The book “What Your Accountant Doesn’t Tell You’, by New Zealand accountant Fiona Clayton-Law, gives tips on tax avoidance, and advocates getting into networking. She says this has created more millionaires in America, Australia and New Zealand than anything else. She also advocates share trading, not investment, but property speculation, options and other derivatives.
I know a number of people who have tried networking, as Clayton-Law uses the term; it has characteristics of pyramid schemes. Most participants I’ve met, as expected, have failed at it. The most obnoxious features of it are destruction of friendships and the exploitation of the elderly and gullible.
‘Rich Dad Poor Dad’ has been up in the top few of New Zealand’s best seller lists for years. The author, Robert Kiyosaki, tells an interesting story of his work and financial history. His prescription for prosperity is much like Clayton-Law’s.
‘The One Minute Millionaire’, by Mark Hansen and Robert Allen, has sold over 60 million copies, if the cover is to be believed. It’s a mixture of fable and what purports to be logic. Consider this statement on the third page. “...our goal is to help create 1,000,000 millionaires. Why? The cascade effect of 1,000,000 millionaires sharing their wealth (both in knowledge and cash) will positively change the economic future of the world.” Such ridiculous statements are interspersed in the book with some useful ideas.
These books have several things in common. The recipe for prosperity is engaging in activities which take money from other people, generally not creating wealth. This makes the quotation from ‘The One Minute Millionaire’ doubly ironic. To make a million new millionaires would increase inequality. One wouldn’t expect the poor to acquire all the new found wealth of new millionaires. The fact is that what these authors advocate does not increase the wealth of humanity. It’s a zero sum game because gains of winners equal losses of losers, if you ignore the costs of running the activity. The authors despise hard work building up a business or service career, such as medicine.
The popularity of these books is symptomatic of a moral sickness which accounts for the economic woes of New Zealand. The government is complicit in this, as with its tax and rates law, and dysfunctional monetary system, it discourages investment in wealth-creating activities such as farming, while encouraging harmful speculative activity, with low or zero tax.
With banks unleashed to indulge in an orgy of irresponsible lending, the Kiwi penchant for property speculation instead of investment in productive ventures, sees us poorer and almost certainly paying a painful price for our collective greed and fecklessness.
This article also appeared in the April issue of Canterbury Farming.