Actually the first book I read which was about financial matters was The Great Depression onf 1990 . I’m glad I didn’t do what was suggested at that stage. Maybe he should put out a second edition …..[blush2]
http://econwpa.wustl.edu/eprints/get/papers/0502/0502021.abs
See Change
honestly its not rocket science,
but superannuation law has been changed, and the year to be eligible for super is, really if you were born after 1945 + 65 years of old age, prior to being born before 1945, alot people didnt have a think called super.. but a thing called a pension plan, our government has set down the law and its foundation…
realistically, if you have to be age 65 years and over to access your super (not quite true, some people are eligible at 55, though different superannuation law, and requirements, in being eligble to pull money out.) and being born prior to 1945…
1945 + 65 years = 2010 (being also compulsory, that you must draw down on your super at age 65)
then what is the majority of super made up of…
*** remembering not everyone is also born on the 1st of January, but through different dates of the year…
then easily and idea, it can be seen and suggested, that everyday and everyweek, money will be constantly drained from the share market (where super has been invested)
yes it will be replenished, each week, by those of us, who decide to contribute to our superfunds, but do we have enough people under the age of 65, to help continue, the aging population…
heres a little diagram.. something i learnt from Noel Whittaker at a seminar.. it might not be clear.. but you guys will understand…
85 – 95 *
75 – 85 **
65 – 75 ***
55 – 65 ****
45 – 55 *****
35 – 45 ******
25 – 35 *******
15 – 25 ********if the stars, are the peoples population, (number of people, then how will those same exact stars look, if we are living longer, and were will those same people at age 15 – 25 in 20 years time will appear on the diagram..
** also noting, that the younger poplulation is being less and less each year, due to, us not having more children and leaving that to a later date in life…
have a think and you will see…
Cheers,
sisplease also note..
not everyone, has access to pension plans, as they will either be eligible on the entry criteria.. will be almost impossible to gain…
not everyone has super, nor other assets as investments
if that is the case.. then can you see were the world is leading too..
honestly, theres nothing really that can stop this disaster..
what i honestly see the government will force people to work into older age retirement, and may also change the eligibility to access your super from age 65 to a later age of say 70 or even 75..
in doing this and so.. this doesnt do too much upon the economy in such a bad way, but will force and slow down, the see-able, future that is about to occur(but preventing people not to access there super for another 5 – 10 year, you can see the advantage, but also the governments betting that, less and less of us, would probably hit that old age, and being realistically, knowing and betting that many of us, will die before that age, if they make super, only accessible at a later age in life.. rather than 65…
Cheers,
sis^^^ keep in mind that China has only just kicked off their pension/superannutaion plans and the % of people covered by it is rather small and is expected to grow…by small they only have 110 million people covered so far.
As for net outflow …wrong …the rate at which people are putting money in today in todays dollars far outweighs the amount being drawn out by the oldies based on the low amouts they put in (keep in mind the 9% lever is only relatively new)
The bigger fear from those in the market is that there is not enough shares/bonds etc to cope with the huge inflows of money that are flowing and are expected to flow into the market.
Apparently somewhere between ’06 – ’08 the whole world will enter into an economic depression. Kiyosaki and other insiders have made commentary on this theory.
Can anyone here give us some insight in regards to Australia?
Buy IP’s now or hold?Fear will paralyse you if you let it! You need to take action and take a position in the market. If we do nothing then in the end we would all be dependant on whatever gov’t scheme happens to be around when we are to old to work.
What would you do if you get to 08 and the crash has not happened? Wait another 3 years or five years. Would you wait until 2010 or 2015. The truth of the matter is that noone has a crystal ball.
However, there is never a better time than now to take control of your life!
Good Luck
Don Nicolussi | Mortgage Broker - Home Loan Warehouse
http://homeloanwarehouse.com.au
Email Me | Phone Me"I think of finance as a technology, a way of getting things done." Robert Shiller
Kiyosaki is not the first person to come up with this theory. What they forget however is when most of this was thought up it was based on the premise that by the time the average baby bomer hit 46 there spending would start to decline. The reason being that 30 years ago most people would have children in there early 20s. So by the time they wre in there mid 40s there children were in the workforse uni leaving home ect. Today we are having children at a much later age. I am 42 and have 2 children under the age of 6. Clearly my spending has only just begun. Many in ther western world are in this position. Most figures indicated that by 2020 we will have doulbe the number over 65 and only a small number entering the workforce. The decade of 2020-2030 may be tough.
Nigel Kibel
http://www.propertyknowhow.com.au
Australian and New Zealand Buyers advocate
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This is a simple way to attract aention. If he says everyong will win $2m lotto, will you buy his books? That is why newpaper always chase the bad news etc.. Simple as that. I only read his “Rich dad and Poor Dad” – as an ispriation book, it is ok. I saw some other books in the book store — pretty boring and a way of presenting simple knowledge by “his so called best author” …. why does he do these … as normal like other weath creators to make money in an easy way …. It is better to run a 3 day seminar for $300 000 than to find a property to invest into it (more risks … )
Hey SIS you’re on the money again with many great points, i thought they were in my seminar he he …
You r wright 1965 + 65 = 2010 and i heard that 2011 was the dreaded date, so i don’t think that your 2015 prediction will b too far out.
getting the older gen to work longer????? i don’t think think they will b too happy.
Other major issue is health which is being forgotten about, the pension is one thing but who is going to cover the rising cost of health care.
resiwealth
Uh..1965+65 is 2030, just as a matter of interest. Those born in 45 have just about zero super and most of the boomers are going to have very little in super except for public servants who’ve had compulsory super since the year dot, but a lot of that’s govt funded. The population in Australia is higher now than it was in the baby boom and is growing, not shrinking.
And a lot of vigourous over 65s are enjoying a longer, part time working life as an option. It gives them their little luxuries, and their a social security bonus scheme for those who work beyond when they could claim the pension.
Nat_R is right – it’s going to be the funds inflow which will cause imbalances. Super funds are going to swing a big stick which may impact little investors negatively.
The public health expenses will be a worry, and they are political dynamite.
Retirement for the working class is only a 20th century concept. For most of history it was ‘work until you drop’. Then age pensions and superannuation plans (incl. 401k etc.) were introduced and initially, based on average life expectancy, one could only expect a few years of retirement.
Now it is an assumed right that one enjoys a good 15 years of peaceful winding-down. But, medical science is at the knee of the exponential and I think only a fool would argue that life expectancy will not continue to rise.
So, at what point will it strike the general public that the current promises of super amount to a Ponzi Scheme? I.e. you deposit 9% of your salary for 40 years, then live off this for another 20, comfortable enough to support your ailing health. Does it not seem ridiculous when presented like this? Don’t be lulled into thinking compounding is the panacea. Like all Ponzi schemes, this one will only work while enough new suckers continue to come to the table at an increasing rate.
When life expectancy hits 100, with 25 years of schooling (say) and retiring at 65, that leaves 60% of it fishing on a secluded beach. Might then people concede, “this won’t work”? It is so patently obvious that, as a consequence of our longevity, working life will be extended.
So to be clear, superannuation is a sensible concept, but in its current form it will not work. If you absolutely have your heart set on retiring at 65 and you are a long way off (e.g. 40 years of potential policy manipulation in my case), then you should be taking care of yourself now.
Caveat emptor, my assumption is that robots ruling or controlling the earth is at least another two hundred years away.
Hi,
What I find interesting is that the masses didn’t see the stockmarket of 1929 unfolding until after it happened. Why? Greed.
Nat R’s point about more sophisticated markets is well made, but at a grass roots level, people remain greedy which is why the boom and bust cycle will occur.
For example, where was the sense in the tech stock rise and fall? All this nonsense talk of ‘new economy’ stocks allowing inflated earnings multiples had sensible folk scratching their heads in astonshment.
So too in real estate… yields as low as 2% or even negative simply isn’t sustainable when reality overrides emotion.
My thought is that, having identified the problem about baby boomers and retiring, the government will work hard to soften the impact. As such, I doubt this will be the root cause.
Instead, something else will crop up as a result of humans thinking they are either too smart, or else the lessons dealt by history no longer apply.
As for Kiyosaki… I would probably still be an accountant if I didn’t see the sense in what he was saying in RDPD. Don’t accept anything anyone says in the financial world as gospel though. Take a concept and test it for yourself before conculding that it does or does not work.
Bye,
Steve McKnight
**********
Remember that success comes from doing things differently.
**********Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
Speaking of the tech wreck, anyone want to guess the highest capaitlised tech stock today? Google, at $80 billion which is a P/E of 50!!
Put option, anyone?
This brings on another point – the risk that super funds are going to contribute to the enxt stock market train wreck, not by withdrawing funds but by investing inthe wrong things and losing big time whenthey crash. As they did in 2000.
Interesting to see some discussion on the next depression. But let’s put our crystal balls away for a moment. Does anyone know what causes a depression? For example, let’s look at the depression from 1929. Any thoughts on what caused this rather depressing time in history?
* Do you believe that it might be caused by a sharemarket crash, because there have been plenty of crashes since then which haven’t had this effect.
* Do you believe that it might be caused by a really BIG sharemarket crash, because the crashes since then have wiped much more money off the market than the one in ’29.
* Do you believe that everyone just got ‘depressed’ about things? Because A LOT of people were depressed when the tech got wrecked. And no ‘depression’ then…
* Do you believe that a property market crash might perhaps cause a depression? Imagine a bank not lending you money to buy property in the US? Sounds like ’89, but no depression.
* Do you believe that we all agree on a date, and then quit our jobs when this date arrives?
* Do you believe that a war causes depression? No depression after WWII.
* Or maybe you believe that the date of the next depression comes from a book, or one of your financial know-it-alls?
What do you believe………….?
Originally posted by quiggles1321:Speaking of the tech wreck, anyone want to guess the highest capaitlised tech stock today? Google, at $80 billion which is a P/E of 50!!
Put option, anyone?
This brings on another point – the risk that super funds are going to contribute to the enxt stock market train wreck, not by withdrawing funds but by investing inthe wrong things and losing big time whenthey crash. As they did in 2000.
Now trading at a PE of 117 !!!!
I really don’t understand what all the fuss is about. [blink]
If you have a good investment strategy and we are all sophisticated investors here right!!![wink3] Then so what if there is a decline in the real estate market?
For properties that are bringing positive cashflow, and there is >50% equity in them, as long as they are in an area with more than one main industry, then tenants will still be able to pay rents, even in a depression. People are not going to run and live in tents, the world will still need rental properties!
The only downfall is that if there is a decline in property prices, you won’t be able to borrow against the equity to buy more. But you can even protect yourself against this by having a resreve of cash or as RK suggested, gold and silver (see front page of Richdad.com).
As far as Robert Kyiosaki goes, if a genius is someone that can take a complex subject like money and investing and explain it in a very simple way, then the guy is a genius!!!
We buy properties in all conditions. Can offer Immediate Cash Settlements, No Real Estate Agents Required
[email protected]
phone 0412 437 582The goverments plan to stop the problems of too many people over 65 is to allow more immigrants in to the country. There will most likely be a shift in policy to allow families with children to migrate to Australia more easily. More children means more demands for goods and services which then equates to more employment to supply these goods. The more people there are over 65 is also a bonus for investors. These people will need housing and this will most likely be in 1 br units or bedsits as they move out of their large 3-4 bedrooms homes and in to something easier to manage. Their may be a global depression as historical cycles suggest but with thorough planning smart investors will survive and expand quickly when it finishes and the new boom begins. So start planning for the boom that follows the depression and be positive.
I don’t think anyone is going to give you the answer you want to hear cause no one has that crystal ball we all wish we had, I say just buy when you get the a good oppurtunity and hold on to hem as long as you can.
Roy H.
L.R.E.A., Dip FS (FP)
Guardian Property Specialists (GPS)
http://www.gpsnetwork.com.auAgain, let’s put away the crystal balls and do some light research into the matter.
“I know of no severe depression, in any country or any time, that was not accompanied by a sharp decline in the stock of money, and equally of no sharp decline in the stock of money that was not accompanied by a severe depression.”
-Milton Friedman, 1976 Nobel Prize winner for economic scienceInteresting. But should we believe a Nobel Prize winning economist over a ‘guru’ or the local tabloid (or even our beloved crystal balls)?
What do you believe?
My two bobs worth: (wax lyrical)[biggrin]
The control and grasp of the modern economist on the direction and stability of economies these days is infinately superior than what it was before the great depresssion.
No-one was interested in business cycle research prior to the great depression because no-one fully understood the dangers. Its been an important field of study for a long time now, occupying some seriously big brains[dead2] and government resources, all bent on developing and implimenting fireproofing systems for economies, against the previously misunderstood and ignored forces within.
Things we now take for granted weren’t around back then. Leading indicators now give economists forewarning of change, thus allowing them to diagnose and stave off/reduce downturns. Automatic stabilizers such as the dole ensure minimum levels of demand are sustained, thus avoiding snowballing. [suave]
In the 1950’s, in the US for example, 30% of all jobs were in manufacturing. Today, that figure is 11%. The service sector today is 83%. Service orietated businesses are have fewer inventories, and less capital outlay. By nature, they are less susceptable to downturns. This small example, means that today a greater proportion of our economy is less cyclical than it was before.
What i am trying to say, is that economys today, whilst acted on by the same age old forces, are different animals to those of yesteryear, and are understood a whole lot better.
For me, if there was gonna be a huge depression tomorrow, i’d rather have my money in bricks n mortar any day than in shares. We live within our economies so there’s no escaping whats around the corner. It might be good, it might be bad.
I like to thing the sky won’t fall on my head, so i’m gonna go on buying houses, invest wisely, make em all affordable, below median price etc (rentable even in a depression). I’ll go on reading stacks of property/motivational books (RDPD was foundational for me), and do the best i can no matter what the economy does. I’m not saying lets all be ostriches, i’m just saying, keep a level head, do your due diligence, and be positive.
I don’t dwell on the negative hype of the media, because to them, good news is boring news, so bad news is great news (keeps us all glued to our sets). I long for the day when the news is about 30 seconds long and all they say is “Nothing at all of interest happened today (translation: nothing we can scare you about), it was totally oridinary and calm… Goodnight.” [chill]
Cabo Wabo
There is an old joke about economists …. they predicted 10 out of the previous 3 recessions …[biggrin]
200 years of Economic History indicate that economic cycles do occur.
At some time in the future, there will an economic downturn. When it happens and how severe it will be; are questions that I do not believe anyone can say with any certainty (sounds obvious, I admit).
From memory, most economic downturns were preceded by rapid and significant interest rate rises.
America’s interest rate is still low at 3.25% (America is the world’s largest debtor nation). Japan (the world’s largest creditor nation) has had very low interest rates for over a decade.
Australia’s official interest rate, at 5.5% is still not at a recession making level.
America’s interest rate will continue to rise (Alan Greenspan indicated this a few days ago) and it remains to be seen whether Australia’s rates have to rise in due course.
The macro economic factor that can lead to a lot of international problems is the extent of global fiscal imbalances, which is at an unprecedented level.
Only time will tell.
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