Book Review : Rich Dad's Guide to Investing
According to Mark Cuban, one book, one perspective from a book can change the the entire course of your life!
And that's why we have to keep reading, as we never know which book will amuse our intellect and suddenly we've got ourselves a new "pair of eyes".
This brings me to today's book review: Rich Dad's Guide to Investing by Mr. Robert Kiyosaki .
This book comes after his bible for financial education, Rich Dad Poor Dad.
Now again, I'm not the one who gives my opinion on this book as I'm still young and limited, but all I can say is that this book is worthy of your time!
Thus, my way of a review is to put excerpts of the book which I think my fellow Steemians would love to read.
Go ahead, if you find any use from this post, order the book!!
"....There are two reasons.
Reason number one is that what we ultimately invest in is a business. If you invest in stocks, you are investing in a business.
If you buy a piece of real estate, such as an apartment building, that building is also a business.
If you buy a bond, you are also investing in a business.
In order to be a good investor, you first need to be good at business.
Reason number two is that the best way to invest is to have your business buy your investments for you.
The worst way to invest is to invest as an individual. The average investor knows very little about business and often invests as an individual.
That is why I spend so much time on the subject of business in an investment course.”
“...I can’t afford to buy this land either.
But my business can.” In other words, my rich dad’s rule was, “My business buys my investments.
Most people are not rich because they invest as individuals and not as business owners.”
"...The reason we have billionaires who are still in their twenties is not because they bought investments.
They created investments, called businesses, that millions of people want to buy."
"...In other words, another reason that 10 percent of the investors make 90 percent of the money is that only 10 percent of all investors know
how to invest from the different quadrants in order to gain different tax advantages. The average investor often only invests from one quadrant."
"..Many people say, “When I make a lot of money, my money problems will be over.”
What they fail to realize is that having too much money is as big a problem as not having enough money"
"...Most investors say, “Don’t take risks.” The rich investor takes risks.Most investors say, “Diversify.” The rich investor focuses"
"...The average investor tries to minimize debt. The rich investor increases debt in their favor."
"The average investor tries to decrease expenses. Rich investors know how to increase expenses to make themselves richer.
•The average investor has a job. The rich investor creates jobs.
•The average investor works hard. The rich investor works less and less to make more and more."
"... Thinking on both sides of the coin.” He went on, saying,
“The rich investor must have more flexible thinking than the average investor.
For example, while both the average investor and rich investor must think about safety, the rich investor must also think
about how to take more risks. While the average investor thinks about cutting down debt, the rich investor is thinking about how to increase debt.
While the average investor lives in fear of market crashes, the rich investor looks forward to market crashes.
While this may sound like a contradiction to the average investor, it is this contradiction that makes the rich investor rich.”
“So if the SEC protects the public from the worst investments and from the best investments, what does the public invest in?” I asked.
“The sanitized investments,” rich dad replied. “The investments that follow the guidelines of the SEC.
e in protecting the public from the bad investments, the SEC also protects the public from the best investments.”
“Which is one of the reasons the rich get richer?” I asked tenuously.
“You got it,” said rich dad. “I chuckle because I see the irony in the big picture. People invest because they want to get rich.
But because they’re not rich, they’re not allowed to invest in the investments that could make them rich.
Only if you’re rich can you invest in a rich person’s investments. And so the rich get richer. To me, that is ironic.”
“Because there are many more bad deals than good deals. If a person is not aware, all deals, good and bad, look the same.
It takes a great deal of education and experience to sort the more sophisticated investments into good and bad investments.
To be sophisticated means you have the ability to know what makes one investment good and the others dangerous.
And most people simply do not have that education and experience,”
•The accredited investor
•The qualified investor
•The sophisticated investor
•The inside investor
•The ultimate investor
An accredited investor is by definition someone who qualifies because he or she has money.
That is why an accredited investor is often called a qualified investor,” rich dad explained.
“But money alone does not qualify you to be a sophisticated investor.”
“What is the difference?”
A sophisticated investor knows the three E’s
- Education
- Experience
- Excess Cash
The following is a list of some of the investments in which so-called accredited investors and sophisticated investors invest:
•Private placements
•Real estate syndication and limited partnerships
•Pre-initial public offerings (IPOs)
•IPOs (while available to all investors, IPOs are not usually easily accessible)
•Sub-prime financing
•Mergers and acquisitions
•Loans for start-ups
•Hedge funds
In reality, the investments are not risky.
It’s the lack of education, experience, and excess cash that makes it risky for the average investor.
“The only reason I built businesses was so I could invest in the investments of the rich.
The only reason you build a business is so that your business can buy your assets.
Without my businesses, I could not afford to invest in the investments of the rich.”
Rich dad went on to stress the difference between an employee buying an investment and a business buying an investment.
He said, “Most investments are too expensive when you purchase them as an employee. But they are much more affordable if my business buys them for me.”
Back in 1973, I put my priorities in this order—to be:
1.Rich
2.Comfortable
3.Secure
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amazon book link(affiliated) :http://amzn.to/2HDraXI