# Stocks and Shares - Rich Dad Prophecy



## aisro (28 Jul 2006)

hi
I've been looking through other threads re references to the above (Robert Kiyosaki's Rich Dad Prophecy) rather controversial series of books (judging by some of the links I've read) and yes, he did give me the pips after a while too...however, I haven't found any commentaries/discussions focusing on the content in the book of the above title, whereby he predicts "the biggest stock market crash in history" to take place around the time when the next generation of pensioners start to cash in on their money....
Just looking for some sensible opinions on the veracity of this...or should one stop paying into pension (managed fund,  self-employed) and build a bunker to hide in when the Crash comes??
Thanks


----------



## markowitzman (28 Jul 2006)

> Just looking for some sensible opinions on the veracity of this...or should one stop paying into pension (managed fund, self-employed) and build a bunker to hide in when the Crash comes??


buy to hold and in crash buy rather than sell
if close to retirement (less than 5-7 years) you should have greater bonds allocation
read the book a few years ago
from memory the slant was not to rely wholly on ira pension for US readers.
They like their stocks as much as we like our property so the advice might have to switched for the Irish


----------



## room305 (28 Jul 2006)

He tends to take snippets of financial advice that were applicable ten years ago, wrap a story around them and pretend it is some breathtakingly relevant piece of wisdom.

Ignore him completely, he can no more predict a stock market crash than you can.

However, if you are coming close to retirement it makes prudent sense to be involved in low risk investments such as cash and bonds.


----------



## aisro (29 Jul 2006)

Hi 
Thanks for that...and no I'm not really nearing retirement yet...another 20+ years to go, but I think that's the kind of timescale R.K. was setting for this unprecedented crash rather than in the next 5 years...so wondered how solid a basis he has for this dire prediction...


----------



## askalot (29 Jul 2006)

aisro said:
			
		

> so wondered how solid a basis he has for this dire prediction...



I've never heard a prophecy that has a solid foundation; they are all based on guess work. Noboby and I mean absolutely nobody, can predict the stock markets twenty years from now. Like most prophets he relies on the blind faith of his followers so well done for asking the question! Also, as is the way of prophets he is happiest peddling tales of doom and for some reason we find stories of apocalypse much more convincing that if he were to predict twenty years of steady growth! Ignore and invest in a broad base of assets.


----------



## room305 (29 Jul 2006)

aisro said:
			
		

> ...so wondered how solid a basis he has for this dire prediction...



Absolutely none. Stock markets are a forward discounting mechanism - if stock is going to take a hit in 2012 (or whenever he predicts the crash will happen) then this will get priced in as we near the event.

Most of his books sound like extended real estate plugs - stock market is dangerous, fund managers are out to screw you, the only thing you can trust is bricks and mortar etc.

One thing that confuses me is his definition of assets and liabilities. He counts your house as a liability. So he recommends you rent rather than buy. Fair enough. However, at the same time he recommends you buy property and rent it out in order to generate positive cash flow. I've never understood that. Why would you buy a place for someone else to live in and then rent yourself?

I think he was quite lucky in his timing. His views on leverage - as pointed out here, great in a rising market especially if buying leverage is cheap - will become progressively more dangerous in the future.


----------

