Rich Dad Predictions - The Good, The Bad and The Opportunities (2014)

The three things you should work hard for in life are:
1) Health
2) Wealth
3) Happiness

The following are notes I made from (and expanded on) Rich Dad Robert Kiyosaki's 2014 Predictions webinar earlier this year.

- Robert says in the next 5-20 years a Massive correction in the stock market.
Well in my opinion even a broken clock is right twice a day, so allowing himself such a big period to be right.
Although those with market linked pensions and other long term investments DO need to pay attention NOW, else in 5-20 years they will see the inevitable happen, as predicted. 
So 2019 is the date, which will be here very soon.
(I believe the market will dip before mid-2014)

Stock market is rigged and insiders depend on it, so trying to keep it that way. Beware of financial planners/advisors, as they are just sales people, not real investors.

A market 'Investor' has a 'buy and hold' strategy that benefits the brokers and market makers, who make money whether you win or lose.

- Traders go with the market, Traders aren't concerned about controlling the market, they are concerned about controlling their position.

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Unsustainable resources, such as peak oil.
A lot of manipulation is happening, trust yourself if something doesn't seem right.

Everything comes from the earth, then at the top of the pyramid is the paper derivative which is the most risky.  That is where everyone is. 
Stocks, bonds, mutual funds, pensions (US 401K) will lose the most and the fastest, with electronic trading. 90% of population will get wiped out financially.
Also your house is not an asset.

- If you're not prepared for upcoming market correction, you still have time to do so.

- Bucky Fuller said in the industrial age you could see change coming - but you can't see it coming today!

People are now doubling up and up to 3 generations are starting to live in one home again.

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- Understanding the relationship between a "policy" and a "demographic" will help predict the future.
eg. Baby boomers are going to all retire at the same time and need health care.
 More people pulling out of the stock market than going in.

Tax laws show what the policy is, Govt makes tax allowances to make people put money where they want it.
Currently Govt wants investors to provide 'low cost housing' so benefits are there.

In business investment a cap rate is a return a business will provide for the investment you put in.
In stock market this is called the P/E ratio (stock price/earnings per share), which has traditionally been 13/14, now at 19 ratio, giving less value than usual.

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Financial advisors aren't educated in the market, similar to mortgage brokers, who are trained to sell you a product and make a commission versus being investors/traders themselves.
Also most accountants only understand maths, not making money.
- Ask the what they are studying!

- When the market crash hits, most people will be wiped out because of their lack of financial education.

- Most people don't address their financial issues because they are intimidated by what they don't know.

- Advice isn't education. Be sure to work with those who can teach you what you need to know.

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There are three levels of wealth:
1) Primary (real resources like fish, oil, gold)
2) Entrepreneurs (get the resources and use them)
3) Paper (stocks, bonds, mutual funds, savings)

Price of oil and resources is always going up.

- The financial crash will be quick and massive due to exponential progression/change.
(The bull goes up the stairs, the bear goes out the window!)

Entrepreneurship is best place to be and get in a business that you can do well in during an up and down market!

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Most people in stock market and property/real estate are relying on false security of prices going up.

- When the financial environment changes, you need to be able to change with it.

Robert is now a 'prepper' as well. Financial preparation, ask "how can I protect my situation"?
Have friends you can count on. Make sure have food, water and defences/guns. Get prepared and stocked up.

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- When investing in property/real estate, take into consideration what industries and economies will affect your investment.

Energy, healthcare, technology and education are four industries that are growing.

- Migration drives real estate prices.

Read "Shaping Our Nation" by Michael Barone if based in the USA, as it's about US migration and politics.

Taxes are going to go up.

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- Rethink your position in the stock market.

- When it comes to investing, it's never too late to start.

- You are ultimately responsible for your money. Take action!

- Make your financial well-being one of your top priorities.
People say they are too busy with work, career, family, children etc…

- Think 'preparation' instead of 'panic'

Derivative are mass weapons of financial destruction.
In 2007, there were $700 trillion of derivatives, which caused the crash (not sub-prime).
Now in 2014, derivative market is $1.2 quadrillion, which is waiting to be triggered!!

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Those who have lost it all have to go back to zero and start again - with 1-bed flat, with a small business.
Taken it easy all their life, being an employee, saving and investing in stocks as they've been told.
Not qualified to play the game in the future.
You can only handle things in the PRESENT!

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Your greatest asset is your brain, your mind and your friends.

The more you know, the more you realise you don't know!
Continue to study, get more information and listen to different people.

There is a difference between spending and investing.

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Difference between education and a sales pitch:
Sales pitch only gives you the good side,
eg: go to school and get a secure job (= pay more in taxes and feed the system) 
OR put your money in the bank to get interest (= get little in interest and inflation runs much higher)
EDUCATION gives you BOTH sides, the good and the bad!

When you study the data, you start to see the trends.

Read books; study; learn; get a coach; take action. Do something.

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Recommended reading Prophecy (by Robert Kiyosaki) and The Crash Course (by Chris Martensen)

Below is an audiobook version of Rich Dad's Prophecy on Youtube


Rich Dad Prophecy audiobook - http://youtube.com/watch?v=9egVgFjPrFQ

Guide to trading monkeys, goats, the stock market and property!?

Lessons in trading monkeys, goats, stocks and property. Bear with me on this one and I'll help you figure out where you should be putting your money if any where at all. In just a couple of simple lessons, you could be out of the jungle and have escaped being put in the zoo. I wonder how many animals it took to put this post together?

Bobby

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Lesson 1: A guide to trading monkeys

"Once upon a time a man appeared in a village and announced to the villagers that he would buy monkeys for $10 each.

The villagers, seeing that there were many monkeys around, went out to the forest and started catching them.

The man bought thousands at $10 and, as supply started to diminish, thevillagers stopped their effort. He next announced that he would now buy monkeys at $20 each. This renewed the efforts of the villagers and they started catching monkeys again.

Soon the supply diminished even further and people started going back to their farms. The offer increased to $25 each and the supply of monkeys became so scarce it was an effort to even find a monkey, let alone catch it!


The man now announced that he would buy monkeys at $50 each! However, since he had to go to the city on some business, his assistant would buy on his behalf. In the absence of the man, the assistant told the villagers: "Look at all these monkeys in the big cage that the man has already collected. I will sell them to you at $35 and when the man returns from the city, you can sell them to him for $50 each."

The villagers rounded up all their savings and bought all the monkeys for 700 billion dollars.

They never saw the man or his assistant again, only lots and lots of monkeys!

Now you have a better understanding of how the stock market and the BAILOUT PLAN WILL WORK !!!!"

It doesn't get much clearer than this................ Banana anyone?


Moral: Don't buy monkeys or be one!
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OK... Rewind and lets go again from another perspective:

Lesson 2: A guide to trading animals (monkeys -v- goats)

"Here's a story that will help you figure out the difference: One day a man appeared in a village and said that he would pay a thousand rupees for each monkey that the villagers could supply. The villagers caught all the monkeys in the neighbourhood and sold them to him. Soon a second man appeared and offered two thousand for each monkey. Since all monkeys were with the first man, the villagers had no choice but to try and return his money and take the monkeys back from him. However, the man refused. The villagers hiked up the price to Rs 1500 and then to Rs 1900 but he still refused. The villagers were at first puzzled by this refusal of the first man to make profits but they figured that there must be more buyers who were on the way to the village to offer higher and higher prices. So they hiked up the offer and bought back the monkeys for Rs 3,000. The two men then went away and the villagers then started waiting for more buyers. They waited and they waited but no one ever came.

Nearby, there was another village where exactly the same story happened, in the same way, except that the animals in question were goats.

Here too, the villagers waited and waited but no one ever came to buy their goats at a higher price. However, there was a big difference. In the first village, everyone soon realised that the monkeys were a nuisance. They shouted and shrieked, stole food and bit people and were worse than useless.

In the second village, the goat-owners were better off. The goats could be milked every day and the milk was good and healthy. When the goats eventually grew too old to be milked, the villagers could kill them for mutton.

Even though goats and monkeys had both been extremely overpriced, the goats turned out to be not such a bad deal. However, the monkeys were a complete disaster. The monkey-owners had to eventually abandon the animals in the jungle and try and forget about their losses.

And that's the difference between having bought overpriced goats and overpriced monkeys. Just like the stock markets. If you are going to be a fool and pay absurd prices because you think that a greater fool will appear in the future, make sure you buy a goat and not a monkey.

adapted from: http://www.valueresearchonline.com/story/h2_storyview.asp?str=11664 "

Image source: bradfitzpatrick.com
(I thought it looked cool on google and deserved some fair usage policy)

Moral: If you're buying animals it may as well be a goat instead of a monkey.
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Lesson 3: If you must buy and hold, buy dividend paying stocks in companies that are likely to be around for the long term. Do your own research and don't just listen to what the papers says or chimps recommend.

Or how about property that pays a rental income and grows in value over the long term!? Do your due diligence and pick up an asset that is below market value and produces a yield. You can collect money every month and let your property portfolio fund itself.

The value of land going bankrupt is virtually zero compared to over valued companies and the poor/emotional business judgement of people working in and trading them.

There is no bull or bear side of a market to gamble on, just the right side - make sure you're on it and have a good team and access to the information necessary to succeed.

Feeling too chicken to take the first steps? Don't listen to the naysayers, in a matter of fact, tell them to go take a diving duck! Join a great peer group and get yourself a coach, to help you get over your own barriers and enjoy property investing - because everything you do should be fun. Opportunity is out there waiting for you if you look and ask for it.

Sunday 16th March 08 - DMAS Stock Trading Seminar, Euston

I'd got to the hotel at Boston Manor on Saturday night and decided to do a dry run to the tube station, planned for the morning. It took me 15 minutes to walk there in the torrential rain and when I got back to the hotel and went to get something to eat at the restaurant - the waiter offered me a towel to dry up as I was nearly soaked to the bone.

In the morning I decided to drive to station! Setting off at 9.30am I thought I'd make it to Kings Cross / Euston London by 11am -IF it had not been for the maintenance works at Acton and a bus ride (with an obligatory crazy guy) to Hammersmith.

I had to beg the guard at King's Cross to let me out as I couldn't find train ticket in all my pockets and bits of paper. So he finally did - and as I stepped outside to call Andrea S. there it was next to my phone!

Steve L. was giving us a seminar on his DMAS Stock Trading Course. It was especially for those people who had helped out by crewing at UPW last month. It was good to get back-to-basics and learn all the simple stuff again. In the past I had got to 'know' too much and my trading was all over the place. A few of the other traders had also made similar mistakes as I had in the past - and I realised I wasn't the only one who made irrational decisions and got emotional over the trades.

To not be emotionally involved and using a simple set of indicators should be the only way of trading. It gives a clear yes or no on whether the trade should be placed. This info should help to stop losing and win more often, if I apply it in future and also paper trade the ideas for a while.

Andrea, Beth, Harriett, Vaishali, Leena, Teejay, Reza, Lee and others from UPW crew were there and Zoe, Claire and Carrie had sneaked off from Chris Howard's seminar to come down as well. Cheeky...

We went for something to eat afterwards, vegetable biryani two days in a row - better to play safe when travelling. I had to meet Vincent in Milton Keynes on the way back north, so I left early. We hugged each other goodbye and I gave the surprised waiter one on the way out as well - share the love!

Caught the tube to Hammersmith, then got off the bus early at the wrong station so had to wait for another. It was only a few minutes and worth it as it was an old London Bus 'Summer Holiday' style. At Acton I got the wrong Picadilly line and had to come back to start again. Back at Boston Manor I had a puncture and my brother-in-law's car, which I borrow for motorway trips, didn't have a wheel brace in. So I waited an hour for the AA to turn up.

Had my luck run out or was I meant to be late in order to avoid something bad happening? Who knows.

It was about 10.30pm when I set off and I stopped at 2 service stations to kip for 15/20 minutes at a time. I then got home at 3am and slept all morning.

It had been an action packed weekend meeting lots of friends and attending NLP seminars, property and stocks, whilst being challenged by being in London - my brain was in overload! As I write this up I have a property meet in Hudds tomorrow to host. I'm then taking a week or two off before the Northern Property Network - so I'd better get busy organising.

You'll hear from me soon...