The Foolish Rats

 

 

"My people perish for lack of knowledge"- Hosea 4 verse 6

 

 

Your house is not an asset. These are the maiden words of the book; Rich Dad Poor Dad by Robert Kiyosaki. A must read. This book continues to top the list of Best Sellers in the class of other influential books like Rick Warren's The Purpose Driven Life. Another must read.  I just finished reading Robert Kiyosaki's Unfair Advantage and you would be correct to say I am intoxicated. This is a secondary feeling having survived the bashing by Robert.  In fact, I feel like a rat. Now, if you are familiar with Robert Kiyosaki, you are sure to relate with the cause of my anguish. Robert can be quite mean in slapping foolishness out of anybody especially unrepentant souls. I have read the Rich Dad Poor Dad and other books by Robert and the reaction has always been epoch. This time around though, there's something different about it. I have this acute sense of awareness that I cannot afford to fall victim of momentary fixations and novel distractions. This time around, I intend to make good my desire to be free. In this post, I will share the insights I drew from my latest encounter with the golden subject of financial education.

 

 

 

I am a graduate of Finance who was never taught anything about personal finance. The course on cash flow was one of the most unintelligible class I had to endure back in school. The lecturer did a sordid job of dressing the concept in utter mystery.  It was years after graduation that I got the opportunity to understand the concept (particularly it's purpose and preparation). Could it be true that most people are financially unintelligent? Is it true that most people that portend to possess traditional education and professional certificates know next to nothing when it comes to managing their own finances. There is even a particular theory that the traditional schooling system is a conspiracy by the oligarchs against the poor. Valid or not, the poverty index is ever-widening while the middle class is thinning out (the hour glass effect). Heuristically, 90% of the wealth in the world is controlled by a meagre 10%. If this sounds gregarious, the data available in my country does seem to support this gulf theory. 70% of Nigerians live below the poverty line- CIA fact book.

 

 

 

Since this is not a book review, I will save you excerpts from the book; Unfair Advantage. What I think is profound though is that most people are illiterate about money and this is putting it lightly. Most of us especially those in the Employee and Small Business Owner quadrants are not perturbed about the impact of tax on our income. We are unaware that the rich folks profit from our ignorance. For instance, it is important to understand that the enemy of savings is inflation and that every time the Central Bank prints money that the value of the cash in our bank account diminishes. With a progressive advancement in technology and as we enter into the age of singularity (a term that explains advanced artificial intelligence and the eventual fusion between machines and robots to create a new life form), the laws of money continue to evolve. The new rules of money dates back to when America defiled the Bretton Woods conference. There was an era when world currencies including the Dollar took their reading from Gold. Once America, took the Dollar off the God, money became debt. This was when paper money seized being real and became fiat; a mere promise.

 

 

Who is a Rat?

 

A rat is anyone who works for money. By this definition, I and many others qualify for the title. The rich don't work for money. Instead, they send money on errand. You'd love to hear the sound of that statement in my mother tongue. It is metaphorical yet literal. How do you send money on errand? It's a life long discovery process. In fact, this is all the rich ever does.

 

 

 

Now I know that: 

1. My car is not as asset because an ASSET is anything that puts money into my pocket. Anything that takes money out of my pocket is a LIABILITY 
2. It is possible to be "SPIRITUAL" yet poor. The laws that govern money creation aren't the same for spirituality.
3. You cannot save your way out of poverty. The rich use debt to create wealth. 
4. Bad debt (spending on liabilities) is what makes people poor. Good debt involves investing in assets. Poor people have more liabilities than assets. 
5. Active income (salaries and emoluments) is subject to the highest tax charge. The rich enjoy bountiful tax holidays.
6. Poor people spend their energy trying to grow their income by working "hard". The rich work hard by spending their energy on acquiring assets. The difference is priority.
7. The poor are limited by the amount in their bank accounts. The rich however ask the right questions. When they want something, all they do is ask themselves "How can I afford this?".
 
 

Wisdom (the ability to know the difference) is the principal thing.

How else do you end this kind of post than by committing to a new order of lifestyle where wisdom is the principal thing. I have seen a lot of financial education advocates and claiming experts drumming the beat of savings as if that's the ultimate passport to the Good Life. I like the way a mentor of mine, Laja Shoniran described savings. In his words (paraphrased) "Locked in saving culture are character building virtues which if properly developed enables amongst other things the ability to delay gratitude for future gains". Savings is  just one step (a very crucial one) towards financial freedom. There is a lot of knowing and doing that must happen for one to be truly financially free. Wisdom is the principal thing and in all thy getting get understanding. God doesn't give wealth. What He gives us is the power (ability) to get wealth.


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