'Savers are losers,' best-selling author warns

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Best-selling author Robert Kiyosaki believes there is a silver lining in the clouds over the sluggish U.S. economy in the form of silver itself."If you have $10,000 cash, I would take $5,000 and buy silver either in an exchange-traded fund or coins and sit on the rest instead of keeping all of it in cash because the purchasing power of silver will go up and cash will go down," Kiyosaki said.The celebrated author of "Rich Dad Poor Dad" recently discussed his views on the current economy in a wide-ranging interview in which he recommended that people look for bargains while real estate and stock prices are low, and offered a cursory glimpse of his own investment strategy in these changing times.As a personal-finance guru best known for challenging traditional beliefs about the real definition of assets and liabilities, Kiyosaki, 60, has earned a reputation for offering what some would say is unconventional advice.His prevailing theme is that great economic changes in this generation behoove people to think more like investors instead of wage earners and consumers."Right now, everyone has to learn to invest," he said. "I always say savers are losers. The purchasing power of the dollar has dropped and it will continue."Kiyosaki predicts that silver, which is trading for about $17 an ounce now, will reach its 1980 record high price of $52.50 an ounce in three or four years. Unlike gold, which is hoarded, silver is an industrial commodity used in products such as cell phones and television sets. And like oil, the supply of silver is declining as demand rises."For the average guy, silver is the way to go," Kiyosaki said, adding that gold has gotten way too expensive for most people at this point. "Twenty-eight years ago, silver was $50 an ounce. Gold was $850. Today gold is at $900 an ounce. Silver is at $17. Which do you think is the better bet? I think silver."As for real estate and stocks, Kiyosaki says now is a great time to be an investor."The real estate and stock market are having sales," he said. "So, this is the time to look for bargains. Between 2004 and 2005 was the worse time for real estate and stocks."Professional investors don't buy high. That's when amateurs buy. A lot of people getting hurt now are the real estate investors who got in late. Amateurs will buy high and sell low. That's not too bright."The trouble with stocks, he said, is that U.S. companies that have always been considered good solid companies are more vulnerable to foreign competitors.General Motors will face stiff competition if and when India-based Tata Motors releases a $2,500 automobile on the world market. The Chinese are building their own jetliners. Microsoft could get hurt by open-source and Internet-based software."I really don't know what (would be considered) a good company and what you invest in," Kiyosaki said. "I'm investing in shipping companies because they'll carry commodities from country to country."Also, the companies I invest in pay a dividend. I only recommend companies with good management that pay a dividend. I want the dividend, the cash flow. I never want to sell stock. I want the check every month."Kiyosaki, who grew up in Hawaii and lives in Scottsdale, Ariz., said low interest rates could make this a great time for renters to become homeowners, but only if they are financially prepared to make the leap."Banks are so afraid of making loans it's harder to get a down payment," he said. "The problem with subprime loans was you needed no money down and banks would loan 120 percent of the value. ... It's harder to go from renter to homeowner in this (environment) because banks are not doing those deals. If you have cash, it's easier to move from renter to homeowner. If you don't have cash, you're still hurt."Kiyosaki's book series has sold more than 28 million copies worldwide since its release in 1997."Rich Dad Poor Dad," the initial book, is the story about the two fathers he had. One was his biological father, the other, his best friend's father. His father earned a doctorate, had a well-paying career, but lost his job after rising to the top of his field and ultimately died broke. His friend's father was an uneducated man who became wealthy. The book is about what the two men taught him about money.It stirred controversy with its declaration that contrary to what people have been told, the house they live in is not an asset, but a liability because it costs them money rather than pays them an income.(Tim Grant can be reached at tgrant(at)post-gazette.com.)(Distributed by Scripps Howard News Service, www.scrippsnews.com.)