HOW TO PROFIT FROM A CRASHING STOCK MARKET -Robert Kiyosaki


(funky music) – [Narrator] This is
The Rich Dad Radio Show. The good news and bad news about money. Here’s Robert Kiyosaki. – [Robert] Hello, hello,
hello this is Robert Kiyosaki with The Rich Dad Radio Show, the good news and bad news about money. And, I’m going to say
something very important so listen up here. Look, for some people
bad news is good news. And for other people
good news is bad news. So, today we have a very important guest because you’re going to be finding out that as this market is crashing, it’s very good news for some people. And for other people,
it’s terrifying news. But, for some of you, what you might hear will scare the you-know-what out of you. And for other people, it might
be the most exciting thing you can ever hear. So, the question I have is, well, is the market going to go up, or the market go down. Or, the stock market especially. I mean that’s what people follow. But, anyway, I’m watching bubble vision, CNBC, and they’re saying
“Oh, we had a bounce, “that’s going to be
another rally’s coming, “we’re going into a bigger future, “the fundamentals are strong. “Unemployment is low,
economy’s, jobs are plentiful, “yadda yadda yadda yadda.” And other people, I was at dinner, and people were like, “Is it
going to keep going down?” And I said “God, I hope so.” And they go “What, what?” And they should understand this. In any market, all markets go up, and all markets come down. I’ve been saying this
for the last 70 years, we’ve been in a secular, bull market. That means since the end
of World War II, basically, the U.S. market has kept going up. So, you didn’t have to do much. You just put your $10 down, and five years later it was $20. So, the people who are
so used to a bull market for the last 70 years. But now it’s chopping up
and down, and up and down. Many people are saying well,
it’s gonna to keep going, it’s gonna to keep going. And other people saying
no, it’s going to go down. But today’s guest is going to tell you why he doesn’t really care. You see, if you can understand that, and that’s why The Rich
Dad Radio Show is here, because you have some
people say it’s gonna go up, and other people say the
market’s gonna go down. So, our guest today is an old time friend, Dr. Alexander Elder, he’s a
professional trader and author. I got to know him via his work, and his students in Australia. And, he is an ardent follower of very, very successful traders who understand how Dr. Elder thinks,
how he looks at markets. It’s not that he doesn’t care, but if the market’s going
up, he’s gonna make money, and the market coming down,
he’s gonna make money. It’s not that you don’t care, to me that makes more
sense than what I call the 401k, buy, hold, and pray. You know, let’s pray it keeps going up. And the whole market is
completely manipulated, even the gold market’s manipulated. So, what are you praying for? You just know it’s gonna go up and down. So, we’re going to hear
some very important talks from Dr. Elder today as how you can look, we’re going to look first at the macro, the big world economy, you know, why is it going up, bouncing up and down. But also, what you might need to do to see the world as a
person who is a trader. Not a traitor, a trader,
that when the market goes up you make money, when the market
comes down, you make money. ‘Cause that’s kind of
how I look at everything, and so that’s why over dinner,
at Kim’s mother’s house, I wasn’t the most popular guy there because I said I don’t care if it goes up, I don’t care if it goes down. If it goes down, I’m gonna make money. If it goes up, I’m gonna make money. Now, the guys who cared
are what we call long. – [Kim] They have all of their money in the stock market.
– All of their money in the stock market. – [Kim] And their retirement is based on the stock market going up. – [Robert] That means they’re long, they’re not short, right? – [Kim] That’s right. – [Robert] It’s an
interesting conversation. – [Kim] It was an
interesting conversation, but you know what I find fascinating, is how the stock market has become the main indicator of the economy. If the stock market’s
up, the economy’s good. If the stock market’s
down, the economy’s bad. What about jobs, what about production, what about all that? Our guest, Dr. Alexander Elder,
is a doctor of Psychiatry. So, he’s a professional trader,
and a doctor of Psychology. And we were talking before
the show, and he said, Dr. Elder said when a
person has money at risk, intelligence goes out the window. So, welcome to the show, Dr. Elder. – [Dr. Elder] Thank you
very much, thank you. – [Robert] So, Doctor Elder,
let’s give a macro view, when you step back and you look at China, you were just in Africa, Europe, you know what I watch is the debt market, bond market, more than anything else. – [Dr. Elder] Yeah. – [Robert] What do you
watch as a stock trader? – [Dr. Elder] My time
frame is not hugely long. I do have some very long competitions, but most of what I do is win. And every morning, I do my homework, I have a spreadsheet which
I fill out every morning. First of all, I begin
by looking at Australia and Japan, because the market’s open in that part of the world. Then I look at U.K., and Germany, and there’s, like a wave
running across the globe. Begins in Asia, persists through Asia, comes to us, of course. American market is the most important. From us goes on to Asia. And you want to see in what
direction it’s flowing, and how the way something’s
changed the direction. I look at Baltic Dry Index, which is the cost of dry
shipping goods on the ocean, and that’s a super sensitive
indicator of world economy. – [Kim] Why is that, Dr. Elder? – [Dr. Elder] Because most economy, most trade involves transport. We’re buying electronics which
get shipping off from Asia. We sell wood that gets
shipping to Asia or to Europe. Machinery, and everything goes by boat. And the cost of shipping
by boat is a very, it’s a very sensitive indicator because when the economy
picks up worldwide, the cost of shipping increases, because there’s only so many ships. – [Robert] So that’s
called the Baltic Dry — – [Dr. Elder] Baltic
Dry, it is called that because the exchange is located on Baltic Street in London. – [Robert] Right, that’s kind
of near and dear to my heart, because I went to the school
to drive merchant ships throughout the world, so I understand what you’re talking about. It’s carried by trade, so anyway, why is the Baltic Dry Freight
Index so important to you, and what did it mean in 2007? – [Dr. Elder] Just a minor correction, there’s no word freight in it, BDI, Baltic Dry Index. – [Robert] Oh, Dry Index, okay. – [Dr. Elder] It’s very important because the massive percentage of world trade is carried out by ship as goods move between the continents. Very expensive goods get flown, but everything else gets shipped. And so as soon as the economy
starts picking up steam, the cost of shipping goes up, and when the economy starts
dropping a little bit, just getting a little looser,
cost of shipping drops. And so you can really
tell when a depression or reset is coming or is not coming by looking at what’s
happening with Baltic Dry. I look at it every morning,
it’s available on Bloomberg, it’s available everywhere, so
that’s part of my homework. And then I proceed, I
make a, I have an opinion of what’s happening in the
world, what’s happening in the United States, and
then I look for my trades. – [Robert] So what happened in
2007 that gave an indication that something was about the change? – [Dr. Elder] The economy was
booming in 2007 and Baltic, and the demand for shipping was immense, and Baltic Dry Index reached
a record number of 10,000. It was trading at 10,000 points. Within a year it dropped
from 10,000 to 1,000, and everybody was still fat and happy, and the market, stock
market was still going up. But of course a vicious bear market ensued a few months later in 2008 and Baltic Dry was
leading that whole picture except very few people paid attention. – [Kim] So when that happened, Dr. Elder, what did you do trading wise? – [Dr. Elder] I was selling stocks short, trading’s a two-way street, you can make money on the way up and you can make money on the way down. When things go up, you
obviously want to own things, and when things go, when
things start going down, sell short. Transactionals love
shorting because stocks fall about twice as fast as they rise, and if you know what you’re doing, the money comes much faster on shorting than it comes from buying. – [Robert] So as a professional, let me give you some of
Dr. Elder’s background. He was born in Leningrad
and grew up in Estonia, the great country of Estonia, and took medical school there at age 16. At 23 while working as a ship doctor, he jumped a Soviet ship in Africa, received political asylum in the U.S. and has worked as a
psychiatrist in New York City, and taught at Columbia University. But he is most famous for his
book, “Trading For A Living.” His latest book “The New
Trading For A Living: “The Psychology” keyword
“Discipline, Trading Tools “And Systems, Risk Control
and Trade Management.” So the thing here, I want to talk to, so Doctor Elder looks at the big picture but then he goes into what’s called macro and then he goes micro. That’s the big difference between, my question before we got on the air, I’m watching bubble vision, CNBC, have all these ads saying,
“All you have to do is trade for a living, you can
make millions of dollars.” And I cringe every time I
hear them say that because, Dr. Elder’s, every time
we’ve been on this program it’s not quite that easy, right, buy low and sell high, all that stuff? – [Dr. Elder] Trading for
a living is the hardest way to make an easy dollar. Joke. Trading is very hard, trading, intellectually trading is very easy because you’re dealing
just with five numbers, open, high, low, closing
price, and volume. Psychologically it is the
hardest game in the world. And once people have their money at risk, that’s when they just start going crazy. That’s when they lose rational judgment. Greed and fear kick in and they may go through
an emotional storm. So being intelligent, having a few dollars, is absolutely a no brain to your success. It takes a lot of time
and it takes a huge amount of discipline to learn to do it right. – [Robert] Right, right.
Sometimes people succeed. I often equate trading for a
living like the game of golf. You know, in theory, the
game of golf is very simple, but the game of golf is inside of you. Has very little to do
with the golf course. Is that correct, Kim? – [Kim] That’s correct. That’s a lot of psychology that
goes into the game of golf. – [Robert] So, also, his other book was “Come Into My Trading Room,” Barron’s 2002 book of the
year, and his earlier book was “Trading For A Living” in 1993. So for those of you
who watch bubble vision like I do every morning, I watch it and I see these guys
saying, “All you have to do “is buy low and sell
high” and all that stuff, or I love this one, “Flip This House.” Flipping a house is trading, you know, and I look at it and I cringe because as Dr. Elder knows you might put, let’s say buy a $300,000
house, you put 60% down, but you’ve got $300,000
that could reverse on you and all that, is that correct, Dr. Elder? – [Dr. Elder] Yeah, with
stocks of course and especially with futures the leverage is even greater, and then of course what
lots of beginners do, they don’t even have enough
money to trade stocks so they say, “Well, let me trade options.” In my entire life, in my
entire professional career, in which I’ve spoke to countless people, I have never ever once met
a person who made money who built up capital buying options. Buying options is a mug’s game. Professionals sell options, we write them. But it’s true beginners who think they can buy $5000 of options and have
fifty thousand a month later. – [Robert] Correct. – [Dr. Elder] It’s unprincipled, unprincipled, dishonest people prey on this poor, essentially low, well, poor individuals by selling
them a bill of goods and saying, “Oh, this is
easy, sign up to my service “and you’re gonna be rich
before the year is out.” Such a lie. – [Robert] So when we come back, we’ll be talking to Dr. Elder about the era of fake
news, but once you hear what he says here, be very careful, ’cause I’ve traded options
and exactly as Dr. Elder says, man, it is very very risky. It’s like buying real estate. An option is called a down payment on a mortgage for a house. It’s the same thing. All these guys from “Flip This House” and “Flip That House”, I sit there and cringe simply because
you’ve got so much at risk. So please listen to what I’m saying here, I’m not saying you can’t do it, I’m saying if you’re gonna do it, just go in with your eyes open. So when we come back
we’ll be going to the, talking to Dr. Elder
about the era of fake news and how do you prepare yourself to get trustworthy information about the economy? – [Announcer] You’re listening
to The Rich Dad Radio Show, with Robert Kiyosaki. – [Robert] What is your
number one expense in life? Your number one expense? It’s taxes, and I want
to ask the question, is how come there’s no
financial education in school, but why isn’t there
education on taxes, either? You know, they tell you to
save money, which is stupid. They tell you invest in the
stock market, which is stupid. But why don’t they teach you about taxes? Here is Rich Dad advisor Tom Wheelwright, we’re talking about a
revision for his book “Tax-Free Wealth,” welcome, Tom. – [Tom] Thanks, Robert. – [Robert] So what’s the
“Tax-Free Wealth” about? What’s different this time,
so we’ve got revised edition? – [Tom] Well, so, what we
did was, this is the first major tax reform we’ve
had in 30 years, 2017. – [Robert] It was ’86 was the last one. – [Tom] ’86 was the last one, back when I was in Washington, D.C. – [Robert] Some of the guys got wiped out because of that tax change. – [Tom] They did, they did. It wiped out an entire
industry, savings and loans. This new tax law is just as big, but in a very different way, it affects different industries. You know, the tax law is
always a series of incentives, and the question is
always which incentives and which ones apply to me, and so the key to revising
“Tax-Free Wealth” was what is, what changed so much in this new tax law that we can absolutely take advantage of, I mean, seriously, the amazing incentives. For example, I mean, the bonus
depreciation, for example, for real estate is unbelievable. You buy a million dollar apartment, get a $300,000 deduction or
more the very first year. – [Robert] So if you
want to make more money and pay less taxes like
Donald Trump and myself, get Tom’s book, “Tax-Free Wealth.” – [Announcer] Don’t be like Charlie. Charlie is that do-it-yourselfer
who does himself in. Do-it-yourself is good for tile and grout. It is not good for asset protection. Charlie thought he’d save a few dollars forming his LLC online with
no guidance he did it wrong. When he sold the property, he lost thousands and thousand of dollars. He did himself in by
trying to do it himself. Don’t burn yourself, use Corporate Direct to set up and maintain your LLCs and corporations. Corporate Direct is owned and operated by attorney and Rich Dad
advisor, Garrett Sutton. Garrett wrote the best sellers,
“Loopholes of Real Estate” and “Start Your Own Corporation.” He is Robert Kiyosaki’s
attorney for asset protection. He and his team will do it right. Visit them at corporatedirect.com
or call 800-600-1760. Mention Rich Dad and receive a hundred dollars off your formation fee. That’s corporatedirect.com.
Corporatedirect.com. – [Announcer] It pays to listen. Now back to Robert Kiyosaki
and the Rich Dad Radio Show. – [Robert] Welcome back, Robert Kiyosaki of the Rich Dad Radio Show, the good news and bad news about money, and we have a very special guest
today, Dr. Alexander Elder. Now you can listen to the
Rich Dad Radio program any time anywhere on iTunes or android and all of our programs are
archived at richdadradio.com, and the reason we archive them is because we’re an education company. We don’t recommend buy this or sell that, but we recommend you do
listen to this program one more time, especially
if you have this idea that you can make millions
of dollars trading stocks and options, or flip this house, all these things that
people pitch out there. I don’t think it’s reality that what a lot of
people are talking about, so I would suggest you
listen to this program again and be cautious, you know,
making decisions with eyes open, being more aware that’s all I care about. So, you can listen to this radio program at richdadradio.com,
you listen to it again, you’ll pick up twice as much. But also if you share
with your friends, family, and especially business
associates and discuss it, you’ll learn even more because we’re a financial
education company and we’re not recommending you do anything but listen to this program one more time. – [Kim] So Dr. Alexander Elder,
he’s a professional trader and he’s a doctor of psychiatry, which goes hand-in-hand because trading can be
such an emotional subject. He’s also the author of, his first book was “Trading
For A Living” in the 90s, and then he updated it to
“The New Trading For A Living” that came out a few years
ago, psychology, discipline, trading tools and systems,
risk control, trade management. – [Robert] And once again, the
reason we had Dr. Elder on, ’cause he’s a teacher. I first came across Dr.
Elder’s students years ago in that beautiful
country called Australia, and they just raved about him. He’s a great teacher,
he’s a great teacher, versus a lot of these people on television and stuff like that, they
may be real or may be not, but I don’t hear too many
people raving about them, that’s the big thing here, so at Rich Dad we like to
have things be at least real, give you the good and the
bad, and as Dr. Elder says, you know these people are
teaching to trade options, he’s never seen anybody make money at it. And these guys who flip houses, “Flip This House” and all
this, I sit there as a guy who, I own a lot of real estate, I don’t know if I’d flip a house. I have, but I really wouldn’t
want to do that today. – [Kim] There can be
a lot of risk in that. – [Robert] Yeah, because
the prices are so high, and stuff like, but anyway, I was driving to work
to do this program today and these DJs got on board and said there was a survey done
and they asked adults, what did school not teach you that they wished they taught you? He said, 100%, it was why don’t
they teach us about money? And for those who have listened
to the Rich Dad Radio Show, we been around, Rich Dad’s
been around for 22 years now, and we said why don’t we
teach kids about money? And high schools still
don’t teach any of this, anything about money, and I
don’t think it’s a mistake. So that’s why we have
the Rich Dad Radio Show, we’re here to educate you,
not tell you what to do. So Dr. Elder was telling us about what he, what indicators he looks at, indicators, what’s the real facts, Jack? So the Baltic Freight Index,
it’s the amount of trade – [Kim] Baltic Dry Index. – [Robert] Dry Index. – [Kim] Baltic Dry Index. – [Robert] I went to school at
U.S. Merchant Marine Academy to drive ships. So anyway, Dr. Elder has a story about him going to a school in Vermont and volunteering pro bono, mean for free, going to teach them about how he does what he does so he could show their kids. So Dr. Elder, would you
mind sharing what happened when you tried to teach
the class about money? – [Dr. Elder] The story
actually has a pre-story. Back when I was living in New York, I was very friendly with
the principal of the school to which my kids went, and one time I was having
lunch with the guy, and I say to him, “There are only two topics
you must teach in school, money and human relations. Everything else is optional. So the guy says, “Well, we
already teach human relations, why don’t you come and teach money?” I taught money and trading
in a private school in New York for a year. I opened a $40,000 account, we made money at the end of the year. I gave half the profit to the school, half the profit distributed
to class members, but I ended up hating the kids, it was, there was a
bunch of spoiled brats, I really didn’t like the kids. – [Robert] Human
relations, human relations! – [Dr. Elder] And human
relations were backwards, so five, six years ago, my
wife and I moved to Vermont, very pleasant mountain environment, I go to local, I say, our
kids are gonna do good here, so I go to local high school, and I say to them, “This is
who I am, this is what I do, and this is the course
I taught in New York, and this is what I would
like to teach here, for free of course, I don’t
want a penny from you, I’ll teach this course,
I’ll open a $50,000 account and at the end of the
year if we make any money, my money will be at risk,
if we make any money, I’ll distribute it to class members, and so that’s the program.” So, back and forth, we’re
planning the whole thing, they got six or seven kids who
were going to be in my class, and then they said, well, I said to them, “Here is a book I want all
of you to read in summer, and the first thing we’ll do,
first Monday in September, we’re going, I’m going, the
first school day in September, I’m going to give you a test, just to make sure you’ve read the book because just to show how, show me that you’re diligent about it.” And the school people say, “No, no, not the first
weekend in September, first in December.” Why? Oh, because we have soccer and this class would interfere
with the soccer practice. And that’s it. I said, look, we cannot start in December because we have to cover so much material and we have to start trading
and then school breaks and vacations and I go away on trips, there’s simply not enough money to cover theory and to trade, no, no, we have to start in September.” “No, no, no, we cannot start in September because of soccer.” And there it was, we’re going nowhere, I turn to the kids and I say, “Kids, if you think you can make a million dollars playing
soccer, you should play soccer.” And that was the end of it. – [Robert] So was that the end of your teaching career
in the school system? – [Dr. Elder] Yeah, yeah, yeah. And then my wife says, “Oh, if you want to teach, there is a beautiful private
school about 40 minutes away, you could talk to them,” I said, “I don’t want to drive 40 minutes, I want to drive one mile down
to my local school here.” It’s not the business, professional trade, I just want to do it and I’m not, in any case, so that was that was that. The value of education, the value of education is really not high. – [Kim] Well, we tried to, we tried to donate like
500 Cash Flow games to the local school system here in Phoenix and they said, “If you jump
through these 50 hoops, we’ll maybe consider it.” We said we’re giving them to you, you don’t have to pay for them.
“Nope, we don’t want ’em.” – [Robert] And the problem
is, you know, Dr. Elder, is you jumped ship in Africa, a Soviet ship, was that because you didn’t care for communism and socialism? – [Dr. Elder] I hated communism, I hated, hated, hated communism. As a matter of fact, there is a book, as a young man, I was
going to change the world. There’s a book put out by the Hoover Institution
at Stanford University, “The KGB Wanted List,”
I read that book twice. I didn’t like them, they
didn’t like me, the communists, and that’s why I risked my life to jump ship and to come here. – [Robert] You know, as Karl Marx says, “The purpose of socialism
is to get to communism.” This is what Margaret
Thatcher said about socialism, “The problem with socialism is that eventually you run out
of other people’s money.” Isn’t that true? I mean, we have now
more socialists running for political office in
America than ever before. I mean, this AOC, Alexandria, she’s a very attractive young woman and she went to a very fine school but she wants free education, free food, free housing, free medical.
– And a lot of young people are starting to mouth the same doctrine about socialism.
– And look what happened in Cuba and Venezuela, I mean, Dr. Elder, isn’t one of the reasons
you came to America is the ability to be a
capitalist to make money? I mean, so what do you
think about all this drive inside our school system to
teach kids to be socialist and communist without knowing it? – [Dr. Elder] You know,
our former Vice President, Al Gore, received a Nobel Prize
for this film that he made, “An Uncomfortable Truth.” I went to see the movie, to me it looked like one PowerPoint. I never knew they gave
Nobel Prize for PowerPoint, but in England eventually the
government educational office decided that they weren’t
going to show this film in class because it was so full of lies they had to provide the kids
with alternative materials to show them this was
just one man’s opinion and by no means true, this essentially leftist
communistic agenda the government is going
to control our lives, do everything, it’s absolutely pervasive. I don’t see much of it living
in the mountains in Vermont, I mean, we decide, our form of government
here is a town meeting, first weekend in March,
everybody comes together and decides all the questions. But once they go to New York, where we have essentially a
communist running New York City, this deBlasio guy, it’s
shocking, it’s shocking. But I’m no longer a kid
trying to change the world and I can just look at it and say, this is utterly insane, shrug my shoulders and
go on with my stuff. – [Robert] Thank you for saying
that, so this whole thing, the reason The Rich Dad was formed nearly 22 years ago now is because we need financial education, which will never, ever, ever,
ever happen in our schools. I mean I taught in
schools in South Africa, it was horrifying, it was the most, one of the most horrifying
experiences of my life and I’ve never gone back to teach again, because the teachers
are, they don’t know it, they’re just like my family,
they’re hardcore socialists and communists and that is because they don’t know anything about money and they think the government
should give everybody everything for free and as you and I know, it’s other people’s money. It’s my money, it’s Robing Hood. Take from the rich and give to the poor and that’s why we have such a huge gap. So, I think one of the most
important things he said, the last time we were on, what does it take to get
to be nearly as good as you in trading for a living, where you can make money going
up and make money coming down and live anywhere in the
world you want, you know, what they promise you in
all of those infomercials. What does it really take? – [Dr. Elder] It takes a
tremendous amount of work, it takes commitment and focus and thinking, of course. Now, I did not learn how to trade just by picking up a few books
and taking a few courses. It was years of blood, sweat and tears. Well not so much blood,
but sweat and tears, until I finally figured out the game and started the line with
taking money out of the markets. And I continue to do the work. You know, not long ago, I went with my wife and
another couple to Janis and I was in the midst
of a big trade exchange. So every morning they have
some breakfast together and then they would go
and sight see in Venice and I found a cafe with an internet. I would sit outside with
my computer and cigar and do my work all day in
Venice and then, you know, have a very pleasant dinner
with my wife and my friend, but I don’t know too many
people who are committed enough to be in a foreign country where you’re supposed to
throw everything to the wind and just enjoy yourself
and continue working. It’s silly if it works
and builds character so you can be, well I don’t own a tv set, haven’t owned a tv now for about 20 years. But I see them on YouTube. They make trading sound easy, which it’s the opposite of
easy I will assure you of that. – [Kim] So if somebody’s
got a full-time job and they’re not happy in their job and they really would
like to do something else and this sounds really
interesting, where do they start? – [Dr. Elder] They have,
well short-term trading is really probably not for them. Because they cannot be
in front of the screen, but they have to think hard and to figure out what’s
the next big idea. Now those figures don’t
happen every month, but if you can generate or discover or find out one or two a year,
you can do very well in deed. For example, last year, one of the biggest, one of the two biggest problems of the year for me was Brazil. When they had an election, I knew that they had
an election coming up, and then in July I was in Chicago and I had dinner with this client of mine, who is a former Brazilian army captain, been in America 20 years
and we talked about this presidential
election coming in Brazil, they have this guy Jair
Bolsonaro running for president, also ex-paratrooper camp captain and immediately hated him. That he was, he’s an army captain, he’s not your touchy feely soft type. But he hated corruption and he hated crime and he ended up being
elected president of Brazil. Brazil is a rich country, rich in people, rich in resources, they have technology, they build jets which
they sell to America. But it’s completely crime
ridden corrupt place. And having the new management come in, they call him Little Trump in Brazil, was a sign of progress for the country. The immediately hated him, hated him, the economist magazine from London had him on the front cover
“The Danger of Brazil.” Well, meanwhile the guy
got elected in a landslide and the Brazilian market
just went from stale and just went up. And to me, anytime anytime an economic
nationalist gets elected, the country has a bull market. It happened in India
when Modi was elected, I missed that one unfortunately, then of course we have Trump
elected in this country, I didn’t miss that bull market and then Bolsonaro in Brazil. Now, this is an example, this is just one of the
examples of a big idea that doesn’t occur very often, but you have to be alert to them. What else? – [Robert] Well that’s like, Doctor Elder, you know about three years ago, you told me to watch Petrolbras because it was going from like $35 a share or something or $70 a share and it dropped down to a dollar a share and so by that time I was in on it, it was at three and so you’re, just listening to you about Petrobras and what is it at today? – [Dr. Elder] 15.25 was at six. – [Robert] So that’s what
Doctor Elder is talking about. It’s not about buying, holding and praying for the long term which they
teach you in 401k school. But anyway there’s so
much a person can learn, so we’re kind of out of time. Wish I could talk to you longer, but again you’ve got this new book, ” New Trading for a Living,” can you tell us a little about your book and why people should get it? – [Dr. Elder] Well, it’s translated into 16 different languages. It is the world’s best seller
when it comes to trading. There are several good books out there, but I think this is the only complete book because it covers
everything from psychology, to market analysis, to risk
management, to self management. So that’s what makes it unique. – [Kim] And self management, self management is probably
the most important, isn’t it. – [Dr Elder] That’s right, that’s right. – [Robert] So Doctor
Elder, thank you very much for being a fabulous
contributor to our program. Thanks for being a great real teacher. I have a new book coming
out Ellis called Fake, Fake Money, Fake Teachers and Fake Assets. So the reason I, at the
Rich Dad Radio Program, we pride ourselves in having what I consider
having real teachers. You can speak badly about real estate, you can speak badly
about anything you want as long as it’s coming from
your real point of view. And that’s why I appreciate
having you on the program. You tell it like it is,
that’s why I appreciate it. So once again Doctor
Elder, thank you very much. – [Kim] Thank you Doctor Elder. – [Dr Elder] Thank you for
everything you do for the people, because I’m sure you’ve changed
countless people’s lives with your rich dad, poor dad concept. – [Robert] Well we do our best, we just wanna be real out there and tell people what we see from our little corner of the world. So once again, thank you Doctor Elder. – [Kim] Thank you so much. – [Robert] And when we come back, we’re gonna take you to our
most popular part of our program is Ask Robert, where you get
to ask me your questions. – [Announcer] You’re listening
to the Rich Dad Radio Show with Robert Kiyosaki. – [Announcer] Don’t be like Charlie, Charlie’s that do-it-yourselfer
who does himself in. Do it yourself is good for tile and grout, it is not good for asset protection. Charlie thought he’d save a few dollars forming his LLC online, with no guidance, he did it wrong. When he sold the property, he lost thousands and
thousands of dollars. He did himself in trying to do it himself. Don’t burn yourself, use
Corporate Direct to set up and maintain your LLC’s and corporations. Corporate Direct is owned
and operated by attorney and Rich Dad advisor Garrett Sutton. Garret wrote the best sellers, “Loop Holes of Real Estate” and “Start Your Own Corporation.” He is Robert Kiyosaki’s
attorney for asset protection. He and his team will do it right. Visit them at corporatedirect.com
or call 800-600-1760. Mention Rich Dad and receive
$100 off your formation fee. That’s corporatedirect.com,
corporatedirect.com. – [Announcer] Financial freedom begins with financial education. Now back to Robert Kiyosaki
and The Rich Dad Radio Show. – [Robert] Welcome back, Robert Kiyosaki and the Rich Dad Radio Show and the good news and
bad news about money. Let’s go and thank our guest
today, Doctor Alexander Elder, he’s a professional trader and author. Was born in Leningrad, became a medical doctor and jumped ship. And he’s also grown up in
Estonia, great country. And he jumped ship in Africa and he now trades for
a living in the States. He loves capitalism, he hated
socialism and communism. The reason I mention that is that’s where our
country is going right now. We’re becoming socialists
as well as communists and that is kinda frightening because I went to Vietnam
to fight for capitalism, not socialism or communism. But as you know our school
system filled with people. Are they good people,
most school teachers? But because without financial education, most are hardcore socialists. Some lean through being communists. And it’s just a philosophical thing. It’s all psychological
as Doctor Elder says. And he says, when it comes to
money, people go crazy anyway. So, they’re all nuts. – [Kim] He says, as soon as
someone has money at risk, then intelligence goes out the window. And he’s a doctor of psychiatry, so it’s a perfect match to be trading because it’s such an emotional thing and it’s like you said earlier,
it’s like the game of golf. The game of golf is really in your head, more than in your skill, physical skill. – [Robert] It has nothing to do with the golf course, really. – No, no and Doctor Elder’s an author of “The New Trading for a Living.” And his website is elder E-L-D-E-R.com. – So ladies and gentlemen,
thank you for sending your, thanks to Doctor Elder and
you can submit your questions to [email protected] And now we get to these questions. But once again, please listen
to what Doctor Elder says, I don’t necessarily agree
with him, but he is for real. Fake is about, we are listening
to too many fake teachers. And a fake teachers is somebody
who talks about something they know nothing about. And my God, when it comes to the psychological
psychotic subject of money, most people are talking about something they know nothing about. Why do I know they don’t, they’re talking about something
they know anything about, cause they haven’t got any money. You know, if a person has money or they’re successful at
money, I listen to ’em. But if they don’t have any money, I kinda sip my tea as I listen. What’s the first question
for Ask Robert, Melissa. – [Melissa] Our first question
today comes from Angel in Wisconsin, favorite book,
Rich Dad’s Guide to Investing. What are the best, most profitable and worst biggest loss
deals you and Kim have done and what did you learn from those deals. – [Robert] Okay, I asked for
that question specifically because we get that question every single day in different forms. One of the biggest problems
with going to school is they teach you that making
mistakes means your stupid. And look ladies and gentlemen, you don’t make money
unless you make mistakes. You cannot be a great golfer unless you hit a few balls out of bounds. You don’t learn to walk unless
you fall down once or twice. You don’t learn to ride a bicycle unless you risk falling off. But when it comes to real life, most people go to school and they put training
wheels on their life. It’s called don’t make mistakes,
have all the right answers, do as your told and do what
Wall street tells you to do. Which is save money and
invest in the long term in a well diversified portfolio, stocks, bonds and mutual funds. That is the best advice for somebody who is academically smart. Because they’re not
gonna make any mistakes, but in my opinion, that’s
the biggest mistake of all, which is why I wrote the book “Fake.” So the answer is this, every time Kim and I have
lost money or made mistakes, we’ve actually gotten smarter. It’s like a kid who falls down. They eventually learn to walk, but I would say 95% of the population is so terrified of making mistakes, they just do as they’re told. They get a job, they save money and they invest in the stock market and their 401K or Roth IRA and then they wonder why
they can’t make any money, because they’re terrified
of making mistakes. Any comments Kim? – [Kim] Well yeah it comes
down to kinda reframing so I look at the question Angel’s asking. He says what was the
worst, your biggest loss. Well, anytime we had a
loss, it was a great deal, because we learned something
and we got smarter from it. So it’s not right or wrong,
it’s not good or bad. I mean every mistake you and I make, Robert is not a bad
thing, it’s a good thing. I mean, if you can start
looking at mistakes are a great way to
learn, it’s a good thing. I don’t like making mistakes, but when I make it and learn
from it, I get smarter. So a bad deal’s not a bad
deal if you’ve learned from it and it takes me to the
next deal which is better. – [Robert] And Kim writes
about her biggest mistake was listening to that silly silly attorney.
– Yup, big real estate deal. – [Robert] And it was a fitness
club out of Florida in Miami and because you’re so
afraid of making mistakes, what happened? – [Kim] That’s exactly right, I was so afraid of making mistakes, afraid of losing money, afraid of what people we’re gonna say. – [Robert] Looking stupid. – [Kim] Looking stupid, that
I brought in an attorney and the deal was in Florida, I bring in an attorney from Arizona who knows
nothing about Florida. The deal just got worse
and worse and worse and finally the seller said
I’m done I’m not selling and when I stepped back, I was so angry, but I wasn’t angry at everybody else, I was angry at me. I was angry at me for being
so afraid of making a mistake, afraid of losing money that
I immediately turned around and the next deal that came my way, actually I knew of it and I sought it out and within 60 days we
had a much better deal, bigger deal three blocks from our house. And to this day that is one of our most, most profitable most profitable assets. – [Robert] So that really dummy, look, most attorneys are important, but most are parasites. They don’t really do
deals, they queer deals and they make it so bad. – [Kim] It’s so complicated. – [Robert] And they argue,
– What if this, what if that. – [Robert] And they fight
and they just drag it out. You know and they’re parasites. And so when you think how many times have we been in trouble just because of attorneys. You know and they’re
supposedly smart people. But their job is not
to make the deal work, their job is to make the deal complicated and messy and get aggravation
going on both sides so they can drag it out for years and all you do is pay them. They’re a bunch of parasites. But, that’s why we say on Rich Dad, you better find great
attorneys and unfortunately, how do you find a great attorney? – [Kim] You kiss a lot of frogs. – [Robert] You find bad attorneys. So my point to answer
that question here is that those of you who went to school and your mommy and daddy taught
you not to make mistakes, you’ve been short changed. You have been taught how not to learn, how to be safe, how not to make mistakes, and so exactly as Doctor
Alexander Elder says, when you put money at risk, you go nuts. Next question, Melissa. – [Melissa] Our next question
comes from Garrett in Florida, favorite book, “Rich Dad, Poor Dad,” says I’m a 25 year old
male with a matching 401K through my employer that
I’ve been contributing to for two years now. It has $8500 total invested,
100% in the SNP500. Question is, would you recommend I take my current earnings out and eat the early withdrawal fee in preparation for our market collapse, or remain in and deal
with whatever happens when the markets do collapse. – [Robert] Well, that’s a great question, but first of all, why are you in a 401K? Now I know because they
tell you it’s matching, and it’s, the employer gives money to you. That’s bs, it’s your money anyway. You know, the employer just
tells you it’s their money. They’re giving it to you. But, I wouldn’t take that money out. You know, I’d just leave it in there. I think you’re doing good, I would look at, I would
study the markets now. Is there a better way? Can you crash-proof that 401K? That’s the question. You know a way to maybe
crash-proof it is go to cash. Go to money market funds. Ya know, I don’t recommend it but you may want to consider that because we’ve had several
other guests on who’ve said the biggest asset there’s gonna be in the next five to 10 years is cash. Because, ladies and gentlemen, this whole economy, our
government, a stock market and all these buildings out
here are floating on debt. The U.S. government is floating on debt, that’s why it shut down right now. The economy is floating on debt, the stock market is floating on debt and the bond market is floating on debt. We’ve never floated on so much debt in the history of the world. That’s why December 12, 2018 was the biggest market crash in history. Worst December since 1931. Cause it’s floating on debt. The question is can we pay off that debt? I don’t think so. So the real problem is
not the stock market, but the bond market. And what that means is if there’s no cash, cause people can’t pay off their debt, cash might become king again, because, as you know, there
was quantitative ease in QE today, we’re in QT,
quantitative tightening. The feds pulling money out of the economy. That’s why it’s slowing. So, you may wanna study a little bit, I’m not recommending it, but you may just wanna
consider going to money market, you’ve never heard me say that before. But you may wanna go to cash if you’re afraid that it’s gonna crash. Any comments Kim? – [Kim] Well I think this all goes to Doctor Elder’s whole point, is that, instead of asking us what
to do with your money, are you willing to get
the education you need to figure out what to do with your 401K and what to do with the stock market? I mean, all you know is that prices, if the stock keeps going up, you’re gonna do okay,
but you don’t know how to make money when the
stock market comes down. So Doctor Elder’s whole
point is how willing are you to get the education you that really need so you’re in control instead
of asking other people what to do with your money. – [Robert] Make your own decisions – [Kim] Yes. – [Robert] So once again, I would suggest you
read Doctor Elder’s book and do trading for a living,
cause he’s a psychologist. Because most of it is when
people get around money, they go nuts. And if you withdrawal that money, it’s probably gonna be gone anyway, you’ll be penalized 10% on withdrawal and you’ll go nuts again. And if you can’t control how nuts you are, it’s like, you shouldn’t
play golf either, ya know. Because you’ll go nuts. You gotta be calm and collected. So really those are the
things we recommend here. Ya know, it’s like how
you flip that house, geez. This guy was flipping a $300,000 house. You have to put $60,000 down. Elder calls that position sizing, I mean you’ve taken so much
risk to make so little. Your risk is so huge, and
if it goes sideways on you, then you have tax problems. If you flip a property, there’s
a short term capital gain. Average guy doesn’t know that. So that’s why we have
The Rich Dad Radio Show, we have people like Doctor Elders on. I don’t necessarily agree
with everything he says. But like he says, if you study, get this one big move, like
he figured out with Brazil, and about three years ago was Petrolbras, which I invested in, we did very, very well. And he doesn’t care if
the market goes down. That’s the biggest thing
that we have him on for. If you’re worried about
the market going down, then I would study more. That’s the biggest point here, cause I don’t really care if it goes down. But you might. We’re at Kim’s mom’s house and when the people who
are along the market, they’re going, “Oh what if it
crashes, what if it crashes?” I said, I don’t care and
they went psycho on me. How can you not care? Well because, I don’t have
any money in the market, that’s why. And if it goes down, I’ll make more money. And that’s really kind of what the Rich Dad Radio program stands for. If you study, listen to it, I wouldn’t recommend any investments. But you wanna get to the
point where you don’t care. Market goes up, you get rich, market goes down, you get rich. So once again, thank
you for your questions. Thanks for Doctor Alexander Elders. So you can submit your questions
as [email protected] And thank ya’ll for
listening to this program.

59 Replies to “HOW TO PROFIT FROM A CRASHING STOCK MARKET -Robert Kiyosaki”

  1. Yes but how long do you really think the gen pop will allow such an obviously unstable, unreliable, economic system to run their lives?

    History is full of countless examples of wealth inequality creating revolutions. In fact that factor alone is usually what causes revolutions. Capitalism has never, nor will ever, stabilize into anything but a cycle of Pump and Dump economists evasively call a "Bell graph".

    I highly doubt a system that has no other function but pump and dump isgoing to persist for much longer, no matter how many iphones and chai lattes you stuff in peoples faces.

  2. 🙄There is no way of predicting a stock market crash. It is not about timing the market, it is about time IN the market…⏰⏰⏰

  3. Alexander Elder gets tons of respect by default, so Like to this video just for the guest! The simplest way to profit from falling market – inverse ETFs. Thank me later 👌

  4. There's money to be made in every market cycle! Also, buy and hold for the long term and it won't matter what the market does short term.

  5. Dr Elder is great guest…one of the best … traders like him are always very knowledgeable and important to listen…he is an educator as well…

  6. If you are still wanting to donate 500 cash flow games to a school? I have a nonprofit, it's going to be an after school program teaching kids from financial education. We could use the games. Poor 2 Glee Foundation (501c3)

  7. I’ve read your first book recently and now my eyes are wide open for videos and content like this! ✨

  8. This is exactly what I needed to learn today. I read an article this morning and Crescat Capital LLC said to a) Long the XAUCNY and b) Short the MSCI World Index. I don't know how to do either, can someone give me advice please?

  9. As an Investor and at one time, a licensed Financial Professional in the Public Sector, and now Chairman of an Investment Firm in the Private Sector… this is what I have learned… YOU MAKE GREAT MONEY IN A GOOD MARKET, BUT YOU MAKE A FORTUNE IN A BAD MARKET!

  10. We, the Brazilian people, hope that Bolsonaro can make Brazil great again. We are not a communist country and we do not like left ideology. Finally, we hope to throw away the leftist ideology of all of Latin America and we will win this game.

  11. To help my interest as a listener, it would help to improve the audio of the guest. Every guest you have on comes through in analogue landline quality, which is so outdated for 2019 production values.

    It is already difficult to listen to podcasts packed full of info that you have to absorb & digest. Having to strain to hear is probably a deal-breaker to more than a few people.

  12. People respond to incentives, and most attorney's are incentivised to BILL HOURS, which means complex deals are good deals (for both sides' lawyers). I'm a CPA who consults with small businesses, and my regular clients pay a flat, monthly fee, so they WANT to talk to me, and I can be a trusted advisor. I listened to my market who complain about this hourly b.s. (charging $100 for a 2-minute phone call), and I took a play out of my wife's book (she's a Naturopathic Physician with a membership practice). Guess what? People like transparency, honesty, and REAL skills. Thank you Robert and Kim, and thank you Mr. Elder for your perspective!

  13. Best guest and talk you’ve had in a while. Thank you. You’ve got to have Dr. Elder back so he can finish giving examples of big ideas that are followed by bull markets. You had to cut him off because you were out of time.

  14. I'm like teaching ride on bicycle. I every day listening Robert and read his books. Sometimes i fall from bicyle named "rich mindset".
    But i try and try, again and again repeat, and i'm going learn how to ride this "mindset" bicyle.

  15. options trading is being made to look easy.Thank you for this program it is a very wise teaching about stocks and financial education.

  16. Instead of hosting a radio show I suggest you to do in Video format. In this world of video learning we can learn much more through videos and it is interesting also.
    You are doing a great work Sir,
    Keep it up… Millennials like me need this .
    Hope for the change…

  17. An ad came on after the show. The guy said he had a waterfront mansion in Florida. I just wanted to say, in Florida, if you want a waterfront home; you just dig a hole.

  18. This is the best interview I have heard in a long time. P.S. Federal Reserve, I am still available as a financial consultant.

  19. The truth of the matter is everybody know the best time to buy is when the market plummet and you are heading to another crash sooner than you think.

  20. I got hired at my dads job without a driver's license. I never hauled a long trailer before and ended up-literally-carshing a semi truck into another one…biggest mistake. Got layed off and never worked there since. But I learned by these two mistakes…1: pull the other truck out so you can pull the first one out, lol. And 2: If you wanna learn how the company works, migrate to another job in the same company and learn their techniques so that you know what's going on and what to do if you run into a problem. Learn.

  21. You just lost credibility. You said in your other video; "getting a job is for loosers", that you don't trade in "paper". Now in this video you encourage people to do exactly that!
    More BS , from a BS salesman.

  22. thank you for promoting that wealth and money= happines, not friends, nor family, culture, tradition, just money and wealth that is all you need. bullshit. bullshit and again bullshit.

    what if you live for tomorrow, what it paying taxes is all you can do? can you see how life is for the majority of us? or are you blind? people are diying because they don''t have anything to eat… and you speak about taxes, incomes???

    please come to a poor country and see how it is. diagrams??? noooo…. nothing is shure, everything is corrupt. and you want to come to one of this countries…. to give lessons? what? you want to take some money? from people that are already poor? nice. good luck. intelligent. thank you for this contribution for this world. i have a business.. wise words.

    i can live. this is my reality, i don't put money aside. of course not, just if i would steal from people poorer than me and unluckier, could i do that ( like the politicians). thank you for promoting that wealth= happines, not friends, family, culture, tradition, but money and wealth. and you know what? i am one of the wealthy people of my country… that means i can survive. that's it. you are on the wrong way. reconsider all of your life choices, you filthy pig.

  23. How do you recommend building wealth starting from the same place you started from at the beginning, in debt, no savings, & renting?

    Credit is much tighter now than it was in the past due to high debt to income ratio restrictions based on how deeply in debt most Americans are, and one could never buy their first condo (costing average $225k in Northern Virginia for a 600 square foot 1 bedroom) on credit like you did in the past. Moving far away to a more affordable city costs $10,000-20,000 with no guarantee of a job or business success and is impossible for people who are not so easily employable.

    So, would you recommend tax lien certificates? Buy a mobile home instead of a house? How can one improve their situation and build wealth in the current climate starting from where you and Kim started eating one meal a day?

    At 40% taxes, 4.5% medical insurance, 29%-60% rent coming out of a middle class person’s paycheck, how can the Average American making $40,000-80,000 build wealth? What is the first step and what are the subsequent steps, specifically?

    Most financial educators suggest getting a financial education, live under one’s means, pay off debt, acquire assets, and start investing in real estate and needed services as a business. As you can see from the percentages above, that is a very puzzling equation for lay people to figure out.

    I’ve heard suggestions like live in an affordable/unsafe apartment (mold, pests, dangerous neighborhoods, which in the end cost you more in health bills, destroyed property, lost time at work to deal with those issues), buy your own condo/house (Impossible with no available credit and the required 30-40% of the home price in cash for the down payment, fees, closing, escrow, and inspection plus improvements and moving), pay off debt (how, with 30-60% of your payments going to interest alone), and start a business to make more money (again, how, with the above scenario)?

    I am asking for a show that addresses these specific circumstances, because this very general advice will never help the listener do what you are telling them to do which is get out of the rat race and build financial education and wealth.

    You did it, how can we do it today with the current economic climate and circumstances?

  24. You know what the bible says, that's your real foundation isnt it Robert, that's why I really fuck with u

  25. I am listening this program in Mexico and socialism and capitalism they are bad here because the government capitalist rich people they got the oil they got the gold all the minerals and that belongs to the whole Nation to everybody here but just a few people are making so much money and the rest are so poor so I don't see the good of the capitalism that way

  26. Robert and Kim, please open up. K-12 school system. One that incorporates what you teach us adults. I'm taking measures to teach my children so that hopefully they have a chance in life

  27. I trusted the trading expertise of Hurley Jordan and it has really proven to be worthwhile. I would like to build this professional relation for a lifetime. Do well to come in touch with him [email protected]

  28. Sir,
    With due respect I disagree you about,
    Upcoming hyperinflation.
    It's not hyperinflation but STAGFLATION.
    It's not in the future, it's already there all over the world.
    Down Jones is stagnant.
    Economy is stagnant.
    Each and every sector, except gold, silver and oil are stagnant.
    No big crash is expecting as you says.

  29. It‘s strange that socialists are on the move all over the world. The same here in germany/europe. A left conspiracy going on? Just look at this Fabian Society from UK. It‘s crazy!

Leave a Reply

Your email address will not be published. Required fields are marked *