Rich Dad Retirement Basics
Rich Dad Retirement Basics
As you probably already know, I got the chance to interview Rich Dad Poor Dad author Robert Kiyosaki during my Money Revealed docuseries.
One of his main goals is to make sure that people like you and me are financially educated. Robert is someone who truly knows his way around money and how to make it grow…
And an important time for your money to grow is when you’re saving for retirement.
Today, Robert talks about what it’s like to live on “the edge” in our retirement years and the knowledge you need to succeed.
Let’s get started…
Dr. Patrick Gentempo
Will Your Retirement Be as Comfortable as You Think?
When I was a young boy, the path to retirement was simpler. For the most part, if you saved your money regularly, paid your mortgage off and lived modestly, you could retire well.
This was partly because inflation was low since the dollar was pegged to gold and also because most employees could expect a company pension and health benefits until the day they died. It did not take much intelligence to have a secure financial future.
Today, we live in a world that requires an extremely high financial intelligence to retire well.
It is no longer enough to save money, as higher inflation and taxes wipe out your earnings. You can’t rely on a company pension, because most companies don’t offer one. Instead, it is expected that you contribute to a 401(k) plan that may or may not provide you a secure retirement and that is simply a glorified tax-deferred savings account that benefits the rich, not you.
These changes are because of two actions by the U.S. government that I’ve written about extensively, most notably in my book Conspiracy of the Rich. In 1971, Nixon took the dollar off the gold standard, making the dollar a currency instead of money. And in 1974, the Employee Retirement Income Security Act was passed, paving the way for 401(k) plans, forcing uneducated workers into the stock market and creating the modern financial services industry.
When Nixon took the dollar off the gold standard, he did so with the intention of creating “a new prosperity without war.” Unfortunately, since that time we’ve instead seen continued war, stagnant growth, a rapid rise of income disparity and a looming retirement crisis.
You’ll work until you die — and you’ll like it?
We’re seeing the devastating effects of those actions today as individuals and countries are living on the edge of financial disaster.
On an individual level, take for instance a young friend of mine whose dad worked his whole life in an old-world industrial plant. Every time my friend talked with his dad, his dad would mention how long it was until his retirement, when he’d collect a pension and health benefits and enjoy golf a few times a week and sports on TV.
There were no savings to speak of, some stock options decimated by the economic downturn, much debt and no other plan. Unfortunately, only a few months before my friend’s dad hit the minimum retirement age, the plant went for sale, found no buyers and closed.
Now he, along with hundreds of others at that plant, cannot find a new job, has no savings and is looking at a very insecure financial future. For him, it may be too late.
As you read the story above, it probably sounds vaguely familiar and perhaps has little emotional impact on you. You may have even skipped over it.
Stories like that echo stories that have been shared for many years now. The news is filled with stories of people living in countries on the edge of financial collapse and then buffered by good news here and there to keep us all from falling into complete despair.
The reality is that we have become used to living on the edge, and we’re forgetting what it means to live comfortably instead. This doesn’t have to be bad, you just have to have the right mindset…
Living on the Edge Requires Financial Education
Living on the edge requires alertness and intelligence — you cannot give up or be lulled into a sense of security or else you will fall. Each step must be calculated and taken carefully yet confidently to get to safety. The only other option is to do nothing and hope someone will save you — which is akin to suicide.
It’s for times like these that the Rich Dad Co. was formed. Our financial education tools all exist to help equip you for the perils of our modern economy so that you can be sure to have the knowledge and practical application required to survive and thrive while others fail and fall.
For many, there is no choice about living on the edge. The die has been cast for us by people much more powerful and influential than us. But we can control our actions on the edge.
It’s my hope you’ll step forward confidently and smartly, equipped with as much financial knowledge and courage as you can gain and muster. It sure beats the alternative.
Rich Dad Retirement Basics
We all have a vision of what our dream retirement will be like. It probably involves an island somewhere, a hammock, a good book and a glass of wine sitting next to you as you relax for the first time in a long time.
But ask most retirees and you’ll get a very different picture of what retirement is really like today.
In a world where you could potentially be living much longer, it’s vital that instead of spending your entire life working for money, you must instead have your money work for you your entire life.
This means moving from the left side of the CASHFLOW® Quadrant, the employee and self-employed side, to the right side, the business and investor side.
This is one of the most fundamental concepts of the Rich Dad philosophy on money. By building businesses or investing in assets that provide passive cash flow month in and month out, you provide the security you need to have a robust retirement.
The good news is that having your money work for you allows you to still pursue many different passions and hobbies (and maybe even get paid for them) but in a way that allows you to be financially secure and not dependent on those activities to keep you financially afloat.
So instead of following old-money advice — “You’ll go to school, you’ll get a job and invest for the long term” — my advice to you is to instead invest in your financial education so you can make the right investments to have a happy and healthy retirement.
It may not be novel advice, but it’s the right advice.