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Rich Dad Radio Show: In-Your-Face Advice on Investing, Personal Finance, & Starting a Business
Savers are Losers and May 15th makes it 10X more dangerous
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Before we had AT&T business wireless coverage, our delivery GPS wasn't the most reliable. Once our driver had to do a 14 point turn to get back on route. A 14 point turn. An influencer even livestreamed the whole thing. Not good for business. Now with AT&T business wireless routes are updating on the fly and deliveries are on time. And the influencer did get us 53 new followers though. AT&T business Wireless connecting changes everything.
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Savers are losers. And on May 15th, it gets worse. Most people have no idea what is coming for their money. They're going to wake up that morning, go to work, check their savings account and feel responsible. And they will be losing. In this episode, I'll show you three moves the rich are already making to protect themselves from May 15th. This one can't wait.
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This is the Rich Dad Radio show, the good news and bad news about money.
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Here's Robert Kiyosaki. Welcome to the Rich Dad Radio show, the good and bad about money. This is Robert Kiyosaki and today is just you and me, and we're talking about what the rich are teaching their kids about money. Savers are losers. That is what the rich teach their kids. Not save your money. Not be responsible. Savers are losers. And most of you were taught the exact opposite. There is a date coming May 15th. Most of you have never heard of it. Most of you will wake up that morning, go to work, come home, do exactly what you have always done. You will check your savings account. You will feel responsible. You will feel smart, and you will be losing. That is what today is about. On May 15, the most powerful financial job in the world changes hands. Not the president, not the Secretary of the treasury, the chairman of the Federal Reserve bank, the person who controls interest rates, the person who influences how much money gets printed. The person who quietly determines how far your dollar goes at the grocery store, the gas pump, your savings account. Most people will ignore this completely. And that's fine. Most people have been ignoring it since 1971. Most people have been losing since 1971 because of it. Here is the truth that school never taught you. Saving money is not smart. It used to be smart. It has not been smart for 50 years. Let me tell you something about the Federal Reserve Bank. It is not federal, it is not a reserve, and you cannot walk in and open an account. Most people don't know that. The Federal Reserve is a privately controlled central bank, the most powerful one in the world, and it operates largely outside the control of the American government. That should make you Uncomfortable, because this institution has two weapons that reach directly into your wallet every single day. The first weapon is interest rates. The Fed sets the rate at which banks borrow money. That rate flows straight into your life. Your mortgage, your car payment, your credit card, and yes, the interest your savings account earns or doesn't earn. The second weapon is the money printer. When the United States government spends money it doesn't have, and with nearly $36 trillion in national debt, it has been doing exactly that for a long time. The Fed can simply create that money, not earn it, not borrow it, create it out of nothing. An electronic blip on a screen. And every dollar created that way quietly steals value from every dollar already in existence, including yours. That is not a conspiracy theory. That is how the machine works. And the person who runs the Federal Reserve sets the tone for both of those weapons. Jerome Powell has been that person since 2018. His term expires on May 15th. President Trump has been pushing publicly, aggressively for lower interest rates. Powell said no. And. And because the Fed is not a branch of the government, Trump could not fire him. A criminal investigation was launched into Powell's use of funds for Federal Reserve building renovations. A pressure campaign. It didn't work, but May 15 comes regardless. Trump has already named his replacement, Kevin Warsh, a former Fed governor, a man widely expected to be far more open to cutting rates than Powell ever was. So lower rates are coming, and most people will hear that and think good news. That's what they want you to think. In 1971, the rules of money changed. Most people never got the memo. I learned this from my rich dad, he told me, and I remember exactly where I was sitting. He said, Robert, in 1971, savers became losers and debtors became winners. I didn't fully understand it then. I understand it now. Before 1971, the US dollar was real money. Every dollar in circulation was backed by gold. Governments could not simply print more money whenever they felt like it. Printing more dollars required having more gold to back them. That created discipline. That created limits. And it made saving genuinely smart. Nixon changed all of that. In 1971, President Richard Nixon took the United States dollar off the gold standard without the approval of Congress. During a quietly held two day meeting, he changed the rules of money for the entire world. After 1971, the dollar stopped being money. It became debt, an IOU. And if the United States needed more money, they just printed it. Today, they don't even need a printing press. Today is a digital blip on a screen created at the speed of light and Every time they create a new dollar, every dollar you already have becomes worth a little less. This is why saving is an oxymoron after 1971. And here is the part that really gets me. The tax code punishes you for it. Save money and earn interest. The government taxes that interest as ordinary income, the highest possible rate. Borrow money to invest in real estate or a business. The government hands you tax breaks. The system does not treat savers and investors equally. It was written to reward debtors. It was written to punish savers. That is not accident. That is policy. Now I have a number for you, a comparison that will make it impossible to look at your savings account the same way ever again. A gold coin that just sat on a table and did absolutely nothing. The difference between that coin and your Savings account is 12 and a half million dollars. Stay with me because on the other side of this break, I'm going to show you exactly what happened to that gold coin and what happened to the savings account sitting right next to it. Same table, same 54 years. Both did absolutely nothing. One of them turned $100,000 into $12.5 million. The other one gave you a participation trophy. And after I show you those numbers, I'm going to tell you exactly what May 15th means for your savings. Don't go anywhere. We are back. We have a lot to cover. We were talking about 1971, the year the rules changed. The year saving. Stop being smart. I promised you a number. Here it is. Picture a gold coin sitting on a table, just sitting there, not doing anything. In 1971, that gold coin was worth $35. Now picture a savings account sitting next to it, also just sitting there, also not doing anything. Your parents put $100,000 in that savings account in 1971, and they put $100,000 into gold. Two choices, two completely different financial lives. The savings account earned interest high rates in the 1980s, lower through the 90s, near zero after 2008, barely above nothing today. Over 55 years, that $100,000 grew to around 800 to $900,000. Sounds good. Until you do the math. Inflation over that same period means $100,000 in 1971. Purchasing power requires roughly $760,000 today just to buy the same things. And the government taxed every year of that interest. Ordinary income, the Highest possible rate. 55 years of discipline, 55 years of doing the responsible thing. Your parents are roughly where they started. That is not a retirement plan. That is a participation trophy. Now, the gold. In 1971, gold was $35 an ounce. $100,000. Bought 2,857 ounces. Put those coins in a safe and walked away. Didn't trade them, didn't watch the market, did nothing. The gold just sat there, same as the savings account. Today, gold is over $4,400 an ounce. Those 2,857 ounces are worth over 12 and a half million dollars. The saver has $800,000. Eaten by taxes and inflation. The gold holder has over 12 million. The gold did nothing extraordinary. It just sat there while the dollar did what dollars do after 1971, it declined. The gold coin didn't change. The dollar changed. The gold sat there and won. The savings account sat there and lost. That's the difference. Let me bring you back to May 15th because this is why it matters. Kevin Warsh takes over the Fed. Lower interest rates are coming. Most people will hear that and feel relieved. Lower rates. Finally, people get angry when I say this next part. Lower rates are not relief for savers. Lower rates are punishment. When the Fed cuts rates, your savings account earns even less. That near nothing interest rate you are already earning goes lower. That is not good news. That is your participation trophy getting smaller and it gets worse. Lower rates mean more money gets printed. More printed money means more inflation. More inflation means a dollar in your account buys less tomorrow than it does today. Every rate cut is another hole in the bottom of your savings bucket. People say, but, Robert, what am I supposed to do? I understand. I am not telling you to spend everything you have. I am telling you that parking your money in a savings account in a world where the Fed is about to cut rates again is choosing to lose slowly, quietly, politely, but losing. My rich dad told me something I never forgot. He said, robert, there's a difference between saving money and moving money. Savers park their money. The rich move their money. That one difference is the reason most people retire broke. So what did the rich do instead? Three moves. Three things the rich teach their kids that school never taught you. I'll walk you through all three right after this break. Stay with me because what I'm about to show you after this break is exactly what the rich are doing with their money right now. Not their financial planners, not their advisors. Them. Three moves. That is all it takes to get on the other side of this machine. The saver ask, how much interest am I earning? The rich ask a completely different question. And that question changes everything. Don't go anywhere. We are back where we're talking about a question. The rich ask a Different question than savers ask. Savers ask, how much interest am I earning? The rich ask, how fast does my money come back? One question parks money, the other moves it. My rich dad called it the velocity of money. Real investors do not park their money. They move it into an asset, get the money back, move it into the next asset. Parked money loses. Moving money wins. Three moves. Here they are. Move one. Get into good debt. People get angry when I say this, Robert. Debt is dangerous. That's what school told you. That is exactly backwards. There is good debt and there is bad debt. Bad debt takes money out of your pocket. Credit card balances, car loans, consumer spending. That is bad debt. It destroys wealth. Good debt puts money into your pocket. A loan used to buy a rental property whose rents cover the mortgage and still produce cash flow every month. That is good debt. That is a tool the rich have used to get richer for generations. And the system rewards it. The tax code punishes savers. Taxes your interest as ordinary income. The same tax code rewards debtors depreciation tax breaks on investment property. The system was designed to do this. Once you see it, you can play it. Debt is leverage. Everything you pointed at gets magnified. Pointed at liabilities, it destroys you. Pointed at income producing assets, it builds wealth. That is a difference between bad debt and good debt. And that is a difference between the saver and the rich. Stop saving. Start leveraging. Move 2. Buy what the dollar cannot touch. Gold. Silver. My rich dad called them God's money. They were here when the earth was formed. They will be here long after the dollar has printed itself into a history book. The Fed can print dollars, it cannot print gold. Every time they cut rates, every time they fire up the money printer, every time they create another electronic blip on a screen, gold goes up. Not because gold got more valuable. Because the dollar got weaker. The gold coin on the table already proved that. And Bitcoin. I know some of you are skeptical. But think about what Bitcoin actually is. There will Only ever be 21 million Bitcoin. Ever. By design. Mathematical scarcity. No central bank can inflate it. No government can print more of it. Gold scarcity is geological. Bitcoin scarcity is mathematical. Both do the same thing. They sit outside the machine. They cannot be debased. They cannot be diluted. The rich do not hold excess cash in a savings account. They hold it in assets the dollar cannot touch. While savers watch their purchasing power erode year after year. The gold holder and the bitcoin holder are on the other side of that trade, they are not saving dollars. They are escaping them. Buy assets that cash flow. This is the most important move. A savings account parks your money. It sits still. And sitting still is how you lose. A cash flow asset moves your money. A rental property collects rent every month. Whether interest rates go up or down, down. Whether inflation is high or low, whether the stock market is crashing or booming, the asset works. The money flows to you. You take that money and move it into the next asset. That is the velocity of money. Professional investors do not ask, how much interest am I earning? They ask, how fast does my money come back so I can deploy it again? Those are completely different questions. They lead to completely different financial lives. The saver parks money and praise the interest outpaces inflation. It doesn't. It hasn't since 1971. Three moves good debt that puts money in your pocket. Gold and Bitcoin that the dollar cannot touch. Cash flow. Assets that keep your money moving. That is what the rich are teaching their kids are not save your money, not be responsible. Move your money. May 15th matters. But let me be clear. May 15th is a symptom, not the disease. Kevin Warsh takes over. Lower rates come. More printing follows. More inflation. More purchasing power quietly extracted from every saver. Still playing the old game. That will happen. But the machine was already running before May 15. It has been running since 1971. The face in the Fed chairman's seat changes. The machine does not. Savers stand on the losing side. They park their money in a system designed to erode it. They did everything they were told to do. They saved and they lost. The rich stand on the other side. Good debt, gold cash flow. They get richer as the dollar gets weaker. Every dollar the Fed prints is another dollar working in their favor. That is not luck. That is financial iq. The gold coin didn't change. The dollar did. If you are still parking your money in a savings account, you are the dollar and the dollar is losing. That's the difference. And once you see it, you cannot unsee it. Thank you for your time. Thank you for caring about your future. Thank you for understanding that you are the only one who cares about taking care of you. Take.
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Sam.
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