assets and lia- bilities." "Good securities and bad securities," I added. Rich dad nodded. "That is why I .have always said to you, 'The rich don't work for money' I say that because the rich are smart enough to know that money is worth less and less. If you work hard for bad money and do not know the differ- ence between assets and liabilities, good securities, and bad securities, you may struggle financially all your life. It is truly a shame that those who work the hardest and are paid the least suffer the most from this constant erosion of money's value. People who do the hardest work have the hardest time getting ahead due to the effects of Gresham's Law. Since money has ever-declining value, a financially wise person must constantly seek things that do have value and can also produce more and more debased money. If you don't do that, you fall behind financially over time rather than get ahead." Rich dad then pointed to the sketch on his legal tablet: Reduce Risk Through Financial Literacy PASSIVE Real Estate Assets PORTFOLIO Paper Assets "I am more secure today than your dad because I worked hard to acquire all three of these basic assets or securities. Your dad has chosen to work hard for job security. So what he has worked hard for looks like this:" Your Dad 154 Rich Dad's Guide to Investing Rich dad then crossed out job security: Your Dad "So when he lost his job, he found out that he had worked hard for nothing. And worst of allv he was successful. He worked himself all the way to the top of the state education system but then he bucked the system. There goes his job se- curity with the state government. I feel for your dad almost as much as you do. But you cannot talk to someone who has very set core values and is not willing to change. He is out looking for another job rather than asking himself if a job will get him what he really wants." "So he clung to job security and false assets. However, he failed to convert his earned income into real assets so he could have a rich person's income, which is passive income or portfolio income," I said. "He'should have done that, convert- ing his paycheck into real securities, before taking on the system." "Your dad is a brave man, highly educated, but not finan- cially well educated. And that was his downfall. If he were Reduce Risk Through Financial Literacy 155 rich, he could influence the system with campaign contribu- tions, but since he had no money, all he could do was protest and defy the government. Protest is effective, but it takes a heck of a lot of people protesting to make any change in gov- ernment. Just look at how many protesting people it is taking to stop this Vietnam War." "The irony is that he was protesting against the power of the rich to influence government by campaign contributions," I said. "He saw the power that people with money had over politicians and the favors the rich receive or the laws that were passed in favor of the rich.