Resigning from the entitlement generation will be the focus of our "Teach Your Children Well" page today. We cannot change the day we were born. So while we may be part of a chronological generation, we don't have to subscribe to an entitlement mentality that seems to be taking such deep roots.
In the page about multiple income streams, you read about the three types of income. We'll expand on that idea a little more in this posting. Since financial education is not taught in our school system, it will be up to you as parents to give your child that "unfair advantage" of exceptional financial literacy.
It is only unfair because too few have access to the facts. Not that they are secret. There are volumes published with great information. Many have been highlighted here at books-empower.com. But instead of encouraging young minds to seek ways to use their talents, too often the focus is on convincing them that the government must take care of them. Because of course they cannot do it for themselves.
We're all about changing that rhetoric. You can move your child away from the propaganda of the entitlement generation by teaching your child that he isn't entitled to free fish. He can work for his own fish. And even better, he can be a provider of fish.
If you're wondering about that analogy, please check out another great book found among our list of classics. "How An Economy Grows and Why it Crashes" should be part of every high school curriculum.
The authors, Peter and Andrew Schiff use the setting of an island as the backdrop for their story.
The crux of that lesson is to teach our next group to be leaders, job creators and problem solvers. The objective is to guide them around, over, or right on through the entitlement generation quicksand.
In many of Robert Kiyosaki's books, he illustrates in very simple terms the difference between income and expense and the contrast between asset and liability. He uses the cash flow quadrant as an example. On the left side we find the employee and self employed people. On the right side are the business owners and investors.
He makes the distinction that a person who owns a business that requires his personal time to keep it growing falls into the left side. To be on the right side means you can walk away and maintain your income. He further illustrates the tax ramifications of each quadrant.
He also tends to challenge us to think outside our normal limits. At times we might not like the questions, nor will the suggestions always lead us to nod in agreement.
We'll go into more about cash flow in another page. For this one we are discussing avoiding the trap of expecting to be taken care of for life. During the 2012 election, Mitt Romney was caught on a video commenting about how 47% of Americans do not pay taxes. The other side immediately skewered his campaign for the words.
It paid off handsomely at the polls. The "tax the rich" chant grew and grew. I wondered back then why Romney didn't take the emotion out of the hype and just answer the question. We handle problem solving best by eliminating emotion.
In his book, "Why "A" Students Work For "C" Students And "B" Students Work For The Government", Robert Kiyosaki converts an answer to that 47% question. The information comes directly from the bipartisan Tax Policy Center. Mr. Kiyosaki posts it in plain English.
"To be considered in that richest 1% of Americans you must earn $370,000 a year. In 2011, the top 1% paid 37% of all income taxes collected in America.
To rank in the lowest 50%, you earn $34,000 a year or less. The entire lower 50% pays 2.4 % of all taxes paid."
He summarizes, " If 1% of the wealthiest Americans pay 37% of all taxes collected, while half of Americans earning $34,000 a year pay only 2.4%, it doesn't seem unreasonable to ask: Who isn't paying their fair share?"
He finishes that segment by asking about that last question, " If you are incensed by it, please ask yourself: How emotionally attached are you to entitlements? And instead of getting distracted by the political sideshow of 'rich vs.poor', wouldn't you be better off being financially educated?"
I would agree. Your child doesn't have to follow the direction of the entitlement generation leading our nation now. They will pay for the mistakes and out-right greed however. So as their primary teacher, you must teach them well to protect what they earn.
Candidates always go on and on about protecting the middle class. That is because the middle class works for ordinary income and this form of compensation suffers the highest tax hit. Politicians have gifted themselves some of the highest and most lucrative entitlement programs available. Far better than those afforded to the people they profess to seek to protect.
But as the huge boomer population begins to draw from Medicare and Social Security as their only income, they will in fact be leaving the middle class and joining the mathematical ranks of the poor.
In this link you'll find some interesting comments from Dr. Ben Carson on this entitlement generation issue. Please read it carefully. There are some questions with multiple possibilities that Dr. Carson sorts out.
Part of this link came from his excellent book, "America The Beautiful." The subtitle is "Rediscovering What Made This Nation Great."
We'll go into the mechanics of teaching your children how to not only get their own fish, but to be a fish supplier in later pages. The critical first step is realizing that an entitlement generation has brought us closer to the warning issued by G. Edward Griffin in his great book, "The Creature From Jekyll Island." You read that warning in the sub headline of this page. We posted a page about the secret meeting on Jekyll Island a while back.
Mr. Griffin's book is in my opinion a must read for all Americans. And for your children to leave the thinking of the entitlement generation, they should make this the second book they read. Right after reading the very best financial literacy book ever written, which is "Rich Dad Poor Dad." Knowledge is not only the new money but our best weapon in turning the tide of government reliance and restoring the vision of the Founding Fathers and the American Republic.