ROBERT KIYOSAKI 00:00
But what most people tell you is this, repeat after me, "work hard, save money, get out of debt, invest for the long-term and diversify," how many people heard this?
Okay. And the reason I bring this up here is that because around 1996, I was watching this very famous morning show that was broadcast all across the nation and they have these nice handsome, you know, couple who were the host and hostess, and they come and say, "And today we have the financial expert of all times and he's going to give us the financial advice for the New Year – it's like 1996 or whatever it was, you know – and welcome so-and-so."
And they clap, you know and out comes a financial expert, he goes, "Hi everybody! What I recommend for this year 1997 is, work hard, save money, get out of debt – (Cough) I can't even do it straight – invest for the long-term and diversify." And the host and hostess, "Oh, that is so brilliant! Oh, thank you for your infinite wisdom on this on financial, we thank you."
The next year, they invite them back, same thing. "And for the new year, I recommend you guys what? Work hard, save money, get out of debt, invest for the long-term and diversify." And the host and hostess, "Oh, I can't believe what a genius. What a financial genius, just give him a hand. I can't believe it."
Every year same guy, same message, same advice, they think is brilliant.
Then after 2000, the stock market started to crash and they bring the same expert on and he comes on, and what does he say? "What I recommend is work hard, save money, get out of debt and invest for the long-term and diversify."
And the market kept crashing and he's kept getting the same advice. And this is what I want to say about that advice, between the year 2000 and 2004, millions of small investors lost an estimated 7 to 9 trillion dollars, the same time Wall Street pays them the biggest bonuses out. And this is the advice they were giving people here.
I want to say to you, this advice used to work, it doesn't work today. I'm not saying, it's bad advice. I'm just saying it used to work. After 1974, it started to change. And what I'll be going into is how that change came about and why people are getting in trouble following this advice.
Especially, this one here [Save Money] because you're going to find out the most risky of all Investments are savings, stocks, bonds and mutual funds, they are the riskiest of all investments.
But most people think they're safe and that's what you'll find out. And that's why I thank public television for allowing me to say what I'm going to say because there's many people, as I said, and organizations, who do not want me to tell you what I'm about to tell you. And all the little people, they hire who are 'financial experts,' but they're not really financial experts.
Do you realize most of financial experts are not 'I', they are really 'E' and 'S', they are salespeople. And I'll be going into some of those differences. Okay?
So I know I'm an investor very simply because I live by my income on my investments, I don't live by my commissions. And there's a very big difference here.
"Work hard, save money, get out of debt, invest for the long-term and diversify." It used to work, but it does not get you ahead in life today...
But that doesn't mean you shouldn't do it, it just mean that you got a lot more to do.