“Guide to investing ” written by Robert Kiyosaki in 2004 is the 3rd boot in the rich dad series .
Kiyosaki starts his book by asking this question: ” Are you psychologically ready to become an investor? ” in an attempt to put the emphasis on the importance of the psychological preparation in our way to becoming investors.
The author says that, when it comes to investing, it question of choosing between security and independence. Usually people who choose security spend their lives struggling financially while those who choose independence and taking risks end up finding ways to get rich by investing. These people must already adopt the vocabulary of investment and wealth at a young age, so that these words seep into their minds and their quest becomes a personal philosophy.
Kiyosaki recommends developing a flexible investment plan. That is to say which can adapt to several investment vehicles, so that once our plan is put into execution the investment becomes a mechanical action and the only effort required then is to follow the steps already planned.
He also advises to never hesitate to seek for advises from successful people and learn from their experiences. In addition to that, Kiyosaki says we should not be afraid of making mistakes because these are just another way of learning and gaining experience.
Besides all above, the author reveals 5 other elements that are, according to him, indispensable for success:
– Challenging
– Determination
– Dynamism
– Data
– Dollars
Kiyosaki invites us to focus on the first 3 ones to get last 2 .
Then, the author incites his readers to determine what kind of investors they want to become, to help them choose he presents these 5 types of investors :
– The Accredited Investor:
The accredited investor is someone with a high income or high net worth.
– The Qualified Investor:
The qualified investor understands how to analyze publically-traded stock. This investor would be considered an “outside” investor as opposed to an “inside” investor. Generally, qualified investors include stock traders and analysts.
–The Sophisticated Investor:
He has education, experience, and excess cash. In addition, the sophisticated investor understands the world of investing. He or she utilizes the tax, corporate, and securities laws to maximize earnings and to protect the underlying capital.
– The Inside Investor:
Is an investor who build their own businesses to create wealth to then invest outside.
– The Ultimate Investor:
To become the selling shareholder is the goal of the ultimate investor. The ultimate investor owns a successful business in which he or she sells ownership interest to the public.
To get rich then, the investor buys assets and then pays taxes unlike an ordinary employee. Economic policy is more favorable for business owners than for their employees. But it really pays off when you become an insider investor. For beginners, it is therefore advisable to keep a stable job that allows them to live and use their income to create the capital to invest.
The “Guide to Investing” emphasizes starting a business because it generates excess cash flow, can be resold and can become a public company. For this, the entrepreneur must have vision, courage, creativity, perseverance and patience. His business idea can only bear fruit if he manages to manage all aspects of the business well. From communication to legal, including products, everything must be studied and organized to achieve a goal.
Takeaways :
If you had to take three things from this book it would be:
– That an investor needs to be prepared psychologically by designing a long-term investment plan.
– In the investment process, you have to accept your mistakes and learn from them.
– Finally, whatever type of investor you want to become, focus on starting a business to get rich.
Oeconomia 