In Rich Dad's Prophecy we learn why we shouldn't trust mutual fund managers (although this book was written over a year ago, look at what is happening right now with mutual funds), why "buy and hold" and "diversificiation" are not the best strategies to use and also why passively listening to your brokers (really jokers) can cause you to lose masses of money.
More importantly to the subject of this book is what is going to happen in 2016 when baby boomers liquidate their equity holdings.
Oh, and by the way, this is not a "doom and gloom" book as one individual wrote (probably a broker)this is just good, solid advice for anyone who is investing now and plans on having money invested over the next 13 years.
Some people warned about the "internet and tech bubble" a few years ago. Detractors called that "doom and gloom" thinking too but what happened?
I highly recommend Rich Dad's Prophecy. I also recommend Retire Young Retire Rich and Rich Dad's Guide to Investing.
The book warns of many financial obstacles, but has little in the way of strategies to avoid them.
Here. . . I'll save you some time:
The stock market is going to crash around 2016 because of a law called ERISA, so prepare yourself accordingly.
You can make money in up and down markets if you know what to do.
Don't trust your money to mutual fund managers.
Buy, hold, and diversify is not the great strategy you think it is.
Educate yourself financially, but if you don't, stick with buy, hold, and diversify.
Real estate is a better investment for many because you can control it more readily.
There. . . now you don't have to read the book. That'll be twelve dollars.
You need control over yourself, control over your emotions, control over your excuses, control over your vision, control over the rules, control over your advisors, control over your time, and control over your destiny. I like his message of hope after his prediction of gloom. It does not take much to change your financial future. And now I am going to quote a saying I heard once, that Robert hasn't used yet (Not in the books I've read). When it comes time to make a decision there are three choices. To decide yes, to decide no, or to decide not to decide. I believe many people have unconsciously decided not to decide, but by reading these books, and following the advice he gives, you are deciding to take responsibility for your financial future.
I like this book, and I like his writing style. I recommend this book, especially if you have read and liked his previous books.
Others on the web, (John T Reed especially) have gone to great lengths to demonstrate that this man is not who he represents himself to be. The case they make is persuasive. A lot of his "advice" is foolish, ambiguous or both.
However, I have to give the man credit. He tells a good story And there are parts to this book that the so-called "investors" need to know: 1) Markets go down as well as up 2) Investment and savings are totally different things. 3) Those who do not understand the risks the stock market entails should not invest in the market--period.
I put "investors" in quotes because the ones who are most dependent on an ever rising market to bail them out are the ones who stubbornly refuse to acknowledge that the "buy and hope" method of "investing" is much more risky than the academics, brokers, or money managers make it out to be. They have no knowledge or plan for buying or selling investments. They have no understanding of the real purpose of financial markets. And, most unfortunate, they don't understand that neither the "pros" nor the government have any incentive in educating them about how to use the market most effectively.
The author's thesis isn't original, but it is clearly one scenario that could throw out all of the calculations based on the buy and hope strategy out the window. He speculates that ERISA--which mandates withdrawls from retirement plans at 70 1/2, could induce massive selling, causing a catastrophic decline in the market.
Anyone who invests in the stock market should have a plan for if and when a severe decline occurs. Saying you are a "buy and hold" investor is tantamount to saying "I have no strategy at all."
This is true even if you are diversified. At the point of a financial crisis, all the markets are positively correlated--meaning diversification benefits disappear just when you need them the most.
Having said that, the author's advice to "invest" in real estate is poorly thought out. He correctly points out the potential problems when boomers massively sell paper investments (stocks, mostly). Yet, why won't these same boomers also sell their real estate investments? Considering the economic scenario he is portraying, boomers will need all the help they can get.
If you haven't read any of his books, this is probably the best one to get. Then again, while he says you need to have a "financial education", the money you spend on this book could be better spent elsewhere.
