Second Chance. Robert T. Kiyosaki
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Название: Second Chance
Автор: Robert T. Kiyosaki
Издательство: Ingram
Жанр: Личные финансы
isbn: 9781612680491
isbn:
Q: I can see that the rich, the upper 1%, are getting richer. But what is happening to the 90-95%? Why is their income going down? Are those the rich that you’re talking about, the rich that are growing poorer?
A: Yes. This chart tells a tale of two different types of rich people. As you can see from the chart, the real rich, the top 1% of all Americans, became extremely rich—with a gain of 309% in income since 1979.
Yet, the top 95-99% are losing ground. Their income is not growing.
Q: Is this why you said earlier about some of the rich becoming the new poor?
A: Yes. Notice the chart we just looked at only takes us to 2007. That was the year the Great Recession began. After 2007, many millionaires were wiped out in the subprime mortgage fiasco and the stock market crash.
Q: So this chart would look worse today?
A: Yes. The upper 1% of Americans has gotten richer. Many of the others, the other type of rich I’ve described, are now poorer. Many slid from rich to poor in less than a year. Many were wiped out when they lost their high-paying jobs, their homes, and their wealth as stock portfolios collapsed.
Of the rich who survived the crash and remain in the upper 20%, many (thanks to inflation) are becoming poorer. Some have already slid into the middle class.
Q: Tell me again… what’s the difference between the two types of rich?
A: One type of rich is people with high-paying jobs, such as corporate executives, professional people such as doctors and lawyers, athletes, and movie stars. They are high-income rich.
The other type of rich is the person who does not need a job to be rich. Most of these people are asset-rich.
The Millionaire Next Door
In 1996, The Millionaire Next Door was published. It was a great book for its time. Written by Thomas J. Stanley and William D. Danko, the book described how ordinary, middle-class citizens had become millionaires. They did it without being Donald Trump, Steve Jobs, or Gordon Gekko from the movie Wall Street. They were not millionaire movie stars, rock stars, or professional athletes. They had become middle-class millionaires by having a good education, living in a modest home in an upscale neighborhood, driving sensible cars, saving money, and investing steadily in the stock market.
Many were “net-worth millionaires,” people who had become rich as a result of the rising value on their homes and retirement portfolios. They had become middle-class millionaires through inflation, by being part of the rising U.S. economy. They were living proof of the American Dream.
The September 11, 2001 terrorist attacks signaled the start of the new millennium and end of the American Dream.
The chart below shows that, since 9/11, life for the millionaire-next-door has not been easy.
In 2000, the NASDAQ or dot-com crash triggered a series of booms and busts, shaking many millionaires-next-door out of the millionaire category.
The Foreclosure Next Door
In 2007, when the subprime-mortgage bubble burst, many millionaires-next-door became the foreclosure-next-door.
Figure 4: U.S. Homes Foreclosed
June 2012
Prior to 2007, housing prices had been rising steadily for years. As home prices rose, millions of homeowners began taking out “home-equity loans,” which many used to pay off credit card debt or go on vacation. Using their homes as ATMs… they learned the hard way—when they were upside down—that their “house is not an asset.”
When housing prices crashed, credit card use went down. When homeowners stopped using their credit cards, the economy slowed because the economy depends upon consumer spending and use of their credit cards. When consumers slowed their spending, retailers began to suffer, and when retailers suffer the world economy suffers.
Today, in 2014, there are approximately 115 million households in the United States. Of those 115 million households, 43 million are renters and 25 million are households or families who own their homes free and clear. Of the approximately 50 million households with mortgages, it’s estimated that over 24 million are “underwater,” which means they owe more on their home than their home is worth.
As long as homeowners feel poor, the economy will suffer.
The Lost Generation
When the middle-class millionaires-next-door lost their jobs and their homes, and began using retirement accounts to pay the bills, there was another casualty: The children of the millionaire-next-door.
All over the world, there is a generation of young people known as the new lost generation. They’re the college and trade school and high school grads who cannot find jobs or jobs that utilize their level of education. More than income, they are losing crucial real-life work experience. Without real-life work experience in their 20s and 30s, their earning power and income in later years will suffer, which is why they’re often called the lost generation.
Young, Educated, and in Debt
Many of these highly educated people graduate saddled with student-loan debt, quite possibly the worst of all possible debt. Unlike a car loan, home loan, or business loan, student loan debt is rarely forgiven. A student cannot declare bankruptcy and expect to be released from the loan. Student loan debt is an albatross around the neck of a student for life, accruing interest for life. Many will have problems buying a car, home, or investing for their future until their student loan debt is paid off. The current overhaul of the student loan programs may address these issues and challenges.
Many of these young people are boomerang kids, kids who leave home, only to return to live with mom and dad. This makes many moms and dads, the sandwich generation, people who are now caring for their kids and their parents, often with three generations living under one roof.
Other countries offer free higher education. In America, we create debt slaves out of our students.
Q: Is this why you say everyone needs a second chance? Because some of the rich are becoming poor, the middle class is shrinking, poverty is increasing, and our students are highly educated, underemployed, and deep in debt?
A: Yes. The world is changing and money is changing. Those who are operating in the past, with the old-world rules of money, are being wiped out in the present.
We live in the Information Age. There is an abundance of information, and much of it’s free. But without financial education, a person cannot convert that information into knowledge.
Q: And if knowledge is power, then millions are highly educated but without much power. Is that why millions of people need a second chance… to get their power back?