Rich Dad's Prophecy

By Robert Kiyosaki

Rich Dad’s Prophecy, by Robert Kiyosaki, is about a coming stock market crash said to come about as a result of retiring Baby Boomers liquidating their retirement plans.

According to Kiyosaki, the tremendous stock boom from 1982 to 2000 came as a direct result of the 76 million Baby Boomers flooding the stock market with investment capital. This process is a simple example of supply and demand -in this case extremely high demand for stocks. Much of this stock is held within pension, IRA and 401k type retirement plans.

The problems start to come out when the numerous early Baby Boomers start to retire in the near future. At retirement, stocks will be sold as aggressively as they were bought and stocks will be driven down by all of the selling. As stocks tank many retirement portfolios will shrink considerably.

Even if stocks do not crash, most Baby Boomers still won’t be able to afford to retire for the length of their vast expected lifespan!

Additionally, according to Kiyosaki, pensions are a relic of the past. Pensions became widespread at a time when life expectancy was much lower than today. A company could afford to pay their former employee until they died shortly after retirement. Now, the majority of corporations can’t afford to pay the pensions of an entire population that is expected to live to their mid 80’s!

Many Baby Boomers understand that they won’t be able to retire at 65. Some of the more optimistic ones say they will just work until they can’t possibly work any longer. But this isn’t an intelligent plan, as 25 percent of those older than 65 are physically disabled, whether permanently or temporarily!

The only solution, according to Kiyosaki, is to increase your financial intelligence and to generate cash flow from wise investments that make money regardless if the economy is up or down.

I found this book to be informative and refreshingly contrarian. Robert Kiyosaki isn’t afraid to speak the truth, even the most people hate to hear it. Most of all, I found Kiyosaki to be highly optimistic. This seems ironic about a writer of a book about “the coming stock market crash”. But, Kiyosaki offers advice on how to plan ahead and prosper in the coming crisis.