|Rich Dad's Prophecy: Why the Biggest Stock Market Crash in History Is Still Coming...and How You Can Prepare Yourself and Profit from It!
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This is a "Gloom and Boom" book.First the bad news: Between the years of 2007 and 2012-just a few years from now-the vast majority of Baby Boomers will be on the verge of retirement-and they'll be looking to cash in on their hefty retirement plans. Quite frankly, the country is not prepared to handle this major drain of cash reserves, and there's every chance that peoples' lifelong savings will dramatically lose their value. And now, the good news: Sensing this financial crisis in the offing, Kiyosaki and Lechter provide a detailed financial plan to help forward-thinking people prepare for the worst-and they urge that one's planning start NOW. They go over a variety of alternative ways of generating wealth through other forms of investments, including real estate development, self-employment, and investing in other companies. Warns Kiyosaki: "I think we've all learned from this past year that mutual funds are NOT the answer to accumulating long-term wealth."
- Don't waste your time or money
Nothing sells books like fear. Come up with a really scary premise for a nonfiction book and it's a potential goldmine. So here comes this book to scare the pants off of you, and make you think you're going to lose all of your money and have to live in a cardboard box under a freeway underpass if you don't buy it and do what it says.
The first problem is that it makes a long range prediction of a stock market crash which never works. The literature is filled with books that have predicted crashes (such as Prechter's books) which have never come true. It's easy to come up with reasons why the stock market will crash. Doomsday scenarios are a dime a dozen.
The second big problem is the author's advice about how to survive the crash. The best advice would be to sell stocks short, buy put options, sell stock index futures, and things like that. But, the authors don't discuss those very obvious things.
The authors solution is to buy real estate and start a small business. But, in a real stock market crash real estate plummets in value and small business fail.
There is a big difference between a stock market crash, like the crash in 1929, and a bear market. A real stock market crash would devastate the entire economy of the United States, and probably a large part of the world. Real estate and small businesses would not be a safe hiding place.
The fact that real estate held up well in the last bear market should not fool you into thinking that in an actual stock market crash, real estate would be a good place to be....more info
- Inspiring, but give the usual caution to this kind of book
I give Mr. Kiyosaki 4 stars because I enjoy the low-key pep rally style he has in all his books.
The book's fun reading, but I advise caution because:
1. As Mr. Kiyosaki says, what finacial quadrant you're in depends on your personality. Jawohl! I'll bet his rich dad was delighted that there were so many E-quadrant folks around during his lifetime who would work for low pay, so's to keep his many businesses afloat.
2. Predicting a big market down sometime between 2006 and 2017 is about as useful as breasts on a billy goat. Anyone could do the same thing and be correct. In fact, I'll put my own backside on the line more precisely and nail down that bad-market year as 2009 -- that's what I'm personally aiming for as the time to watch out for.
3. The book is a bit braggy -- the thought that you can make a big market hit with stock options most of the time (and in a short time) because you are a good student of calls and puts doesn't sound like anyone's actual experience that I know. It seems to me that trading real estate is at least as difficult.
4. Speaking of which -- if the stock market is supposed to tank, I do not understand why real estate couldn't do the same thing. And at the same time. OK, to be kind, Mr. Kiyosaki's experience of success is in the area of real estate, so why wouldn't he have confidence that this is THE ANSWER? I find this to be much like the majority (all?) of you-can-win-financially books.
5. Real estate! I never heard him talk about such mundane problems as tenants who don't pay, maintenance disputes, vandals, rediculous insurance rates, banks that pound on your door (OK, mailbox) for mortgages you can't meet because half your deadbeat tennants won't pay up, underoccupancy of the properties, bad guesses as to which properties will pay off. This don't sound like no picnic!
6. Last, I do not understand why the author says that equity investments do not return a regular income. Of course they do! These get reinvested automatically, not sent to your mailbox as a capital gains check.
In spite of all this transparent (to me) story of "here's how I did it, so you do it this way too" kind of book, why do I reconmmend reading it? I have always thought that if you get one good thing from a book, seminar, or performance, then it was worth the price; the age-70 funds withdrawal law for regular IRS's contained in ERISA, for example. That's sobering. And let us not forget, he was correct in a 1999 book about not keeping our $$$ in the market, because stock prices were too high at that time!...more info
- Repetitive & Misled
I read Mr. Kiyosaki's first book and felt it was generally solid and a good start for the 90% of the population that is not focused on their personal finances.
This book takes his "buy income producing property" mantra a step further. He identifies a potentially real issue (massive decline in the value of the stock market) and offers his solution (buy assets that produce cashflow).
The book didn't offer a single solid idea on how to prepare for this disaster (except for repeating the idea of investing in income producing real estate over and over again). I find his brand of financial education very misleading and, based on the back pages of the book, he appears to be hocking a slew of additional "get rich quick" merchandise to gullible consumers.
He seems to equate value to the amount of cashflow that is produced and proclaims stock investments to be just paper value that can evaporate. I disagree heartly as a real estate investment is just as risky and can evaporate just as quickly.
I think he oversimplifies the process of investing in real estate rental properties. If the stock market does crash and the unprepared Baby Boomers will have to live poorly, then it is safe to assume that rental income from real estate investments could be reduced. In addition, there are hundreds of pitfalls to real estate investments that could turn them into losers that Mr Kiyosaki ignores or assumes away.
In addition, he professes to make money by receiving rental income on from his investments that provide 15-30% returns as well as profiting when he sells or re-finances the property when its value increases. He ignores that the real estate boom experienced over the last 20 years is in large part due to affluent baby boomers. If their affluence disappears, the demand for real estate will also disappear and the real estate market will experience a decline in value similar to the stock market. In the same manner, the rental income that is earned could be reduced if usage goes down or costs go up. In fact it could turn negative requiring the owner to put up more cash to save the investment.
None of this is discussed, as this world of investing is for serious real estate investors who spend all of their time on these types of opportunities. These people usually are able to avoid the bad investments and make the good investments (leaving all the bad investment to those amateurs who try to follow the book's advice).
Overall, I find it difficult to believe that there are investment opportuniuties available to 'Joe Public' that offer 20% returns without risks that justify those potential returns. I reminded of a saying of how if something sounds too good to be true ...........more info
- eye-opener on how current retirement laws may affect everyone's investments...
Current laws would require retirees to start withdrawing from their retirement accounts at age 70-and-a-half whether they want to or not...? I never realized how this may possibly cause a selling cascade in the stock market (as there would be around 75 million baby-boomers affected assuming that many of them may have investments). It appears we may (hopefully) have a few years to prepare for this possibility....more info
- Condescending, Redundant, Repetitive
Robert Kiyosaki's books are all the same thing re-packaged over and over again. This book could have been condensed into a couple of paragraphs and saved it's readers a lot of time. He writes in an arrogant, condescending manner that is hard to stomach. I would hate to have been his real dad. It's obvious that he despises him and worships at the alter of "Rich Dad." It's offensive and disturbing.
Read the first review of this book and you'll have the essence of the whole thing. Don't give this guy any more money for putting out this drivel....more info
- A Must Read for Everyone
Thank goodness President Bush learned the principles of this book!!! This book predicts and describes all of the problems with the Social Security system, and tells you why it has to be changed. Read it and realize that if we don't make the changes like President Bush is proposing, we could all be broke in less than 15 years! Everyone MUST read this book to protect themselves, their families, and everything they've ever worked for....more info
- A Bold Contrarian View
It takes guts to write a prophecy, and it takes particular guts to write this prophecy. It is a refreshing, and probably correct, "contrary" opinion to the endless optimism that you get from Wall Street. For this reason alone, the book deserves five stars. (It is also better written than some of the earlier works, probably the result of practice.)
Early in the book Kiyosaki starts by pinpointing the central problem of retirement income--that ERISA, the so-called Employees' Retirement Income and Security Act, had actually undermined the security of workers' retirement incomes by replacing so-called defined benefit plans, underwritten at fixed levels by companies, with defined contribution plans, under which workers were individually responsible for investing their own contributions. Baby Boomers bought this snake oil because of their desire for individual, rather than collective, security. The results, and wreckage, can be seen at places like Enron. But the marketers of the new plans certainly knew what they were doing.
The underlying problem is that the Baby Boomers were the last American generation to be more numerous than their parents. Every succeeding generation has been of comparable, or even smaller, size because the Baby Boomers' fertility only approximated replacement rates. Thus, there is a flat, rather than broadening, pyramid as age groups get younger. This historic demographic shift called for far-sighted savings and investment plans designed years ahead of Baby Boomers' retirements. (Japan has a much higher savings rate than the US and is now staring this issue in the face.) Because Baby Boomers have put off retirement planning too long (as they have earlier in life with other issues), they are facing a massive financial crunch. The result, as Kiyosaki points out, will be a stock market crash that's almost a foregone conclusion: It's more a question of when rather than whether. The fact that this prophecy originated with "Rich Dad" doesn't make Kiyosaki less of a prophet. After all, God gave Moses the ten commandments.
My main quibble, and it's really a difference of opinion, is with the 2016 target date. In my new book, "A Modern Approach to Graham and Dodd Investing," I outline a target date closer to 2006 (along with some proposed solutions). That's when early Baby Boomers turn 60,and can start tapping their IRAs without penalty. (And they've never been ones to postpone gratification.) It's possible that my target date is too early, and that Kiyosaki's is too late, with the truth somewhere in between. But he and I agree on major concepts, while differing in detail....more info
- Very illuminating!
I have read five other Rich Dad books and though I knew it all.
I though that Kiyosaki and Lechter had told it all. Not so.
After reading Rich Dad's Prophecy, I am prepared for the baby boom crash just like I was prepared for the big stock market bubble that burst in 2000.
Knowledge not fear is the key to investing. Follow Kiyosaki and Lechters advice and you will be a financial winner too....more info
"Rich Dad's Prophecy" predicts a market crash around 2016 when the oldest Baby Boomers start cashing out their 401(k) plans and stop contributing. Solution: Invest in real estate rental properties instead. (Comment: The market crash came 8 years early, and occured for different reasons. Rental properties have also crashed.)
Kiyosaki, however, ignores the difficulty of finding positive cash-flow rental properties (doing so almost forces one to use dangerous ARMs, interest-only loans), evaluating potential purchases for hidden problems (eg. leaky roofs), and cost-effective maintenance of properties. I also don't think much of his characterization of one's home as a liability instead of an asset - it appreciated (until recently). Finally, his book is highly repetitive and becomes boring.
Bottom Line: I didn't take Kiyosaki's advice earlier, and am glad I didn't....more info
- Oooh, I'm so scared!!
First of all, the book is predicated on being able to predict the stock market 13 years from now. This is clearly impossible, and there are almost an infinite number of things that could happen to screw up the authors predictions.
Second, if there really is a huge crash in stocks, real estate values will likely drop considerably. The economy as a whole will fall, rents will drop, and small businesses, which in the best of times, fail at a rate of about 95%, will go out of business in droves.
So the advice to get ready for the stock market crash by opening a small business and buying rental real estate makes no sense.
So, this book really has very little to offer from a practical sense....more info
- Interesting view point, a little flawed
The premise of the phrophecy is that the baby boomers will pretty much take their money out of the stock market suddenly and cause it to crash. I suspect the market is far more vast than considered and the baby boomers' 401ks combined represents only a few drops in the bucket. If the market crashes, it won't be because of this prophecy's premise....more info
- Rich Dad Prophecy by Kiyosaki
This work warns of the coming increase in the retirement population throughout the world. The baby-boom retirement will create both opportunities and challenges. The opportunities will
be to grow markets to serve the new customer mix. The threats
will be underfunded pension and retirement accounts.
The author provides the next decade as the time to be careful financially. Although he recognizes that
many investors are educated, there is a difference between school and street smart investing. The book encourages us to invest cautiously and conservatively in mutuals while diversifying to avoid excess pockets of unacceptable risks. The author encourages us to diversify and invest in real estate over the long term.
This is an important work which will assist in long term planning
for early retirement or mid-term corrections in the portfolio
strategy to avoid catastrophic losses. The price is reasonable
considering the value of the information presented....more info
- No Issues Good Product
Book was delivered quickly. No issues with product or delivery. Be more conscious of condition description, I would have rated it fair/good. Thank you! I will be ordering from you in the future. ...more info
- It's simply amazing....
that this guy can keep writing the same book over and over and over again, changing it slightly, and keep selling it. It wasn't even good the first time. It's sure not good the tenth time. Yes, by all means, get your finances in order. Certainly consider starting a small business or purchasing rental real estate or both. The problem is that none of these books tell you anything about doing any of that. There's no meat, no substance, no practical advice. How do you buy rental properties? What do you look for? How do you finance them? How do you maintain them etc? There's just nothing in any of these books about any of that.
And now there's this nice conspiracy theory that basically says ERISA was brought about to screw workers over. That it's a terrible thing, that investing in the stock market is a disaster waiting to happen, and we're even told the year that the world will come to an end. Heavens to Betsy!
It's laughable. ERISA is/was a huge benefit to workers. Nobody can possibly predict what the stock market will do 13 years from now. Nobody even knows what it'll do five minutes from now. Foreigners could take up the slack. New immigrants to the US could take up the slack. Any almost infinite number of things could happen.
Besides that, if the stock market really does crash at that time, guess what? Every type of real estate will crash in value, small businesses will go out of business by the thousands etc. etc. There will be no place to hide except for cash. You certainly will not want to be a big rental or commercial real estate investor at that time. Or a small business owner unless you sell something that people can't do without, like medication or food.
If you want to read this book for entertainment go ahead, but take it out of the library. Don't give this charlatan another reason to laugh all the way to the bank....more info
- No one is safe...
Say the big crash really did happen. Who would be safe... really?.
If the big crash did happen about 95% of all businesses would be wiped out. Only the strong would survive right?. If you are struggling to put food in your stomach are you going to buy software from Microsoft or Joe Nobody?. I think you'd go for the LONG TIME ESTABLISHED ONES. So pretty much everyone starting as small business would be wiped out, if they are not careful.
Secondly is investing in real estate such a good idea?. Yes, prices will drop tremendously. People will be begging to sell their houses so that they will not be strapped to debt. It will even be good because flat and depressed markets are the ONLY markets in which you can get people to cough up high rent prices. Oh forgot to say this, who is going to pay you high rent when everybody is suffering?. Not many people. In addition, if everyone does what Robert Kiyosaki says there will thousands be people trying to play land lord and competing with each other on rent prices and service. Some may be wiped out, even then.
So enjoy your happy future as a land lord. What's this I hear?. You'll hire management company and be laughing on the beach while everyone is stuck hiding in fear. Well, it won't be much of a paradise either. How can you enjoy yourself in a tumbling economy, with no one to serve you and few if any businesses around to offer you what you want.
I really hope there isn't a big crash, it is nice to prepared. All I'm saying is that RK doesn't exactly tell you of the other side of the coin, which is vital to the decisions you make about your future....more info
- A poorly written book based on a bad assumption...
Basically, RK uses this installement in the Rich Dad/Poor Dad series to claim that the stock market is due a big fall when, by federal law, Baby boomers start to withdraw equity from their tax deferred retirement vehicles at age 70.
This means that RK is predicting not only stock market performance over a decade in the future, he's also predicting tax law over a decade in the future.
The chances that the tax code governing 401k's will weather the years unscathed are miniscule. And it's a good thing too. RK's "ark" of choice - real estate - would also plummet in value during a massive depression where paying tenents would be scarce.
Going into a depression saddled with large real estate debt is a surefire way to be living under an overpass in a cardboard box for your retirment.
RK's got a point -- the market will be hurt when Baby Boomers liquidate their assets to live off of in retirement. But its doubtful that the government will force this selloff when the boomers get here. This shouldn't stop a wise investor from making long-term stock purchases or using more creative vehicles to make money.
I like that RK is so enthusiastic and assertive about getting your financial life in order and making a change in the way that you make money. Investments are great and people should build up some investments for their futures. But this book is founded on such shakey soil that it's difficult to stomach. Pick up some of his others (Rich Dad/Poor Dad or the Cashflow Quadrant) if you need a pick-me-up....more info
- You ignore this at your own peril
In his latest book "Prophecy", Robert T. Kiyosaki predicts a major stock market crash in the near future. This, he says, is a result of the baby boomers (mostly) saving for their retirement via stock investments and given that a large number of them will retire from 2016 onwards their investments will have to be cashed in as it will be needed and as a result the market will fall if not crash. Apart from that, RK says, that most baby boomers may not actually see their money ever again as more often than not most of it is invested in their own companies, i.e., the ones they work for, and if their employer goes down the drain so will their funds saved for retirement. Kiyosaki uses the demise of Enron as an example to demonstrate this.
Granted, there is nothing really new about all this. If you have spent any time working in the financial field you would know about this - although over the years I felt that people tend to stick their heads in the sand and hope that this will not happen or somehow go away
Apart from complaining about the existing system and the financial illiteracy of the vast majority of the market participants (and that would appear to be the main problem), Kiyosaki in Part II of the book sets out a game plan on how to build your own financial ark.
What I like about Kiyosaki's book is that he is pointing his finger straight at what could potentially happen and he does it in rather convincing style. There is indeed a good deal of information here that Kiyosaki has mentioned in his previous books, but I am not terribly upset about this as it serves to reinforce the message. Besides, if you haven't read any of the previous Kioysaki books, you would be stuck in the middle of nowhere if Kiyosaki left out the previously published information.