Recently married, the happy, highly educated young couple moves into one of their cramped rented apartments. Immediately, they realize that they are saving money because two can live as cheaply as one.
The problem is the apartment is cramped. They decide to save money to buy their dream home so they can have kids. They now have two incomes, and they begin to focus on their careers. Their incomes begin to increase.Rich Dad Poor Dad
So because their income goes up, their expenses must go up, too.
Going back to the young couple, as a result of their incomes increasing, they decide to buy the house of their dreams. Once in their house, they have a new tax, called property tax. Then they buy a new car, new furniture, and new appliances to match their new house. All of a sudden, they wake up and their liabilities column is full of mortgage and credit-card debt. Their liabilities go up.Rich Dad Poor Dad
So then not only do you have income and expenses going up, but now the liabilities go up. It’s the common story of Thai people. They buy a car thinking it’s an asset, but in fact it’s a liability on top of their expenses.
They’re now trapped in the Rat Race. Pretty soon a baby comes along and they work harder. The process repeats itself: Higher incomes cause higher taxes, also called “bracket creep.” A credit card comes in the mail. They use it and max it out. A loan company calls and says their greatest “asset,” their home, has appreciated in value. Because their credit is so good, the company offers a bill- consolidation loan and tells them the intelligent thing to do is clear off the high-interest consumer debt by paying off their credit card. And besides, interest on their home is a tax deduction. They go for it, and pay off those high-interest credit cards. They breathe a sigh of relief. Their credit cards are paid off. They’ve now folded their consumer debt into their home mortgage. Their payments go down because they extend their debt over 30 years. It is the smart thing to do. Their neighbor calls to invite them to go shopping. The Memorial Day sale is on. They promise themselves they’ll just window shop, but they take a credit card, just in case.Rich Dad Poor Dad
Ask yourself, “does this make sense?
The mirror symbolizes the power of self-knowledge. This self- knowledge, according to Japanese legend, was the most treasured of the three. In the Japanese culture.
If they used the power of the mirror, they would have asked themselves, “Does this make sense?” All too often, instead of trusting their inner wisdom, that genius inside, most people follow the crowd. They do things because everybody else does them. They conform, rather than question. Often, they mindlessly repeat what they have been told: “Diversify.” “Your home is an asset.” “Your home is your biggest investment.” “You get a tax break for going into greater debt.” “Get a safe job.” “Don’t make mistakes.” “Don’t take risks.”