"That is part of the picture because all an investor really does is trade time, expertise, or money for a security that they hope or intend will become an asset. So just as you trade Reduce Risk Through Financial Literacy 151 money to buy an investment piece of real estate, like a rental house, or pay money for a share or stock, a business owner will pay people money to build a business asset. One of the main reasons the poor and middle class struggle is that they value money over true assets." "So the poor and the middle class value money and the rich don't really value it. Is that what you're saying?" "Partially," said rich dad. 'Always remember Gresham's Law." "Gresham's Law?" I replied. "I've never heard of Gresham's Law. What is that?" "Gresham's Law is an economic law that states that bad money will always drive out good money." "Good money, bad money?" I asked, shaking my head. "Let me explain," said rich dad. "Gresham's Law has been in effect since humans began valuing money. Back in Roman times, people used to clip silver and gold coins. Clipping coins meant that people would shave a little bit off the coin before handing it to someone else. So the coin began to lose value. The Roman people were not stupid and soon noticed that the coins were lighter. Once the Roman people knew what was happening, they hoarded the coins with high silver and gold content and spent only the lighter coins. That is an example of bad money driving good money out of circulation. "To combat this clipping of coins, the government began reeding coins, which is why coins of value have the tiny grooves on the edge. If a coin had the grooves filed down, a person knew the coin had been tampered with. Ironically, it is the government that does the most clipping of the value of our money." "But that was back in Roman times. How does that law apply today?" I asked. "In 1965, less than ten years ago, Gresham's Law began working in the United States when the government stopped 152 Rich Dad's Guide to Investing producing coins with silver in them. In other words, the gov- ernment began producing bad coins, or coins without any real value to them. Immediately, people began hoarding the real silver coins and spending the debased or fake coins." "In other words, people somehow intuitively know that government money is not worth much," I stated. "It seems that way," said rich dad, "which may be why I think people save less and spend more. Unfortunately, the poor and middle class buy things that have even less value than their money. They turn cash into trash. Meanwhile, the rich buy things like businesses, stocks, and real estate with their money. They are looking for secure securities in a time when money has an ever-decreasing real value. That is why I've constantly said to you and Mike, 'The rich do not work for money' If you want to be rich, you have to know the differ- ence between good money and bad money...