As they approach retirement, many U.S. workers naturally worry about Social Security and the degree to which it will support their financial well-being in their post-career years.
Robert Kiyosaki, author of Rich Dad Poor Dad: What the Rich Teach Their Kids About Money That the Poor and Middle Class Do Not!, once made a big statement on Social Security, 401(k)s and the importance of knowing the true difference between assets and liabilities — and it still applies today.
💵💰Don’t miss the move: Subscribe to TheStreet’s free daily newsletter💰💵
Staffing shortages, which can result in long wait times and inefficiencies in federal services, are a growing concern for current and future Social Security recipients.
Additionally, worries about long-term financial sustainability persist. Without legislative intervention, Social Security’s trust funds are expected to be depleted by 2033, potentially leading to a reduction in monthly benefits to roughly 80% of current expectations.
Related: Shark Tank’s Kevin O’Leary sends strong message on Social Security
Although cost-of-living adjustments (COLA) aim to increase Social Security payments, they often fail to keep pace with inflation. Economic uncertainty — particularly during recessions or market downturns — only heightens these anxieties, leaving some individuals fearing they will rely on Social Security more than they originally anticipated.
Kiyosaki highlights the financial insecurity facing many Americans about retirement and warns of the importance of understanding a key financial principle.
Rich Dad Poor Dad author Robert Kiyosaki is seen with a model Trump jet. Kiyosaki offers some strong words about Social Security, 401(k)s and understanding the difference between liabilities and assets.
Getty Images
Rich Dad Poor Dad author warns Americans on 401(k) plans and Social Security
Before discussing his statement on Social Security and 401(k) plans, it’s worth noting Kiyosaki’s very recent words that understandably have the potential to make current retirees and those saving and investing for retirement nervous.
In a May 4 post on X, referring to a prediction he made in his book Rich Dads Prophecy, Kiyosaki wrote about his belief that his prediction of the biggest stock market crash in history is happening now.
“I hope I am wrong….but as I forecasted….the biggest market crashes in stocks, bonds, and real estate….are about to happen in the very very near future,” he wrote. “This is why I have been investing in gold, silver, and Bitcoin.”
More on retirement:
Dave Ramsey sends strong message to Americans on 401(k)sShark Tank’s Kevin O’Leary warns Americans on Social SecurityScott Galloway sounds the alarm on Social Security, boomers
In Rich Dad, Poor Dad, Kiyosaki had a warning for U.S. workers about 401(k) plans and Social Security that continues to be relevant.
“Company pension plans are being replaced by 401(k) plans,” he wrote. “Social Security is obviously in trouble and can’t be relied upon as a source for retirement.”
“Panic has set in for the middle class.”
Related: Dave Ramsey sends strong message to Americans on 401(k)s
Beyond Social Security and 401(k)s, Robert Kiyosaki discusses assets and liabilities
Rich Dad Poor Dad illustrates two opposing financial mindsets Kiyosaki encountered growing up.
His “Poor Dad,” his biological father, valued job security and formal education but struggled financially. In contrast, his “Rich Dad,” his best friend’s father, was a self-made entrepreneur who emphasized financial literacy and investing.
The book urges readers to follow the “Rich Dad” philosophy to achieve financial independence.
A big part of that, Kiyosaki explained, is understanding the true difference between assets and liabilities.
“An asset puts money in my pocket,” Kiyosaki wrote. “A liability takes money out of my pocket.”
He recalled his “Rich dad’s” words: “Rich people acquire assets. The poor and middle class acquire liabilities that they think are assets.”
Looked at from that perspective, assets include things that generate income or grow in value, such as stocks and bonds, rental properties, businesses that generate passive income and real estate that appreciates over time.
Liabilities involve things that drain money through expenses or debt, such as mortgages on personal homes, car loans, credit card debt and student loans.
Related: Veteran fund manager unveils eye-popping S&P 500 forecast
“You must know the difference between an asset and a liability, and buy assets. If you want to be rich, this is all you need to know,” Kiyosaki wrote. “It is rule number one. It is the only rule.”
“This may sound absurdly simple, but most people have no idea how profound this rule is,” he continued. “Most people struggle financially because they do not know the difference between an asset and a liability.”
