Fake Money: The World Is About To Change

Money is something people use every day, yet very few stop to think about what gives it value. Most of us work hard to earn it, save it for the future, and trust that it will continue to hold its purchasing power over time. In this chapter, Robert Kiyosaki challenges that assumption by arguing that modern money is fundamentally different from what it used to be. According to him, the world entered a new financial era in 1971, and understanding this shift is essential for anyone who wants to protect and grow their wealth. Kiyosaki begins by explaining a major historical event that changed the global monetary system. In 1971, U.S. President Richard Nixon ended the convertibility of the U.S. dollar into gold. Before this decision, the dollar was backed by gold, meaning governments and institutions could exchange paper currency for a fixed amount of the precious metal. Once this link was removed, the dollar became what economists call **fiat money**—currency whose value depends largely on government authority and public confidence rather than a tangible asset like gold. Kiyosaki refers to this as "fake money" because it can be created in virtually unlimited quantities by governments and central banks. According to the author, this change had long-term consequences that many people still fail to understand. When money is no longer tied to a scarce physical resource, governments gain the ability to print or digitally create more of it whenever necessary. While this may help stimulate economies during financial crises, it also increases the supply of money in circulation. As more money chases the same amount of goods and services, prices gradually rise. This process, known as inflation, quietly reduces the purchasing power of people's savings. Kiyosaki argues that inflation affects different groups in different ways. Individuals who rely solely on wages and savings often suffer the most because the value of their money steadily declines while the cost of living continues to increase. On the other hand, people who own appreciating assets such as businesses, real estate, or investments frequently benefit because the value of these assets tends to rise alongside inflation. This, he says, is one reason the gap between the wealthy and everyone else has continued to widen over time. One of the chapter's strongest messages is captured in the statement that "the rich do not work for fake money." Rather than spending their lives exchanging time for wages, wealthy individuals focus on acquiring assets that generate income regardless of whether they are actively working. Businesses, rental properties, investments, and other productive assets continue to produce cash flow even as inflation reduces the value of currency. By owning these assets instead of merely earning salaries, the wealthy are often better positioned to benefit from changes in the financial system rather than becoming victims of them. The author also questions one of the most common pieces of financial advice: "Save money." For generations, saving has been promoted as a responsible financial habit. Kiyosaki does not argue against maintaining emergency funds or short-term cash reserves, but he challenges the belief that saving alone can create long-term wealth. If inflation consistently erodes purchasing power, then simply accumulating cash may actually leave people poorer over time. From his perspective, money should be invested in productive assets capable of growing faster than inflation instead of remaining idle in savings accounts. Another important topic introduced in this chapter is financial education. Kiyosaki believes that most schools fail to teach students how modern monetary systems operate. People learn how to earn money but rarely learn why money gains or loses value, how inflation affects investments, or how governments and central banks influence the economy. As a result, many adults enter the workforce equipped with professional skills but lacking the financial knowledge necessary to build lasting wealth. The chapter also criticizes traditional education for focusing heavily on academic success while overlooking practical financial literacy. According to Kiyosaki, many teachers are sincere and dedicated professionals, yet they often teach within a system that does not prepare students for the financial realities of adult life. Graduates may excel in examinations but still struggle with debt, taxes, investing, and wealth management because these subjects receive little attention in conventional classrooms. Kiyosaki further discusses the growing burden of student loans. He argues that millions of students begin their careers carrying substantial debt, forcing them to prioritize loan repayments over investing or entrepreneurship. Instead of building assets early in life, many spend years servicing liabilities. In his view, this system benefits lenders and financial institutions while delaying financial independence for ordinary workers. The discussion then shifts toward the idea of **fake assets**. Kiyosaki revisits one of the central concepts from his earlier works by distinguishing between assets and liabilities based on cash flow. A true asset consistently puts money into your pocket, whereas a liability takes money out. He argues that many people mistakenly consider their primary residence to be their greatest asset, even though it often requires ongoing expenses such as mortgage payments, maintenance costs, taxes, and insurance. Whether readers agree with this viewpoint or not, Kiyosaki encourages them to evaluate financial decisions based on actual cash flow rather than emotional attachment. The author also warns about complex financial products, particularly derivatives. He explains that during the 2008 financial crisis, many sophisticated investment instruments collapsed in value, exposing weaknesses in the global financial system. While these products were often marketed as valuable assets, Kiyosaki believes they represented financial structures built on excessive leverage and unrealistic assumptions. Their failure demonstrated how easily perceived wealth can disappear when underlying risks are ignored. Toward the end of the chapter, Kiyosaki categorizes modern money into three broad forms. The first is **God's money**, represented by gold and silver, which he considers to possess intrinsic value because they cannot be created at will. The second is **government money**, including paper currencies such as dollars, euros, and other fiat currencies issued by central authorities. The third is **people's money**, represented by decentralized digital currencies such as Bitcoin and other cryptocurrencies. Although each form serves different purposes, Kiyosaki encourages readers to understand their characteristics before deciding where to store their wealth. The chapter concludes by encouraging readers to question long-held assumptions about money. Kiyosaki does not simply argue that fiat currency is flawed; rather, he urges individuals to understand how the financial system operates so they can make more informed decisions. Financial security, he believes, comes not from blindly trusting traditional advice but from continuously educating oneself about money, inflation, assets, and the forces that shape the modern economy. The central lesson of this chapter is that the nature of money has fundamentally changed, and those who fail to recognize this change risk falling behind financially. By understanding inflation, questioning conventional beliefs about saving, investing in productive assets, and improving financial education, individuals can better prepare themselves for a future in which knowledge—not merely income—becomes the greatest source of wealth.