Review: Rich Dad's Prophecy

I recently finished reading Rich Dad’s Prophecy by Robert Kiyosaki and Sharon Lechter, and I must say it gave my paradigm a real working over. To be honest, it scared me half to death! Not really for myself, since I’ve never believed that I’d get any of the money back that’s gone from my paychecks to Social Security. I just consider that yet another tax. Nor have I planned to fund my retirement via 401K. But Prophecy really brought home the reality of the precariousness of the financial future of the baby boomers in general, and my kids’ grandparents in particular.

Ironically, I got my copy of Prophecy in a local dollar store, while taking my kids Christmas shopping. (I guess the hardbound edition must not have sold very well.) I had meant to buy a copy since I first heard about it a few years ago, and friends have recommended it to me since then, but I just hadn’t gotten around to it. Needless to say I was really excited to find such a steal. I was so pleased in fact that I bought 20 copies (leaving only 1 on the shelf), thinking I could come up with some way to sell them for a few dollars profit. (Hey, it was only $20!) I gave a copy to my parents, one to my in-laws, and two more to sisters of mine that are interested in wealth building (or at least have husbands that are interested in wealth building). Now I just have to figure out what to do with the other 15 copies…

In any case, back to the book itself.

The “Prophecy” of the book’s title is Kiyosaki’s Rich Dad’s prediction that there will be a massive stock market crash in the near future, due to the fact that the baby boomer generation holds their retirement savings almost exclusively in the stock market (via 401K’s), and that as they reach retirement age, they are forced by law to withdraw that money from the market. Due to simple supply and demand (more people selling stocks than buying stocks), the markets will turn down, and individual retirement savings will become worth less and less. The aging baby boomers will see this trend, and will likely then cash out their stock holdings (penalty or no penalty), which will only accelerate the crash. Millions of retirees will probably be left with insufficient savings to last for the rest of their lives. At this point they are likely to turn to the government to keep them alive, via Social Security and Medicare. If this happens, they authors estimate that every working person (working at a job, that is) will end up supporting approximately 4 non-working people.

As bleak as this future sounds, Kiyosaki refers to it not as “Doom and Gloom”, but “Doom and Boom”. In fact, the subtitle of the book is “Why the Biggest Stock Market Crash in History Is Still Coming… and How You Can Prepare Yourself and Profit from It!” For those who are prepared for future events, the opportunities will be incredible. Troubled times are when vast fortunes are amassed. Financial turbulence represents a transfer of wealth. If millions of investors are panicking and selling everything, eventually someone gets to buy at rock-bottom prices. The exciting thing is, if you pay attention to what’s happening, you get to pick which side you want to be on. Any guesses where I plan to be?

Personally, as I read Prophecy, I felt a great responsibility settle itself on my shoulders. I can see a real storm brewing for my parents and in-laws (and their whole generation), and they’re neither prepared, nor even convinced that there’s a problem. As Kiyosaki hints, it’s time to build an ark to weather the times ahead. But I need to build an ark big enough to carry my whole family, including grandparents. I guess that’s part of the very traditional (versus conventional) beliefs I still hold. As the oldest son, it’s my responsibility to provide for my parents in their old age, and by natural extension, my wife’s parents also. And although I feel the weight of duty, I also choose to accept this challenge, because I love them, and it’s just the right thing to do. But what a grand adventure! I almost feel akin to Noah (Gen. 6-9) in this undertaking, and I know that God will also help me in my preparations to preserve my family.