“Rich Dad Poor Dad” author Robert Kiyosaki isn’t a fan of traditional retirement savings plans because he doesn’t think they are a safe place to park your money. In a recent tweet, he predicted that 401(k) plans and IRAs will soon be “toast,” and shared that his previous predictions have usually come to fruition.
“If you can find me on Wolf Blitzer’s program on CNN, I am […] calling for the crash of Lehmann Brothers in 2008 before it crashed,” he tweeted. “In 2023 I am on Neil Cavuto’s show on Fox Business calling for the crash of banking giant Credit Suisse, which it did. […] Watch for my next warning. The S&P [500] is next, which will toast millions of 401(k) [plans] and IRAs.”
Instead of putting money into retirement savings plans, Kiyosaki recommends investing in other assets.
“Buy gold, silver [and] bitcoin while you still can,” he tweeted.
But are precious metals and crypto really better long-term investments than a 401(k)? GOBankingRates spoke to experts to get their takes on Kiyosaki’s advice.
Some Experts Don’t Agree
Robert R. Johnson, Ph.D., professor of finance at the Heider College of Business at Creighton University, doesn’t agree with Kiyosaki’s tweet.
“This isn’t just bad advice — it is irresponsible and dangerous advice,” he said. “My belief is that one cannot truly invest in cryptocurrencies, one can only speculate. An only slightly less bad decision would be for Americans to move retirement assets into precious metals. If one has a long time horizon — say, 20 or more years — one should not invest in gold or other precious metals.
“At the end 1925, the price of an ounce of gold was $20.63,” Johnson explained. “At the end of 2022, an ounce of gold sold for $1813.75. Over that 97-year period, the precious metal returned 4.72% compounded annually. Over that same time period, the compound annual rate of return of a diversified portfolio of large stocks (the S&P 500) was 10.1%.”
Sean Casterline, a wealth manager at Delta Private Wealth, said that “Kiyosaki is ‘right’ like a broken clock.”
“He’s been an eternal perma-bear for years and to recommend an investor should make this kind of investment is simply dangerous,” Casterline said. “Building a well-balanced investment portfolio should be the approach most investors use.”
He noted that bitcoin and gold have both experienced more volatility than the stock market.
“In November of 2021, bitcoin reached a high of $64,400. At the lows in 2023, bitcoin was trading at $16,500,” Casterline said. “That’s a drop of over 74%. Gold doesn’t have the same level of volatility. However, in mid-2011, gold was trading around $1,825. It went through a deep correction into November 2015 to a low of $1,060. That’s a drop of almost 42%.
“Replacing stocks and bonds with investment vehicles that go through massive swings is simply inappropriate,” he continued. “Couple that with the fact that bitcoin is highly correlated to the stock market, and you have a recipe for investment disaster.”
Consider Using Bitcoin and Precious Metals as Part of Your Long-Term Investment Strategy
Adam Koprucki, founder of RealWorldInvestor.com, doesn’t think you should replace the stocks and bonds in your retirement portfolio with bitcoin, gold and silver, but notes that you can include these assets as a part of your overall long-term savings strategy.
“Bitcoin is still seen as a speculative investment, and commodities are more of a safe haven during times of high inflation. It’s not unreasonable to dedicate a small percentage (5%) of your 401(k) to these investments,” he said. “[However], I certainly wouldn’t abandon traditional target date funds and stocks anytime soon.”
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