Rich Dad’s Guide to Investing

• Money comes from our minds and our thoughts.
• The only reason I built businesses was so I could invest in the investments of the rich.
• Learn to build businesses and invest through your businesses.
• Don’t worry about money. If we do the right things, there will always be plenty of money.
• People who suddenly become rich – by things such as inheritance, a big jackpot from Las Vegas, or the lottery – suddenly become poor again because psychologically, all they know is a world of not enough money. So they lose all their suddenly found wealth and go back to repeating the only world of money they know: a world of not enough money.
• A true investor does not become attached to the vehicles or the procedures. A true investor has a plan and has multiple options as to investment vehicles and procedures.
• Investing is a plan… not a product or procedure.
• Remember that a plan is not really a plan until it is in writing and you can show it to someone else.
• If you want to see a person’s past, present, and future, just listen to his or her words.
• The idea that it takes money to make money is one of the worst ideas there is, especially if a person wants more money.
• It takes a rich person’s vocabulary to make money and more importantly, keep money.
• If you knew what being old felt like, you would plan your financial life differently.
• You need to plan far beyond retirement. In fact, if you’re rich, you should plan for at least three generations beyond you.
• It’s not what we say out loud that determines our lives. It’s what we whisper to ourselves that has the most power.
• Words form thoughts, thoughts form realities, and realities become life.
• I just followed the plan for ten years, and one day I woke up and realized I was rich.
• We must look at how well strategies, not stocks, perform.
• Always remember that it is best to start by walking before you begin to run in a marathon.
• My plan is constantly under revision because I am under revision.
• Nothing is more tragic than to see people who have sold themselves short on what is possible for their lives.
• If our maker has created a life of unlimited abundance, why should you plan on limiting yourself to having less?
• I decided to just love him for his strengths and not get into what I thought were his weaknesses. Love and respect are far more important than money.
• And of the assets of time and money, time is really the more precious asset.
• The moment you begin to think of time as precious and that it has a price, the richer you will become.
• Poor people measure in money and rich people measure in time.
• I think of money as only a medium of exchange.
• Working hard and saving money are important if you want to be secure and comfortable. But if you want to be rich, working hard and saving money will probably not get you there.
• You often hear people say investing is risky. It’s actually the investor who is risky.
• I’d rather hear tales of woe and misery because that is where the bargains are.
• Most investments that will make you rich are available for only a narrow window of time.
• As they say, the bull comes up the stairs and the bear goes out the window.
• KISS (keep it simple silly).
• If someone cannot explain the investment to you in less than two minutes, and you understand it, then either you don’t understand, he doesn’t understand, or you both don’t understand.
• If he or she can’t explain the investment so a 10-year-old can understand at least the overall concept, chances are he or she does not understand it either.
• Investing is a subject where you can study the basics for the rest of your life.
• Be prepared for whatever happens, rather than attempt to predict what is about to happen.
• Many people who think they are investors are not really investors. In reality, they are speculators, traders, or – even worse – gamblers.
• Many people dream of getting rich but most will not pay the price of the investment of their time.
• The number one control you must have to be an investor is control over yourself.
• A true investor does not care which direction the market goes. A true investor will make money in either direction.
• The builder of a business will always trade money for the asset.
• One of the main reasons the poor and middle class struggle is that they value money over true assets.
• Unfortunately, the poor and middle class buy things that have even less value than their money. They turn cash into trash. The rich buy things like businesses, stocks, and real estate with their money. They are looking for secure securities in a time when money has an ever-decreasing real value.
• You also have to have a very thick skin and not mind people saying NO to you. But you also have to be able to change their mind if it is appropriate to do so.
• Reading a financial statement of a business or individual is like reading a biography or an autobiography.
• You invest for one reason: to acquire an asset that converts earned income into passive income or portfolio income.
• Always remember that your expense is someone else’s income. People who are out of control of their cash flow make the people who are in control of their cash flow rich.
• When you come to the boundaries of what you know, it’s time to make some mistakes.
• A mistake was simply a lesson with emotions attached to it.
• It’s not how much your investment goes up that matters, its how much it can come down that is most important.
• School smarts are important but street smarts make you rich.
• Success is the ability to go from one failure to another with no loss of enthusiasm.
• Newton’s Law states, “For every action there is a reaction.” If you’re greedy, people will respond to you in kind.
• If you want a smile, first give a smile. If you want a punch, first throw a punch. If you want money, first give some money.
• There are two ways to become rich. One way is to earn more. The other way is to desire less.
• There are people who buy tickets to the game, and there are people who sell tickets to the game. You want to be on the side that is selling the tickets.
• He also felt that if you could not maintain a 20% return from capital invested, you were not really an investor.
• Their power is the ability to take ideas and turn them into assets.
• Our brains are our most powerful asset and, if used improperly, they can be our most powerful liability.
• The idea of a “job” was created in the Industrial Age and ever since 1989, we have been in the Information Age.”
• It’s a matter of the way you think more than your education.
• Thinking is the hardest work there is. That is why so few people engage in it.
• Imagination is more important than knowledge.
• Create assets that buy other assets and liabilities.
• There are investors who buy assets and there are investors who create assets. If you want to solve the 90/10 riddle for yourself, you need to be both types of investors.
• McDonald’s is not in the hamburger business, they’re in the real estate business.
• Always remember that nothing kills your great ideas more than people with small ideas and limited imaginations.
• Great spirits have often encountered violent opposition from mediocre minds.
• You must have a very strong spirit to withstand the doubt of those around you.
• Use businesses to buy assets with pre-tax dollars.
• I get ahead faster because I get to buy my assets with gross income and pay taxes on net income.
• You will never get rich working for someone else.
• Learn to deny short-term immediate self-gratification in favor of a greater long-term reward.
• There are many people with great ideas but few people with great fortunes.
• Most small business people dream of someday owning a boat or a plane. That is why they will never own that boat or plane. When I was first starting out, I dreamed of having my own team of accountants and attorneys, not a boat.
• Cash flow is to a business what blood is to the human body.
• To be good at communications, you first need to be good at human psychology.
• Many people are talking, but only a few are listening.
• Poor people are poor communicators.
• Cash flowing into your business is in direct proportion to communication flowing out.
• Successful people find their weaknesses and make them strengths.
• Body language counts for approximately 55% of communication, voice tone 35%, and words 10%.
• You have only one chance to make a first impression.
• Never buy a property just because it is a bargain because some bargains are cleverly disguised nightmares.
• True happiness is not attained through self-gratification but through fidelity to a worthy purpose.
• Once you build a successful business, you will have the skills to build as many as you want. You will also have the skills to analyze other business from the outside before you invest in them.
• Wealth is dictated by how many eyeballs you command.
• Don’t give your children money. It keeps them weak and needy.
• In retrospect, I do not think actually achieving the goal is as important as writing down the goal and then going for it.
• If you think you can, you can; if you think you can’t, you can’t. Either way you’re right.
• Provide a lot for many, for very little.
• It was during the Industrial Age that the “Go to school so you can find a job” idea became popular.
• The price of admission today is an idea, and ideas are free.
• Money is an idea. For some people, however, the hardest thing to change is an old idea.
• Keep your full time job, and start a part time business.
• The people being left behind are often people who continue to think in old economy ideas versus new economy ideas.
• What is right for you today could be wrong for you tomorrow.
• The reality today is that the people who physically work the hardest are paid the least and taxed the most.
• It takes information to make as well as to keep money.
• Ideas do not need to be new; they just need to be better.
• Constantly challenge our ideas because if we don’t, someone else will.
• You’d better start swimming or you’ll sink like a stone.
• Just because you’re rich or poor today does not mean you will be in the near future.
• When a paradigm shifts, everyone goes back to zero.
• During any economic bonanza, there are only three kinds of people: those who make things happen, those who watch things happen, and those who say, “What happened?”
• You have the power to create a world of not enough money as well as a world of an abundance of money.
• Just as there are houses for the rich, the poor, and the middle class, there are investments for each of them.

Source: Rich Dad’s Guide to Investing By: Robert Kiyosaki