If you could know the future, would you invest differently?
Rich Dad’s Prophecy is the book by Robert Kiyosaki with the caption:
Why is the biggest stock market crash in history yet to come …
and how you can prepare and profit from it!
This book was written (with Kiyosaki co-author and partner, Sharon Lechter, CPA) in 2002. All of the predictions made in this book are on track – if not ahead of schedule.
The main “prophecy” is that a MAJOR stock market upheaval is coming in 2016. This is the year when approximately 2,282,887 “baby boomers” turn 70 – and are required by LAW to make squeeze-outs. of their 401 (k) accounts. In 2017, the number of people over 70 rose from 700,000 to 2,928,818, and continues to increase each year thereafter.
What does it mean? Since the inception of pre-tax retirement funds, Americans have been encouraged to place / spend their savings in stocks and mutual funds. Markets ONLY go up when more people buy than sell. 2016 is the year when an astronomical bubble of retirees is forced to make withdrawals. This is stipulated in the law which created 401 (k) accounts specifically so that taxes are due and payable to the federal government NO LATER THAN 70 years of age.
Kiyosaki tells the story of his “Rich Dad Prophecy” based on the enactment of “ERISA” (Employee Retirement Income Security Act 1974). These problems include:
1. Most people save nothing, or much less than necessary, for retirement and medical expenses – which continue to rise.
2. Those who set up 401 (k) accounts were forced to become “investors,” an activity previously reserved for affluent (and educated) speculators. In the process, the stock market was inundated with funds.
This is exactly what happened:
– Most people without a corporate pension – replaced by optional 401 (k) plans – continued to spend their money on material goods and save little or nothing (in fact, racking up record amounts of consumer debt .)
– The minority of workers who created investment accounts (which still number in the millions) have injected billions into stocks and mutual funds. The stock market hit record highs with the influx of cash.
Note: it is no coincidence that the passage of the ERISA in 1974 is the lowest on the market, following a crash in 1973-1974 at less than 600 Dow Jones Industrial Average. 1974 was also the center of a recession sparked by the “oil embargo” in the Middle East and the “Nixon shock” following the removal of the dollar from the gold standard.
As Kiyosaki’s Rich Dad predicted, “Always watch for changes in the law. Every time a law changes, the future changes.”
All of this set the stage for the crash predicted in 2016. With over 2 million retirees forced to sell stocks (and pay taxes on earnings), the market MUST contract – or implode!
Kiyosaki wrote this book which predicts the impending crash of 2002. This is BEFORE the financial collapse of 2007-2008 (which continues today). During this crash, the market lost 50% of its value from a high of 14,000. (It has since regained 85% to 12,000.)
Americans continue to have dismal savings rates. In addition, the record unemployment caused by the current recession has forced many people with savings and investments to empty their retirement accounts. The number of new employees will not compensate for the number of retirements. After years of recession, there are actually fewer people employed, they earn less and invest less.
Combine these problems and you have an irreversibly declining market. As millions of other workers see the value of their investments and retirement accounts drop, and they too will start selling – trying to recoup whatever value they have left even if they have to pay penalties.
The process continues and the market is taking off at an accelerating rate! In the process, the retirement savings and investment accounts of millions will be wiped out.
Conclusion: the prediction of a crash in 2016 is probably optimistic! It may be there sooner since retirees can withdraw funds earlier – they will only delay withdrawals for up to 70 years if they don’t need the money sooner!
Kiyosaki balances terrible prophecy with upbeat advice, especially how to build your “financial ark.” He writes: “Sometimes your greatest opportunities come at the greatest time of crisis. And for those who have positioned themselves well, it is not about surviving disaster, but rather achieving financial independence and self-sufficiency. richness.”
He continues: “But that’s not something to fear. Rich Dad’s Prophecy reveals not only the best ways to protect wealth, but also how to prosper through events to come. The fears, dreams and actions of baby boomers will control our economic future. . You should consider building your own personal financial ark to stay afloat in the turbulent waters ahead. In Rich Dad’s Prophecy, you will learn how to prepare to prosper in the face of the coming financial disaster. It is a must read for those who want to maintain and grow their wealth in the years to come.
Rich Dad’s Prophecy will do more than tell you about the expected stock market crash. You will learn how to build your own personal “financial ark” that will ensure you not only survive the storm, but also profit from the turbulence to come. To learn more about Rich Dad’s Prophecy – as well as other Kiyosaki books, resources, and seminars – please visit Rich Dad’s website at RichDad.com.