Today's poor writing from Robert Kiyosaki
I'm amazed that Yahoo keeps promoting articles by this guy on its home page. Yes, he wrote Rich Dad Poor Dad, but when you look at the stuff he submits directly to Yahoo, it's apparent that his books benefited from heavy editing. This article is incomprehensible. The headline, referring to 401(k) plans, is "The Biggest Scam Ever." But the writing, which rambles on about Nixon, the gold standard, the Fed and inflation, doesn't come close to backing up the headline or even making a traceable argument.
There are reasons to prefer a Roth IRA to a 401(k) plan, but Kiyosaki doesn't mention them. He condemns all 401(k)s no matter what they're invested in. Americans' poor overall savings rate, according to him, is evidence that 401(k)s are bad. In any case, 401(k)s are still a good deal and the best savings vehicle for many families. (They're tax-sheltered, your employer often contributes, etc.) Some people who read this stuff will probably stop contributing to their plans. Yahoo: You're publishing junk.
UPDATE: I hadn't read the comments section of the Kiyosaki article, but commenters seem to agree.
Comments
Interesting article. I’m wondering if you’re still going to tell people that their IRA / 401k’s will still be a good when the rate of inflation will soon be 10%, 15%, or even 20%! Paper investments are being wiped out right before your very eyes! Of course, one would to know about Nixon, the gold standard, the Fed, inflation and other ramblings!
Maybe it’s that Jay Hancock’s Blog is publishing JUNK!
Just a thought ……………………………….
Dave: Inflation isn't going to hit 10 percent anytime soon. But if you're afraid it is, put your 401k and IRA dough into gold, TIPS and natural resources mutual funds. It's really not hard.
Posted by: Dave | December 1, 2009 11:41 AM
I think if Dave were really the savvy investor he purports to be then he would have not said anything at all and just kept putting money in jars and burying it in the backyard.
Posted by: bryanintimonium | December 1, 2009 12:41 PM
Just because math is hard, doesn't mean it should be ignored in favor of politics.
While there may be legitimate issues with 401(k)'s, to simply ignore the "irksome" fact that most plans also include a corporate match that has a significant benefit to the investor is disingenuous at best.
Posted by: Josh (or jwiv) | December 1, 2009 2:02 PM
"Biggest Scam Ever" is an exaggeration that toes the line between attention grabbing headline, and maintaining credibility. While not the best thing he's written, he does make 3 good points:
1. inflation risk
2. downward stock price pressure from forced selling when baby boomers retire
3. general misconduct and fraud throughout all financial services (ever heard of the definition of financial engineering? it's when some Wall St _____ figures out how to make your money his)
and a 4th that I thought of a long time ago: YOU CAN"T PREDICT FUTURE TAX RATES. The perceived benefit of contributing tax deferred assumes tax rates will not be much higher in the future.
There is real risk in ceding control over that much money for that long a time given the irrefutable presence of multiple variables that can diminish your real buying power at the time you need to use it.
Posted by: Josh Dowlut | December 1, 2009 2:49 PM
The best way to get rich in the financial services sector is to come up with a gimmick and then write a book a lot of naive people will buy.
Posted by: save_the_rustbelt | December 1, 2009 4:09 PM
Shame on Yahoo! for posting and providing this con artist an outlet for his drivel.
Shame on Yahoo!
Wait sorry...they have in fine print below that they their post do not imply their agreement with the views...however they are putting a propagandist and snake oil salesman in their "expert column" on what must be one of the web's most trafficked financial websits.
Shame on Yahoo!
A petition should be made to remove this fellow....or a conversion to google finance.
Posted by: Vic | December 2, 2009 1:14 PM
Why is America in the state that its in? Cause of savers or 401K's, look at Maddoff. People just blindly bought the sales pitch of their broker and only now are paying the price. There are other investments and 401k's are for the people who dont know any better. I want to see when its time to cash out, if what you put in is what you get out. Honestly I doubt it, America is started to show the cracks.
Ask anybody if the 401k's existed before the Great D...no, it was never needed until debit became the name of the game.
It may not be the biggest scam, but it sure will be a circus if Mr K is right
Posted by: Nuno | December 3, 2009 10:07 AM