Robert Kiyosaki is the author of the famous Rich Dad, Poor Dad book series. He is also a very successful investor in real estate.
Last weekend Kiyosaki appeared on the Foxnews program of Neil Cavuto. Cavuto and his correspondents were pushing the memo that despite a few strong hurricanes in the last years, people are still eagerly buying real estate along the Atlantic/Caribbean coast. Then Cavuto turned to his guest Kiyosaki. The interview was remarkable. I almost started to write down a transcript. But to save time, I waited for the official Foxnews transcript, which is apparently not coming… So I’m reproducing from memory.
Kiyosaki admitted outright that he is scared of the situation in real estate. He even said that he would like to sell his two beach homes in Caribbean and in Hawaii, “right now“, just because he does not like worrying about his properties. Hurricanes rarely hit Hawaii, so the worry is not only about Nature’s fury.
Kiyosaki stressed that this is not the time for amateurs to be jumping in. He said that there are already too many idiots in the market asking ridiculous prices, so that few good deals are possible. He clearly implied that the real estate bubble is big. In his words:
And then he stressed again, that this is not the time to be jumping in and going for capital gains.
On the other hand, Kiyosaki confided that he feels sexually excited when bubble busts are coming, because after them it is the best time to buy. That’s kind from Kiyosaki, since purely financially he might be more interested in making the pool of “poor dad idiots” larger. Ok sorry, Kiyosaki must be a decent man. But Cavuto seems to like that “job” of encouraging fools.
I checked the official website of Kiyosaki. He has a series of articles All Booms Bust, which confirms the same disposition towards current real estate market. Here are some snips:
Kiyosaki is not the only one capital insider who is expecting real estate bust. For example, I saw right-wing newsletters with the titles such as After Greenspan, a Major Recession, “Greatest Real Estate Investor [Tom Barrack]: Bust Warning”, and even “Restoring the American Dream” (right, Bush presidency was not great for the American Dream…)
[Crossposted at European Tribune and Daily Kos.]
All Booms Bust… can’t find the article
Sorry, there was a small error in the address. It works now.
Many of the biggest real estate players are selling their holdings. In Silicon Valley, the largest commercial landlord, Peery Arigilla, has announced that they are selling everything they own. Likewise in Canada, the Reichmann family is selling their collection of office buildings. I’ve heard of several developers in other cities who are also selling out. Surely, this is the critical signal for a top in real estate. Although Rich Dad, Poor Dad was a very popular book, I thought that parts of it were frankly unbelievable – especially the verbatim recollection of long, philosophical conversations that he claims to remember… Read more »
I’ve never heard of or read the book, but “poor people spend money on luxury items” is one of its “essential points”?? WTF?
Depends on your definition of “poor” and of “luxury items”, I suppose.
I haven’t read his book either, but the statement reminds me of a conversation with a student who had worked in a high powered lawyers’ office for some years. Most of their clients were very, very wealthy. Which led him to ponder why they were so wealthy and how they stayed that way and got ever wealthier. He was telling me that they never spent serious money on anything that wouldn’t generate even more money. Franchises like McDonald’s were popular – a virtual cash cow he said. The “non-wealthy” (not necessarily poor) on the other hand, tended to spend their… Read more »
Yes, and the reason why is very simple. Rich Dad, Poor Dad tries to make it look complex, and justify the difference in station as an intellectual superiority/inferiority setup. But really, the difference comes down to this: The rich already have the basic necessities, and more than a few luxuries. Either they’ve earned fast enough to buy them and then turn to investing, or they’ve inherited them from their parents. But they don’t have to fight for a house that isn’t falling down around their ears; don’t have to skimp and save to afford a car that won’t fall apart… Read more »
it kind of tickled.
And I certainly don’t disagree. It’s what I’ve always believed myself. But my student added another layer to my thinking. Because the rich take for granted that the necessities of life are a given, and more luxury than most of us are used to for that matter, they have a very different attitude toward money. Money for them is a way to get more money. Money for people like me is a way to buy things that make my life better, that makes my daughter’s life a little easier than mine was, even that makes the world a better place.… Read more »
I remember being blown away in an economic class eons ago when my professor explained that 98% of wealth in the US comes from assets NOT income. Only a mere 2% of universal wealth in the US actually comes from people going to work 40 hours a week…
Money really does make money…
Terry Pratchett had an absolutely amazing illustration of one of his books. Watchman Sam Vimes is walking down the street and thinking about the rich and the poor. And he thinks about his boots. Worn-out things, with cardboard and string used to stretch out their life as much as possible. And he still has to buy new boots every few months. Meanwhile, a rich man can buy a pair of boots that will last him several years, if not most of his life. Yet Vimes still spends more on boots. And poor people like him always spend more on boots,… Read more »
It is a mindset.
I had a Chinese friend who was telling me about her rich uncle that worked at Kentucky fried chicken who owned three condos downtown and a huge portfolio of stocks and sent all of his first generation children to college that … I naturally assumed that he owned the KC franchised… she corrected me and said NO that he worked on the counter boxing chicken…
. I like the thesis of your diaries, makes you pauze and wonder about ordinary questions to make daily life more livable. Often it’s a question of making ends meet, thrifty spending, not getting into heaps of debt, credit cards, interest rates on loans, medical expenses, living to a budget to make ends meet. Just saw a report on CNNi about General Motors (GM) stocks plunge 6% today, which is massive for one of the largest U.S. corporations. Pulling down the Dow Jones, NASDAQ and European stock markets. The underlying fear is a possible filing for bankruptcy by GM due… Read more »
In America, there is never “enough.” I used to think like that, now I’m old enough to not want a big house I have to take care of.
However, I do still struggle with the concept of “enough chocolate.”
.
Chocolates – you should move to Belgium or its previous colony Congo or perhaps the Ivory Coast.
≈ 50 kg ≈
“Treason doth never prosper: what’s the reason?
For if it prosper, none dare call it treason.”
▼▼▼ READ MY DIARY