‘Rich Dad’ Robert Kiyosaki Shares the Best Places To Invest in a Down Market
Written by
John Csiszar
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Amber Barkley
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Noted financial personality Robert Kiyosaki is the creator of the “Rich Dad” series of books and videos. He’s long been a fixture on television broadcasts like “Cavuto Coast to Coast,” thanks to a combination of his outspoken, direct advice and his long-term record of financial success.
On the Aug. 15, 2023, broadcast of Cavuto’s show on the Fox Business Channel, Kiyosaki was asked about his general investment advice, particularly as it relates to the current state of the markets in 2023. Here’s an overview of the answers that Kiyosaki gave to the popular news anchor.
‘Savers Are Losers’
Kiyosaki told Cavuto that “savers are losers,” but it wasn’t meant to be a disparaging remark towards more conservative investors. Rather, Kiyosaki’s point was that after you factor in inflation, savers actually lose money over time.
He demonstrated this point by holding up a one-ounce silver coin. Kiyosaki said that about 25 years ago, it used to take just five U.S. dollars used to buy that silver, but now it takes closer to $30 — although the 2023 peak price of silver didn’t quite reach $30, Kiyosaki was merely making a point about the cost of inflation.
If you’re a saver, this doesn’t mean you should abandon your strategy and invest like Kiyosaki does. However, it is a reminder that a savings account, while “safe,” can’t protect you from the ravaging effects of inflation. A savings account is best used as a place to stash things like your emergency fund or to hunker down when economic times are hard.
Gold and Silver
The ability of gold and silver to appreciate against the U.S. dollar is one of the prime reasons why Kiyosaki said he is a big believer in them as an investment. However, he doesn’t stop at just precious metals.
Kiyosaki noted that he’s a fan of commodities in general, including non-financial assets like cattle. To Kiyosaki, being able to physically touch an investment is something that gives it real-world value. Financial assets, which exist only on paper, don’t provide any real-world utility and are simply propped up by those hoping someone else will pay more for them in the future, in the view of investors like Kiyosaki.
Real Estate
Kiyosaki reiterated to Cavuto that he’s always been “a real estate guy,” backing up one of his investments of choice as stated in many of his books and videos. Kiyosaki believes in owning investments that you can touch, rather than strictly financial assets like savings accounts or even stocks, although he does acknowledge owning some stocks, as well. As Kiyosaki put it to Cavuto, “If you can print it, I don’t want it,” indicating his preference for tangible investments.
Kiyosaki has stated in his own books and videos that he uses real estate primarily as a long-term investment to generate income, rather than as a way to earn short-term gains. Getting real cash in your pocket from your investments is one of the cornerstones of Kiyosaki’s philosophy.
‘I Use Debt for Money’
Kiyosaki told Cavuto, “I use debt for money,” which makes sense given his fondness for real estate as an investment. As most real estate transactions are financed, Kiyosaki almost by default has to rely on debt as “money” to make his investments.
One of the benefits of using debt for money is that you can leverage your investment, sometimes to a high degree. As a simple example, if you only put down $20,000 on a $200,000 home, a 10% gain in the price of the house translates to a 100% return for you, notwithstanding closing costs, taxes and other fees. The other advantage of using debt for money is that less has to come out of your own pocket, although you’ll have to balance that against the cost of the money you borrow.
‘Choose Your Asset Class Wisely’
On more than one occasion — particularly as Cavuto was referencing the returns of the stock market — Kiyosaki remarked that investors should “choose [their] asset class wisely.”
The grin on his face as he made those remarks suggested that while he acknowledged that some stocks performed well, others could lead to losses. Kiyosaki didn’t directly address Cavuto’s question regarding the long-term performance of the stock market in general, only saying that he believes in the idea of “choosing your asset class” and that his investments of choice are not paper instruments like stocks.
Buffett and Burry Are on the Sidelines
Kiyosaki told Cavuto that Warren Buffett and Michael Burry, two prominent and oft-quoted investors, are both on the sidelines now when it comes to the stock market, with Burry even shorting the market. To Kiyosaki, this is a sign — on top of his general aversion to financial assets like stocks to begin with — that it’s not the time to pile into the stock market.
Caveats and Final Thoughts
By his own admission, Kiyosaki’s investment style is not for everyone. Kiyosaki told Cavuto that “we all have our strengths and weaknesses,” and that he was never good at paper investments but has thrived using tangible ones like commodities and real estate. Given these admissions, it’s worthwhile to note that even Kiyosaki himself isn’t saying that everyone should liquidate their stocks and move into real estate and commodities.
However, as he said to Cavuto, it’s good to have people with different perspectives on investing bouncing ideas off each other.
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