Nov 10, 2023
Most people work for money. After all, we have bills to pay. But according to “Rich Dad Poor Dad” author Robert Kiyosaki, the mindset of the wealthy is markedly different.
In a recent post on X, formerly known as Twitter, he wrote, “RICH DAD’s Lesson #1: ‘The rich don’t work for $.’ WHY? Because our Wealth is designed to be stolen from our fake money via taxes and inflation and the stock market.”
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The fourth-generation Japanese-American presents a valid argument regarding the vulnerability of wealth. A portion of every paycheck goes to taxes. Meanwhile, inflation gradually erodes the purchasing power of money, and the stock market is inherently volatile.
“The poor and middle-class work at jobs that pay taxable fake $ income and then they save fake $, then invest in stocks, bonds, mutual funds & ETFs which are crashing as I write this text,” he continued.
The rich, according to Kiyosaki, are not fixated on these so-called “fake paper assets.”
“The rich want assets that put real tax-free money in their pockets and they know how to save real assets, G, S, BC,” he said, referring to gold, silver and bitcoin, adding that they provide “lifelong financial security & freedom.”
Here’s a closer look at these assets.
Gold and silver
Precious metals — particularly gold and silver — have been a popular hedge against inflation and uncertainty. They can’t be printed out of thin air like fiat money, and it’s believed their value is largely unaffected by economic events around the world.
Kiyosaki has long been a fan of gold and first purchased the yellow metal in 1972. He has explained in the past it’s because he doesn’t “trust” the Federal Reserve, which controls the supply of money.
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In October he predicted, “Gold will soon break through $2,100 and then take off. You will wish you had bought gold below $2,000. Next stop gold $3,700.”
Kiyosaki likes silver, too. “Silver from $23 to $68 an ounce,” he said, projecting major upside for the gray metal.
To be sure, despite their “safe haven” status, the price of precious metals can still be volatile. While the price of gold has climbed about 7% in 2023, silver has fallen by about 5% during the same period.
Today, there are many ways to gain exposure to gold and silver, but Kiyosaki prefers to just buy the metals directly. “I do not touch paper gold or silver ETFs. I only want real gold or silver coins,” he wrote last year.
So it might be time to visit your local bullion shop or online seller.
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Bitcoin
Bitcoin investors have learned the hard way just how volatile it can be.
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In November 2021, the virtual currency reached a high of $68,990. Today, it’s hovering around $35,400.
But Kiyosaki doesn’t seem bothered by the massive swings.
Last month, when bitcoin was testing $30,000, he tweeted, “Next stop Bitcoin $135,000.”
If Kiyosaki is right in his prediction, it would imply an upside of 281% from where the cryptocurrency sits today.
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It’s very easy to buy bitcoin these days. There are many online exchanges, brokers and even ATMs to purchase from. Be warned, they can charge up to 4% in commission fees, so look for ones that charge low or even zero commissions.
Cash flow assets
While stressing the importance of saving gold, silver and bitcoin, Kiyosaki also pointed to assets that produce cash flow.
“The rich work for assets that put tax free money in their pocket…cash flow assets such as rental properties, oil, food production,” he said.
So how much should investors allocate to these investments?
In a post on X last month, the entrepreneur and businessman wrote, “Before going down with the ship consider a shift to 75% gold, silver, bitcoin 25% real estate/oil stocks.”
He said that this asset mix may allow investors to “survive the greatest crash in world history.”
It’s easy to gain access to cash flow assets these days. Investors can purchase dividend-paying oil stocks using their brokerage account. And if you want to invest in real estate, there are ways to earn rental income without becoming a landlord.
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Jing is an investment reporter for MoneyWise. He is an avid advocate of investing for passive income. Despite the ups and downs he’s been through with the markets, Jing believes that you can generate a steadily increasing income stream by investing in high quality companies.
