Yahoo Finance Robert Kiyosaki: Why Saving Money Is the Wrong Way To Prepare for Retirement
Robert Kiyosaki, the bestselling author of “Rich Dad Poor Dad,” has argued — against conventional wisdom — that “the historical advice to ‘save’ is no longer a sufficient way to prepare for retirement.”
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According to the “Rich Dad” blog, you won’t be able to retire if you rely on saving money alone. Instead, Kiyosaki said adjusting your mindset is the key to preparing for retirement in the right way.
That, in addition to investing and creating steady cash flow, is his preferred method of staying financially secure during retirement.
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401(k)s Are the Problem
According to Kiyosaki, the biggest problem with the 401(k) is that it requires people with no financial education to be in charge of their retirement investing.
His blog read, “Because people had no financial education, a whole new industry was created — financial planning. The problem with financial planners is that they’re salespeople, not investors. They push the products of their employers, usually paper assets.”
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How To Prepare for Retirement — the Right Way
According to Kiyosaki’s blog post, Americans need to shift their mindset. For instance, instead of saying, “I can’t afford that,” ask instead: “How can I afford that?”
He continued, “Then, look for an investment that will pay for your desired standard of living. Make your money work for you, not the other way around.”
Cash Flow Is King
In another “Rich Dad” article, Kiyosaki recommended additional tips to better prepare for your sunset years, such as investing for cash flow.
While some financial advisors may recommend long-term-care insurance, he advised investing instead in assets that will provide the cash flow you need to cover your expenses as you grow older.
“This is smart because it makes your money work for you during your retirement,” wrote Kiyosaki. “You get cash, and you keep your assets.”
Another recommendation is to invest in what Kiyosaki calls a “truly diversified portfolio” — a strategy which entails investing in as many asset classes as possible: paper, real estate, commodities, business and cryptocurrency.
The blog continued, “Look at your retirement plans from the eyes of an investor; you should be in all five asset classes, and you should be specializing in one or two.”
Finally, Kiyosaki advised using taxes to your advantage.
“The rich know how to invest in ways to pay little-to-nothing in taxes,” he wrote. “So, rather than spend your time figuring out how to move your money in a way that keeps you poor to avoid taxes, put in the time and effort to learn how to invest your money in a way that makes you rich and decreases your tax burden.”
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This article originally appeared on GOBankingRates.com: Robert Kiyosaki: Why Saving Money Is the Wrong Way To Prepare for Retirement
