The 8 New Rules of Money by Robert Kiyosaki

THE STOCK MARKET IS DEAD

I see dead people. The dead people are baby-boomers who are counting on the stock market to provide a safe, long-term retirement. Many are going to live a long life, but live in poverty simply because the stock market is dying.

In my book, Rich Dad’s Prophecy published in 2002, I wrote about the biggest stock market crash in history, a crash that is coming around 2016. Obviously my prediction was a long-term guess but the year 2016 seems to be right on target. 

After Rich Dad’s Prophecy was published, I was severely criticized by journalists from publications such as The Wall Street Journal, Money Magazine, and Smart Money. Yahoo Finance dropped me as a contributing writer, simply because I caused too much of a ruckus with their advertisers. It was a gamble stating my prediction, but sometimes a person must say what they must say… even if unpopular. 

Today, I am not alone. Bill Gross, the respected Co-founder of the largest bond fund in the world, PIMCO (Pacific Investment Management Company), is now saying the same thing. On Tuesday, July 29, 2012, he stated that consistent annual returns are a thing of the past. He said, “The cult of equity is dying. Like a once-bright aspen turning subtle shades of yellow then red in the Colorado fall, investors’ impressions of ‘stocks for the long run’ or any run have mellowed as well.” 

He also said the stock market operates as a Ponzi scheme, showing returns that have no bearing on reality. For those of you who have followed me, you know I have been saying the same thing for years. 

A Ponzi scheme keeps investors happy as long as there is fresh new money entering the market. New investors buy stocks that old investors are selling. The eventual panic and collapse will occur sometime around 2016, when there are no new investor blood transfusions for older dying baby-boomers. It will not be pretty. 

Financial planners will always say, “Invest for the long-term.” John Bogle, founder of the Vanguard Funds and another investment professional I respect, continues with the “invest for the long-term” mantra, in spite of what Bill Gross says. 

The question is, who should you listen to? 

My advice is always the same. If you are going to be an investor, first invest in financial education. If you are going to invest in the stock market, take “technical investment” courses. Learn how to make money regardless if the stock market is going up or down. Learn to invest with insurance, such as “stops” and “options.” You still have time to take classes, simulate or practice trading with small amounts of money and prepare for the biggest market crash in history. 

If I am correct and the stock market begins to collapse around 2016, many professional investors will make a “killing.” Unfortunately, those being killed will baby-boomers, amateurs and the uneducated. 

This is why I see dead people. Don’t be one of them. 

Thank you for supporting COR. 

Robert Kiyosaki