Renowned economist Robert Kiyosaki has predicted “a historic crisis“. But, in the face of uncertainty, he sees an opportunity to diversify savings. What does diversification mean? Does diversification help us invest? Agent 11Onze Xavier Esteve explains it to us in four key points.

Kiyosaki, who is a very influential investor in the United States, and author of the bestseller ‘Rich Dad, Poor Dad’ (Debolsillo, 2016), says that the crisis coming in the next few months could drag us into a “situation of collapse”, not only in the currency market, but also in the cryptocurrency and precious metals markets. Even so, he is optimistic: he is convinced that every crisis is an opportunity for those who know how to take advantage of it. 

Be wary of debt, because it can lead to inflation

According to the 11Onze agent, Xavier Esteve, the main factor in the coming crisis is “the large accumulated debt globally, especially in the United States“. Esteve explains that the relationship between debt and gross domestic product (GDP), i.e. the capacity to generate wealth, “is not, at present, consistent”, or, in Kiyosaki’s words, “is not synchronised”. In fact, Kiyosaki defends an alarming thesis: that the Treasury Department and the US Federal Reserve are “artificially inflating” the stock market with decisions that are “disconnected” from the real economy.

Esteve acknowledges that inflating the market in this way “is not a good thing”, and tries to explain: “Money is being printed without taking into account what people spend and, therefore, this money can be labelled as fake, since it does not enter the economy. On the other hand, it does have an effect on price rises, on possible temporary inflation in the coming months”. This transitory inflation, says Esteve, can collapse the house of cards that is the market and cause goods to lose their value to unprecedented levels. “The possible bankruptcy of Chinese real estate company Evergrande may also affect this temporary devaluation,” he says. In this context, Esteve reminds us that Kiyosaki warns that “the rich will get richer, but the poor and middle class will get poorer and poorer”.

The 11Onze agent also explains that Kiyosaki’s statements are understandable given the fact that the financial concerns of the US have been hanging by a thread for some time and, “especially now, with the insecurity of the real economy, and coming out of two years of the pandemic, which have affected, among others, the rates of oil and gas production”. Although Esteve reminds us that “economics is not an exact science, nor can it predict the future”, he does observe “worrying symptoms”. “Today, the lack of certain raw materials and the rise in gas, electricity and petrol prices are worrying. The big question is whether fear and lack of confidence will take hold of the market”, he points out.

When stocks collapse, it’s time to invest

Faced with this possible crisis scenario, like Kiyosaki, the 11Onze agent is optimistic. He believes that crises, in all areas, are the bread and butter of every day and “bring times of change“. “That’s when you can create or look for new ways to improve your financial situation,” says Esteve.

I don’t want to be alarmist,” Esteve continues, “Kiyosaki tells us that this drop in the prices will give us an opportunity to invest in assets considered as a store of value, such as bitcoin, gold, and silver. In fact, the economic eminence advises small investors what he himself will do when prices have fallen enough: “I’m bullish on gold, silver, and bitcoin, not stocks. When their values plummet, that’s when I’ll buy.

“It is not good to put all your eggs in one basket”.

In situations of economic crisis, especially if it is expected to be transitory as this one seems to be, “worrying is not the solution”, says Esteve. The answer involves keeping calm and “having good planning to help us overcome any financial hurdles“. “Furthermore, if we do it right, this planning can help us improve our savings,” he says.

Esteve is encouraged to respond to the small investor’s misgivings with two sayings, one of them very Catalan: “It is not good to put all your eggs in the same basket“. And the second, attributed to Harold Macmillan, former Prime Minister of the United Kingdom: “We should use the past as a springboard, not as a sofa”. “Obviously you can diversify. It’s one of the best ways to invest,” sums up Xavier Esteve without thinking. But then, what is diversification?

Image font: Gage Skidmore

Spread your savings, risk small amounts

Diversifying means spreading your savings across different assets, be it currencies, precious metals, stock market investment products such as ETFs, real estate, or cryptocurrencies, among others. New technologies make this diversification even easier. Our El Canut app will soon offer this possibility. And as the value of these assets fluctuates in the market, diversifying can help you not only to secure your savings, but also to invest, as Esteve says.

Our broker explains that, although many people think that investing is only for professionals or people with a lot of capital, “it’s not quite like that”. “It is clear that everyone has their difficulties and circumstances and, first and foremost, we have to have our vital needs covered, as I always say, but one of the virtues of 11Onze is precisely that, through La Plaça and the 24-hour service, we try to provide our clients with all the information they need to make the right decisions”, says Esteve, who reminds us that 11Onze will let clients invest “with small amounts, which will not pose a financial problem“. As the well-known scientific figure,  Eduard Punset said: “When the ecosystem does not exist, it has to be invented”. “We have to move with the tide,” says Xavier Esteve.

If you want to discover the best option to protect your savings, go to Preciosos 11Onze. We will help you buy at the best price the ultimate safe haven asset: physical gold.