Home Life Hacks Why The Rich Keep Getting Richer

Why The Rich Keep Getting Richer

Why The Rich Keep Getting Richer

The rich are getting richer year in, year out. How is that possible? The American bestselling author and multimillionaire Robert Kiyosaki claims to know the answer…

How do you get rich, according to Kiyosaki? Actually, his course to become rich is very simple and very difficult at the same time. Because if we could all get rich ‘just like that’, we all would be rich by now. The core of Robert T. Kiyosaki’s argument is:

‘The main reason people have financial problems is because they have been in school for years but have learned nothing about money. The result is that people learn to work for money… but never learn how money can work for them’.

people learn to work for money… but never learn how money can work for them

Kiyosaki’s point of view is that you have got to have assets in order to get rich. That’s to state the obvious, but no less true. The author himself did not hesitate to take on large, risky debts in order to acquire real estate. By the way, real estate debt in the US works differently than in most other countries, you’ve been warned.

Classic House with GardenTo raise money you have to invest – or you have to be born with a silver spoon. Then all you have to do is look after your money. Kiyosaki also has advice for them. He is horrified when it comes to investing in safe index funds, because if you don’t take a risk, you won’t get a return. Or at least much less. In order to create money, you must never lag behind the masses. The Millionaire School Teacher gives a striking example. He smelled the start of the financial crisis when a cash girl at a supermarket asked him to invest in ‘her’ real estate. ‘Pay attention now,’ thought Kiyosaki, ‘bargains are coming!’

His philosophy is:

1. Poor people only spend money. They hope to get rich – and for that they visit a casino hoping to win the jackpot.

2. Rich people mainly spend money on buying assets; assets that will make money, either directly or in the short or long term.

3. The middle class buys liabilities that it thinks are assets, like a (too) expensive own home. Because that increases in value every year, doesn’t it?

Kiyosaki explains his method of gathering assets in Rich Dad, Poor Dad with the intriguing subtitle ‘What the rich teach their kids about money – that the poor and the middle class do not!’ This book forms the basis of his wealth philosophy.

Pay as little tax as possible

The sequel to the get-rich-real-quick course is called Why The Rich Are Getting Richer. Both books are in turn part of the so-called Rich Dad Philosophy, a set of books, courses, seminars and webinars. And that’s where the critics come in.

Critics say: ‘Kiyosaki got rich by telling other people how to get rich. So can we!’ Also, not everyone agrees with parts of Kiyosaki’s ethics. For example, he thinks you should pay as little tax as possible. In his view President Donald J. Trump is right that he prefers not to pay a dime of tax.

Though you may take Kiyosaki’s answer why the rich keep getting richer (‘you have got to have assets in order to get rich’) with a grain of salt, economists say actually the same, just with other words. Let’s turn to Karl Marx (1818-1883). Marx answered this question in his magnum opus Das Kapital. The rich are getting richer because they own goods, businesses, copyrights and real estate—and you do not.

The rich get richer because they own goods, businesses, copyrights and real estate

More than a hundred years later, the French economist Piketty rethought Marx’s view on capitalism. His bestselling book Capital in the Twenty-First Century can be summed up with the sentence: ‘Owners will own more and more, until they have everything’. Why is this so? Because, according to Piketty, return on capital is growing faster than the economy. Just look at the astonishing wealth of the super rich such as Jeff Bezos ($197.9 billion), Bill Gates ($115 billion), Bernard Arnault ($111.9 billion), Mark Zuckerberg ($99 billion) and Warren Buffett ($79.4 billion) and Marx and Piketty seem to be right.

The rich are getting richer because they don’t work for their money. Almost everywhere in the world income from labor—excuse me—is taxed to death. Labor is being taxed more and more and VAT is only going up. Company profits have exploded since the 1980s, but those in employment hardly saw the economic growth back in their wallets. Working for money under a boss is for the dumb.


Please enter your comment!
Please enter your name here