Robert Kiyosaki, Simon Black & Huge Risks in the Financial System

Robert’s seminal work Rich Dad, Poor Dad changed so many lives and completely shattered the staid, traditional notions of finance and success.

Perhaps one of his biggest ideas from the book is that most school systems simply do not prepare people for success.

You don’t learn critical lessons in school like how to invest money, how to start a successful business, how to create value and improve the lives of other people.

Instead, you learn how to be a good taxpayer.

And as usual, Robert’s remarks were spot-on last night.

After about an hour, Robert invited me up on stage to speak to the crowd about the incredible risks in the financial system that we face, as well as all the amazing opportunities in the world right now.

I took the audience back in time 10,000 years.

Prior to what we commonly call the Agricultural Revolution, our ancient ancestors never knew where their next meal would come from.

They were constantly hunting, always roaming from place to place in search of food.

But around 10,000 years ago, human beings discovered that they could plant seeds in the ground and grow their own food… and LOTS of it.

That changed everything.

For the first time in history, our ancestors could consistently produce far more food than they could consume.

The surplus of all the extra food they didn’t consume became the very first form of savings, something they were able to leverage to build the roots of the civilization that we enjoy today.

For several years now I have called this concept the Universal Law of Prosperity. It’s very simple: in order to prosper, you have to produce more than you consume.

The ancients figured this out thousands of years ago.

And though you won’t find the Universal Law of Prosperity listed in any finance or economics textbook, it is the most important law in those fields.

The Universal Law of Prosperity applies to everyone: individuals, families, companies, governments, banks, etc.

If you and I spend more money than we earn, eventually we’re going to go bankrupt.

If a business doesn’t generate enough revenue to pay its expenses, it’s going under.

And governments who routinely run budget deficits will one day run into serious trouble.

Yet if you look out across the world, you’ll see willful violations of the Universal Law of Prosperity everywhere.

Government debt has exploded in recent years as a result of their inability to live within their means. This is the case especially in the West.

Interest rates are now near zero, or even negative in many parts of the world, which only encourages businesses, individuals, and governments to borrow more.

Our entire financial system is based on debt and consumption.

You always hear, for example, how the American consumer drives the US economy.

You don’t ever hear anyone say that the American manufacturer… or the American capitalist… drives the US economy. It’s all about consumption, not production.

This constitutes a willful violation of the Universal Law of Prosperity.

And it’s simply foolish to assume that these imbalances between production and consumption can continue forever and ever without consequence until the end of time.

Look- the world isn’t coming to an end. There are obvious (and substantial) risks in our financial system, and there will be consequences.

When everything is based on debt… when nearly every government and central bank is insolvent… it just makes sense to take basic steps to protect yourself from these risks.

There are literally hundreds of things you can do, and we’ve talked about some of the easiest options in this letter.

Keep some physical cash in a safe instead of depositing ALL of your savings in the banking system.

Hold precious metals (e.g., gold, silver).

Own productive assets, whether a profitable business or a few apple trees that you planted in your backyard.

Invest globally. More than a billion people are being lifted out of poverty and into the middle class in developing countries.

Technology is advancing at an astonishing pace.

We have the ability to live better, longer, more meaningful lives, and to create wealth and value in a way never before seen in human history.

This isn’t a message of doom and gloom. The world is full of so much opportunity right now.

Bottom line- taking rational steps like these in the face of such clear trends just makes sense.