AUDIOBOOK REFERENCE GUIDE

AUDIOBOOK REFERENCE GUIDE

FAKE AUDIOBOOK REFERENCE GUIDEIntroductionFigure 1.12. Fake Teachers: What did school teach you about money?For most people, the answer is “nothing.” Most teachersare great people. But, our educational system is broken,obsolete, and fails to prepare students for the real world.PAGE 2

2. Fake Teachers: What did school teach you about money?For most people, the answer is “nothing.” Most teachersare great people. But, our educational system is broken,obsolete, and fails to prepare students for the real world.FAKE AUDIOBOOK REFERENCE GUIDEInstead of guiding students into the light, our educationsystem is leading millions of young people into financialdarkness and the worst type of debt: student loan debt.Figure 1.27PAGE 3

Liabilities take money out of your pocket.FAKE AUDIOBOOK REFERENCE GUIDEMy poor dad always said, “Our house is our biggest asset.”My rich dad said, “Your house is not an asset—it’s a liability.”Millions of people believe their house is an asset.Figure 1.38PAGE 4

FAKE AUDIOBOOK REFERENCE GUIDEFAKE: Fake Money, Fake Teachers, Fake AssetsFigure 1.4Bucky Fuller taught us to lookat the big picture first, then thesmall picture. Unfortunately, most investors start with the smallpicture and then go smaller. For example, many investors wake up,check to see if their one favorite stock is up or down, then go towork. They may be an expert on, let’s say, Amazon, but often fail tosee the bigger picture. One stock among thousands of stocks in aglobal market does not give you much information on the future.PAGE 5

FAKE AUDIOBOOK REFERENCE GUIDEChapter Two: In God We TrustPhoto 2.1rooved Edges and Debasing CoinsToday, most U.S. coins have grooved edges. Grooved edgesade it more difficult to shave gold and silver coins.The Romans then created more fake money by “debasing” theirold and silver coins. Debasing meant gold and silver coins wereixed with base metals such as copper, tin, and nickel.PAGE 6

FAKE AUDIOBOOK REFERENCE GUIDEFAKE: Fake Money, Fake Teachers, Fake AssetsLook at this chart.Figure 2.1Now look at the chart of what happens to fake money, when ourleaders print more fake money.PAGE 7

FAKE AUDIOBOOK REFERENCE GUIDENow look at the chart of what happens to fake money, when ourleaders print more fake money.Figure 2.2Is it history repeating itself?40PAGE 8

FAKE AUDIOBOOK REFERENCE GUIDEFAKE: Fake Money, Fake Teachers, Fake AssetsThe chart below shows where the kid’s money came from.Source: Wikipedia – Delphi234Figure 2.3PAGE 9

FAKE AUDIOBOOK REFERENCE GUIDEChapter Two: In God We TrustSource: Federal Reserve Economic Data (FRED)Figure 2.4The FRED chart above shows the United States printingtrillions in fake money after the crash of 2008.Do you notice a similarity with the 1920s German printing offake money, the Reischmark?The bad news is, never in human history has fake moneyPAGE 10survived. Odds are that all of today’spaper money will return to itstrue value: zero.

Another Example of Counter-Party RiskHere is another example of counter-party risk. Let’s say you buyan insurance policy on your home. That insurance policy is only asgood as the counter-party, i.e. the insurance company. If your houseburns down and your insurance company goes bankrupt, yourhouse and your insurance policy are both worthless.FAKE AUDIOBOOK REFERENCE GUIDETHE CRASH OF 2008Figure 3.1This is what happened in 2008:1. Subprime borrowers, people like your friend, borrowedmoney to buy a house they could not afford.2. Banks were happy to issue the subprime loan to yoursubprime friend.3. The bank then sold the mortgage to an investment bank.4. The investment bank then packaged thousands ofPAGE 11

company pension plans. After 1974, employees were on theirown, hoping personal retirement savings accounts such as a401(k) would keep them alive after their working days wereover.2. Major employee pension funds are broke. For example,CalPers, the California pension fund for governmentemployees, the largest government employee pension fund inAmerica, is 1 trillion underfunded.3. This is a chart of Social Security:FAKE AUDIOBOOK REFERENCE GUIDESource: The Peter G. Peterson Foundation Social Security AdministrationMedicare is an even bigger Figureproblem.The United States has been3.2fighting a multi-year, multi-trillion-dollar war we cannot win.PAGE 1269

FAKE AUDIOBOOK REFERENCE GUIDEFAKE: Fake Money, Fake Teachers, Fake AssetsFigure 5.1You can clearly see where and when tops of Mandrake’s tentscollapsed in 2000 and 2008.PAGE 13

FAKE AUDIOBOOK REFERENCE GUIDEYou can clearly see where and when tops of Mandrake’s tentscollapsed in 2000 and 2008.Figure 5.2Don’t the peaks look like thetops of giant circus tents?You can also see where the Gross Universal Cash Heist beganpumping air back into the Mandrake’s tent.104PAGE 14

FAKE AUDIOBOOK REFERENCE GUIDEChapter Five: How Much Money Are You Printing?Figure 5.3TARP and QERather than call it printing money, the mega-elites—FederalReserve Chairman Ben Bernanke and the U.S. Treasury SecretaryHank Paulson, former CEO of Goldman Sachs—came up with newnames: the Troubled Asset Relief Program (known as TARP) andlater, quantitative easing or QE. PAGE 15I guess to them, it sounded more intelligent than to simply say

Chapter Five: How Much Money Are You Printing?FAKE AUDIOBOOK REFERENCE GUIDEFigure 5.4appens When a Country Prints Too Much Money?PAGE 16

Happens When a Country Prints Too Much Money?FAKE AUDIOBOOK REFERENCE GUIDEFigure 5.5PAGE 17

Steven Brill cites the research in his book, “Incomes for the topercent rose 31.4 percent from 2009 to 2012: but crept up a barticeable 0.4 percent for the bottom 99 percent.”FAKE AUDIOBOOK REFERENCE GUIDELet’s look again at these charts again Figure 12.1PAGE 18

FAKE AUDIOBOOK REFERENCE GUIDEChapter Eight: Going Back to SchoolFigure 8.1Real teachers teach from real-life experience, from theirmistakes, and encourage you to do the same.PERSONAL EXERCISE:PAGE 19List three fake teachers you’ve had in your life and the subjects

growing is because, without real financial epeople—are swimming in muddy water. Thacademic elites who run our legal system, bare catching a lot of fish.FAKE AUDIOBOOK REFERENCE GUIDERich Dad Poor Dad, published in 1997,illustratdad devand mewater. IPoor Dasome ofIf yRich Dayou madiagramFigure 9.1189PAGE 20

Today, I hear financial planners tell clients, “Your 401(k) is anasset.”FAKE AUDIOBOOK REFERENCE GUIDEYet, if you clear the water and can see where the cash is flowing,you will know the truth.Follow the MoneyFigure 9.2193PAGE 21

FAKE: Fake Money, Fake Teachers, Fake AssetsFAKE AUDIOBOOK REFERENCE GUIDEThe middle class is the asset for the government, Wall Street,and the banks. Compare the cash flow of the middle class to thecash flow of the rich.Figure 9.3Notice the cash keeps flowing into the asset column of the rich.LESSONS Real financial education teaches the rich to keep thecash flowing into the asset column.Fake financial education keeps the cash flowing out ofPAGE 22

FAKE AUDIOBOOK REFERENCE GUIDEChapter Nine: How to Catch a Lot of Fishthree-day real estate course taught me to do this:INCOME 25EXPENSEASSETCondoLIABILITYDebt ( 18,000)Figure 9.4ash flow of 25 a month is not a lot of money. Yet, 25 wrmation in the way I thought about money. Once I was a 25 from 100 percent debt, I was free. I knew that if I kng, I would never need money again. I would never havean’t afford it” ever again.PAGE 23

FAKE AUDIOBOOK REFERENCE GUIDEFAKE: Fake Money, Fake Teachers, Fake AssetsNet transaction:0090 shares0Figure 9.5The dividends from the 90 shares of stock are income andinfinite return is achieved.BOOKSPAGE 24I may spend a year writing a book. It costs about 50,000 to

FAKE AUDIOBOOK REFERENCE GUIDEChapter Nine: How to Catch a Lot of Fish 250,000 (licenses)Royalties0Book0Figure 9.6The asset—the book—creates income via royalties for aninfinite return.BUSINESS: The Rich Dad CompanyPAGE 25The Rich Dad Company began in 1997 with 250,000 raisedfrom investors. In 2001, 750,000 was returned to investors. All

FAKE AUDIOBOOK REFERENCE GUIDEFAKE: Fake Money, Fake Teachers, Fake AssetsThe primary reason why most people are not rich is because theywent to school.Photo 9.1Why People Are Not Rich1. In school, students are taught that mistakes make youstupid.In real life, making mistakes makes you richer.PAGE to26 learn from their mistakes.God designed humans

FAKE AUDIOBOOK REFERENCE GUIDEChapter Nine: How to Catch a Lot of FishFigure 9.73. Good grades mean you are smart.In real life, my banker has never asked for my reportcard. My banker does not care what school I went to orwhat my GPA was.In real life, my banker wants to see my financialstatement.INCOME STATEMENTIncomePAGE 27

what my GPA was.In real life, my banker wants to see my financialstatement.FAKE AUDIOBOOK REFERENCE GUIDEINCOME STATEMENTIncomeExpensesBALANCE SHEETAssetsLiabilitiesFigure 9.8199PAGE 28

Today, there are thousands of Cashflow Clubs all overthe world.FAKE AUDIOBOOK REFERENCE GUIDE4. Get out of debt.In real life, debt makes the rich richer.Figure 9.9200PAGE 29

In real life, the rich don’t pay taxes.FAKE AUDIOBOOK REFERENCE GUIDEashflow Quadrant keeps the waters clear:Figure 9.10would like to learn more about taxes, please reador Tom Wheelwright’s book Tax-Free Wealth.PAGE 30ill find that tax laws throughout the world are sim

Human Assets and LiabilitiesFAKE AUDIOBOOK REFERENCE GUIDEAs we grew older, rich dad made his son and me aware of humanassets and liabilities—not just financial assets and liabilities.Rich dad drew the following diagram for his son and me.Figure 11.1Rich dad then said, “Your greatest assets are people. So peopleare your greatest liabilities.”PAGE 31

FAKE: Fake Money, Fake Teachers, Fake AssetsFAKE AUDIOBOOK REFERENCE GUIDEPicture Is Worth a Thousand WordsThese two pictures tell the story about the difference betweenilian flight school and military flight school.CIVILIAN FLIGHT SCHOOLGOAL FLY SOLO: Small PotentialImage 12.1MILITARY FLIGHT SCHOOLGOAL FLY AS A TEAM: Big PotentialPAGE 32

FAKE AUDIOBOOK REFERENCE GUIDEMILITARY FLIGHT SCHOOLGOAL FLY AS A TEAM: Big PotentialIntense teamwork requires intenseImage 12.2 spiritual education.PAGE 33262

FAKE AUDIOBOOK REFERENCE GUIDEChapter Twelve: Entrepreneurs in EducationTHEY CALL THIS CHEATINGImage 12.3What does it take to become a military pilot?Intense spiritual education requires dedication to a mission,the highest degree of respect for yourself and for everyone onyour team, and precise mental, emotional, physical, and spiritualdiscipline, while training to be the best of the best.PAGE 34

FAKE AUDIOBOOK REFERENCE GUIDEy’s reply was, “No, McDonald’s business is real estate.”ollow the McDonald’s formula. My businesses are in thess of real estate.e McDonald’s formula looks like this:Real EstateFigure 14.1ore on this formula later.ower of Wordshen I am asked, what is the secret to becoming rich, I say,are many ‘secrets.’ One of the secrets is the power of wordsPAGE 35

wealth of anyone who worked for money, saved money, or investedmoney in government sponsored investments such as 401(k)s, IRAs,stocks, mutual funds, and ETFs.FAKE AUDIOBOOK REFERENCE GUIDEIn 1973, rich dad advised his son and me to learn to use debtto acquire assets. That is why I took my first real estate course. Ialso took stocks and bond courses, as well as my certified financialplanner courses.Figure 15.1As you can see by this chart, savers did well up until around1990.After 1990, interest rates began to decline. Poor and middleclass savers became losers.After 1990, the gamblers, led by the Fed, Big Banks, and U.S.Treasury, began printing more and more money, to save themselvesand their rich friends.PAGE 36