Rich
Dad's Prophecy
by Robert T. Kiyosaki
(c) 2002
Warner Business Books
Warner Books Inc.
ISBN 0-446-53086-7
Simple but tough lessons Robert learned about business, page 12:
1- Friends do not always make good business partners.
2- A company can be profitable and still be in financial trouble.
3- It is the little things like not having enough thread that can stop
the whole business.
4- People do not always pay their bills, which means you cannot always
pay your bills. People do not like you
when you do not pay them.
5- Patents and trademarks are important aspects of a successful
business.
6- Loyalty can be fleeting.
7- It is essential to have accurate financial records and accounting.
8- You need a strong management team and a strong team of professional
consultants such as lawyers and accountants.
9- It costs money to build a business.
10- It is not lack of money that kills a business. It's more the lack of business experience and
lack of personal integrity.
"Many people ask young people, 'What do you want to be when you
grow up?' When they ask that question,
they are usually asking what profession.
Personally, I don't care what you do when you grow up. I don't care if you become a doctor, movie
star, or a janitor. But as you grow up,
I do care that you grow up to be more truthful and honest. Too many people grow up becoming more polite,
but not necessarily more truthful, or worse, they tell lies as kids and become
bigger liars as adults." Rich Dad
"A customer who does not pay is not a customer."
"A person's choice of 'character' is far more important than a
person's choice of 'profession.'"
ERISA, Employee Retirement Income Security Act
"Sometime in the future, long after I am gone, millions of
hardworking people will find out that clowns like you and your partners have
been playing games with their money -- their retirement money -- their
financial future -- their financial security.
The government has made changes in the law -- changes to protect workers,
but I do not think this law change will solve the problem. In fact, I think the law-change will make
things worse for many people. I am
afraid something terrible is going to happen." Rich Dad to Robert
Even in some large blue chip companies, pension plans are empty or
under funded. And many times, a company
would buy another company, not because of the business, but because they wanted
the business' retirement money. Often
the pool of money was more valuable than the business.
So while the ERISA was passed as a benefit to employees, it was in
many ways more of a benefit to the employer.
In many cases, the expense of retirement was transferred from the
employer to the employee.
The biggest problem will come from those employees who have diligently
put money into their retirement accounts.
It is those who have faithfully put money into their retirement plans
who will cause the biggest stock market crash in history.
(There is a required sell off of mutual funds as people reach the
required minimum distribution. The
minimum distribution is in place for the government to be able to collect taxes
on the "tax sheltered" retirement accounts.)
There will be more sellers than buyers. . . .
How does the price of a stock go up when more people are selling than
buying?
At the present time, only a relatively few people are over seventy and
less than half have defined contributions pension plans.
The question is: what happens when millions of baby boomers are
required to begin withdrawing money from the stock market? By the year 2016, when the first of the 75
million baby boomers begin to turn seventy years of age, many of them will have
defined contribution pension plans. And
each year, more and more will be added to the list. Millions of baby boomers may not sell early
even though they know the market is crashing because of imposed tax penalties.
Finding a financial planner:
Chapter 13, "Control Over Your Emotions"
Many people think it is smart to be debt free. Early in my life, Rich Dad pointed out,
"Good debt is debt that makes you rich and bad debt is debt that makes you
poor."