Let me give you an idea. If it was 1900 and I own a farm and that farm gives me $10,000 a year. Let’s say I grow corn and the market value of that corn is $10,000, so every year I make $10,000. Middle Class [people] think that the wealth was in that $10,000 – And say, “Oh he makes $10,000, he’s a $10,000 guy” and judge and assess me as a $10,000 person. But the wealth wasn’t in the $10,000, it was in the farm. Why? Because the minute I pass that farm on to my son, the second I do, I’m 65, he’s 18, the second I pass the farm on to my son, he is instantly, just as wealthy as me – just like that! So, now my son runs the farm and he makes, because of inflation, $11,000.
Now, could you imagine? My uncle had been in the same company for 40 years. Now think about it, could you imagine my uncle – he comes up to his boss; he says “Boss, I built this company with my sweat, blood and tears. I’ve been here from the beginning; I built this thing; I’ve been here every step of the way, now I am the director of administration. I oversee 100 people. You’re paying me $100,000 a year and I’ve been here 40 years. My son is graduating high school in May. He’s 17 years old, but he’s going to turn 18 in May as well. So, what we are going to do is; we are going to go ahead and have him, and he’s going to be your director of administration. He’s going to oversee the 100 people. And you are going to pay him $100,000 a year. Wait a minute, I was up for a raise, I forgot. You’re going to pay him $103,000.”
Now what do you think the boss is going to say?
Think about this for a second. Who cares how much money my uncle made? He could have made $100,000 a year he could have made $500, it doesn’t matter! When he’s gone his son still starts at zero! See, that’s why we aren’t getting wealthy. That’s why there are no broke Kennedy’s, there’s no broke Bush’s, there’s no broke Rockefellers. Why? Because instead of focusing on the income they focused on the asset. And if you pass on an asset to your son that’s $5,000,000, he’s not starting at zero; he’s starting at $5,000,000. He takes the $5,000,000 and makes it $20,000,000. His son makes it from $20,000,000 to $50,000,000. $50,000,000 to $100,000,000. But what we do is, we start from scratch, we get our education, we get to $100,000 a year, and then BOOM, we are done. And our son starts at the exact same spot – ZERO! He owns nothing; he has nothing; he’s worth nothing.
So, it doesn’t matter how much he made – it’s not getting passed on. You can’t accumulate wealth like that.
See, what happened was my son was one of the farmers making $11,000 a year, some corporation came along convinced my son to sell them the farm. How’d they do it? They preyed on our lack of knowledge. They told my son, “Hey, we’ll pay you $12,000 a year for the rest of your life.”
So, my son said, “Let me get a day to think about it.”
He talked to his wife and family and they say, “Well you can make $11,000 as a farmer or $12,000 doing nothing.”
“I’ll take $12,000 for doing nothing.” So, they sell the farm to the corporation. The corporation makes good and pays him $12,000. He thinks he’s done it. Because the wealth is in the income – right? And I just made $1000 more for my family.
But for everything you get you have to give. And because he did that, he forever – forever - enslaved my grandson. Because now my grandson has no farm. He will probably still farm because his daddy farmed and his daddy’s daddy farmed, etc. but now he’s going to do it for someone else.
So, now that company that bought the farm from my son is now going to employ my grandson. And my grandson is going to do the exact same job that his daddy did, but instead of doing it for himself, he’s doing it for the corporation. The corporation is now making $12,000, because of inflation, off the farm. So, now my grandson is doing the same work I did and my son did, but instead of getting $10,000 doing that work, he’s getting $6000. The company is making $12,000 and giving him $6000 and then keeping $6000. So, now forever, my grandson has no worth – he just rents his income.
You see, that’s what has happened from 1900 to 2000.
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