Robert Kiyosaki, controversial bestselling author of “Rich Dad Poor Dad,” has an urgent message for employees: Wall Street is gambling with your pensions. They’re rife with risky, secretive investments and scandalously high fees, and they dispense deceptive performance results. Because of this pension crisis, the next market crash will wipe you out.
In an interview with ThinkAdvisor, Kiyosaki discusses his new book, “Who Stole My Pension?: How to Stop the Looting” (Plata Publishing, Jan. 14, 2020), written with Edward Siedle, a former Securities and Exchange Commission attorney.
In the interview, Kiyosaki, 73, as outspoken and blunt in conversation as in writing, calls Wall Street “corrupt,” the Federal Reserve “a criminal organization” and many financial planners “incompetent.”
Pensions “lie” about their returns; for example, pensions for teachers, firefighters and police officers, who are oblivious to the speculative investments and fleecing Kiyosaki perceives.
He himself proudly steers clear of the stock market, investing instead in the shadow banking system because, he says, “that’s where the money is.” The entrepreneur owns rental properties in the U.S. Southwest and Far West, as well as hotels, golf courses and oil wells, among other businesses.
He got rich chiefly by licensing his “Rich Dad Poor Dad” brand to franchisees and investing in real estate. He has authored 28 personal finance books, and he wrote two others with his friend President Donald Trump.
In “Who Stole My Pension?” Kiyosaki and Siedle, who has forensically investigated more than $1 trillion in retirement plans, urge pension participants to create “a global network” to “improve pension investment practices.”
The way Kiyosaki tells it, he was mentored — starting at age 9 — by his best friend’s self-made affluent-but-uneducated “rich dad” on how to make money, while his biological “poor dad,” with a Ph.D., opted for financial security via a government job. He later lost his pension and was left without financial resources.
Some reports state that Kiyosaki’s “rich dad” — who built wealth in the construction business, Kiyosaki says in the interview — was fictional.
The author, who grew up in Hawaii, founded the Rich Dad Co., based in Scottsdale, Arizona, in 1996. He reportedly filed for corporate bankruptcy in 2012 because of a multimillion-dollar lawsuit brought by The Learning Annex against another of his companies, Rich Global. Further, some of his seminar franchisees have been charged with perpetrating investment scams.
ThinkAdvisor recently interviewed Kiyosaki, speaking by phone from his home office in Phoenix. He contends that pensions are invested in “financial weapons of mass destruction,” like those “that brought down the market in 2008 … Nothing has changed.”
Here are excerpts from our interview:
THINKADVISOR: Why did you write a book about what you see as a pension crisis?
ROBERT KIYOSAKI: To give people a chance to take action and prepare before the house of cards comes down again. I’m afraid that the crash that’s coming will make 2008 look like nothing. Student loan debt is now bigger than the subprime market debt, which brought down the market in 2008.
“Pensions are lying about their investment performance, and you should be suspicious about the results they tell you,” you and your co-writer Edward Siedle say. Please explain.
Pensions have been stolen by the same people that brought you the subprime real estate crash.
“Firms, in recent years, have devised the most secretive investments in history – schemes designed to conceal outrageous fees, risks, unethical and even illegal practices to thwart pension transparency,” Siedle writes. Please elaborate.
Wall Street takes teacher and firefighter union members to Vegas or Hawaii, and they party on. They get them drunk and tell them about derivative-type investments [like the ones] that brought down the market in 2008. “Financial weapons of mass destruction” is what Warren Buffett called them. He should know because his company, Moody’s, insured those derivatives. So Buffett’s hands aren’t clean, either. But he knows what he’s talking about.
[Buffett's Berkshire Hathaway is the largest shareholder of Moody's Corp., with a 13% stake.]
Back to investment info given to union members: What’s their response?
They have no idea what [the firms] are talking about. So they’re put into extremely risky, exotic things with high fees, the same things the subprime guys were doing 2005-2007.
So you’re saying that this isn’t a new scenario?
Nothing has really changed. The Federal Reserve Bank is a criminal organization that bailed out the banks — the guys who rip us off. The Fed lowered the interest rate to almost zero so that the pension plans can’t get any returns. If you’re expecting a 7% return, the best you can get is 2%. The pensions are going broke. In Paris and Chile, people are rioting, and it’s all about pensions. But Americans don’t talk about [a U.S. pension crisis].
You worked with your friend Donald Trump for eight years co-writing two books. Is he aware of the pension crisis that you warn about?
He knows it’s coming.
But it’s doubtful that he’s doing anything about it. Why is that?
Because Grunch — Gross Universal Cash Heist [from Buckminster Fuller’s book, “Grunch of Giants”] — controls everything: the people at the Federal Reserve Bank, like Goldman Sachs and Wells Fargo.
You say you forecasted the crash of Lehman Bros. six months before the start of the Great Recession of 2008. What led you to that call?
In Hawaii, where I grew up, there were always earthquakes before a [volcano] eruption. The shaking would increase as it got closer and closer. So there were always warnings. The same with Lehman Bros.
Did you go public with your prediction?
Yes. [At the beginning of] 2008, I went on CNN and warned that the crash was coming. Wolf Blitzer said, “Are you saying that Lehman Bros. is closing down?” I said, “Yes.” I was never invited back because they don’t want people scaring the public. They have to protect the banks and financial planners.
You write that financial planners aren’t bringing up the pension crisis with clients. Why is that, do you think?