Robert Kiyosaki is the author of Rich Dad Poor Dad, the 1997 bestseller that became a personal finance and investment bible and go-to tome for many people beginning their journey in wealth generation and financial freedom.
It means that people are taking notice when Kiyosaki - who trades not in stocks or currency, but in real estate - shares his thoughts on the current market outlook. Especially when he says he is waiting for the next crash to happen.
We got the opportunity to chat to Robert over the phone to discuss upcoming live event the Global Crisis Summit, where he is just one of many great speakers presenting their thoughts on the current economic climate and how you can create wealth and protect your assets during this time period.
But we also got an insight into the way he thinks as an entrepreneur, revealing his life lessons and how, as he has a distrust of the big banks and Wall Street, he’s been acquiring more physical gold and silver - and more recently Bitcoin - on top of his real estate empire.
With a focus on creating and buying assets instead of liabilities that cost, Robert Kiyosaki’s advice and knowledge divulged below will definitely get you thinking...
I don't trust the Federal Reserve Bank. I don't trust the treasurer. I don't trust Wall Street. So my assets have been pretty much the same. I'm a real estate guy. I'm an entrepreneur. I create my own assets.Robert Kiyosaki
1. For those who haven't come across you before, could you please introduce yourself and give a brief overview of your entrepreneurial career?
My background is fourth generation Japanese-American, born in Hawaii. In class, I said to my fourth grade teacher ‘What am I going to learn about money’ she says, ‘Well, I don't teach about money’. So I talked to my father because he was her boss, ‘How come we don't learn about money?’, ‘Because the government tells me what I can teach and money isn’t one of those subjects’. So you know, as a kid, why don't we learn about money?
That's when my Poor Dad suggested I go find my best friend's father. And he would teach me about money. I’m nine years old, I ask ‘how come he knows about money and you don't?’ And he says, ‘well, because he's an entrepreneur.’ Again I’m nine years old, I don’t know much. 'So what are you?’. He says, ‘I'm an employee’. And then that's kind of where the education started.
2. You are known for your bestselling book Rich Dad Poor Dad. Do you think you would have led a completely different life if you didn’t speak to your rich dad and have him pass on these lessons spoken about in the book? Or did you already have that entrepreneurial mindset to ensure you'd have ended up in a similar situation?
I would have, but it wasn’t instantaneous, because as I grew older, I had both men to talk to, when I came to a fork in the road. For example, my education, I have a college degree, I could sail ships all over the world. I was a tanker driver, after that I went into the Marine Corps to fly. Because Vietnam was still going on.
When I came back from Vietnam, United Airlines was going to hire me. So my Poor Dad just thought, 'oh, that's really great. You'll be an airline pilot.' And my Rich Dad says, 'it's not such a good idea'. But that's the difference, I had to think for myself, so if I had gone to work with airlines today, I'd be unemployed. You know they’re firing pilots left and right, right now.
I actually went to work at Xerox, not because I like Xerox but because I had to learn how to sell. You know, communication is probably one of the top skills of an entrepreneur. Can you sell? Can you raise capital? So that's why I went to work for Xerox. And then I just kept raising capital for corporate, my businesses, my startups and things like this. One of them failed. When I was in my 20s and 30s I was kind of a joke around Honolulu, because I was the biggest failure they knew. I started in Nylon, and I took it internationally, but we just couldn't keep up with demand.
And that failed so then I went into the Rock and Roll business and the bands like Duran Duran, The Police, Van Halen, Boy George, I was manufacturing licensed merchandising products for these rock bands. Then MTV hit and then we made money again, but the thing got too big again, you know, success will kill you if you can't keep up with it.
3. You are a big promoter of acquiring assets that generate an income instead of liabilities that are a cost. Have you seen the types of assets that generate income evolving or changing over the last 10 - 20 years? E.g. cryptocurrency, solar farms and other alternative investments etc. Or do you believe that there are some assets, if managed properly, will always stand the test of time?
First of all, I don't trust the Federal Reserve Bank. I don't trust the treasurer. I don't trust Wall Street. So my assets have been pretty much the same. I'm a real estate guy. I'm an entrepreneur. I create my own assets. So I have cash, gold, silver and today Bitcoin. So my system has never changed. But today I have millions and millions of ounces of gold and silver.
I think the biggest news of all is that Warren Buffett has dumped his banking shares. And he's dumping his airline shares, and he bought Barrick Gold. So Buffett is finally switching over to where I was at the whole time, buying gold. It hasn’t really changed since I came back from Vietnam. I just don’t trust Wall Street, the treasury or the Fed.
I got asked a few months ago, ‘how come you’re not in the S&P 500?’ Because it’s all manipulated. I don't like that, I want to control my assets. So I own 8,000 rental units. I can control those. I own my companies. I have about 500 employees. I control the show. I'm an entrepreneur; I don't need to invest in the stock market. I'm not saying it's good or bad. I just pushed myself to it; I have not changed since the 70s. I was buying gold at $35 an ounce. Today it’s about $2,000. I was buying silver at $1.30 and today its $30. Also because I’m in real estate, I don’t pay taxes. Legally. I don’t like paying taxes.
4. You've been through many property and financial crashes in your career. Most people see them as a time to sell assets and to keep their money safe in a bank, however do you think that these events are actually great opportunities to build your wealth? What have you learnt through your experiences of riding these ups and downs?
I think crashes are wonderful things. But that's why I'm glad I’m talking to you is because when Buffett's dumping banking shares, like JP Morgan and Goldman Sachs, HSBC is going to go down next, BNP Paribas, the banking system is about to collapse. So about two years ago, I started selling my non-performing properties.
I went back into cash and gold and silver and I'm waiting for the next crash right now. So what happened in 2008, I was already out. I was already selling my non-performing properties. By the time 2008 hit, I was in position to go out and pick up people whose debt to equity structures and their management were weak. So we picked up so many great properties after the crash.
5. Do you think the younger generation have it easier now to start building their wealth with access to vast amounts of data and knowledge online and networking possibilities on social media? Or do you think this is possibly information overload and it takes the individual away from reality and focus?
That’s a fantastic question. I think it depends upon the person. My Rich Dad taught me playing Monopoly. We would play that game using the fake money. Whereas the younger generation grew up in electronic games, and you use cyber money. So you guys are far down the road because you know, the banking system is going to shift from paper to crypto anyway. And that's why the banking system’s going to collapse, you don't need banks anymore. Because you know, there's financial technology and all this. These guys who are like the Amazon of banking will take over.
6. What financial life lesson have you learnt that has stood the test of time throughout your years in the business and entrepreneurial world?
I think the most important thing is a mentor. And the reason I say your generation is so far ahead of the game, you’ve got YouTube, YouTube has some of the best teachers on it right now, you’ve got to choose carefully. When I was in my younger years, I didn't have access to those guys, but now you have access to them.
So there are some people you know, I subscribe to their podcast or their YouTube, and I just listen to them as times change. I did the same thing with my Rich Dad. But this time it's all virtual on YouTube, right? Whereas I had to go see my Rich Dad in person. So you guys are way down the road.
7. You're a key speaker at the upcoming Global Crisis Summit online conference. Can you provide us with a brief overview on what it’s all about?
Yeah, the biggest guy on the list is not me, it's Harry Dent. And Harry Dent knows that there is a crisis coming. And he's been very accurate; he called the great boom. And now he's been calling for the great crash. The difference is, is what do you do about the crash? So what he says to do and what I will do are two different things. So the reason people want to listen to the Global Crisis Summit, is to get different points of view.
And as I said, you know, the most important thing is choose your teachers wisely. You know, so Harry doesn't like gold and silver and he likes T-bills, US Treasuries. I don't touch US Treasuries, and I have gold and silver. On the other side of it is I'm a debt guy. I mean, I'm in debt, probably 600 million bucks.
And that's how I buy real estate, with debt. The reason I do that is because I don't want to pay taxes. I’m just saying it’s a different point of view, I’m not saying one is right or wrong, but there's a crash coming. And the question is, what are you going to do about it as an individual? And that’s what we will be discussing at the summit.
If you can trade stocks, it's really going be a good time because you can go short the market, you can trade put options or call options. There's so much you guys can do. I’m just an old guy trained in real estate, and gold and silver.
8. You’re big on helping people being financially independent. Was this a main driver for wanting to join your fellow co-hosts and show people how to create wealth and protect their assets within this current economic period we find ourselves in?
What I’m trying to say is there’s a million ways you can protect yourself. I mean, what I do, I hate to say this, very few people can do. And I'm $600m in debt, not too many people can borrow that much money. Because it's tax free money. And then I depreciate my property and I pay no taxes again on the income. And then with the income I buy gold, silver and Bitcoin. But the reason we're in real estate is for debt and taxes.
That's why you should come to the crisis investment because you still have time to say, well, I think I'd like to try that. I'd like to try this, like to try that. But most Americans, all they know is what we call mutual funds and ETFs, that's all they know. And that's called passive. And I'm not a passive investor. I'm an inside investor. I own the investment. I own the asset.
9. Without giving too much away before the live event, can you outline at a high level the types of opportunities that may become available over the next 12-18 months? Is it in property, financial markets, energy, land or something else?
There are opportunity and investments all over the world. You see Warren Buffett is dumping his bank insurance. That means anybody who's got their debt to equity structures misaligned are going bankrupt. Big shopping centres are going bankrupt all over America, office buildings are going bankrupt, cities are going bankrupt. We're going into a global depression. But for a person like me, who's ready for it, it’s going to be a good time, for people are not ready for it. You know, they’re probably going to lose their jobs.
I just don't know why people go to school and learn nothing about money as I was saying to you. I don't teach you that. I'm a real investor. I'm a real entrepreneur. I just happened to write a book called Rich Dad, Poor Dad. And it's really what I was taught.
When I say what should you do? Well, you've got to find a mentor. And YouTube has given you access to so many mentors now, it's fantastic. But if you think you're going to go back to school, you're not going to learn anything. You look at what's happening in America. In 2021 driverless trucks are going to hit the road.
There are three million truck drivers in America; they're going to lose their jobs over the next 10 years. And then this pandemic, with these Zoom calls and all that, that means school teachers are going to lose their jobs. So unemployment goes up simply because technology takes out employees.
10. How do you think industries and the economy will be disrupted now that many of their employees will be able to work remotely, possibly even employing in cheaper markets now that location isn’t a major factor? Do you think that it might also impact where people decide where they want to live, therefore affecting real estate, how they shop, in turn affecting the physical retail industry? Are we starting to see a shift in culture, demographics and the way the economy works?
Yeah, well think about it this way. The corner bank has gone, all these bankers will be on the streets like everybody else, like the guys who are protesting. Your banker will join the truck driver and the school teachers.
So that's why if you can get your mind prepared for that, and that why you want to come to attend the crisis event. So you can listen to other points of view. I'm going to make more money than ever before, however it doesn't affect me and the best thing about it is my employees are protected. But a lot of people working for bad companies are going to lose their jobs, like the airline pilots.
All the flight attendants and mechanics and agents, there's millions of people losing their jobs. But these people are begging for the government to give them money, and that only makes the problem worse. It’s tragic. That's why there's no financial education and school. And with quantitative easing, it’s essentially counterfeiting money and interest rates are near zero because they don’t want you to save money.
So the rich are in trouble, because if their assets sink, that's not good for them. And the poor and middle class are in trouble because inflation will take more of our money. So it’s a very important event we’re holding. And our big point is not to get an answer, but to think differently and to look at different options.
11. Do you think that the global pandemic and financial impact of it has created a new audience for becoming more financially literate and thinking about becoming financially independent?
Yeah, exactly. I mean, I wrote Rich Dad Poor Dad 25 years ago, I created the Cash Flow board game 26 years ago, and I sell more books and games today than before. Because our schools will never teach you what my books and games teach. But everybody can go to YouTube and start a YouTube channel. But if you’re still thinking as an employee, 'I’m going to get a job', you’re going to miss the opportunities.
The Global Crisis Summit with Robert Kiyosaki and other speakers begins at 8am (UK time) on Sunday 30th August. Register free at www.crisislivestream.com