah. 1.00

01:07:19.480 Pretending that they know how to get rich makes them rich.

01:07:23.460 The other part of this is that this is the first guy who I've seen basically say that

01:07:29.140 you should get scammed.

01:07:30.860 Yes. 0.95

01:07:31.280 Join MLMs.

01:07:32.800 Do these seminars.

01:07:34.500 be a mark yes and this is why i almost think that he's doing this in something resembling

01:07:42.000 good faith oh totally i think he's 100 earnest right because he is at his core a mark yeah he

01:07:49.360 sort of turned being a mark into scamming other people not maybe not quite realizing what was

01:07:56.160 happening like he had been the mark and he can't perceive himself as such and so he starts doing

01:08:02.760 what the scammers are doing to other people, writes a book with this convoluted, nonsensical

01:08:10.700 advice, gets rich off that proof of concept in his own mind.

01:08:15.900 Right.

01:08:16.100 Of course, I was right all along.

01:08:17.820 Yeah.

01:08:18.060 Because he still doesn't understand.

01:08:20.660 Yes.

01:08:21.000 That it's a scam.

01:08:21.720 I wanted to say he's like a Shakespearean figure, like this tragic figure, but he's

01:08:26.560 never really had a fall.

01:08:28.180 He's not a Shakespearean figure.

01:08:29.280 I think he's more of like a character in like a Christopher Guest movie.

01:08:33.040 It's like he's going around telling you, like, if you really want to get rich, you

01:08:37.840 should play three card Monty.

01:08:39.360 Yes.

01:08:39.840 Outside of Madison Square Garden, you should go give those guys 20 bucks, find the Red

01:08:43.540 Queen, great investment idea.

01:08:46.040 And you're like, you really believe this, don't you? 0.86

01:08:48.740 This is like the boomer id, because the entire generation basically bumbled their way into

01:08:56.380 financial success, just like born into an era where a basic job got you a house, a pension,

01:09:05.160 the markets grow, houses quadruple in value over the span of a few decades. And there you are,

01:09:12.520 a 70-year-old sitting on millions of dollars, despite having done nothing spectacular in your

01:09:19.340 life, right? Just sort of like following the basic advice. And then you look at millennials

01:09:23.340 and you see that they are struggling it was so easy for you that the only way that you can make 0.99

01:09:29.760 sense of it is to think they are doing something fundamentally wrong they don't really get it

01:09:35.900 their problem is they don't believe it enough because you believe it right he believes it 0.97

01:09:39.600 because if you're selling grifty fucking seminars then like yeah it is all about the mindset because 0.98

01:09:44.140 everything is about being a charismatic speaker that's the only thing you need to demonstrate 0.99

01:09:48.500 There's no actual skill.

01:09:49.900 Right.

01:09:50.320 Then that's why he's this boomer mentality, just like boiled down into its essence, like 1.00

01:09:55.720 its dumbest form. 1.00

01:09:57.240 It's incredible. 1.00

01:09:57.760 He basically becomes the person he always thought he was.

01:10:00.940 He thought he was a millionaire.

01:10:02.540 He made more than $9 million on this book.

01:10:05.020 He's still doing these seminars.

01:10:06.420 Of course, he doesn't actually give the seminars anymore.

01:10:08.080 They're now licensed to this extremely scammy company.

01:10:11.500 There's been a series of lawsuits. 0.99

01:10:13.660 He's just delivering the same old bullshit and raking in millions. 0.99

01:10:17.740 And like all of this feeds his self-conception as like someone who has knowledge. 1.00

01:10:23.920 Yeah.

01:10:24.080 But it's just air.

01:10:25.500 Yeah.

01:10:26.660 There's something almost ethereal about his existence.

01:10:31.900 Layers of scams placed atop one another until he hits Oprah.

01:10:37.700 Totally.

01:10:38.140 I would love to see Oprah just like on air talking about returning to the gold standard.

01:10:42.680 but okay are you ready for the ending twist oh hell yeah i could not believe this so since the 0.98

01:10:52.620 book comes out like he's now he's a trump guy he's a fuck fauci guy he's shocker distilling 0.98

01:10:59.360 even more this like yeah come a mark every financial scam he is trying to sell you yeah 0.97

01:11:05.160 in all that time he's never really given any specifics about who this rich dad is right he

01:11:12.060 avoids the question. He blows up at people when they try to get basic confirmation of this alludes

01:11:17.860 to Harry Potter. Yes, exactly. In 2019, we find out that rich dad was real. There is a guy named

01:11:26.460 Richard Kimi who dies in his 90s. Robert then says, this is rich dad. Wow. I mean, who knows

01:11:36.060 if any of the stuff in the book is actually true, right? There's so much, you know, he was never a

01:11:39.880 billion dollar empire. It doesn't appear he ever owned convenience stores. I mean, he's still doing

01:11:45.080 a ton of exaggerating and misrepresenting. That's good, because if the convenience store thing was

01:11:51.600 true, then that makes it more likely that the child slave thing was true. Yeah, that's sort of 0.82

01:11:57.400 what I'm hoping. And also, this Richard Kimi guy actually seems kind of okay. He's like a Japanese

01:12:03.840 American guy growing up in Hawaii, and he basically realizes that all of the tourism industry in

01:12:09.380 Hawaii is geared toward the high end. It's all rich people. Somehow he scrapes together enough

01:12:13.940 money to buy some land or buy a building or something. And he opens a hotel for like

01:12:17.620 middle class people. And he works like he's the front desk person doing baggage, working his ass 0.99

01:12:23.500 off. And he basically creates the like middle class tourism industry in Honolulu. And eventually

01:12:30.000 he sort of that becomes like a larger hotel and then becomes a chain of hotels. And, you know,

01:12:35.040 he just sort of kind of goes from there right it's sort of like an actual american success story

01:12:39.900 right like identified an underserved market created a product and executes and it works

01:12:46.680 he actually did the thing that robert never did and right the the other weird thing about this

01:12:52.320 is that apparently there was i don't know if this was ever written but there was a gentleman's

01:12:56.240 agreement between robert and this richard kimmy guy to not reveal his identity and robert stuck 0.97

01:13:02.360 by it wow this is like the one likable thing i've ever learned about oh shit probably because the 0.97

01:13:07.480 it wasn't a gentleman's agreement and the guy was like if you say that i'm the sociopath in rich dad 0.99

01:13:13.300 poor dad i will sue you into the fucking ground and robert was like all right yeah i do wonder 0.99

01:13:18.700 if that's what's really going on because he is a huge piece of shit in the book oh my god i can't 1.00

01:13:24.160 I cannot believe that he had a real successful mentor, 0.99

01:13:29.580 and he's just like, okay, don't pay your taxes.

01:13:34.420 That's what you're learning.

01:13:36.760 Did his dad ever write a response book? 1.00

01:13:39.140 Cool son, dumb son. 1.00

01:13:40.460 The story of my two sons. 1.00

01:13:54.160 Thank you.

If Books Could Kill - April 06, 2023

Rich Dad Poor Dad

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