The Rules Have Changed- Robert Kiyosaki
by Robert Kiyosaki
Most of the U.S. population has been living for years on the knife-edge precipice
between solvency and ruin, relying on the next paycheck or two to meet each
month’s expenses, typically with only a very thin cushion of cash savings—or more
often, no cushion at all. That paycheck is called “trading your time for money,” and
during a recession, it is the least reliable source of income there is. Why? Because
when the number of employed people starts dropping, there is less disposable income
in circulation to pay for your time.
Not to be an I-told-you-so, but … I told you so.
I’ve been saying this for years: There is no longer such a thing as a safe and
secure job. Corporate America is a 20th-century dinosaur, trembling on the edge of
extinction, and the only way for you to have a genuinely secure future is for you to
take control of that future.
Here’s what I wrote in 2001, in a book titled The Business School for People Who
Like Helping People:
In my opinion, the United States and many Western nations have a financial
disaster coming, caused by our educational system’s failure to adequately provide a
realistic financial education program for students.
That same year, in an interview for Nightingale-Conant, I said:
If you think mutual funds are going to be there for you, if you want to bet your
life on the ups and downs of the stock market, that’s your retirement you’re betting
on. What happens if the stock market goes up and then comes crashing down again
when you’re 85 years old? You have no control. I’m not saying mutual funds are bad.
I’m just saying they’re not safe and they’re not smart, and I wouldn’t bet my financial
future on them.
Never before in the history of the world have so many people bet their retirement
on the stock market. That is insane. Do you think Social Security is going to be there
to take care of you? Then you also believe in the Easter Bunny.
And in an interview I did in March 2005, I said this:
The No. 1 strength of a paper asset is its liquidity—and that is also its No. 1
weakness. We all know there’s going to be another market crash and we’re going to be
wiped out again. Why would you do that?
So what just happened? There was another market crash and many people got
wiped out again. Why? Because our habits and mindset caught up with us.
In 1971, the American economy went off the gold standard. This happened
without the approval of Congress, by the way, but the important thing is that it
happened. Why is that significant? Because it cleared the way for us to start printing
more and more money, as much as we liked, without it being tied to any actual,
hard, real value.
This shift away from reality opened the gates for the biggest economic boom in
history. Over the next three and a half decades, the American middle class exploded.
As the dollar devalued and the on-the-books value of real estate and other assets
inflated, ordinary people became millionaires. Suddenly credit was available to
anyone, anytime, anywhere, and credit cards began popping up like mushrooms after
a spring rain. To pay off those credit cards, Americans started using their homes as
ATMs, refinancing and borrowing, borrowing and refinancing.
After all, real estate always keeps going up in value, right?
Wrong. By 2007 we had pumped as much hot air into this financial balloon as
it could take—and the fantasy came crashing down to earth again. And it wasn’t just
Lehman Brothers and Bear Stearns that collapsed. Millions lost their 401(k)s, their
pensions, and their jobs.
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