By Stephen Buller
Robert Kiyosaki, famous for writing the number-one bestselling book on personal finance, “Rich Dad Poor Dad,” says savers are losers. If you’re able to get past the controversial and inflammatory nature of the statement, you will find much truth, especially in 2024.
I’ll argue for the merits of saving for the future. The ability to make a conscious decision to forego the pleasures of today for something greater tomorrow is a defining characteristic of successful people. It shows vision, patience, and discipline.
Saving is also essential for groups of people to consolidate resources and accomplish more together than anyone could alone. There is a poetic beauty in humanity that makes us both self-serving and social creatures. Cooperation is usually more productive overall than working alone – if you’ve ever put together an Ikea bedframe by yourself, you know what I mean.
So, saving is good – but you must be saving the right thing. If you’re saving something that doesn’t store value, you’re losing purchasing power all the time. If you have an ambitious goal that requires years of saving, you’re fighting an uphill battle. This is the case of all fiat currencies, and it has accelerated in Western countries over the past few years, but make no mistake: It is by design.
This is why “investing” has become such a necessity. It’s not good enough to save, because the interest payments on a savings account don’t keep up with the inflation tax. Instead, we must beat the rate at which our currency is devalued – then pay more taxes on our “returns.”
This is why, according to Robert Kiyosaki, the rich use debt and taxes, not savings. Why save painstakingly for years when you can take out a loan? The currency is immediately at your disposal, and it’s not taxable income. You’ll owe interest, of course, but if you put the funds to good use, you should be able to make the monthly payments, which will only get easier as inflation works for you.
At this point, I should say this is not a recommendation to go into debt. It’s also not a statement that debt is bad. I don’t think there is a problem with banks consolidating funds and making large loans towards productive ventures. In fact, I think that’s the point of a bank, along with protecting individuals’ deposits.
The problem arises when our currency is untethered from real money. In times and cultures past, if a bank made enough bad loans, it went out of business. That might sound terrible, but it meant banks had to be smart about where they deployed funds. They were incentivized to make savvy investments with limited resources. It also increased competition, both in the banking industry and among the ventures funded.
Today, bad loans are papered over with the creation of new currency, which incentivizes riskier loans. This rewards failure, skews market valuations, and erodes the purchasing power of diligent savers.
In general, a nation’s government is in charge of its currency and so must interact with banks in some way. Throughout history, failing governments have used currency debasement to fund unpopular programs, and 21st century America is no exception. In fact, we might epitomize the scheme.
It’s easy to become entrenched in the way things are done, to think that this must be the only way. I think we need to reimagine what money looks like. Rather, I think we need to humble ourselves and accept that those who came before us already knew the answer – gold.
When individuals are empowered, they come together in beautiful ways. I want to envision a better future for all of us, and argue that the most prosperous society will use a money that allows the average worker to save the fruits of their labor and build towards their goals for the future.
For now, you can just save real money instead.
