The Retirement Crisis No One Is Prepared For

0:00A burst pipe. A dead water heater. The AC calling it quits. Who do you call? HomeServe is an easy way to handle unexpected home repairs. With plans covering stuff basic homeowners insurance usually won't. Instead of scrambling for a contractor, you make one call to get the repair process started. Join the millions of customers who trust HomeServe right now. Go to homeserve.com slash podcast for 50 % less your first year. That's homeserve.com slash podcast. Ryan Reynolds here for Mint Mobile. I don't know if you knew this, but anyone can get the same premium wireless for$15 a month plan that I've been enjoying.

0:38It's not just for celebrities. So do like I did and have one of your assistant's assistants switch you to Mint Mobile today. I'm told it's super easy to do at mintmobile.com slash switch. Upfront payment of$45 for three-month plan equivalent to$15 per month required. Intro rate first three months only, then full price plan options available. Taxes and fees extra. Default terms at mintmobile.com. This is the Rich Dad Radio Show. The good news and bad news about money. Here's Robert Kiyosaki. Hello, Robert Kiyosaki, the Rich Dad Radio Show. I'm broadcasting from Phoenix, Arizona, where it's either heaven or hell, and right now is heaven.

1:17That's why people live here. Anyway, we have a very important show. All our shows are important. But this is especially important if you have a family member who is a boomer, baby boomer. And I forgot the years they were born between, but there's millions of them. And especially so if they have a pension. And the reason this is important is when I was getting out of the Marine Corps in 1974, they had a thing called ERISA, Employee Retirement Income Security Act. And any time the government says our act is to protect your income, bend over and don't pick up the soap, you know what I mean, because they're going to get you.

2:05So my generation in 1974 was the first generation without what they call defined benefit pension. Defined benefit means you're guaranteed a pension no matter what. But when ERISA kicked in in 74, it shifted to defined contribution. And I remember coming out of the Marine Corps, I was looking for a job in Hawaii, my last station I flew out of. And I go to downtown Honolulu, and every school teacher, I go to these meetings about the new, what do you call it, profession, called financial planners. and say, you too can be a financial planner. I'm going, oh, let me go check this out. So I go and I sit on these meetings for people who want to be financial planners because the shift went from defined benefit to defined contribution.

3:03So your contribution would depend upon what this financial planner advised you, your 401k or IRAs in America, RRSP in Canada, superannuation in Japan, I think, And anyway, stuff like that. So everybody around the world, boomers, the biggest generation in history, is now at the point where those pensions are due. Very important subject because it's going to affect a lot of people. So there's a friend of mine, Ted Sedell. He's a pension forensics expert. He wrote this book here. It's called Who Has Told My Pension? and so there's a lot of boomers my age who are going to wake up and said huh i don't have a passion i'm now too old to work and you're out of time so that's one of the reasons i founded the rich dad company is we have no financial education and so people i don't need a pension you know i invest for myself i have a family we call a family office i don't need a i have advisors But anyway, I was a pilot, and most of my friends became pilots for the airlines.

4:17And they're all happy because they had job security, they had pensions. And guess what? Voila, their pensions disappeared. So here they are. They're now about 65 years old, and they have no pension. And so that's why it's kind of personal to my classmates, my fellow pilots. We flew in the Marine Corps. They were still working and then had no pensions. So that's why Ted Siddell and I co-authored this book here, Who Stole My Pension? Because Ted is the number one forensics expert. He goes after the pensions and how they steal your wealth because they've been thieves. You know, most financial planners are nice people, but I wouldn't let them lead me to the toilet.

5:06I really have no respect for them. because they're going to put me in stocks, bonds, mutual funds, and ETFs. And I don't do those things. You can do what you want. I don't give financial advice. But I'd rather handle my own pension, thank you, my own retirement. So I retired years ago without a pension. And I did it with real estate and investments. So, Ted, welcome to the program. It's been nice working with you all these years. But, you know, that old saying, cheer up, it could get worse. We all cheered up. And a lot of these guys in these pensions, like CalPERS, California personnel and all that stuff, they're smelling the coffee right now, right?

5:51Yeah, they certainly are. And I've just been hired a few months ago to do a forensic investigation of CalPERS, which is nearly$600 billion. between CalPERS and CalSTRS, which is the state teacher's pension. You're talking about a trillion dollars. And so if that money is being mismanaged, that's like a global, a sovereign country. I mean, it's a trillion dollars there in those pensions. So I was hired recently to do a forensic investigation of CalPERS on behalf of the State Retiree Association, RPEA. And that's what I've been doing for the last few months. And it's been in NBC News and on Financial Times and all over the country.

6:52They've been even internationally writing about this investigation because CalPERS is the largest. And you've also been awarded the biggest reward for taking it to these pension crooks. I mean, good. Yeah, I won the largest SEC whistleblower awards in history, nearly$100 million for the investigations I've done. So I got the largest award from the SEC, then the largest award from the CFTC, and then another one from the SEC. So yeah, the federal government has confirmed my findings over the years, and I've done over a trillion of these investigations. but anyhow calpers is is big news because they are the largest and pensions move in what we call a herd with a herd instinct so when the leader jumps off a cliff all the other lemmings jump off as well so it's really important that the leader be leading and not misleading yeah so What Ted is talking about is called the bellwether or the cow with the bell in their neck.

8:13So whatever CalPERS is doing, the rest of the herd is following close behind. And what you're saying is CalPERS is in trouble? Yeah, CalPERS has been in trouble for the last 25 years. Up until about 2000, Robert, CalPERS was considered the quote-unquote gold standard. You know, all the other pensions looked to them. They were the model for effective governance and transparency. All that started falling apart after 2000. One board member went to prison. Another board member committed suicide before he was being sentenced. They've just been hit with scandal after scandal. and they're now pretty much a poster child for poor governance.

9:06And they champion things like, you're familiar with, ESG or DEI. A lot of these progressive investment strategies, CalPRISM was the originator of. And the herd followed the leader, right? So it's pretty wild. anything you can imagine. This is the book here. If you're young enough, please read this book. If you're old, like over 50, you might be in serious trouble. Because explain why they were committing suicide. Well, these guys who are the so-called leaders of these pensions, these teachers and things like that, they were on the take also they were kind of commission on both sides to the toast was buttered on both sides and well the main problem the main problem with public fund public pension plans uh like city county state public pension plans are first of all they are not governed by ERISA.

10:18ERISA, the comprehensive federal law that you talked about earlier that provides important protections for participants. Well, when they created that law in 1974, they made a huge loophole. All state and local pensions are not subject to ERISA. So could you explain how these leaders were stealing from the people they trusted to run the pension? How were they stealing? What were some of the nefarious tricks they were up to? Well, one of the things your viewers need to understand about public pensions, state and local government pensions, is they're political animals. These funds, these investments, retirement funds are not being selected, managed based upon what's the best investment, based upon the best performance or merit.

11:09They're political considerations. Who's giving to whose political campaign? so basically there are no rules anymore on Wall Street giving to politicians and politicians are running these funds here in Florida the state pension fund is 200 and 300 billion dollars it has three board members overseeing it the governor the attorney general and the state chief financial officer none of whom have any experience you may recall Robert I just finished last year investigation. What you're saying, the people running the pensions and deciding what they're going to invest in have no idea what they're doing.

11:54None whatsoever. Last year, I did an investigation of the state of Minnesota pension. And I completed the investigation right before the election. And one of the things we discovered was that Tim Walsh was the chairman of the state pension and you may recall in his uh election uh disclosure he admitted from the get-go he had never bought a stock or bond in his life in his financial disclosure as soon as he was nominated uh which was the very week i released my findings about how he'd been mismanaging the pension he admitted that he'd never he did not own a stock or bond never had owned a stock or a bond and yet this is the guy overseeing the i think it was 250 billion dollar of minnesota state pension same here in florida the we have ron de santa doesn't know anything about investing stocks or bonds i think he had a net worth of a couple hundred thousand dollars before he got a book deal but um and in california it's the same thing you've got uh elected officials who need campaign contributions to fund their political campaigns.

13:08And what's the biggest contract, most lucrative contract a state can hand out? A money management contract. It can be worth billions. The reason I'm cracking up is in my family, they still can't get that mantra out of their head. Now, you go to school, but you get a good, safe job with the government because the government has a pension. And what Ted is saying, what I'm saying in this book here, you're up the river without a paddle. And that's what's going to happen right now. It's happening all over the world. So we come back. Ted, I mean, I shouldn't be cracking up, but I think it's absurdly stupid that my family, go to school so you can get a good government job.

13:55Or my father was happy I could have flown for the airlines because I would have got a good pension. They're gone. We'll be right back with Ted Sattel.

14:10Welcome back, Robert Kiyosaki, Rich Dad Radio Show. And remember, we don't give financial advice. Behind me is a cash flow board game, so you can learn about money, cash flow, income statements, financial statements, so you can learn. And I think the people that play cash flow know more than most of the people running these pension boards that Ted is after. So, Ted, what requirement does a person have to have to handle billions of dollars in money, like this guy, Waltz, who was Kamala Harris' running mate for vice president? How much experience did he have running about investing? Zero. One of the things that my investigations show is There's not a single state in this country that requires these pension board members have any financial experience whatsoever.

15:09So you've got people running six point there's six point five trillion in public pensions in America. And the boards watching over these funds are laymen. And then you've got, on the other hand, you've got the sharpest Wall Streeters out there selling high risk private equity, private credit, alternative hedge funds to these cops, firefighters, school teachers who have no training whatsoever. That's why Wall Street calls public pensions the, quote unquote, dumbest investors in the room. And they are. They don't know what the hell they're doing. And there are no requirements anywhere. So I'm going to this California CalPERS investigation I'm very excited about for a couple of reasons.

16:03One is that two former board members are part of the group that hired me. So I've got their decades of insight and how the board operates from behind the scenes. the other thing that you'll appreciate is i also from the get-go there's a documentary filmmaker who's been filming the investigation so i'm very excited that the film will get out to people people watch the film who maybe won't read 150 page forensic report what what film what film is this it's a documentary film but by a fellow named um doug orchard um the trailer will be out next week but I can't tell you anything more. It's his film, so the name was tentatively broken, Promises, Stolen Pensions.

16:54But that will be coming out, and I'm hoping a lot of people will watch the film because there are tens of millions of people who are participating in these pensions. Like I said, they're not going to read a 150-page expert report, but they might see an hour-and-a-half documentary film. And the third thing that I'm really excited about here is about this investigation is the fact that I'm able for the first time to use AI to help. And man, I got to tell you, it's a game changer. Really exciting. I shouldn't be laughing, but I got, as a kid, I was pounded by my whole family's academics. The only reason you wanted a college degree was to get a government job with a pension.

17:43Why don't you just study money? So that's why Rich Ted Company was created to teach cash flow and investing and things like this, that everybody says is risky. But now, I hate to say this, I shouldn't laugh, but homelessness is about to explode. And there's going to be a lot of hardworking firefighters, school teachers, government workers whose pensions are stolen, which is why I wrote this book here. So, Ted, any suggestions you have for people of my age, I'm a boomer, who are suspicious or suspect, you know, they're losers right now. They're going to be big-time losers, but they're out of time.

18:27Do you know what I'm saying? They drank the Kool-Aid of go to school, get a job, and get a pension, but now they're out of time. When you investigate these pensions that are stolen and looted and robbed by incompetence, what do the pensioners do? I mean, how do they survive? I know my pilot friends had to get other jobs. At least people would hire them for a certain time. But what do people do when they lose their pension? Well, the main thing that they need to do right now is start looking at their pensions instead of expecting that they're just going to be there miraculously. They really need to start looking.

19:12And the first thing they'll encounter is all these state pensions are subject to state Freedom of Information Act laws. They are supposed to be, state pensions are supposed to be the most transparent of all pensions. far more transparent than corporate pensions because of these state Freedom of Information Act laws. And the first thing that pensioners are going to discover when they start looking is, start asking for questions, is that none of these pensions is following transparency law, Freedom of Information Act laws. They will shut you down. I've done over a trillion of these investigations never once, Robert, in the last 13 years, has a single pension given me the documents they're required to give me under law.

20:02I note it in every one of my reports, and life goes on. They just refuse to give you the information, and they're more secretive now than they ever. So, Ted, we understand that these guys with pensions, and the reason I shouldn't laugh, but when I was in high school, my poor dad was head of the teachers union, Hawaii State Teachers Association, HSTA. And he would have meetings with all these school teachers in there. And you'd think the Hawaii State Teachers Association would be talking about education. They don't. They talked about pensions and pay raises. They didn't give a crap about the kids.

20:46and now you know i hate to say i have two sisters and one brother i don't know if they have a pension i retired years and years and years ago i didn't need a pension but that was my rich dad saying to me he says you better because of arrest in 74 i was getting out of the marine corps he says you better start cya cover your ass right now so that's why you know i wrote rich dad poor to create the cash flow board game so people can save themselves. So what happens to these people whose pensions are gone? Does anybody bail them out? Does the government, you know, they bail out the banks. Can't they bail out the firefighters?

21:27Well, all these, remember, the people contributing to these pensions are the employers, state agencies, the employees, state workers, and taxpayers. so everybody loses when these pensions go down taxpayers have to put more money in you know basically uh so you're going to end up failing if these pensions are gambling on risky private equity and hedge funds that lose and at the end of the day the participants and the stakeholders stakeholders include participants and taxpayers are going to have to put more money in and you brought up a good point when you're talking about your personal experience um these teachers unions i just this week uh um disclosed that the nea the powerful teachers union uh is being investigated by congress the house of representatives for getting uh selling costly financial products to teachers that are terrible terrible investments most people don't realize the nea is a money manager they are registered with the sec they're a union uh posing as a money manager or a money manager posing as a union which however you want to look at it but they've been doing this for years selling financial products to teachers and really crappy ones at that well that the The organization you wrote for was Forbes, or is Forbes.

23:00And Forbes called the NEA, not the National Education Association. Forbes called the Teachers Union the National Extortion Association, because our education standards go down further and further and further, but the teachers get richer and richer, simply because they're a bunch of Marxists, you know. I'm not saying they're bad people, But the definition of a Marxist is an intellectual who thinks people should follow what they do. They should be told what to do. And in my family, all the smart guys said, you should listen to me because I have a college degree and you don't. I wouldn't listen to you.

23:37Anyway, we're in serious trouble. But I'm glad to hear the NEA is going to be held accountable because, oh my God, they're a nasty organization. They're horrible. Well, the NEA has been taking advantage of teachers and undermining. In the old days, there was a time in America where unions fought to improve the retirement security of their membership, whereas the NEA has for the last 30 plus years been undermining the financial retirement security of their membership by selling them high cost, variable annuities that are just not a good investment at all. So I feel badly that the teachers have been taken advantage of by their own union.

24:21Should have never happened. A union should not be a money manager registered with the SEC. One or the other. Be a money manager, be a union, but you can't be both, in my opinion. And that's why I say my family, they're all educated, poor dad's family, be sure to get a job as a teacher because they have a good pension. It wasn't about be a good teacher, have a good pension. And when the NEA, like Forbes, has been on them for years, but you're finally going after them, which is really good news. So once again, I'm going to ask the same question. What did some of the people do who lost their pensions late in life?

25:06Any ideas? I mean, what do they do? Well, you know, go back to work, basically. Or, you know, there are only two things you can do. either bring more money in or cut your cost of living. One of the two is you're really forced to choose from. Like Warren Buffett said, a man who makes$100 and spends$99 is happy. He makes$100 and he spends$101, he's unhappy. So there are really only those two things that you can do, or either go back to work or cut your standard of living or do both. Do a bit of both. I hate to say this, but even McDonald's is letting people go. I mean, the economy is being hit so bad, poor people can't afford to fine dine at McDonald's or these fast food places.

26:03So it's not a good time to be looking for a job at 65. And AI is going to wipe the rest of them out. so that's why this is kind of why I started Rich Dad 30 something years ago cash flow board games so people can teach themselves quick what I did was when I got out of the Marine Corps the first thing my rich dad said to me I had to do was two skills I had to have number one is I had to learn how to sell so I got a job with Xerox because I couldn't sell I was terrified of rejection and then And I kept saying, no, I don't want to sell. I don't want to sell. I don't want to sell. Because in my family, the poor dad family, salesmen were scum.

26:48And so Rich that finally looked at me and says, Robert, how's your sex life? I said, it's nonexistent. He says, because you can't sell. So that kind of convinced me to get a job with Xerox. And the second thing, he says, you have to take real estate. I said, why real estate? Because you have to learn how to use debt. Because as you know, the dollar became debt in 71. under tricky dick nixon so you know that's kind of what i did so i retired a long time ago because i i don't have i have no stocks bonds and mutual funds etfs i don't follow warren buffett's plan so i just have real estate of gold and silver period and they produce income real estate produces income that's what i do well it's really amazing to me i believe that everybody young person should get involved in sales because we're all involved in sales whether we know it or not but i i hear the same thing universally if i say to a younger person you know get some sales experience they they you know to them it's like drinking urine or something it's like this i don't want to be in sales that's beneath me it's like it's not beneath anybody i mean we're all in sales Whether we're lawyers, doctors, whatever we do, we are involved in sales.

28:08I would encourage anybody to get involved in sales. That's the best entree to becoming an entrepreneur. Again, this is our book, Who Stole My Pension? It's not a funny subject, but I kind of find it entertaining right now that it's going to get worse. That's the problem. and homelessness will spread simply because these hardworking people have no financial education and ted knows that these the leaders of their pensions a lot of them are on the take right ted i mean they got bonuses from the people they bought from securities from yeah in every state the pension investment staff is are they're the most highly compensated state workers in any state More than the governor, many of them more than the president of the United States.

29:00They get paid, you know, a million-dollar salaries or three-quarters of a million dollars. State workers. Yeah. And the firefighters, school teachers, you know, police officers, they get screwed. Anyway, Ted, it's been great being your friend because I get to talk to you all the time about what's really happening. Because Ted is a bloodhound out there. Ted, thank you very much and keep up the good work. Thank you. Great to be here. And I want to come back with a final word from Robert. We'll be right back. Thank you.

29:55HomeServe right now. Go to homeserve.com slash podcast for 50 % less your first year. That's homeserve.com slash podcast. Savings compared to renewal price void in Florida. Welcome back. I want to thank my friend and co-author Ted Siddall for this book here. I shouldn't have been laughing, but all my years of being an academic family, you know, go to school, get a job so you can get a pension, is coming to roost now. And it's really sad because many of these firefighters, police officers, and my fellow pilots and all that, they'll be homeless without a pension. So please take care of yourself.

30:35That's where Rich Dad was created. That's why the board game cash flow sits behind me, is that if you educate yourself, you might have a better chance of success into the future and a happier retirement. So thank you for being a fan of Rich Dad. Thanks.

30:54This podcast is a presentation of Rich Dad Media Network.