Business Paper on The Widening Gap between the Rich and the Poor

The Widening Gap between the Rich and the Poor

In this video, Mr. Kiyosaki shows how the gap between the rich and the poor is a moral issue with several other contributions. He stated that the number of unemployed youths increases over time as more and more students graduate from tertiary institutions and flood the job market (Kiyosaki, 2016). However, companies and organizations want employees with working skills which the fresh graduates require further training to acquire. The educated graduates thus become unemployable and increase the percentage of non-working people in the country. On the other hand, parents save and invest a lot in their children’s education and thus expect the children to land a job after graduation and later take care of them in their old age. This mindset is failing since the job opportunities are fewer compared to the number of job seekers. Consequently, the lower and middle-income families remain at the same financial position despite their hard work over the years.

Another reason highlighted by Mr. Kiyosaki is the taxation system in the country. The rich have lower taxation rates than the poor. This implies that a larger portion of money from the income of the poor is diverted to the government as compared to that of the rich. The net income reduces for the lower and middle-income earners while the rich are shielded from high taxes. The rate of inflation is also high which affects the value of money. The interest earned on savings reduces over the years to a point where saving money for later use is not beneficial. It is far much better to invest today than to save since the investment will accrue profit over time, unlike savings which loses their value.

There is also the dependency mentality where people expect the government to assist them financially. The social fund covers people who are still productive but fail to utilize the available resources. This mentality makes the poor poorer since they do not think beyond their current situation but rather depend on the government to take care of them. Moreover, the recent economic crashes in the country mostly affected the poor while the rich were bailed out. The government is keen to ensure that the investments of the rich do not collapse while the poor people have no such cushioning.

Lack of financial literacy among many people in the country is another contributor to the widening gap between the rich and the poor. Learning how to manage finances means that one will learn how to invest and reinvest to make a sustainable income. Financial literacy also involved the awareness in rightly classifying properties one owns, as assets or liabilities. The rich acquire assets which bring in more money, while the poor acquire liabilities which requires time and money to own and maintain, mistaking it for asset. Students go through an education system where they learn how to be good employees without learning how to manage finances (financial literacy). Gladly financial literacy can now be acquired outside the school, for instance, in clubs where people teach others without a fee through board games such as monopoly..

Concisely, the widening gap between the rich and the poor can be attributed to emphasis being placed on higher education than acquiring skills. It is also attributed to excessive dependence on the government, the taxation system and lack of financial literacy. Thankfully, there is needed help for anybody who wants to get financial freedom and it is readily accessible.

 

 

Reference

Kiyosaki, R. (2016, July 21). Why the rich are getting richer | Robert Kiyosaki | TEDxUCSD [Video file]. Retrieved from https://www.youtube.com/watch?v=abMQhaMdQu0&t=416s