Financial Planner

A financial planner will say you are diversified if you are invested in different sectors. For example, you may invest in a mutual fund of small cap stocks, large cap stocks, growth stocks, precious metal stocks, real estate investment trusts (REITs), exchange-traded funds (ETFs), bond funds, money market funds, and emerging market funds. While you are technically diversified into other sectors, the reality is you are not diversified because you arc in only one asset class—paper assets. When the stock market tanked in 2007, all paper assets associated with the stock market tanked. Being "diversified" was of little use to those diversified in solely paper assets.

— Robert Kiyosaki; Rich Dad's Conspiracy of The Rich

As the old saying goes, "Never ask an insurance salesman if you need insurance." You know what the answer will be. Two reasons why financial planners recommend diversification are because they can sell you more paper assets, and because it spreads their risk in case they are wrong. Often, they don't have your best interests at heart.

— Robert Kiyosaki; Rich Dad's Conspiracy of The Rich

I listen to many financial advisors, but only follow the advice of a few. One advisor I follow religiously is Richard Russell, an expert on the stock market. This is what Richard Russell says about investing for the long term in stocks: "[Stock] Markets can be compared with gambling at Las Vegas. When you gamble at Vegas, you are bucking the house odds. Which is why if you play long enough at Vegas, you will always lose your money."

Russell also says this about people who invest in fairytales: "Investing in the stock market is a long-term tax on people who want something [profits] without doing any real work for those imaginary profits."

The problem with most financial advisors is they are in the E and S quadrant and work for the B and I quadrants. Most financial advisors are not in the B and I quadrant, nor are they rich people. Most are called brokers—stockbrokers, real estate brokers, insurance brokers. As my rich dad often said, "The reason they are called brokers is because they are broker than you."

— Robert Kiyosaki; Rich Dad's Conspiracy of The Rich

When you talk to most bankers, financial planners, or real estate brokers, they will tell you that a 5 percent to 12 percent ROI is a good return on your money. Those are returns for a person without much of a financial education. Another fairy tale or fear tactic they will say is, "The higher the return, the higher the risks." That is absolutely not true - if you have a solid financial education. I always look to achieve infinite returns with my investments.

— Robert Kiyosaki; Rich Dad's Conspiracy of The Rich