What Schools Will Never Teach You About Money By Robert T. Kiyosaki

FAQ 
Why is it a liability to the banker?
Short Answer 
The definition of an asset is something that puts money in your 
pocket. The definition of a liability is something that takes money 
from your pocket. Since the banker must pay interest to the saver, the 
saver’s $100 is the saver’s asset and the banker’s liability.
FAQ
How does the banker make money?
Short Answer 
Debtors.
Explanation 
The banking system of the world works on a system known as the 
fractional reserve system.
INCOME STATEMENT
INCOME STATEMENT
Banker
Saver
Assets
BALANCE SHEET
Liabilities
Income
Expenses
Assets
$100
$100
Interest
Interest
BALANCE SHEET
Liabilities
Income
Expenses

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Chapter Three
Unfair Advantage
99
98
Taxes Reward Debtors
Now you know why the tax department rewards debtors with 
tax-free money and punishes savers by taxing interest on savings at the 
highest taxable rate as ordinary income.
Learning to Be a Debtor
In 1973, I returned home from Vietnam. I had been away from 
Hawaii since 1965. I was fortunate to be assigned to Marine Corps Air 
Station at Kaneohe Bay, Hawaii, for my last year of service. 
I had left Hawaii as a boy of 18 and returned home as a young 
man of 26. I had respectfully listened to adults all my life. I had gone 
to school after receiving a Congressional appointment to a federal 
military academy in New York, and graduated with a bachelor of 
science degree. I got a job upon graduation, sailing for Standard Oil as 
a third mate on their oil tankers, and earned a lot of money for a kid 
of 21 years of age. I was earning nearly twice as much as dad, who was 
nearly 50.
Rather than make a career of Standard Oil and one day become 
a ship’s captain, I resigned. I joined the Marine Corps, earning $200 
a month as a Marine lieutenant, which was a lot less than the $4,000 
a month I was earning at Standard Oil. My flight training began at 
Pensacola, Florida, where it took two years to graduate and receive
my wings.
In 1971, I was immediately transferred to Camp Pendleton, 
California, for advanced training and was stationed on board an 
aircraft carrier in Vietnam in 1972. I crashed three times that year and 
was glad to return home to Hawaii in 1973, still in one piece.
Now that I was home and about to leave the military, it was time 
to think for myself. I was 26 years old, and I knew it was time that
I decided what I wanted to do when I grew up.
The new airbase was only 15 minutes from my poor dad’s home 
and 30 minutes from my rich dad’s office in Waikiki. During my
final year as a pilot, I visited both men and sought their advice for
my future.
With a fractional reserve of 10, the following diagram is a more 
complete example. The banker pays the saver 2 percent interest on a $100 
deposit. The banker then multiplies the saver’s $100 deposit by 10 so 
the banker now has $1,000. The banker lends out this magically created 
$1,000 at a much higher interest rate of 10 percent to a borrower.