The following are notes I made from (and expanded on) Rich Dad Robert Kiyosaki’s 2014 Predictions webinar earlier this year.
– Robert says in the next 5-20 years a Massive correction in the stock market.
Well in my opinion even a broken clock is right twice a day, so allowing himself such a big period to be right.
Although those with market linked pensions and other long term investments DO need to pay attention NOW, else in 5-20 years they will see the inevitable happen, as predicted.
So 2019 is the date, which will be here very soon.
(I believe the market will dip before mid-2014)
Stock market is rigged and insiders depend on it, so trying to keep it that way. Beware of financial planners/advisors, as they are just sales people, not real investors.
A market ‘Investor’ has a ‘buy and hold’ strategy that benefits the brokers and market makers, who make money whether you win or lose.
– Traders go with the market, Traders aren’t concerned about controlling the market, they are concerned about controlling their position.
Unsustainable resources, such as peak oil.
A lot of manipulation is happening, trust yourself if something doesn’t seem right.
Everything comes from the earth, then at the top of the pyramid is the paper derivative which is the most risky. That is where everyone is.
Stocks, bonds, mutual funds, pensions (US 401K) will lose the most and the fastest, with electronic trading. 90% of population will get wiped out financially.
Also your house is not an asset.
– If you’re not prepared for upcoming market correction, you still have time to do so.
– Bucky Fuller said in the industrial age you could see change coming – but you can’t see it coming today!
People are now doubling up and up to 3 generations are starting to live in one home again.
– Understanding the relationship between a “policy” and a “demographic” will help predict the future.
eg. Baby boomers are going to all retire at the same time and need health care.
More people pulling out of the stock market than going in.
Tax laws show what the policy is, Govt makes tax allowances to make people put money where they want it.
Currently Govt wants investors to provide ‘low cost housing’ so benefits are there.
In business investment a cap rate is a return a business will provide for the investment you put in.
In stock market this is called the P/E ratio (stock price/earnings per share), which has traditionally been 13/14, now at 19 ratio, giving less value than usual.
Financial advisors aren’t educated in the market, similar to mortgage brokers, who are trained to sell you a product and make a commission versus being investors/traders themselves.
Also most accountants only understand maths, not making money.
– Ask the what they are studying!
– When the market crash hits, most people will be wiped out because of their lack of financial education.
– Most people don’t address their financial issues because they are intimidated by what they don’t know.
– Advice isn’t education. Be sure to work with those who can teach you what you need to know.
There are three levels of wealth:
1) Primary (real resources like fish, oil, gold)
2) Entrepreneurs (get the resources and use them)
3) Paper (stocks, bonds, mutual funds, savings)
Price of oil and resources is always going up.
– The financial crash will be quick and massive due to exponential progression/change.
(The bull goes up the stairs, the bear goes out the window!)
Entrepreneurship is best place to be and get in a business that you can do well in during an up and down market!
Most people in stock market and property/real estate are relying on false security of prices going up.
– When the financial environment changes, you need to be able to change with it.
Robert is now a ‘prepper’ as well. Financial preparation, ask “how can I protect my situation”?
Have friends you can count on. Make sure have food, water and defences/guns. Get prepared and stocked up.
– When investing in property/real estate, take into consideration what industries and economies will affect your investment.
Energy, healthcare, technology and education are four industries that are growing.
– Migration drives real estate prices.
Read “Shaping Our Nation” by Michael Barone if based in the USA, as it’s about US migration and politics.
Taxes are going to go up.
– Rethink your position in the stock market.
– When it comes to investing, it’s never too late to start.
– You are ultimately responsible for your money. Take action!
– Make your financial well-being one of your top priorities.
People say they are too busy with work, career, family, children etc…
– Think ‘preparation’ instead of ‘panic’
Derivative are mass weapons of financial destruction.
In 2007, there were $700 trillion of derivatives, which caused the crash (not sub-prime).
Now in 2014, derivative market is $1.2 quadrillion, which is waiting to be triggered!!
Those who have lost it all have to go back to zero and start again – with 1-bed flat, with a small business.
Taken it easy all their life, being an employee, saving and investing in stocks as they’ve been told.
Not qualified to play the game in the future.
You can only handle things in the PRESENT!
Your greatest asset is your brain, your mind and your friends.
The more you know, the more you realise you don’t know!
Continue to study, get more information and listen to different people.
There is a difference between spending and investing.
Difference between education and a sales pitch:
Sales pitch only gives you the good side,
eg: go to school and get a secure job (= pay more in taxes and feed the system)
OR put your money in the bank to get interest (= get little in interest and inflation runs much higher)
EDUCATION gives you BOTH sides, the good and the bad!
When you study the data, you start to see the trends.
Read books; study; learn; get a coach; take action. Do something.
Recommended reading Prophecy (by Robert Kiyosaki) and The Crash Course (by Chris Martensen)
Below is an audiobook version of Rich Dad’s Prophecy on Youtube