The author of financial best-seller “Rich Dad Poor Dad” has some unusual advice for millennials in his new book: Saving is for losers.
“You cannot follow your parents’ rules of money,” said Robert Kiyosaki, who this year published a fresh tome, Second Chance: For Your Money, Your Life and Our World. “The old rules were you go to school, you get a job, you work hard, you save money and you invest for the long term in the stock market.”
But now, he says, the rules are now reversed.
“Savers are losers. And many parents are still telling their kids to save money,” he told CNBC. “Why would you save money when every central bank is printing money?”
Indeed, Kiyosaki said he isn’t saving money.
“When I was a millennial, I could get 15 percent interest on my money. Today, I’m lucky to get one percent,” he said. “I’m a debtor. I borrow because I’m in real estate. So I’m getting money at 2.5 percent. I just recently refinanced $300 million at 2.5 percent. So debtors are winning and savers are losing.”
That’s likely not an interest rate available to the average homebuyer: Last week, the average contract interest rate for a 30-year fixed-rate mortgage with a balance of $417,000 or less was at 4.18 percent.
To be sure, the assumptions underlying Kiyosaki’s advice may leave some scratching their heads.
For one, he calls “global growth” an oxymoron, claiming that “the whole world economy is on a downslope” and is contracting.
That would be news to economists. The Organisation for Economic Co-operation and Development (OECD) this month cut its global growth forecast to 2.9 percent this year on slowing emerging market growth, particularly China. But that’s not a contraction. The OECD also expects gradual strengthening of global growth in 2016 and 2017 to 3.3 percent and 3.6 percent, respectively.
Kiyosaki also claims that “the rich are getting poorer now – not that anybody cries for them.”
That runs counter to many studies indicating the rich aren’t just getting richer, their ranks are growing.
The Global Wealth report from Boston Consulting Group (BCG), released in June, found that the number of millionaires in the world grew to 17 million in 2014, up from 15 million in 2013. The world’s millionaires now control 41 percent of the $164 trillion in global private wealth, up from 40 percent in 2013 and millionaires are expected to control 46 percent of the world’s wealth in 2019, the report said.
– Holly Ellyatt, Diana Olick and Robert Frank contributed to this article.