financial crisis

Smoke and Mirror

Dear Reader,

In 2002, I predicted in my book Rich Dad’s Prophecy, that the biggest stock market crash in U.S. history would happen sometime around 2016. I also predicted that there would be a smaller crash before that, sometime around 2007. Most financial newspapers and magazines trashed it because I discussed a looming stock market crash.

In the early summer of 2005, I sent a warning to the Rich Dad community that the real estate market was cooling down. After all, we know that all booms go bust eventually, and every party comes to an end.

While many readers thanked me for the words of caution, many others sent me hate-mail. An angry real estate broker even called me and said, “Are you trying to ruin my business?” I wasn’t trying to bring doom and gloom to those that follow me. I was trying to wake them up!

On August 9, 2007, the stock market plunged nearly 400 points. The Federal Reserve and central banks around the world began injecting billions in cash into the economy to make sure the panic did not spread.

In March 2008, I was interviewed by Wolf Blitzer on CNN and predicted the crash and bankruptcy of Lehman Brothers. Wolf Blitzer wanted to know if the financial crisis had passed. Rather than say what he may have wanted me to say, that “things will be fine and the worst is over,” I instead predicted that Lehman Brothers was in big trouble. On September 15, 2008, Lehman Brothers declared bankruptcy, the biggest bankruptcy in history.

Deceit

Many people were left speculating about the failure of economists and financial analysts to predict the housing bubble and forewarn of its collapse. In simple terms, a bunch of crooks and thieves were running some of the biggest banks in the world and used smoke and mirrors financial tools to rob the middle-class and defraud the world.

How did they achieve this?

How do they pull the wool over our eyes?

It’s simple. They’re banking on our financial ignorance.

The Goldman Sachs case is the worst of all because it so blatantly preyed on the financial ignorance of its investors by creating a fake investing tool packed to the gills with toxic collateralized debt obligations so that other smarter, in-the-know investors could enjoy the windfall when the house of cards fell. In the process, they helped to bring down most of their competitors—who were equally deceitful but not as smart—and collapse the world economy.

When the markets did crash in 2008, Kim and I made millions in spite of the financial crisis. We did even better because we continued to acquire or create more assets. Millions of people were in financial trouble because they found out the things they thought were assets were really liabilities when the markets crashed.

Rich dad simply said, “It is not possible to predict the markets, but it is important that we are prepared for whichever direction it decides to go.”

After the crash of 2008, millions of people lost trillions. The rich did not lose because the U.S. government “bailed out” the biggest banks. Savers lost because banks printed trillions of fake dollars, causing the value of a saver’s savings to go down.

In my book, Conspiracy of the Rich: The 8 New Rules of Money, I wrote that bailouts were the name of the game. This means that the ultra-rich would never suffer as the middle-class and poor did in the financial crisis.

The gap between the poor and the rich grew just as Donald Trump and I had written about in our book Why We Want You to Be Rich. After the success of our first book, it only made sense for us to come together again but this time to write about our journeys as entrepreneurs.

There was a shift after the financial crisis to what I call the Information Age where people no longer could trust working for corporations and took matters in their own hands. In the Information Age, anyone can get wealthy because everyone has access to the same information via the Internet. It’s simply a matter of who can think the most creatively and act most quickly upon the information available to them. In the Information Age, Industrial Age companies—and those who operate like them—are toast, and nimble entrepreneurs, and those who can think like them, are winners.

We published Midas Touch in 2012 and dedicated the book to “entrepreneurs who struggle, strive, and succeed and to the entrepreneurs of tomorrow who will see opportunities where others see only obstacles.” It was our way of teaching the new generation of entrepreneurs about the ups and downs of entrepreneurship through our experiences.

My mission to join the Information Age didn’t stop there. Back at the Rich Dad Company, we took everything digital. While the CASHFLOW® board game was still selling by the thousands each month we knew that we could reach more entrepreneurs and investors by creating a digital version. The app version was released to the Apple Store in 2014 and debuted as the #1 Finance Game.

President Trump

I still cannot believe I am on the cover of two books with the President of the United States. That is beyond being lucky and my wildest dreams.

Donald believes in teaching hard working Americans to develop the mindset and skill set needed to get ahead in this economy as entrepreneurs. They must become truly successful by creating jobs, rather than looking for jobs. People often say, “Our children are our future,” and Donald knows we need to prepare our children for a very different future, which is why financial education is so important. In a world where lower-wage countries are taking our jobs, we need to teach our students how to create jobs. Donald Trump understands what it takes to be an entrepreneur who creates jobs. He knows how to best address our economic problems by strengthening the global business partnerships that are essential to our nation’s success.

The greatest thing a Trump presidency can do for the American working class is to help them reorient their mindset from one that looks for others to solve their problems to one that looks within both individually and as communities to solve their problems.

But none of these things will in and of themselves solve the problems plaguing the working class. Only they can do that for themselves. They’ll have a helping hand, but it is ultimately in their hands-and yours.

What a Trump presidency will do is provide a model for all Americans of what a successful businessperson and entrepreneur look like, how they lead, and how they inspire others to succeed around them. I stand by my words, that is what America needs.

A Great Teacher

In February 2018, I returned to Hilo for the 60-year reunion of our fifth grade class. Imagine that: a group who met as ten-year-olds was still holding regular class reunions.

The reason for our reunions was not about our class or our classmates, but to honor our fifth grade teacher, Mr. Harold Ely, one of the greatest teachers in our lives.

It was Mr. Ely’s inspiration that kept me reaching for my dreams, although I failed high school English twice because I could not write. If not for Mr. Ely’s early inspiration I might have dropped out of high school. If not for his early inspiration, I would never have been accepted into the U.S. Merchant Marine Academy and sailed the world. It was in his fifth grade class that I was inspired to follow the great explorers in history—Columbus, Magellan, Cortés, and Cook—and follow a path that led me to the academy, a very tough school. My dream was to sail into Tahiti, which I did in 1968, while a student at the academy.

Today, I am best known as a writer and I continue to travel the world, following in the footsteps of the great explorers. None of that would have happened without the inspiration of a great teacher in the fifth grade.

The most important lesson Mr. Ely taught our class was to stand up after falling down, and that falling down and standing up made us stronger. He also taught us never to let anyone rob us of our dreams.

I am telling you about one of my great teachers because I think there are too few great teachers left.

The great teachers in my life are who formed my financial success. It all started with my rich dad who taught me the basic principles of financial intelligence.

Last year I finalized my latest book, Fake: Fake Money, Fake Teachers, Fake Assets and it was written because it’s is really why we founded The Rich Dad Company in the first place: to give people financial education so that they can thrive whether the markets are up or down.

When the next crash comes it could cause financial ruin for the middle class and the poor. And it’s all because of fake money, fake teachers, and fake assets. I want to save as many of those people as possible.

Regards,

Robert Kiyosaki

Robert Kiyosaki
Editor, Rich Dad Poor Dad Daily

You May Also Be Interested In:

Robert Kiyosaki

Robert Kiyosaki, author of bestseller Rich Dad Poor Dad as well as 25 others financial guide books, has spent his career working as a financial educator, entrepreneur, successful investor, real estate mogul, and motivational speaker, all while running the Rich Dad Company.

View More By Robert Kiyosaki