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RE: Book Review - Rich Dad's Cashflow Quadrant - Robert Kiyosaki
Thank you @brandonp for this lovely post. It was very informative and I'm looking forward to more book reviews in the future. This is a great topic to cover too as it can potentially help all of your followers.
One question I had was on Point 6. Know the difference between Risk & Risky. Can you please elaborate a little on this?
I don't have the book in front of me to give you exactly what Kiyosaki says, but there are a couple aspects to this point. First is that one must know the difference between risk and volatility. Just because the value of an asset fluctuates day to day does not mean it is necessarily risky, just volatile. Second, one must realize where the risk in an investment actually is. In the case of a rental property, there is financial risk to the owner, but this is mitigated by the fact that the mortgage is paid via rent from the property. This is probably a terrible elaboration, but that is how I took it.
I see. Thanks for the explanation. I was trying to compare risk vs. risky to crypto currency which is one of my latest investments that's why I asked. Crypto seems like its very volatile. Whales seem to have a good control over the market and really dictate which direction coins go.
Another huge aspect of the "risk vs. risky" point is about financial literacy, but if you broaden it to just mean "knowledge" then it fits a little better. One of the reasons investments are risky is because of the fact that people tend to lack the knowledge to truly understand and fully comprehend the investments they are taking positions on. In terms of crypto let's put it this way: I don't invest in other crypto's because I don't have nor do I ever plan to have the knowledge necessary to give me a leg up on the competition. I've been on Steemit and understand it enough that I feel I have the knowledge to do on average better than the typical person on the platform.