Robert Kiyosaki wrote this book in a somewhat narrative fashion. He goes through his early business struggles and includes conversations with his “rich dad” about the elder’s financial projections for the nation.
The book goes on to explain that there are some serious flaws in the law (Employee Retirement Income Security Act or ERISA) that encourages an unsustainable type of investing. Non-investors are thrown into the world of stocks, but it isn’t in their best interest unless they are also trained. The government has done this because there is a serious problem: people can’t afford to retire and that makes people unhappy, which then threatens their power position. Basically, government has been trying to kick this can down the road for a few decades now, causing the problems to get bigger and bigger. It looks like it will finally be too heavy to kick this next time, but who knows? The government is very talented at pushing off the root problems.
The good news is that this book also gives you some processes that should protect you. These processes are the same ones Robert Kiyosaki always says: buy cash producing assets and let them pay themselves off, get enough of them and they’ll pay your living expenses as well. What is different about this book is: 1. A stronger urgency, even for those who currently have comfortable lifestyles. 2. He addresses character traits as much as anything else. WHO you are matters as much, or even more, than anything else.
Kiyosaki takes all these concepts and wraps them nicely into a single biblical and nautical metaphor, Noah’s ark. But unlike Noah’s ark, the ark he teaches you to build will hold you afloat even if it doesn’t rain.
Where I found it:
I had been wanting to read this book ever since I learned of its existence about 2 years ago. For some reason I didn’t see it in the library catalog then. I considered buying it on ebay, but settled down when I realized there are plenty of good financial forecasting books out there to be had for free from the library. Then, one day I visited my sister in law and we visited the library. There it was sitting on the shelf. Luckily our libraries are also sisters, so I could check it out and return it at my own branch.
I’ve heard a lot of solid reasons for a market collapse, here’s yet another angle: retirement.
Workers used to depend on a three legged retirement program: social security, pensions, and investments. As everyone knows social security is getting thin. The second leg, pensions, are becoming rare as companies shift the risk on to the employee.
Finally, by shoving everything and everyone into the stock market, people ill equipped for the risk world of investing are forced to participate. Their minds are set at ease by the word “diversify” and they dump their money into index funds. As more people blindly invest, the stocks continue to grow blindly as well. But what happens in market corrections? When the risk adverse employees see their portfolio going down, they switch out to bonds or another perceived safe haven, pushing stock prices even lower. Basically, the average employee has been duped into putting money they depend on into a non-dependable location and they don’t have the guts to make that work.
Maybe the employees aren’t as panicky as predicted. Maybe they have been properly indoctrinated to “invest for the long term” (even if they are retiring soon). The bad news is that there is also a built in time-bomb called “minimum distributions”. As the baby boomers reach 70 ½ years old in unprecedented numbers, they will be REQUIRED to start letting the air out of the stock market.
When all is said and done, your three legged stool is standing on a paper thin leg, and a leg that is mascaraing as two separate legs that also happens to be showered in sparks with a time bomb strapped to it. It is holding for now, but if any flames catch, your stool is toast.
It is time to take action and stop letting other people put your assets together for you. Get off the stool, and get in your boat. Choose your own cargo, strap it down carefully, and take responsibility for the steering. This book has a lot more to do with taking responsibility than following the normal “Rich Dad” method. It’s okay to build a “poor ark”, a “middle class ark”, or a “rich ark”, just don’t expect your government or job to take care of you. You are in control of your ship.
I recommend Rich Dad Prophecy to anyone who is preparing for retirement. I’m not talking about people who are 50+, but anyone who is planning their retirement whether it is next week or in 40 years. If you are still living paycheck to paycheck and retirement is undreamable, get that in line first.
This book opens your eyes to critically view the financial world around you and it motivates you to take action for your own retirement.
I do want to caution though, Robert Kiyosaki is the debt king. He believes in good debt (debt that someone else pays off for you such as the tenants in a rental property) like its God’s gift to investors. Sure, “good debt” is a great way to leverage your money and accelerate growth. It would be nearly impossible to get rich in one lifetime without it. However, too much good debt and you lose your margin of safety and go bankrupt at the first bump in the road (or storm on the ocean?). When Robert says something like, “you can retire with $15,000. Just go buy three $100,000 houses at 5% down, then live off the rent”, please take it with a grain of salt.
Also, note this book is old. Sure, the copyright is 2013, but most of the information is from the 1970’s to early 2000’s. Even if it were written from a 2013 perspective, that’s ancient in financial books.
What got me interested in this type of book in the first place was one of Robert’s live online events. Check out
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